Report for the Hearing delivered in Case 272/86

I — Summary of the facts

In and after 1983, the Commission received complaints from a number of Community traders to the effect that imports into the Hellenic Republic of olive oil of all kinds, coming both from Member States and nonmember countries, were prohibited. It was claimed that it was also difficult, if not impossible, to export certain types of olive oil from the Hellenic Republic to other Member States.

1. With respect to imports, the Commission sent a telex message to the Greek authorities on 13 August 1984 pointing out that since the accession of the Hellenic Republic no olive oil had been imported into that country, either from nonmember countries or from other Member States. An Italian company Alivar, had tried on two occasions, most recently in May 1984, to import olive oil into the Hellenic Republic, but did not receive authorization from the Greek authorities. In those circumstances the Commission asked the Greek authorities whether olive oil of Community origin could be freely imported into the Hellenic Republic in accordance with the Community rules and, in particular, what administrative formalities applied to such imports. No reply was received, so a reminder was sent on 4 October 1984, followed by a second on 28 November 1984. On 4 April 1985 the Hellenic Republic replied that olive oil from EEC countries could be freely imported.

2. With respect to exports, on 1 February 1985 the Commission sent a telex message to the Greek Minister for Agriculture stating that according to reports in certain newspapers and on Greek television, the Greek Government had taken measures prohibiting bulk exports of extra and fine quality virgin olive oil to other Member States and nonmember countries, or at least imposing certain conditions on such exports. The Commission therefore asked the Greek government to confirm that no measure had been adopted which would directly or indirectly impede trade in olive oil, particularly within the Community. By letter of 14 February 1985 the Greek Minister for Agriculture informed the Commission that the prolonged drought of the previous year had led to a serious shortage of extra and fine quality olive oil on the Greek market. Consequently the Greek Government had decided for the time being not to approve exports of those two grades of olive oil. The Minister admitted that those measures, despite the fact that they were very limited and concerned only a small percentage of production, might create problems in intra-Community trade. He requested the relevant departments of the Commission, in agreement with the Greek Ministry of Agriculture, to consider how a solution to this problem could be worked out.

3. The Commission subsequently decided to initiate the procedure under Article 169 of the EEC Treaty and sent a letter to the Greek Government on 24 April 1985 calling on it to submit its observations within two weeks. The Commission took the view that by prohibiting the exports of extra and fine quality virgin olive oil to the other Member States and imports into Greece of olive oil from other Member States and nonmember countries the Hellenic Republic had failed to fulfil its obligations under Articles 30 and 34 of the EEC Treaty and Regulation No 136/66/EEC on the establishment of a common market in oils and fats, in particular Article 3 thereof. Moreover, by refusing or failing to provide the required information, the Hellenic Republic had infringed Article 5 of the EEC Treaty, under which Member States have a duty to facilitate the achievement of the Community's tasks. No reply was received to that letter.

4. On 21 October 1985 the Commission addressed a reasoned opinion to the Greek Government, calling upon it to take the measures needed to comply with it within one month after its notification. The Commission essentially reiterated the arguments contained in its letter of formal notice. With respect to the infringement of Article 5 of the Treaty, the Commission stated that the Greek Government's reply of 4 April 1985, which had been forwarded eight months after the Commission's telex message and which indicated that imports from the EEC were unrestricted, was inadequate in so far as it gave no explanation regarding the complaints lodged about the conditions and administrative formalities which traders had to fulfil in order to import oil. As regards imports from nonmember countries, the Greek authorities had also failed to respond to the telex message sent by the Commission.

5. By letter of 6 March 1986, the Greek Government replied to the reasoned opinion. The exceptional drop in the production of extra and fine quality olive oil during the period 1984-85 had led to an excessive price rise which had had an impact on the price index and disrupted the market, giving rise to considerable speculation. In order to stabilize the market and protect consumers' income the Greek Government had been obliged to take measures, albeit of a temporary nature, to withhold authorization for exports of olive oil, but only of the abovementioned categories. It was quite clear that the measures were temporary since, on 11 July 1985, 10000 tonnes had been exported to the Soviet Union. As regards imports, the Greek Government referred to its letter of 4 April 1985, according to which imports were unrestricted, and remained so. Moreover, a quantity of 2000 tonnes had been imported from Italy.

6. On 10 April 1986, the Commission sent the Greek Government a further letter of formal notice, stating that Greece had not only continued to apply the prohibition on exports of extra and fine quality olive oil but had also extended it to all types of edible olive oil and to lampante grade oil. Only exports of extra and fine quality olive oil in packs not exceeding five litres were permitted. The Commission indicated that the abovementioned Community provisions had been infringed by the new restrictions as well and called on the Greek Government to submit its observations within 10 days.

7. Having received no reply, the Commission delivered a supplementary reasoned opinion on 26 June 1986, calling on the Greek Government to take the necessary measures to comply with it within a period of one month after its notification. In particular, the Greek Government's reply of 6 March 1986, although indicating that the restrictions on exports were limited to bulk exports of extra and fine quality virgin olive oil, conflicted outright with the information in the complaints made to the Commission and the information in the press. By virtue in particular of Article 13 of Regulation No 136/66/EEC of the Council on the establishment of a common market in oils and fats, the Greek authorities had no power to adopt national measures to stabilize prices. The fact that 10000 tonnes of oil had been exported to the Soviet Union in July 1985 did not prove that the prohibition of exports had been wholly lifted.

8. Following the supplementary reasoned opinion the Greek authorities informed the Commission, by letter of 18 July 1986, that during the previous two months private traders and cooperatives had exported 55000 tonnes of edible olive oil in bulk.

II — Written procedure and conclusions of the parties

The Commission's application was received at the Court Registry on 11 November 1986.

Upon 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 inquiry.

The applicant claims that the Court should:

Declare that by prohibiting imports of olive oil from other Member States and from nonmember countries and exports of the same products, with the exception of extra and fine quality virgin olive oil in packs not exceeding five litres, and by failing to provide the Commission with information in that regard, the Hellenic Republic has failed to fulfil its obligations under Articles 30, 34 and 5 of the EEC Treaty and under Regulation No 136/66/EEC on the establishment of a common organization of the market in oils and fats, in particular Article 3 thereof;

Order the Hellenic Republic to pay the costs.

The defendant contends that the Court should:

Dismiss the Commission's application;

Order the Commission to pay the costs.

III — Submissions and arguments of the parties

1. The Commission claims that any prohibition of imports or exports, or both imports and exports, of the. products in question and any national measures or administrative practices whose purpose or effect is to restrict exports or imports within the Community are incompatible with Articles 30 and 34 of the EEC Treaty, which prohibit quantitative restrictions on trade and any measures having equivalent effect. Those provisions form an integral part of the common organization of the market in oils and fats, established by Regulation No 136/66/EEC of the Council. The Commission considers it to have been proved that the Greek olive oil market has remained inaccessible for relatively long periods, contrary to the fundamental rules on the free movement of goods and on the common organization of the market in oils and fats. Neither a shortage of the products in question on the domestic market nor the temporary nature of the prohibition can reduce the gravity of the abovementioned infringements of Community law; still less can they render such measures lawful. A group of Commission officials which went to Greece in 1985 to examine the management of Community aid for olive oil production found that the restrictions were still operative. (a) In the case of imports, the Commission points out that between 1981 and the present time the Hellenic Republic has imported only one consignment of 2005 tonnes of refined olive oil from Italy. In fact, that consignment never reached the Greek market but was immediately re-exported to the Soviet Union. The Commission states that it is in possession of a number of documents showing repeated efforts to import Italian olive oil into the Hellenic Republic, in particular in 1984 and 1985. Applications from the companies concerned were rejected tacitly without any explanation. Finally, the Commission submits an article from a Greek economics magazine which refers, inter alia, to a statement by the Greek Minister for Commerce that olive oil would not be imported. (b) With respect to exports, the Commission states that only edible olive oil in small packs not exceeding five litres and olive-residue oil of all kinds can be exported. All other exports are prohibited and, in any event, are not carried out. That is quite clear from a comparison of Eurostat data on quantities in small packs with the data for other types of olive oil. The fact that 65000 tonnes of olive oil in bulk was exported during the 1985-86 season proves not that the market has been opened up but, on the contrary, that a quota is imposed, representing State intervention in the olive oil market in breach of the Community rules. There were three export operations: (a) 10000 tonnes were exported to the Soviet Union in July 1985 under an inter-State agreement the execution of which was entrusted exclusively to Elaiourgiki (the central cooperative union of olive oil producers); (b) 25000 tonnes were exported in May 1986, of which 20000 tonnes went through Elaiourgiki and 5000 tonnes through private companies; (c) 30000 tonnes were exported in July 1986, 25000 tonnes again going through Elaiourgiki and 5000 tonnes through private traders. In the alternative, the Commission states that its files contain 12 complaints lodged between 9 January 1985 and 18 November 1986 by Greek and foreign traders who had tried in vain to export edible olive oil in bulk from the Hellenic Republic. (c) Finally, the Commission claims that by refusing or failing to provide the Commission with the information requested and by excessively delaying the transmission of such information the Greek Government has failed to fulfil its obligations under Article 5 of the EEC Treaty. The Commission denies that the Hellenic Republic submitted an application under Article 13 of Regulation No 136/66/EEC, which provides for a Community system of consumer price stabilization, and that that application received no reply. In conclusion, the Commission considers that a comprehensive examination of the market in oils and fats in Greece gives a striking picture of the following alarming situation: the common organization of the market in those products in Greece is pratically nonexistent, in so far as the national rules continue to be applied in most cases.

2. The Hellenic Republic contests the Commission's allegations. (a) As regards imports, the Hellenic Republic contends that imports of olive oil are unrestricted. That is true both of olive oil from other EEC Member States and of olive oil from nonmember countries. If, despite such freedom, there are no imports, that is because importation presents no interest since demand is covered by national production. The re-exportation of 2000 tonnes of olive oil constitutes additional proof that the Greek market could not absorb that quantity. The case of Alivar was an exceptional and wholly isolated case which does not reflect the procedures applicable to imports. There are no limitations or measures having equivalent effect. There can therefore be no infringement of Article 30 of the EEC Treaty or of Regulation No 136/66/EEC. (b) With respect to exports, the Hellenic Republic refers to the letter of 14 February 1985 in which the Greek Minister for Agriculture informed the Commission that it had been considered necessary, for a limited period, to take measures to restrict exports of only two categories of olive oil. At the same time, in that letter, the Minister for Agriculture asked the Commission to allow discussions between the relevant departments of the Commission and the Ministry of Agriculture with a view to finding a solution to that exceptional problem, which was a matter of concern to the Greek authorities at the time. No reply was received to the Minister for Agriculture's request. Why, it must be asked, did the Commission not submit to the Council, pursuant to Article 13 of Regulation No 136/66/EEC, a proposal for measures to limit the consequences of variations in the harvest in Greece during the period in question? During the olive oil production year from 1 November 1985 to 31 October 1986, 72000 tonnes of virgin olive oil were exported, a particularly large quantity. The quantities available for export were limited in view of the fact that Greece has the highest per capita consumption of olive oil in the Community, 20 kg, and therefore domestic consumption accounts for the major part of production each year. As regards the Eurostat data for the period from 1 November 1986 to 31 January 1987, the Hellenic Republic does not see what complaint is made against it since in all the other Member States which produce olive oil exports in packs not exceeding five litres accounted for all, or nearly all, the quantities exported. Finally, the fact that 85% of olive oil exports in bulk were carried out through Elaiourgiki is accounted for by the fact that it is the largest olive oil production cooperative, holds large stocks of olive oil and is therefore able to export larger quantities than private individuals. (c) In answer to the Commission's complaint that the Hellenic Republic delayed in providing, or failed to provide the information requested, the Hellenic Republic states that any delay in providing information was due not to any lack of willingness to cooperate with the Commission but to the division of responsibilities between several State departments. The Commission's reference to Greek economics magazines in fact merely concerns an opposition economics magazine, the same one in all cases (Nafiemboriki). Press reports do not necessarily present a true picture, particularly where there is a tendency towards sensationalism. Finally, the Hellenic Republic is not in a position to refute nonexistent evidence, in so far as the Commission has not produced the documents in its possession.

IV — Answers to the questions put by the Court

1. The Court asked the Hellenic Republic to specify the period during which it applied measures restricting exports of olive oil, the nature of those measures and the grades concerned. The Hellenic Republic replied that it applied measures controlling exports of extra and fine quality olive oil from 10 January to 10 May 1985, the legal basis being Letter No 95 of 10 January 1985 from the Secretary of State for Economic Affairs to the Bank of Greece. That period was extended by a telex message of 9 May 1985. The Hellenic Republic was also asked to explain the administrative formalities and produce the national provisions governing imports and exports of olive oil since 1984. The Greek Government replied that, apart from the measures mentioned above, no other provision restricting imports or exports of olive oil had been adopted since 1984. The Court did not consider that reply adequate and therefore repeated its request, on the basis of Article 21 of the Statute of the Court. The Hellenic Republic then stated that the procedure to be followed for imports and exports of olive oil was a matter of administrative bank practice forming part of the measures implementing Regulation No 136/66/EEC of the Council of 22 September 1966 on the establishment of a common market in oils and fats: the procedure required the submission of an application to the Bank of Greece or to one of its local branches and was intended both to enable the persons concerned to carry out imports and exports and to avoid the illegal export of currency. Since the Hellenic Republic had failed to produce the national provisions governing the abovementioned administrative bank practice, the Court made a further request in that regard. The Hellenic Republic replied that the practice concerned consisted more specifically in the following procedure : (i) Submission of a form entitled ‘Declaration — Prices applied to import (export) transactions’ (according to the circumstances) to one of the banks authorized for that purpose; the latter examines the file from the point of view of the exchange-control problems to which it gives rise, before the goods are shipped, after verifying that the form has been filled in correctly and checking that the unit price of the goods is not substantially lower than the known current prices; (ii) Every foreign-currency transaction requires the intervention of the branch of a bank, which verifies compliance with the rules on foreign currency having regard to the value of the goods concerned. Exceptionally, for statistical purposes, the examination of the form ‘Declaration — Prices applied’ is carried out by the Bank of Greece and its local branches; (iii) The time-limit for importing foreign currency is six months from the date of shipment of the goods, and the latter operation can take place only upon presentation of one of the five parts of the form ‘Declaration — Prices applied’.

2. At the request of the Court, the Commission produced documents showing the attempts made to import olive oil into the Hellenic Republic in January and May 1984 and June 1985. According to the Commission, those applications were rejected tacitly, without any explanation being given to the persons concerned. With respect to exports, the Commission stated that it had received a large number of complaints between January 1985 and November 1986. It produced to the Court a list of complaints and documents relating thereto.

U. Everling

Judge-Rapporteur

1 Language of the Case: Greek.