JUDGMENT OF THE COURT

8 February 2000 (1)

(Conditions governing association of overseas countries and territories —Decision 97/803/EC — Sugar imports — ACP/OCT cumulation of origin —Assessment of validity — National court — Interim measures)

In Case C-17/98,

REFERENCE to the Court under Article 177 of the EC Treaty (now Article 234EC) by the President of the Arrondissementsrechtbank te 's-Gravenhage(Netherlands) for a preliminary ruling in the proceedings pending before that courtbetween

Emesa Sugar (Free Zone) NV

and

Aruba

on the validity of Council Decision 97/803/EC of 24 November 1997 amending atmid-term Decision 91/482/EEC on the association of the overseas countries andterritories with the European Economic Community (OJ 1997 L 329, p. 50),

THE COURT,

composed of: G.C. Rodríguez Iglesias, President, J.C. Moitinho de Almeida andD.A.O. Edward (Presidents of Chambers), P.J.G. Kapteyn, J.- P. Puissochet, G.Hirsch, P. Jann, H. Ragnemalm and M. Wathelet (Rapporteur), Judges,

Advocate General: D. Ruiz-Jarabo Colomer,

Registrar: H.A. Rühl, Principal Administrator,

after considering the written observations submitted on behalf of:

—     Emesa Sugar (Free Zone) NV, by G. van der Wal, of the Brussels Bar,

—    the Government of Aruba, by P.V.F. Bos and M.M. Slotboom, of theRotterdam Bar,

—    the Spanish Government, by M. López-Monís Gallego, Abogado del Estado,acting as Agent,

—    the French Government, by K. Rispal-Bellanger, Head of subdirectorate inthe Legal Affairs Directorate of the Ministry of Foreign Affairs, andC. Chavance, Foreign Affairs Secretary in that directorate, acting as Agents,

—    the Italian Government, by Professor U. Leanza, Head of the Legal AffairsDepartment, Ministry of Foreign Affairs, acting as Agent, assisted by D. DelGaizo, Avvocato dello Stato,

—    the United Kingdom Government, by S. Ridley, of the Treasury Solicitor'sDepartment, acting as Agent, and K. Parker QC,

—    the Council of the European Union, by J. Huber and G. Houttuin, of itsLegal Service, acting as Agents,

—    the Commission of the European Communities, by T. van Rijn, LegalAdviser, acting as Agent,

having regard to the Report for the Hearing,

after hearing the oral observations of Emesa Sugar (Free Zone) NV, theGovernment of Aruba, the Spanish, French and Italian Governments and theCouncil and the Commission at the hearing on 16 March 1999,

after hearing the Opinion of the Advocate General at the sitting on 1 June 1999,

gives the following

Judgment

1.

    By order of 19 December 1997, received at the Court on 23 January 1998, thePresident of the Arrondissementsrechtbank te 's-Gravenhage (District Court, TheHague) referred to the Court for a preliminary ruling under Article 177 of the ECTreaty (now Article 234 EC) twelve questions on the validity of Council Decision97/803/EC of 24 November 1997 amending at mid-term Decision 91/482/EEC onthe association of the overseas countries and territories with the EuropeanEconomic Community (OJ 1997 L 329, p. 50).

2.

    Those questions were raised in proceedings between Emesa Sugar (Free Zone) NV ('Emesa‘) and the Government of Aruba concerning the conditions forimportation into the Community of quantities of sugar which Emesa processes andpacks on that island.

Legal background

3.

    Under Article 3(r) of the EC Treaty (now, after amendment, Article 3(1)(s) EC),the activities of the Community are to include the association of overseas countriesand territories (hereinafter 'the OCTs‘) 'in order to increase trade and promotejointly economic and social development‘.

4.

    Aruba is one of the OCTs.

5.

    The association of the OCTs with the Community is governed by Part Four of theEC Treaty.

6.

    Pursuant to the second and third paragraphs of Article 131 of the EC Treaty (now,after amendment, the second and third paragraphs of Article 182 EC):

'The purpose of association shall be to promote the economic and socialdevelopment of the countries and territories and to establish close economicrelations between them and the Community as a whole.

In accordance with the principles set out in the Preamble to this Treaty, associationshall serve primarily to further the interests and prosperity of the inhabitants ofthese countries and territories in order to lead them to the economic, social andcultural development to which they aspire.‘

7.

    To that end, Article 132 of the EC Treaty (now Article 183 EC) sets out a numberof objectives, which include the application by the Member States 'to their tradewith the countries and territories [of] the same treatment as they accord each otherpursuant to this Treaty‘.

8.

    Article 133(1) of the EC Treaty (now, after amendment, Article 184(1) EC)provides that customs duties on imports into the Member States of goodsoriginating in the OCTs are to be completely abolished in conformity with theprogressive abolition of customs duties between Member States in accordance withthe provisions of that Treaty.

9.

    According to Article 136 of the EC Treaty (now, after amendment, Article 187EC):

'For an initial period of five years after the entry into force of this Treaty, thedetails of and procedure for the association of the countries and territories with theCommunity shall be determined by an Implementing Convention annexed to thisTreaty.

Before the Convention referred to in the preceding paragraph expires, the Councilshall, acting unanimously, lay down provisions for a further period, on the basis ofthe experience acquired and of the principles set out in this Treaty.‘

10.

    On the basis of the second paragraph of Article 136 of the Treaty, on 25 February1964 the Council adopted Decision 64/349/EEC on the association of the OCTswith the European Economic Community (Journal Officiel 1964, 93, p. 1472). Thatdecision was intended to replace, as from 1 June 1964 (the date of the entry intoforce of the internal agreement on the financing and management of Communityaid signed in Yaoundé on 20 July 1963), the Implementing Convention on theassociation of the overseas countries and territories with the European EconomicCommunity, annexed to the Treaty and concluded for a period of five years.

11.

    Thereafter, several decisions relating to the association of OCTs with the EuropeanEconomic Community were adopted by the Council. On 25 July 1991 the Counciladopted Decision 91/482/EEC (OJ 1991 L 263, p. 1, hereinafter 'the OCTDecision‘), which, by virtue of Article 240(1) thereof, applies for a period of 10years from 1 March 1990. Article 240(3)(a) and (b) provide, however, that beforethe end of the first five years, the Council, acting unanimously on a proposal fromthe Commission, is to establish where necessary, in addition to Community financialassistance, any amendments to be made for the next five-year period to theassociation of the OCTs with the Community. To that end, the Council adoptedDecision 97/803/EC.

12.

    In its original version, Article 101(1) of the OCT Decision provided:

'Products originating in the OCT shall be imported into the Community free ofcustoms duties and charges having equivalent effect‘.

13.

    Article 102 of the same decision provided:

'The Community shall not apply to imports of products originating in the OCT anyquantitative restrictions or measures having equivalent effect.‘

14.

    The first indent of Article 108(1) of the OCT Decision refers to Annex II thereto(hereinafter 'Annex II‘) for definition of the concept of originating products andthe methods of administrative cooperation relating thereto. Under Article 1 ofAnnex II, a product is to be considered as originating in the OCTs, the Communityor the African, Caribbean and Pacific States (hereinafter 'the ACP States‘) if ithas been either wholly obtained or sufficiently worked or processed there.

15.

    Article 3(3) of Annex II lists a number of operations that are to be considered asinsufficient working or processing to confer the status of OCT originating products. Article 6(2) of that annex states:

'When products wholly obtained in the Community or in the ACP States undergoworking or processing in the OCT, they shall be considered as having been whollyobtained in the OCT‘ (the 'ACP/OCT cumulation of origin‘ rule).

16.

    Furthermore, under Article 12 of Annex II, proof of origin of the products isprovided by a 'movement certificate EUR. 1‘ (paragraph 1), issued by the customsauthorities of the exporting OCT country (paragraph 6), who are to verify whetherthe goods qualify to be regarded as originating products by carrying out any checkwhich they consider appropriate (paragraph 7).

17.

    In its proposal for a decision for mid-term amendment of Decision 91/482, sent tothe Council on 16 February 1996 (COM(95) 739 Final, OJ 1996 C 139, p. 1), theCommission expressed the view, in the sixth and seventh recitals in the preambleto that proposal, that free access for all products originating in the OCTs and themaintenance of the ACP/OCT cumulation of origin rule had given rise to the riskof conflict between two Community policy objectives, namely the development ofthe OCTs and the common agricultural policy.

18.

    In the seventh recital in the preamble to Decision 97/803, which followed thatproposal, the Council observes that it is appropriate for 'fresh disruption [to] beavoided by taking measures to create a framework conducive to regular trade flowsand at the same time compatible with the common agricultural policy‘.

19.

    To that end, Decision 97/803 inserted in the OCT Decision, among otheramendments, Article 108b, which allows ACP/OCT cumulation of origin for sugarup to a specified annual quantity. Article 108b(1) and (2) provide:

'1.    The ACP/OCT cumulation of origin referred to in Article 6 of Annex IIshall be allowed for an annual quantity of 3 000 tonnes of sugar ...

2.    For the purposes of implementing the ACP/OCT cumulation rules referredto in paragraph 1, forming sugar lumps or colouring shall be considered assufficient to confer the status of OCT-originating products‘ (but there is nomention of the milling of sugar).

The dispute before the national court

20.

    Emesa has operated a sugar factory in Aruba since April 1997 and exports sugarto the Community.

21.

    Since Aruba produces no sugar, the sugar is bought from cane sugar refineries inTrinidad and Tobago, one of the ACP States. After purchase, the sugar is takento Aruba where it undergoes working and processing, after which the product isregarded as finished. Those operations consist in cleaning and milling the sugar (togive it the degree of fineness specified by the customer) and packing it. Accordingto the defendant in the main proceedings, its factory processes at least 34 000tonnes of sugar a year.

22.

    After the adoption of Decision 97/803, Emesa sought an interim order from thePresident of the Arrondissementsrechtbank te 's-Gravenhage prohibiting:

—    the Netherlands State from charging import duties on sugar originating inthe OCTs which it proposed importing;

—    the Hoofdproductschap voor Akkerbouwproducten (Central Board forAgricultural Products) ('the HPA‘) from refusing to grant it importlicences;

—    the Aruba authorities from refusing to grant it movement certificatesEUR. 1 for the sugar produced by it in Aruba where those certificates werenot withheld under the OCT Decision before it was amended.

23.

    In support of those claims, the plaintiff in the main proceedings argued essentiallythat the review of the OCT Decision, which, in its view, should be seen as aquantitative restriction in so far as de facto it excluded sugar imports from OCTs,was contrary to Community law in that it reintroduced structural restrictions, notapplicable under the OCT Decision even though no significant Community interestscould justify such adjustments after such a brief period of application and despitethe fact that the effects of the OCT Decision were entirely foreseeable.

24.

    In his order for reference, the President of the Arrondissementsrechtbank te 's-Gravenhage declared the claims directed against the Netherlands State and theHPA inadmissible on the ground that, in order to challenge the implementation ofthe OCT Decision, as amended, an administrative remedy was available to Emesabefore the College van Beroep voor het Bedrijfsleven; however, he upheld the

claim against Aruba. In his provisional assessment, the President of the nationalcourt expressed doubts as to the legality of Decision 97/803, in particular in thelight of the objectives of the scheme of association with the OCTs, as set out inArticles 131, 132 and 133 of the Treaty, which are to promote the economic andsocial development of the OCTs and to establish close economic relations betweenthe OCTs and the Community as a whole; the national court also doubts whetherDecision 97/803 is consistent with the principle of proportionality.

25.

    The national court also observes that Emesa is liable to suffer serious andirreparable harm since, if the contested provisions were maintained, its plant, whichhad only just come into operation, would have to be closed. In its view, theCommunity interest does not preclude, where serious doubts have arisen as to thelegality of the amendment of the OCT Decision, an interim order allowing Emesato continue importing into the Community, particularly since the imports are stillvery limited.

26.

    In those circumstances, the President of the Arrondissementsrechtbank te 's-Gravenhage stayed proceedings and referred the following questions to the Courtof Justice for a preliminary ruling:

'1.    Is the mid-term amendment of the OCT Decision on 1 December 1997 byCouncil Decision 97/803/EC of 24 November 1997 (OJ L 329, p. 50) proportionate,more specifically the insertion of Article 108b(1) and deletion of ”milling” as arelevant method of processing for the purposes of origin?

2.    Is it acceptable for the restrictive consequences of that Council decision —more specifically the insertion of Article 108b(1) and deletion of ”milling” as arelevant method of processing for the purposes of origin — to be (far) more seriousthan would have been the case had recourse been had to safeguard measurespursuant to Article 109 of the OCT Decision?

3.    Is it compatible with the EC Treaty, in particular Part IV thereof, for aCouncil decision of the kind referred to in the second paragraph of Article 136 ofthe Treaty (in the present case, Decision 97/803/EC) to include quantitativerestrictions on imports or measures having equivalent effect?

4.    Is the answer to the third question different

    (a)    if those restrictions or measures are in the form of tariff quotas orlimitations to the provisions relating to origin or a combination of thetwo

    or

    (b)    if the provisions in question comprise safeguard measures or not?

5.    Does it follow from the EC Treaty, in particular Part IV thereof, that forthe purposes of the second paragraph of Article 136, the experience acquired — inthe form of measures favourable to the OCTs — may not subsequently be reviewedor annulled to the detriment of the OCTs?

6.    If that is indeed the case, are the Council decisions at issue therefore voidand can individuals then rely on that in proceedings before the national court?

7.    To what extent must the 1991 OCT Decision (91/482/EEC, OJ 1991 L 263,p. 1; corrigendum in OJ 1993 L 15, p. 33) be deemed to apply without amendmentduring the ten-year period referred to in Article 240(1) thereof, given that theCouncil did not amend that decision before the expiry of the first (period of) fiveyears referred to in Article 240(3) thereof?

8.    Is the Council's amending Decision (97/803/EC) contrary to Article 133(1)of the EC Treaty?

9.    Is Council Decision 97/803/EC valid, having regard to the expectationsaroused by the information brochure (DE 76) distributed by the Commission inOctober 1993, given that, at page 16, the brochure states that the period of validityof the Sixth OCT Decision is now ten (previously five) years?

10.    Is Article 108b, which was inserted on 1 December 1997, so unworkable thatit must be deemed to be invalid?

11.    Does the national court have jurisdiction, in circumstances such as thosedescribed in Joined Cases C-143/88 and C-92/89 Zuckerfabrik Süderdithmarschenand Others and subsequent cases, to adopt an interim measure in advance, in theevent of an imminent breach of Community law by a non-Community enforcementbody designated by Community law, in order to prevent that breach?

12.    On the assumption that the answer to Question 11 is in the affirmative andthat assessment of the circumstances referred to in Question 11 is a matter for theCourt of Justice, rather than the national court, are the circumstances described inthis judgment at points 3.9 to 3.11 inclusive [exclusion of milling and introductionof quantitative restrictions, serious and irreparable harm to Emesa andconsideration of the Community interest] such as to justify a measure of the kindreferred to in Question 11?‘

The first ten questions

27.

    In its first ten questions, the national court expresses uncertainty as to the validityof the OCT Decision, as amended by Decision 97/803 (hereinafter 'the amendedOCT Decision‘), in particular Article 108b thereof, in so far as it allows ACP/OCTcumulation of origin for an annual quantity of 3 000 tonnes only for sugar and fails

to mention milling, in paragraph 2, as one of the types of working or processingregarded as sufficient for the attribution of such origin.

28.

    To answer those questions, it must be borne in mind at the outset that 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 (see CaseC-310/95 Road Air v Inspecteur der Invoerrechten en Accijnzen [1997] ECR I-2229,paragraph 40, and Case C-390/95 P Antillean Rice Mills and Others v Commission[1999] ECR I-769, paragraph 36).

29.

    However, although the OCTs are associated countries and territories havingparticular links with the Community, they are not part of it and are, as regards theCommunity, in the same situation as non-member countries (see Opinion 1/78 of4 October 1979 [1979] ECR 2871, paragraph 62, and Opinion 1/94 of 15 November1994 [1994] ECR I-5267, paragraph 17). In particular, free movement of goodsbetween the OCTs and the Community does not exist without restriction at thisstage, in accordance with Article 132 of the Treaty (Antillean Rice Mills, citedabove, paragraph 36).

30.

    Furthermore, the second paragraph of Article 136 of the Treaty authorises theCouncil to adopt decisions concerning the association 'on the basis of theexperience acquired and of the principles set out‘ in the Treaty. It follows thatwhilst the Council, when adopting such decisions, must take account of theprinciples embodied in Part Four of the Treaty, and in particular of the experienceacquired, it must also take into account the other principles of Community law,including those relating to the common agricultural policy (Antillean Rice Mills,cited above, paragraphs 36 and 37).

The possibility of reviewing the OCT Decision after the first five years of its application(seventh and ninth questions)

31.

    By its seventh question, the national court seeks essentially to ascertain whether,after the end of the first five-year period referred to in Article 240(1) of the OCTDecision, it was still open to the Council, under that provision, to review thatdecision. By its ninth question, the national court queries the validity of Decision97/803 in relation to the legitimate expectations entertained by traders as a resultof the distribution by the Commission, in October 1993, of information brochureNo DE 76, entitled 'The European Community and the Overseas Countries andTerritories‘, in which it was stated that the OCT Decision was applicable for tenyears.

32.

    According to Emesa and Aruba, the period allowed for review in Article 240(3) ofthe OCT Decision constitutes a mandatory time-limit, so that the Council had nocompetence ratione temporis to amend the decision two-and-a-half years after theend of that period.

33.

    That argument cannot be upheld. Although Article 240(3) of the OCT Decisionprovides that, before the end of the first five years, the Council is to establish,where necessary, any amendments to be made to the provisions governing theassociation between the OCTs and the Community, that cannot, as the AdvocateGeneral observes in point 43 of his Opinion, deprive the Council of its competence,conferred directly by the Treaty, to amend the acts which it has adopted underArticle 136 thereof in order to attain all the objectives set out in Article 132 of theTreaty.

34.

    Moreover, as the Court has repeatedly stated, whilst the protection of legitimateexpectations is one of the fundamental principles of the Community, traders cannothave a legitimate expectation that an existing situation which is capable of beingaltered by the Community institutions in the exercise of their discretion will bemaintained; this is particularly true in an area such as the common organisation ofthe markets whose purpose involves constant adjustments to meet changes in theeconomic situation (see, in particular, Case C-372/96 Pontillo [1998] ECR I-5091,paragraphs 22 and 23).

35.

    That necessarily applies with greater force where the hopes purportedly entertainedby the traders were raised by a publicly distributed leaflet having no legal status,such as Commission brochure No DE 76. Furthermore, in October 1993, when thatbrochure appeared, the Commission was fully entitled to state that the OCTDecision had been adopted for a period of ten years and was under no obligationto give details in such a document of any amendments that might be made.

36.

    Furthermore, it is clear from the documents before the Court that, when firstmaking investments in Aruba, Emesa was in possession of sufficient information toenable it, as a normally diligent trader, to foresee that the rules allowingcumulation of origin might be made more restrictive. In particular, the Commissionproposal for a mid-term amendment of the OCT Decision was published in theOfficial Journal of the European Communities of 10 May 1996, that is to say nearlya year before Emesa started production in Aruba.

Irreversibility of the progress achieved under Article 136 of the Treaty (fifth and sixthquestions)

37.

    By its fifth question, the national court inquires as to the existence, having regardin particular to the second paragraph of Article 136 of the Treaty, of a 'locking‘principle whereby the advantages accorded to the OCTs as the process of

association is taken forward in stages cannot be detracted from and, by its sixthquestion, as to the consequences for individuals of failure to observe that principle.

38.

    It should be noted that although the dynamic and progressive process characterisingthe association of the OCTs with the Community requires that account be takenby the Council of the experience acquired as a result of its earlier decisions, thefact nevertheless remains, as is made clear in paragraph 30 of this judgment, thatthe Council, when adopting measures under the second paragraph of Article 136of the Treaty, must take account both of the principles set out in Part Four of theTreaty and of the other principles of Community law, including those relating to thecommon agricultural policy.

39.

    In weighing the various objectives laid down by the Treaty, whilst taking overallaccount of the experience acquired as a result of its earlier decisions, the Council,which enjoys for that purpose a considerable margin of discretion reflecting thepolitical responsibilities entrusted to it by Articles 40 to 43 (now, after amendment,Articles 34 EC to 37 EC) and 136 of the EC Treaty, may be prompted, in case ofneed, to curtail certain advantages previously granted to the OCTs.

40.

    In this case, it is common ground that the reduction to 3 000 tonnes a year of thequantity of sugar which may qualify for ACP/OCT cumulation of origin constitutesa restriction as compared with the OCT Decision. However, provided it isestablished that the application of the rule on cumulation of origin in the sugarsector was liable to lead to significant disturbances in the functioning of a commonmarket organisation (a matter which will be considered in paragraphs 51 to 57 ofthis judgment), the Council, after weighing the objectives of association of theOCTs against those of the common agricultural policy, was entitled to adopt, incompliance with the principles of Community law circumscribing its margin ofdiscretion, any measure capable of bringing to an end or mitigating suchdisturbances, including the removal or limitation of advantages previously grantedto the OCTs.

41.

    That is particularly true, as the Advocate General observes in point 57 of hisOpinion, where the advantages in question are of an extraordinary nature, havingregard to the rules on the functioning of the Community market. The rule whichallows certain products from the ACP States, after certain operations have beencarried out, to be classified as being of OCT origin falls into that category.

42.

    Moreover, the review of the OCT Decision did not merely bring about restrictionsor limitations as compared with the rules previously in force since, as theCommission has stated without being contradicted, various advantages were grantedto the OCTs regarding establishment within the Community (Articles 232 and 233aof the amended OCT Decision), mutual recognition of professional qualifications(Article 233b) and access to Community programmes (Article 233c). Furthermore,Community financial aid for the OCTs was increased by 21% (Article 154a).

The existence of quantitative restrictions on imports contrary to Articles 133(1) and thesecond paragraph of Article 136 of the Treaty (third, fourth and eighth questions)

43.

    By its third, fourth and eighth questions, the national court inquires as to theexistence and the validity of a quantitative restriction, deriving from Article 108bof the amended OCT Decision, in the light of Article 133(1) and the secondparagraph of Article 136 of the Treaty.

44.

    The Council expresses doubts as to the very existence of a quantitative restrictionresulting from the implementation of Article 108b of the amended OCT Decision. That article does certainly limit the quantity of certain products for whichcumulation of origin is allowed and which may therefore be imported free of duty. However, the Council contends that, after that quantity is used up, products maynevertheless be imported against payment of the prescribed customs duties.

45.

    Without its being necessary to dispose of the question whether the tariff quota laiddown in Article 108b of the amended OCT Decision may be regarded as aquantitative restriction or the question whether ACP/OCT cumulation rules conferon the goods in question an OCT origin for the purpose of applying the importrules laid down in Article 133(1) of the Treaty, it should be noted that the productsconcerned can be imported in excess of the quota only against payment of customsduties.

46.

    However, Article 133(1) of the Treaty provides that customs duties on imports fromthe OCTs into the Community are to be completely abolished 'in conformity withthe progressive abolition of customs duties between Member States in accordancewith the provisions of this Treaty‘.

47.

    In that connection, it should be observed, as the Commission has done, that, as faras trade in sugar is concerned, dismantling of the intra-Community customs tariffcame about only after the creation of a common organisation of the market insugar, which led to the simultaneous establishment of a common external tariff anddetermination of a minimum price applicable in all the Member States, with theaim, in particular, of eliminating distortions of competition. Thus, in the absenceof any common agricultural policy as between the OCTs and the Community,measures designed to prevent distortions of competition or disturbance of theCommunity market, which may take the form of a tariff quota, cannot, merelybecause of their adoption, be regarded as contrary to Article 133(1) of the Treaty.

48.

    As to whether the tariff quota fixed by Article 108b of the amended OCT Decisionis compatible with the second paragraph of Article 136 of the Treaty, it needmerely be observed that that provision states expressly that the Council is to act'on the basis of the experience acquired and of the principles set out in thisTreaty‘. As the Court held in Antillean Rice Mills, cited above, paragraph 37, thoseprinciples include the ones relating to the common agricultural policy.

49.

    Consequently, the Council cannot be criticised for having taken into account, inimplementing the second paragraph of Article 136 of the Treaty, the requirementsof the common agricultural policy.

50.

    It follows from the foregoing that the validity of the measure provided for in Article108b of the OCT Decision cannot be called in question in the light of Article133(1) and the second paragraph of Article 136 of the Treaty on the ground thatit fixed a quota for sugar imports under the ACP/OCT cumulation of origin rules.

The proportionality of the measures laid down by Decision 97/803 (first and secondquestions)

51.

    By its first and second questions, the national court seeks to ascertain whether theintroduction of the tariff quota and the alleged removal of milling from the typesof working and processing regarded as sufficient for the purpose of allowingACP/OCT cumulation of origin, in accordance with Article 108b(1) and (2) of theamended OCT Decision, are compatible with the principle of proportionality andthe limits laid down in Article 109 of the OCT Decision for the adoption of safeguard measures.

52.

    According to Emesa and Aruba, it is the excess Community production itself andthe total volume of Community imports that are liable to disturb the Communitysugar market and affect fulfilment of the Community's World Trade Organisation('WTO‘) commitments and not the negligible imports of OCT sugar into theCommunity, which in the aggregate account for less than 4% of the preferentialimports of sugar (in particular from the ACP States). In any event, in the case ofsevere disturbances, recourse to the safeguard measures provided for in Article 109of the OCT Decision, within the limits there specified, would have been moreappropriate.

53.

    It should be borne in mind that in a sphere such as this, in which the Communityinstitutions have a broad discretion, the lawfulness of a measure can be affectedonly if the measure is manifestly inappropriate having regard to the objectivepursued. The Court's review must be limited in particular if the Council has toreconcile divergent interests and thus select options within the context of the policychoices which are its own responsibility (see Case C-280/93 Germany v Council[1994] ECR I-4973, paragraphs 90 and 91; Case C-44/94 Fishermen's Organisationsand Others [1995] ECR I-3115, paragraph 37; and Case C-150/94 United Kingdomv Council [1998] ECR I-7235, paragraph 87).

54.

    First of all, the introduction of the quota fixed by Article 108b of the amendedOCT Decision cannot be considered, in this context, to have manifestly exceededwhat was necessary to attain the objectives pursued by the Council.

55.

    In that connection it is clear from the seventh recital in the preamble to Decision97/803 that the Council introduced Article 108b, first, because it formed the viewthat 'free access for all products originating in the OCTs and the maintenance ofcumulation for ACP and OCT originating products‘ had given rise to the 'risk ofconflict‘ between the objectives of Community policy in relation to thedevelopment of the OCTs and those of the common agricultural policy and, second,to take account of the fact that 'serious disruption on the Community market forcertain products subject to a common organisation of the market has led on anumber of occasions to the adoption of safeguard measures‘.

56.

    It is clear from the documents before the Court that at the date of Decision 97/803,first, Community production of beet sugar exceeded the quantity consumed in theCommunity; in addition cane sugar was imported from the ACP States to cater forspecific demand for that product and the Community was under an obligation toimport a certain quantity of sugar from non-member countries under WTOagreements. Second, the Community was also required to subsidise sugar exportsby granting export refunds, within the limits laid down in the WTO agreements. In those circumstances, the Council was entitled to take the view that anyadditional quantity of sugar reaching the Community market, even if minimalcompared with Community production, would have obliged the Communityinstitutions to increase the amount of the export subsidies, within the limitsmentioned above, or to reduce the quotas of European producers, which wouldhave disturbed the common organisation of the market in sugar, the balance ofwhich was precarious, and would have been contrary to the objectives of thecommon agricultural policy.

57.

    Furthermore, it is clear both from the order for reference and from the figuresgiven by the Council and the Commission that the annual quota of 3 000 tonnes isnot lower than the level of traditional imports of sugar from the OCTs, a productwhich the latter do not themselves produce. Moreover, since the goods from theACP States have only a limited value added to them within the OCTs, the industryaffected by Decision 97/803 could make only a limited contribution to theirdevelopment. Furthermore, the possibility could not be excluded that unlimitedapplication of the cumulation of origin rule might entail a risk of artificial diversionof products from the ACP States to the OCTs with a view to gaining access to theCommunity market for sugar in quantities exceeding those for which those Statesenjoyed, by agreement, guaranteed duty-free access to that market.

58.

    Consequently, the measure relating to imports of sugar covered by the ACP/OCTcumulation of origin rule contained in Article 108b(1) of the amended OCTDecision cannot be regarded as contrary to the principle of proportionality.

59.

    Second, as regards the alleged removal of milling from the types of working orprocessing which confer entitlement to cumulation of origin, it is to be noted, aspointed out by the Council and the Commission, that Article 108b(2) merely

mentions two examples of operations which may be regarded as sufficient to conferthe status of OCT originating products and does not give an exhaustive list.

60.

    In those circumstances, Emesa has no basis for claiming that Article 108b(2)removed milling from the operations which may be taken into account for thepurpose of allowing cumulation of origin.

61.

    Third, with respect to the conditions for the adoption of safeguard measures underArticle 109 of the OCT Decision, it should be noted that such conditions are notrelevant in assessing the validity of Decision 97/803 since the measure contained inArticle 108b(1) of the amended OCT Decision does not constitute a safeguardmeasure designed to cope, on an exceptional and temporary basis, with theemergence of exceptional difficulties which the trade conditions normally applicablecannot obviate, but amends the ordinary regime itself in accordance with the samecriteria as those observed for the adoption of the OCT Decision.

62.

    Consequently, when adopting Article 108b of the amended OCT Decision, theCouncil was not required to comply with the particular requirements linked to theadoption of safeguard measures under Article 109 of the OCT Decision.

The unworkable nature of Article 108b (tenth question)

63.

    By its tenth question, the national court seeks to ascertain whether the unworkablenature of Article 108b affects its validity.

64.

    According to Aruba, that article is unworkable because the OCT authorities do notthemselves have any means of ascertaining when the 3 000 tonne sugar quota hasbeen used up, and are not therefore in a position to issue or decline to issuecertificates of origin in each specific case.

65.

    It should be noted that Article 108b of the amended OCT Decision confines itselfto fixing the tariff quota of 3 000 tonnes for the application of the cumulation oforigin rule, without laying down the rules for its implementation. As the Counciland the Commission have observed, those rules were adopted by CommissionRegulation (EC) No 2553/97 of 17 December 1997 on rules for issuing importlicences for certain products covered by CN codes 1701, 1702, 1703 and 1704 andqualifying as ACP/OCT originating products (OJ 1997 L 349, p. 26).

66.

    Since the rules for implementing Article 108b of the amended OCT Decision havebeen adopted by the Commission, the charge that that provision is unworkablecannot be upheld.

67.

    It follows from all the foregoing considerations that examination of the first tenquestions submitted has disclosed no factor of such a kind as to affect the validityof Decision 97/803.

The eleventh and twelfth questions

68.

    By its eleventh question, the national court seeks essentially to ascertain whetherCommunity law allows a national court hearing an application for interim measuresto adopt protective measures vis-à-vis a non-Community authority where aninfringement of Community law is imminent, in order to prevent any suchinfringement.

69.

    That question must be answered in the affirmative, subject to fulfilment of theconditions laid down by the Court in Joined Cases C-143/88 and C-92/89Zuckerfabrik Süderdithmarschen and Zuckerfabrik Soest [1991] ECR I-415,paragraph 33, according to which interim measures may be ordered by a nationalcourt only:

—    if that court entertains serious doubts as to the validity of the Communitymeasure implemented by the authority against which the interim measuresare applied for and, should the question of the validity of the contestedmeasure not already have been brought before the Court of Justice, itselfrefers that question to the Court of Justice;

—    if there is urgency and a threat of serious and irreparable damage to theapplicant;

—    and if the national court takes due account of the Community's interests.

70.

    The fact that such interim measures would be ordered vis-à-vis an authority of anOCT by a court of a Member State, in accordance with its domestic law, is not suchas to affect the conditions under which the temporary protection of individuals mustbe ensured in proceedings before the national courts when the dispute concerns amatter of Community law.

71.

    By its twelfth question, the national court asks the Court to rule, having regard tothe circumstances of the main proceedings, as to whether it would serve any usefulpurpose for the national court to adopt interim measures vis-à-vis a non-Community authority responsible for applying Community law.

72.

    In view of the answers given to the first ten questions, which have disclosed nofactor affecting the validity of Article 108b of the amended OCT Decision, it isunnecessary to answer the twelfth question since the answer would manifestly notbe relevant to the decision to be given in the main proceedings.

73.

    It follows from the foregoing that the answer to be given to the eleventh questionmust be that interim measures vis-à-vis a non-Community authority can be orderedby a national court in the event of an infringement of Community law beingimminent only:

—    if that court entertains serious doubts as to the validity of the Communitymeasure implemented by that authority and, should the question of thevalidity of the contested measure not already have been brought before theCourt of Justice, itself refers that question to the Court of Justice;

—    if there is urgency and a threat of serious and irreparable damage to theapplicant;

—    and if the national court takes due account of the Community's interests.

The fact that such interim measures would be ordered vis-à-vis an authority of anoverseas country or territory (OCT) by a court of a Member State, in accordancewith its domestic law, is not such as to affect the conditions under which thetemporary protection of individuals must be ensured in proceedings before thenational courts when the dispute concerns a matter of Community law.

Costs

74.

    The costs incurred by the Spanish, French, Italian and United KingdomGovernments and by the Council and the Commission, which have submittedobservations to the Court, are not recoverable. Since these proceedings are, for theparties to the main proceedings, a step in the action pending before the nationalcourt, the decision on costs is a matter for that court.

On those grounds,

THE COURT,

in answer to the questions referred to it by the President of theArrondissementsrechtbank te 's-Gravenhage by order of 19 December 1997, herebyrules:

1.    Examination of the first ten questions submitted has disclosed no factor ofsuch a kind as to affect the validity of Council Decision 97/803/EC of 24November 1997 amending at mid-term Decision 91/482/EEC on theassociation of the overseas countries and territories with the EuropeanEconomic Community.

2.    Interim measures vis-à-vis a non-Community authority can be ordered bya national court in the event of an infringement of Community law beingimminent only:

    —    if that court entertains serious doubts as to the validity of theCommunity measure implemented by that authority and, should thequestion of the validity of the contested measure not already havebeen brought before the Court of Justice, itself refers that questionto the Court of Justice;

    —    if there is urgency and a threat of serious and irreparable damage tothe applicant;

    —    and if the national court takes due account of the Community'sinterests.

    The fact that such interim measures would be ordered vis-à-vis an authorityof an overseas country or territory (OCT) by a court of a Member State, inaccordance with its domestic law, is not such as to affect the conditionsunder which the temporary protection of individuals must be ensured inproceedings before the national courts when the dispute concerns a matterof Community law.

Rodríguez Iglesias Moitinho de Almeida Edward Kapteyn Puissochet Hirsch Jann Ragnemalm Wathelet

Delivered in open court in Luxembourg on 8 February 2000.

R. Grass

G.C. Rodríguez Iglesias

Registrar

President

1: Language of the case: Dutch.