JUDGMENT OF 17. 12. 1970 — CASE 34/70 SYNDICAT NATIONAL CÉRÉALES v OFFICE NATIONAL CÉRÉALES

In Case 34/70 Reference to the Court under Article 177 of the EEC Treaty by the French Conseil d'État for a preliminary ruling in the action pending before that court between

THE COURT composed of: R. Lecourt, President, A. M. Donner and A. Trabucchi, Presidents of Chambers, R. Monaco (Rapporteur), J. Mertens de Wilmars, P. Pescatore and H. Kutscher, Judges, Advocate-General: K. Roemer Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

I — Facts and procedure

The facts and procedure may be summarized as follows :

1) Article 4 of Regulation No 120/67 of the Council of the EEC of 13 June 1967 (OJ 1967, No 117; OJ [English Special Edition] 1967, p. 33) on thé common organization of the market in cereals provided for the fixing of intervention prices in order to guarantee to producers that the market price does not fall below a minimum level. The implementing conditions of this regulation were laid down for the 1968/1969 marketing year by Regulation No 1028/68 of the Commission of 19 July 1968 fixing the procedure and conditions for the taking over of cereals by intervention agencies for the 1968/1969 marketing year (OJ 1968 L 176). Articles 1 (1) and 5 of this regulation respectively provide: By decision of 30 August 1968 the Office national interprofessionnel des céréales (ONIC) adopted a set of ‘Rules laying down the general conditions for the taking over by the Office national interprofessionnel des céréales (ONIC) of cereals offered to the agency.’ Article 1 of this decision provides: The Syndicat national du commerce extérieur des céréales (Synacomex) submitted to the Minister for Agriculture an objection to this decision claiming that the possibility provided for by Article 1 of the said decision should not be restricted to authorized collecting agencies but in accordance with Article 1 (1) of Regulation No 1028/68 should be available to every holder. On this objection's being rejected by the Minister, the question in dispute was submitted by Synacomex and the parties named at (2) to (8) above to the French Conseil d'Etat. By order dated 26 June 1970 this court stayed the proceedings and referred for a preliminary ruling under Article 177 of the EEC Treaty the following question :

‘Every holder of … lots … of wheat … shall be entitled to offer such cereals to the intervention agency … The intervention agencies shall lay down as necessary supplementary procedures and conditions for the taking over of cereals as may be compatible with the provisions of this regulation to take into account the special conditions existing in the Member State to which they belong.’

‘Until the end of the 1968/1969 marketing year authorized collecting agencies may submit offers with a view to the wheat's… being taken over by ONIC.’

‘Whether by use of the words “every holder” in Article 1 of the abovementioned regulation of the Commission of the European Communities all conditions for the taking over of cereals re lating to the definition of the holder or his entitlement to avail himself of the intervention machinery, having regard to the peculiarities of the cereal market in the Member State of the holder, are or are not excluded from the scope of the supplementary measures provided for in Article 5 of the said regulation.’

2) The order requesting a preliminary ruling was lodged at the Court Registry on 16 July 1970. Synacomex jointly with André & Cie, Société française Bunge, Compagnie algérienne de meunerie, Compagnie continentale, Société J. A. Goldschmidt & Cie, Établissements G & P. Levy, Les fils de Félix Saier and also ONIC and the Commission of the European Communities submitted written observations in accordance with Article 20 of the Protocol on the Statute of the Court of Justice. After hearing the report of the Judge-Rapporteur and the views of the Advocate-General, the Court decided to open the oral procedure without any preparatory enquiry. Synacomex jointly with the other plaintiffs in the main action, ONIC and the Commission of the EC made their oral observations at the hearing on 17 November 1970. Synacomex and the other plaintiffs in the main action were represented by Bruno Célice and (at. the hearing) by Pierre de Font-Réault. ONIC was represented by Louis Rousseau. The Commission of the EC was represented by its Legal Adviser, Bernard Paulin. The Advocate-General delivered his opinion on 8 December 1970.

II — Observations submitted under Article 20 of the Statute

The observations submitted under Article 20 of the Statute of the Court of Justice may be summarized as follows :

A — Observations submitted by Synacomex, André & Cie, Société française Bunge, Compagnie algérienne de meunerie, Compagnie continentale, Société J. A. Goldschmidt, Établissements G. & P. Lévy, Les fils de Félix Saier

After stressing that according to the recitals in Regulations Nos 120/67 and 1028/68 the conditions of offer to intervention agencies and the taking over by them must be as uniform as possible in the Community, the plaintiffs in the main action observe that Article 1 of Regulation No 1028/68 is drafted very clearly and precisely. The words ‘every holder’ do not allow any discrimination to be made among holders of cereals between those who hold as a result of having purchased directly from the producers in their capacity as -uthorized holders and those who hold as a result of having purchased from other holders. The question which appears to have troubled the Conseil d'État is different; it is whether in view of Article 5 of Regulation No 1028/68 restrictions may be read into Article 1 as regards the definition of holders to whom intervention is open. According to the wording of the said Article 5 the procedures and conditions for taking over which the intervention agencies may lay down as necessary supplementary measures are only such as are ‘compatible with the provisions of this regulation’. It follows that additional measures restricting the kind of holder to whom intervention is available cannot be based on Article 5, since they would be incompatible with the regulation itself which in Article 1 makes intervention open to ‘every holder of cereals’. Although Article 5 thus allows certain special conditions or procedures to be fixed — ONIC has made use of this in the rules in question — these conditions and procedures must first and foremost be applicable to all holders who offer cereals to the intervention agencies.

The plaintiffs conclude that Article 1 of Regulation No 1028/68 ‘applies to every holder of cereals and in particular to exporters and that Article 5 of this regulation does not allow intervention agencies to limit the definition of holder to authorized collectors’.

B — Observations submitted by the Office national interprofessionnel des céréales

ONIC observes that the Community is still only at the stage at which six national market organizations of very varying structure exist side by side and not at that of an economic and financial unit.

Conscious of the variety of national systems, the Commission has limited itself to laying down rules applicable to the Member States without their affecting the national market organizations recognized as compatible with the Community rules. As regards more particularly intervention as defined in Article 4 of Regulation No 120/67, its fundamental aim is to guarantee producers against the risk of the market price's falling below a minimum level. It thus constitutes a support measure for the benefit only of producers and not cover against the risks of price variations to which in a free system trade and industry are subject. It is therefore proper that its effects apply at the production stage or at least at a stage as near as possible to it.

Regulation No 1028/68 has been issued in this context. The principle laid down in Article 1 allowing ‘every holder’ to offer cereals to the intervention agencies is governed by the application of the provisions of Article 5. This latter gives intervention agencies the power not only to fix ‘the procedures’ but also ‘supplementary conditions for the taking over of cereals’. These ‘conditions’ can only be basic conditions since the ‘procedures’ govern the formal conditions. As to their content, since it is a question of having regard to the special circumstances existing in every Member State, Article 5 does not impose restrictions and does not exclude agencies. These conditions only adapt to each Member State, in accordance with Article 5, the intervention with which Article 1 is concerned. By ‘conditions for the taking over’ it is thus necessary to understand in particular those which relate to the definition of ‘holder’. A ‘holder’ is anyone who under the special conditions of every State is recognized as being such. ONIC states that when the single market came into force on 1 July 1967, the collecting agency for cereals in France was governed still by the principles laid down by the law of 15 August 1936 establishing the wheat office. To give producers a price guarantee cereals collected had to pass through a marketing stage: that of warehousing agencies (cooperatives and dealers). The Council of the EEC having advised the French Government to amend its laws so that the monopoly of warehousing agencies might be reduced by allowing many new trade categories to undertake collection, the French Government issued Order No 67/182 of 22 September 1967, Article 1 of which defines the conditions to the kind of authorized collector entitled by the rules in question to offer cereals to the intervention agency. These general measures of organization of the market in cereals in force in France since 1 July 1967 were notified to the Community authorities, which have never required the French Government to make any variations or amendments.

ONIC observes further that authorized collectors represent a relatively small number of establishments which mainly perform the function of collectors of cereals and in this capacity market almost all that the producers supply. It is only at the stage of these collectors that intervention can be effective by reason of the controls exercised by ONIC on produce coming in and going out, on stocks and on the use of cereals and that the requirements of the rules which limit intervention to cereals harvested in the Community can be satisfied.

The provision in the rules in question limiting to collectors the right to offer cereals to the intervention agencies does not necessarily exclude exporters from the benefit of intervention, since they can become collectors (as for example the third plaintiff which was accredited in October 1967).

ONIC concludes that ‘conditions for the taking over of cereals relating to the definition of the holder or his entitlement to avail himself of the intervention machinery, having regard to the peculiarities of the cereal market in the Member State of the holder, are not excluded from the scope of the supplementary measures provided for in Article 5 of Regulation No 1028/68’.

C — Observations submitted by the Commission of the European Communities

The Commission rejects the argument that in the cereal sector there is not yet a Community organization of markets in place of the six national organizations. On the contrary it claims that the common organization of the market in cereals constitutes ‘a European market organization’ within the meaning of Article 40 (2) (c) of the Treaty: proof is supplied by considering the number of provisions and their legal form and, above all, by the fact that in all important questions the power of decision depends exclusively on the Community institutions.

It is true that the Community rules in the cereal market are not yet comprehensive in every sphere, since the harmonization of national laws has hardly begun. But if a common organization has ever been created within the framework of the common agricultural policy, it is in the sector in question, in which this organization is the most highly developed.

After supplying information on the concept ‘authorized collecting agencies’ in French administrative terminology before and after Order No 67/812 of 22 September 1967, the Commission approaches the examination of the provisions in question by citing the principle laid down in the case-law of the Court of Justice (Case 40/69) which establishes that, whilst in sectors where the Community has not legislated, the national authorities continue to exist subject to their respecting the rules and general principles of the Treaty, in the spheres covered by Community legislation there has been a transfer of sovereignty by the Member States to the Community or more precisely a transfer of ‘legislative powers’. There is naturally nothing to prevent the Community, in a sphere covered by Community rules, when it desires to bring about administrative decentralization or indirect administration, from expressly entrusting certain tasks of implementation to the national authorities, but in this event the scope of the residual or partial powers granted must be strictly interpreted in order not to prejudice the general authority of the principle. Having regard to this criterion, the Commission proposes its interpretation of the said articles in the light of legal and economic considerations.

a) From the legal point of view it states that as regards Article 1 (1) in the statement of grounds accompanying the proposal which was to become Regulation No 120/67 it had already shown on the one hand that cereals offered to intervention agencies had to comply with ‘conditions previously fixed on a Community basis and applicable throughout the Community’ and, on the other hand, that the intervention prices corresponded ‘to the guarantee of the price which each holder can obtain from the intervention agencies in the places and at the dates and on the conditions laid down’. It had thus deliberately provided in Regulation No 1028/68 that every holder of cereals, provided that such cereals satisfied certain conditions might offer to the intervention agency according to a fixed procedure. It states further in respect of Article 5 :

this article enables Member States to make ‘supplementary’ provisions but not such, as conflict or derogate. To restrict a concept which is perfectly clear and which is sufficient in itself is quite different from supplementing it. Moreover the words ‘every holder’ do not require any qualification and their use rules out any restriction;

under the terms of this same article the supplementary provisions which the intervention agencies may lay down must be ‘compatible with the other provisions’ of the regulation in question. Any restriction on the concept of holder is incompatible with the wording of Article 1 which refers to ‘every holder’ ;

finally .'the supplementary provisions' which the intervention agencies may issue relate to ‘procedures and conditions for the taking over’ of cereals by intervention agencies. The, definition of the holder cannot come within the term ‘procedure’ of taking over. Nor can it come within that of ‘conditions’ for taking over. Article 3 (2) of the same regulation shows that this last term relates only, to the conditions of transfer of a consignment of cereals. Moreover the rules prescribed by the various inter vention agencies show that the suppler mentary conditions laid down relate to taking over.

b) At the economic level the Commission stresses that the intervention machinery, as provided for, was established only to stop the normal play of the market when it was falling. Otherwise prices should be freely fixed on the Community market in relation to supply and demand. However by reason of the fact that there is always a permanent potential demand by the intervention agencies at the minimum which the inter vention price constitutes, prices on the market tend to be in a general way at a higher level than the minimum represented by the intervention price. But so that the system may function correctly according to the scheme which has just been outlined, the opportunity to have recourse to intervention must be actually available to every holder — at least to every holder of a minimum quantity — and not only to authorized collectors. If a holder who had purchased cereals from an authorized collector were not sure of being able to approach the intervention agencies himself, in the event, rare certainly but not impossible, of his being unable to sell the whole of what he had purchased, he would take this risk into account in his offer and his attitude would thus constitute a factor in reducing prices. This is why it is not true to say that the limitation of the concept of holder to that of authorized collector accords the protection of the income of producers, for exactly the contrary is true. To say moreover, as does ONIC, that the dealer must bear the risks of his speculation, is in this case only an opinion and not an argument. , The Commission states moreover that although it is true that the rules in question were notified to it by the French Government, the Commission has not considered the compatibility of the provisions of those rules with Community law. It concludes ‘any condition for taking over relating to the definition of the holder is excluded from the scope of the supplementary measures provided for in Article 5 of Regulation No 1028/68 of 19 July 1968’.

Grounds of judgment

1. By order dated 26 June 1970 lodged at the Court on 16 July 1970, the French Conseil d'État has raised under Article 177 of the EEC Treaty the question ‘whether by use of the words “every holder” in Article 1 of Regulation No 1028/68 of the Commission of the European Communities all conditions for the taking over of cereals relating to the definition of the holder or his entitlement to avail himself of the intervention machinery, having regard to the peculiarities of the cereal market in the Member State of the holder, are or are not excluded from the scope of the supplementary measures provided for in Article 5 of the said regulation’.

2. Under Article 1 (1) of Regulation No 1028/68: ‘Every holder of homogeneous lots of a minimum of 50 tonnes of common wheat, rye, barley and maize and of 10 tonnes of durum wheat harvested in the Community shall be entitled to offer such cereals to the intervention agency’.

3. Under Article 5 of the same regulation ‘intervention agencies shall lay down as necessary supplementary procedures and conditions for the taking over of cereals as may be compatible with the provisions of this regulation to take into account the special conditions existing in the Member State to which they belong’.

4. It appears from these provisions that the principle contained in Article 1 enabling ‘every holder’ to offer cereals to the intervention agency is subject to conditions for taking over laid down by the Community rules to which may be added supplementary conditions for taking over laid down by the Member States in accordance with Article 5 of the said regulation.

5. The said Article 5 thus allows for national measures not for the purpose of altering the Community provisions of Article 1 but only to provide for supplementary conditions for taking over as may be compatible with the provisions of Regulation No 1028/68.

6. It follows from the fifth recital in the preamble to Regulation No 120/67 that the objective of the intervention machinery established within the framework of the common organization of the cereal market is to stabilize markets and to ensure a fair standard of living for the agricultural community concerned.

7. Whilst including measures of price support, the intervention machinery does not aim to derogate from the normal conditions of the market beyond what is strictly necessary to achieve its objective.

8. It appears both from the general objectives and those of the common organization of the market in cereals that the intervention machinery requires the widest possible access for all those concerned in the functioning of this market.

9. Although the seventh recital in the preamble to Regulation No 120/67 implies that the offer and taking over óf cereals by intervention agencies be subject to certain conditions, it appears from Regulation No 1028/68 that these conditions relate to the quality and minimum quantities of cereals which may practicably be offered and the only reason for them is the necessity for simplifying the management of the system and not the intention of limiting access to intervention to specific classes of holders or of allowing national law the opportunity of altering the concept of ‘holder” from one State to another..

10. It is impossible to admit in the absence of a clearly expressed intention on the part of the draftsmen of the regulation that in the final stage of the common organization of the cereal market each State may give its own meaning to the generality of the expression “every holder”.

11. The generality of wording is due in particular to the fact that the exclusion of certain classes of holders would have the effect of burdening the market with the quantities excluded from intervention although they originated from the national production in favour of which however the rules were established.

12. Moreover, to attain the objectives set, the implementation of this machinery must be subject to rules which are as uniform as possible in order to avoid obstacles to the free movement of cereals within the Community.

13. Although in order to allow appropriate adaptation of the market to the regionalization of prices, the intervention agencies may lay down, in particular circumstances, intervention measures adapted to those circumstances, Regulation No 120/67 on which Regulation No 1028/68 is based, shows in the seventh recital in its preamble that for the purposes of the required uniformity of intervention systems, those special circumstances should be assessed and the appropriate measures determined at Community level.

14. According to the fourth recital in the preamble to Regulation No 1028/68 it is in particular with regard to the conditions of offer to the intervention agencies and the taking over of cereals by them that the principle of uniformity is considered indispensable for the intervention systems in order to avoid any discrimination between those concerned within the framework of the Common Market.

15. In allowing Member States the opportunity of laying down supplementary conditions for taking over adapted to the circumstances existing in the national market, Regulation No 1028/68 defines the limits within which these national rules may be drawn up.

16. Under the express terms of the third and fourth recitals in the preamble to this regulation, national rules are provided for, not for limiting the scope of Article 1 of the regulation, but for allowing the State to take account of the conditions and the customs of the wholesale trade which obtain in its country or to adapt the intervention system to the climatic conditions of the national market.

17. National rules which aim by means of Article 5 to define within the national system the concept of ‘holder’ having access to the intervention agency, the scope of which must be determined by the Community within the meaning of Article 1, would exceed the above conditions defined by Regulation No 1028/68 and conflict with the principles governing the intervention machinery.

18. The use of the words ‘every holder’ in Article 1 of Regulation No 1028/68 of the Commission of the European Communities thus excludes from the scope of the supplementary conditions for taking over provided for in Article 5 of the said regulation any condition relating to the definition of the holder or his entitlement to avail himself of the intervention machinery.

Costs

19. The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable, and as these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the national court, the decision on costs is a matter for that court.

On those grounds, Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the observations of Synacomex jointly with the other plaintiffs in the main action, ONIC and the Commission of the European Communities; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the European Economic Community, especially Articles 39, 40 and 177; Having regard to Regulation No 120/67/EEC of the Council of 13 June 1967 and Regulation (EEC) No 1028/68 of the Commission of 19 July 1968; Having regard to the Protocol on the Statute of the Court of Justice of the EEC, especially Article 20; Having regard to the Rules of Procedure of the Court of Justice of the European Communities; THE COURT in answer to the question referred to it by the French Conseil d'État by order of that Court of 26 June 1970, hereby rules: