Report for the Hearing delivered in Case C-131/87

I — Legal framework and facts of the case

Council Directive 72/461/EEC of 12 December 1972 on health problems affecting intra-Community trade in fresh meat (Official Journal, English Special Edition 1972 (31 December), p. 3), as amended in particular by Council Directive 85/322/EEC of 12 June 1985 (Official Journal 1985, L 168, p. 41), lays down the health requirements which must be fulfilled by animals from which fresh meat is obtained for intra-Community trade. Council Directive 72/462/EEC of 12 December 1972 on health and veterinary inspection problems upon importation of bovine animals and swine and fresh meat from third countries (Official Journal, English Special Edition 1972 (31 December), p. 7), as amended in particular by Council Directive 83/91/EEC of 7 February 1983 (Official Journal 1983, L 59, p. 34), lays down health and veterinary inspection requirements for the importation of those products from nonmember countries.

The Council adopted both those directives on the basis of Articles 43 and 100 of the EEC Treaty, whereas the proposal of the Commission was based on Article 43 alone.

Directive 87/64, which is challenged in these proceedings, amends the aforesaid Directives 72/461/EEC and 72/462/EEC. It is based on Articles 100 and 113 of the Treaty, whereas the Commission had based its proposal (Official Journal 1985, C 68, p. 5) on Article 43.

Under Article 1(2) of Directive 72/461/EEC and Article 2 of Directive 72/462/EEC, all parts of domestic animals which are ‘fit for human consumption’ are considered to be meat covered by those directives. According to the second recital in the preamble to the contested Directive 87/64, ‘glands and organs, including blood, are within the scope of the abovementioned directives’.

The preamble to the contested directive states that, since those products ‘are required in large quantity by the pharmaceutical manufacturing industries of Member States to ensure the availability of extracts and enzymes for human and veterinary medicine’ (second recital), ‘Member States should be afforded the possibility of authorizing on a more liberal basis the importation [of those products] for pharmaceutical manufacturing purposes from third countries ... ’ (third recital).

According to the fourth recital, ‘... in order to maintain Community preference, the same facilities should be applied in intra-Community trade of glands and organs, including blood, for pharmaceutical manufacturing purposes ... ’.

To that end, Article 1 of Directive 87/64 adds the following paragraph to Article 3 of Directive 72/461/EEC:

‘(d) However, until 31 December 1996, in their compliance with (a) (b) and (c) but by way of derogation from Article 8a, the Member States may, subject to an authorization granted by their veterinary authorities, authorize the introduction in their territory of glands and organs, including blood, as raw materials for the pharmaceutical processing industry. This authorization shall, moreover, be subject to compliance with the provisions concerning the identity of the materials in question, their packaging, transportation, storage, handling and processing and of residual matter following processing so that all public and animal health risks are eliminated.’

Moreover, Article 2 of the contested directive amends Article 16 of Directive 72/462, which provides as follows:

‘Without prejudice to Articles 14 and 15, the Member States shall not authorize importation of fresh meat from a third country unless the meat complies with the public health and animal health requirements adopted in accordance with the procedure set out in Article 29 for importation of fresh meat from that country according to the species of animal concerned.’

Under the contested directive the above provision became paragraph 1 and the following paragraph 2 was added:

‘However, Member States may, until 31 December 1996, authorize imports of glands and organs, including blood, as raw materials for the pharmaceutical processing industry, coming from third countries which appear on the list drawn up under Article 3(1) and are not the subject of a ban. The general conditions to be complied with for the said imports shall be laid down in accordance with the procedure provided for in Article 30. In accordance with the procedure provided for in Article 29, Member States may be authorized to import the said raw materials coming from third countries which do not appear on the list referred to in the first subparagraph under conditions which take account of the specific health situation of the third countries concerned. The conditions relating to the said imports, established in accordance with the procedures referred to in the second and third subparagraphs, must in no case be more favourable than those governing intra-Community trade.’

The Commission had proposed a different approach, whereby glands, organs and blood intended as raw materials for the pharmaceutical industry were to be excluded from the scope of Directives 72/461 and 72/462 and their importation was to be made subject to certain conditions.

II — Written procedure and conclusions of the parties

The Commission's application was lodged at the Court Registry on 22 April 1987.

By orders of 30 September 1987, the Court granted the Kingdom of the Netherlands leave to intervene in support of the Commission's conclusions and also granted the United Kingdom of Great Britain and Northern Ireland and the Kingdom of Denmark leave to intervene in support of the Council's conclusions.

The procedure followed the normal course. By a decision under Article 42(2) of the Rules of Procedure, the President of the Court allowed the Commission to lodge its answer on a fresh issue raised by the Council in its rejoinder and by the United Kingdom in its written observations.

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 Commission and the Kingdom of the Netherlands claim that the Court should:

i) declare void Council Directive 87/64/EEC of 30 December 1986 amending Directive 72/461/EEC on health problems affecting intra-Community trade in fresh meat and Directive 72/462/EEC on health and veterinary inspection problems upon importation of bovine animals and swine and fresh meat from third countries.

In addition the Commission asked that the defendant be ordered to pay the costs.

The Council, the United Kingdom of Great Britain and Northern Ireland and the Kingdom of Denmark contend that the Court should:

1) dismiss the application as unfounded;

2) order the applicant to pay the costs.

III — Submissions and arguments of the parties

1. The Commission, supported by the Netherlands Government, whilst approving of the content of Directive 87/64, takes the view that it should be declared void because the choice of Articles 100 and 113 as legal bases constitutes an infringement of an essential procedural requirement and an infringement of the Treaty. The directive should have been based on Article 43 alone. In the Commission's opinion this dispute is not purely formal in scope because Article 43 provides for the Council to take decisions by a qualified majority and after consultation of the Parliament. Article 113 similarly allows decisions to be taken by a qualified majority but makes no reference to the Parliament, whilst Article 100 requires unanimity and, as a general rule, consultation of the Parliament and the Economic and Social Committee. The Commission and the Netherlands Government rely on the judgments of the Court of 23 February 1988 in Cases 68 and 131/86 United Kingdom v Council [1988] ECR 905, in which the Court held: ‘Article 43 of the Treaty is the appropriate legal basis for any legislation concerning the production and marketing of agricultural products listed in Annex II to the Treaty which contributes to the achievement of one or more of the objectives of the common agricultural policy set out in Article 39 of the Treaty’. The conditions set out above are fulfilled in the present case. (a) The products referred to by the contested directive are covered by Annex II to the Treaty, falling within Chapter 2 (edible meat offal) and Chapter 5 (Heading 05.15: animal products not elsewhere specified or included) of the Brussels Nomenclature. According to the Commission, the interpretation of the Brussels Nomenclature of 1950 requires reference to be made to the Explanatory Notes (second edition, 1966) to the previous system and not — as the United Kingdom has done — to the notes relating to the new system of 1983-86, which entered into force in 1988, because Annex II still refers to the system of 1950. In the Commission's opinion, the note to Chapter 2 and Note 1 to Heading 05.15 show that glands and organs — irrespective of their destination, provided that they are fit for human consumption — fall within Chapter 2, and that edible blood is classified under Heading 05.15. Since the 1972 directives and, consequently, the directive at issue apply solely to animal parts fit for human consumption, those of the products listed in the Explanatory Notes to Chapter 2 of the Nomenclature which are non-edible — and in particular ‘those which are used solely in the preparation of pharmaceutical products’ and are not covered by Annex II to the Treaty — do not fall within the scope of the contested directive. Whilst maintaining that the aforesaid judgments of 23 February 1988 do not require the products in question to be covered by an organization of the market, the Commission claims that this is so in the present case, although edible offal intended for the manufacture of pharmaceutical products is excluded from the common organization of the various markets (see Article 1(1) of Regulations Nos 3905/87, 3906/87 and 3908/87; Official Journal 1987, L 370, pp. 7, 11 and 16). Those regulations served merely to adjust the common organization of the markets to the new customs nomenclature without altering their scope. Offal intended for the manufacture of pharmaceutical products is covered by Regulation (EEC) No 827/68 of the Council of 28 June 1968 on the common organization of the market in certain products listed in Annex II to the Treaty, (Official Journal, English Special Edition 1968 (I), p. 209), including subheading 02.01 B I and Heading 05.15 which are relevant in this case and are listed in the annex to that regulation. The amendments to that regulation introduced by Regulation No 3911/87 (Official Journal 1987, L 370, p. 36) merely adapted it to the new nomenclature. (b) The Commission and the Netherlands Government maintain that the contested directive — by endeavouring to enable the pharmaceutical industry to obtain supplies of an agricultural raw material at reasonable prices and in sufficient quantities — pursues the objectives of the common agricultural policy set out in Article 39(1) of the Treaty, namely ‘to ensure that supplies reach consumers at reasonable prices’ (indent (e)), to stabilize markets (indent (c)) and to assure the availability of supplies (indent (d)). Whilst agreeing that the protection of public health is one of the aims of the directive at issue, the Commission takes the view that the reference to Article 100 in addition to Article 43 is unacceptable. It refers to the judgments of 23 February 1988, cited above. (c) With regard to Article 113 the Commission and the Netherlands Government claim that it cannot be used as a legal basis for the contested directive. According to the Netherlands Government the special provisions relating to the common agricultural policy also cover external trade, as indeed is demonstrated by a number of common organizations of the market which, although based on Article 43 alone, also govern imports and exports. The Commission refers to Directive 72/462 which, without citing Article 113, deals with imports from nonmember countries in Chapters II and III. (d) Furthermore, without wishing to propose a rigid parallelism of form between the original act and the amending act, the Commission claims that the latter must be seen in the context of the former; with very few exceptions, both acts require the same legal basis. The only proper legal basis for Directives 72/461 and 72/462, however, was Article 43. It was only for reasons of expediency in the circumstances prevailing at that time that the Commission had not challenged those two directives, which (contrary to its proposal) were based on Articles 43 and 100. According to the Commission, the 1972 directives relate to products covered by Annex II to the Treaty and pursue objectives of the common agricultural policy as set out in Article 39(1) of the Treaty. If the health and veterinary requirements established by the directives for trade in fresh meat were not laid down at Community level, then the objectives of stabilizing markets, assuring the availability of supplies and ensuring that supplies reach consumers at reasonable prices would remain unattainable. The contested directive merely reduces the scope of Directives 72/461 and 72/462 by providing that they shall not apply for a limited period and in clearly specified situations.

2. The Council, supported by the United Kingdom and, in the main, by the Danish Government, takes the view that Articles 100 and 113 constitute the correct legal basis. In their opinion Article 43 is ruled out because Directive 87/64 does not relate solely to products included in Annex II and does not pursue the objectives set out in Article 39 of the Treaty. Moreover, the Danish Government takes the view that the choice of legal basis is in this case no more than a ‘purely formal’ issue (within the meaning of the judgment of 26 March 1987 in Case 45/86 Commission v Council [1987] ECR 1493) which cannot affect the substance of the contested directive and therefore cannot lead to its annulment, since, in view of the amendments to the Commission's proposal, unanimity was in any event necessary on account of Article 149 of the Treaty. The choice of Article 100 rather than Article 43 as the legal basis therefore had no implications. The Danish Government further points out that the consultation of the Parliament required by Article 43 occurred in this case by virtue of Article 100. (a) The Danish Government maintains that the products in question fall within Annex II to the Treaty, but the Council (in its rejoinder) and the United Kingdom disagree. The Council infers from the Explanatory Notes on the Brussels Nomenclature (second edition, 1966) that a distinction must be drawn according to the use of the products. When offal is used in the preparation of pharmaceutical products, it does not fall within Chapter 2 (and therefore within Annex II to the Treaty), except when it is suitable for human consumption, which seems to be an exception. Animal blood, whether edible or non-edible, falls under Heading 05.15 (and hence Annex II) unless it is prepared for therapeutic, prophylactic or diagnostic uses when it falls under subheading 30.01 (b) (2) (and hence outside Annex II). Consequently, having regard to their pharmaceutical uses, many of the products in question fall outside Annex II. Basing itself on the Explanatory Notes (first edition, 1986) to the new system of nomenclature, the United Kingdom asserts that the products in question, when imported as raw materials for the pharmaceutical processing industry, fall under Headings 05.10, 05.11, 30.01 or 30.02, as the case may be, but not under any of the headings included in Annex II to the Treaty. According to the Council — which refers in this connection to the judgments of 23 February 1988 cited above — and the Danish Government, even if a product does fall within Annex II it is subject to the general rules of the Treaty and not to the specific rules on agriculture unless it is covered by a common organization of the market. In this case, however, the products in question are, having regard to their particular end-use, explicitly excluded from the common organization of the various markets (Article 1(1) of Regulations Nos 3905/87, 3906/87 and 3908/87; Official Journal 1987, L 370, pp. 7, 11 and 16). Nor do they fall within the common organization of the markets set up by Regulation No 827/68, because that regulation refers to the headings of the nomenclature listed in Annex II to the Treaty. Annex II, however, does not cover the products in question (see above). (b) In the Council's view, Directive 87/64 does not seek primarily to encourage trade in the products in question but to ensure the protection of human and animal health. That ultimate aim, which is apparent from the second recital in the preamble to the directive, is achieved by the harmonization of trading conditions at Community level, which themselves take account of public health requirements on account of the inherent health risks attaching to the raw materials at issue. Assuring the availability of supplies for the pharmaceutical industry is not an end in itself but rather a means to the attainment of the final objective. However, the protection of public health is not an objective of the common agricultural policy. Inasmuch as the contested directive relates to intra-Community trade, the proper legal basis is therefore Article 100. According to the United Kingdom, the directive, in applying the same facilities to intra-Community trade as to trade with nonmember countries, seeks ‘to maintain Community preference’ (fourth recital). To that end it aims to harmonize the measures necessary to ensure the protection of the health of humans and animals. Such harmonization, or approximation, falls within the scope of Article 100. In that context the Danish Government asserts that the purpose of the contested directive is to ensure the free movement of goods through the harmonization of the national provisions governing the products in question and, in connection with that aim, to protect the health of humans and animals. Article 39(1)(d) of the Treaty seeks to assure the availability of food supplies for humans and animals, but not the availability of supplies of raw materials for industry (in this case the pharmaceutical industry). The Danish Government further argues that the present case differs from Case 68/86, cited above, in that the primary aim of the directive is only to protect the health of humans and animals, whereas the issue in Case 68/86 was whether certain agricultural policy measures which also involved the protection of health should have been based on both Article 43 and Article 100. (c) In so far as it seeks to encourage and facilitate trade with nonmember countries (third recital), the contested directive should be based on Article 113 of the Treaty. In that regard the Council draws attention to examples of Community legislation based on Article 113 which pursue a trade objective in relation to a product listed in Annex II to the Treaty. The Council also points out that some of the Commission decisions implementing Article 16 of Council Directive 72/462/EEC and laying down animal health requirements applicable to the importation of fresh meat from nonmember countries specifically exclude the application of the relevant health requirements where the importation of glands and organs is intended for ‘pharmaceutical manufacturing purposes’. Consequently, the national provisions continued to apply. In order to rectify that situation, the contested directive encourages and facilitates trade with nonmember countries by means of the harmonization and liberalization of trading conditions, thus necessitating recourse to Article 113 as a legal basis. The United Kingdom further submits that the normal meaning of the phrase ‘to assure the availability of supplies’ (Article 39(1)(d) of the Treaty) is to ensure that production is increased to the level needed to satisfy demand, or is maintained at that level (see judgment of 2 June 1976 in Joined Cases 56 and 60/74 Kampffineyer v Commission [1976] ECR 711). The contested directive, on the other hand, does not aspire to encourage an increase in production, but begins from the premiss that the Community's potential production falls short of the requirement. It seeks to satisfy demand by legislation in the sphere of commercial policy rather than agricultural policy. (d) The Council regards as irrelevant the Commission's argument invoking the legal basis of Directives 72/461 and 72/462 which the contested directive amends, on the ground that the legal basis for each act must be determined by reference to its own subject-matter and its own aims, and not to the legal basis of the legislation which it amends. The Council also points out that Directives 72/461 and 72/462 were based on Articles 43 and 100; thus the Commission cannot, in any event, cite them as an argument for referring to Article 43 alone.

G. C. Rodríguez Iglesias

Judge-Rapporteur

1 Language of the case: German.

2 These paragraphs lay down the conditions (regarding the minimum period of stay within the Community and restrictions in connection with certain diseases) to be fulfilled by fresh meat in intra-Community trade

3 This article, containing restrictions relating to swine fever, was inserted into Directive 72/461/EEC by Directive 85/322, cited above.

4 As amended by Directive 83/91, cited above.

5 These articles lay down general conditions (regarding the minimum period of stay in the country of exportation and restrictions in connection with certain diseases) governing importation into the Community

6 As amended by Regulation No 1014/73 (OJ 1973, L 106, p. 1): ‘offal intended for the manufacture of pharmaceutical products’.