Report for the Hearing in Case C-331/88

I — Facts and procedure

Council Directive 81/602/EEC of 31 July 1981 concerning the prohibition of certain substances having a hormonal action and of any substances having a thyrostatic action (Official Journal 1981 L 222, p. 32) prohibits the placing on the market of certain hormonal substances for administering to animals of all species.

The first two paragraphs of Article 5 provide that:

‘The Council, acting unanimously on a proposal from the Commission shall take a decision as soon as possible on the administering to farm animals of oestradiol 17ß, progesterone, testosterone, trenbolone and zeranol for fattening purposes. Pending adoption of this decision, the national regulations in force and the arrangements made by Member States concerning these substances shall continue to apply while complying with the general provisions of the Treaty and without prejudice to measures adopted in accordance with Community procedure designed for their approximation.’

Council Directive 88/146/EEC of 7 March 1988 prohibiting the use in livestock farming of certain substances having a hormonal action (Official Journal 1988 L 70, p. 16), which is at issue in the present case, regulates the use of the five substances referred to in Article 5 of Directive 81/602. Article 2 of Directive 88/146 prohibits the administration to farm animals of the first three of the substances referred to (the ‘natural’ hormones), except for therapeutic purposes, and prohibits absolutely the other two substances (the ‘artificial’ hormones).

The first two recitals in the preamble to the contested directive give the following reasons for the prohibition:

‘... the administration to farm animals of certain substances having a hormonal action is at present regulated in different ways in the Member States; ... while their immediate effect on animals from the farmer's point of view is clear, assessments of their effect on human health vary and this is reflected in the regulations governing their use; ... this divergence distorts the conditions of competition in products that are the subject of common market organizations and is a serious barrier to intra-Community trade;

‘... these distortions of competition and barriers to trade must therefore be removed by ensuring that all consumers are able to buy the products in question under largely identical conditions of supply and that these products correspond to their anxieties and expectations in the best possible manner; ... such a course of action is bound to bring about an increase in consumption of the product in question’.

Under Article 10 of the directive in question the Member States were to comply with the directive by 1 January 1988 at the latest.

The directive at issue was adopted on 7 March 1988 and notified to the Member States on 11 March 1988. Its contents, including the date for its implementation, are identical to the contents of Council Directive 85/649/EEC of 31 December 1985 prohibiting the use in livestock farming of certain substances having a hormonal action (Official Journal 1985 L 382, p. 228). The latter directive was declared void by the Court in its judgment in Case 68/86 United Kingdom v Council [1988] ECR 885, on the ground that, by failing to comply with the procedure laid down in Article 6(1) of the Council's Rules of Procedure, the Council had infringed an essential procedural requirement.

The applicants in the main proceedings, who are manufacturers, producers or distributors of veterinary medicines or associations in the field of animal health which carry on their activities throughout Europe and the United States and a veterinarian and a farmer, are challenging before the national court the validity of a national legislative measure, namely Statutory Instrument 1988 No 705: The Medicines (hormone growth promoters) (prohibition of use) Regulations 1988, which implement, in part, the contested Directive 88/146, on the ground that the directive in question is invalid.

That national measure replaced with effect from 13 April 1988 Statutory Instrument 1986 No 1876: The Medicines (hormone growth promoters) (prohibition of use) Regulations 1986, which were adopted to implement Directive 85/649.

Taking the view that the dispute involved an assessment of the validity of the directive in question, the High Court of Justice, Queen's Bench Division, decided by order of 20 September 1988 to stay the proceedings and refer to the Court of Justice of the European Communities the following questions for a preliminary ruling under Article 177 of the EEC Treaty:

‘(1) Is Council Directive 88/146 of 7 March 1988 invalid by reason of its inconsistency with the principle of legal certainty? (2) Is Council Directive 88/146 of 7 March 1988 invalid by reason of its inconsistency with the principle of proportionality? (3) Is Council Directive 88/146 of 7 March 1988 invalid by reason of its inconsistency with the principle of equality? (4) Is Council Directive 88/146 of 7 March 1988 invalid by reason of the Council's misuse of powers, that directive being inconsistent with the objectives of the common agricultural policy contained in Article 39 of the EEC Treaty? (5) Is Council Directive 88/146 of 7 March 1988 invalid by reason of its inconsistency with Article 190 of the EEC Treaty having regard in particular to the fact that it fails to state adequately the reasons on which it is based? (6) Is Council Directive 88/146 of 7 March 1988 invalid by reason of its infringement of essential procedural requirements, having regard in particular [to the fact] that it did not originate in a proposal of the Commission directed towards the implementation of that directive nor any other directive, that if it originated in a proposal derived from the Commission, that proposal derived from a Commission which did not, in its composition, reflect the composition of the Commission at the time of the issuance of Directive 88/146 and that the Council failed to obtain the necessary opinion of the European Parliament which opinion should have addressed itself to that directive and no other? (7) Is Council Directive 88/146 of 7 March 1988 invalid by reason of its inconsistency with the principle that legislation should not be retrospective in effect, particularly when it seeks the imposition of criminal penalties for acts done before its publication?’

The order of the Queen's Bench Division of the High Court of Justice was registered at the Court on 14 November 1988.

Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the European Communities, written observations were submitted on 15 February 1989 by the Government of the Kingdom of Spain, represented by Javier Conde de Saro, Director-General for Legal and Institutional Coordination within the European Communities, and Rosario Silva de Lapuerta, abogado del Estado (State Attorney) in the Legal Department for matters concerning the Court of Justice;

on 17 February 1989 by the Council of the European Communities, represented by Moyra Sims, a member of its Legal Department, and by Bjarne Hoff-Nielsen, Legal Adviser;

on 21 February 1989 by the Commission of the European Communities, represented by Blanca Rodríguez Galindo and Grant Lawrence, members of its Legal Department, and Dierk Booss, Legal Adviser;

on 28 February 1989 by the United Kingdom of Great Britain and Northern Ireland, represented by Susan Hay, of the Treasury Solicitor's Department, and by Richard Plender, barrister;

on 1 March 1989 by the applicants in the main proceedings, represented by Christopher Carr and Thomas Sharpé, barristers;

on 2 March 1989 by the Government of the Italian Republic, represented by Pier Giorgio Ferri, avvocato dello Stato.

Upon hearing the Report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to assign the case to the Fifth Chamber and open the oral procedure without any preparatory inquiry.

II — Summary of the written observations submitted to the Court

1. The first question (principle of legal certainty)

a) According to the applicants in the main proceedings, the directive at issue is void because it infringes the principle of legal certainty according to which legislation must be objectively and rationally justified and must protect legitimate expectations. In the applicants' opinion, the objectives pursued by the directive are at the very least doubtful, if not unfounded. As regards the protection of health, the applicants rely on numerous reports by experts, which the national court has made available to the Court, which prove, according to the applicants, that the five hormones in question are safe. For that reason consumer anxiety over health must not be based on superstition, ignorance and prejudice and cannot provide an objective and rational basis for the directive in question. As to the objective of increasing meat consumption by banning all hormones, the applicants consider that that prediction is speculative and is likely to be false. There is no evidence of consumer rejection of meat obtained from hormone-treated animals. On the contrary, the evidence — which has been submitted to the Court — is that untreated meat is less marketable and saleable and that the use of hormones improves the quality of the meat making it less fatty and thus healthier. According to the applicants in the main proceedings, all those objectives are as important as the objective of removing obstacles to trade and distortions of competition and cannot be made subsidiary to that latter objective. Although that fact was not mentioned in Directive 81/602 and although there has been a shift in policy objectives between 1981 and 1988, that does not mean that Directive 81/602 and the contested directive are not both rooted in considerations of health and quality, as is evident from the recitals. Moreover, the applicants maintain that even the objective of removing obstacles to trade and distortions in competition is of doubtful validity in view of the fact that any obstacles and distortions that exist result not from the differing national laws but from a failure to enforce Article 30 of the EEC Treaty. In fact, once it has been shown that there is no danger to health resulting from the use of the five hormones in question, any prohibition on importation into one Member State from another Member State infringes that article. They also consider that the legitimate expectations of economic operators in the agricultural and industrial sectors and of veterinarians were affected. They expected, in fact, that in the absence of any objectively based doubt as to the safety, efficacy and quality of the five hormonal substances, the hormones would be freely marketable in each Member State.

b) The United Kingdom agrees with the applicants' submission that there is no scientific evidence to support the assessments or anxieties on which the contested directive is said to be based and that there is, indeed, scientific evidence to the contrary, as the United Kingdom has already maintained in Case 68/86, cited above. Nevertheless, the United Kingdom prefers to characterize the invalidity as the result of an infringement of a legitimate expectation rather than the result of the breach of the principle of legal certainty. Since 1965 the Community's practice has been to base its legislation on the authorization of pharmaceutical products upon a scientific assessment of the safety, quality and efficacy of the products concerned. According to the preamble to Council Directive 65/65/EEC of 26 January 1965 on the approximation of provisions laid down by law, regulation or administrative action relating to proprietory medicinal products (Official Journal, English Special Edition, 1965-66, p. 20), that practice is the result of two objectives: first, to safeguard public health and second, to ensure that the development of the pharmaceutical industry and trade in medicinal products within the Community are not hindered. Council Directives 81/851/EEC and 81/852/EEC of 28 September 1981 on veterinary medicinal products (Official Journal 1981 L 317, p. 1 and p. 6) confirmed that practice. According to the United Kingdom, although Directive 81/602 prohibited the administration to animals of certain hormones on the grounds that they ‘may be dangerous for consumers’ and that they ‘may also affect the quality of the meat’ (first recital), the clear implication of the directive, in the light of the other abovementioned directives, was that there should be a detailed scientific examination of the harmful or harmless effects of the five hormonal substances, which were first prohibited, not in 1981, but in 1985 by Directive 85/649 and subsequently by the contested directive. According to the United Kingdom, the Commission never gave any indication of a change of policy in this regard; on the contrary, it confirmed the scientific basis of the relevant Community regime. Accordingly, those engaged in the manufacture, distribution and administration of the substances in question were entitled to expect that their administration to animals for non-therapeutic purposes would be permitted since scientific evidence was available to show that the substances in question were harmless when properly administered.

c) The Spanish and Italian Governments and the Council and the Commission reach the conclusion that the directive at issue does not infringe the principle of legal certainty or the principle of protecting the legitimate expectations of economic operators. According to the Spanish Government, the directive is justified by the fact that there have not been sufficient studies to establish that the five prohibited hormones are harmless. Since, according to the Spanish Government, it has not been proved that their use cannot be harmful to human health, the Community, which is under an obligation to safeguard the health of its citizens, must adopt such preventive measures as it sees fit. The Spanish Government also states that the protection of the health of the consumer is not the only reason: the directive is also based on economic reasons which seek to promote the proper functioning of a common organization of the markets and to guarantee the free movement of agricultural products. The Italian Government also emphasizes that the safeguarding of health is only one of the factors considered by the directive, which is not essentially based on a Community assessment of the harmfulness of the prohibited substances. It also takes into consideration the fact that the majority of national laws regard the use of hormonal substances as harmful and that consumers prefer meat produced without hormones. The Council admits that if the directive was limited to health measures, it should be based primarily on the results of scientific evidence. However, the directive is a response to necessities of an economic nature tending towards improved functioning of a market organization and the free circulation of agricultural products. The Council considers moreover that such scientific evidence as was available was not entirely conclusive. It states that in adopting the directive it did not therefore exceed its discretionary power. Furthermore, the fact that the Council did not legislate in a manner consistent with the expectations of interest groups cannot in any way invalidate the directive. The Council also rejects the argument that meat untreated by hormones is high in fat content. The prohibition was imposed rather as a direct response to consumer action throughout the Community in rejecting meat containing hormones. From the outset the Commission calls into question the applicant's concept of legal certainty. In its view, legal certainty can only be held to have been breached if the provisions lack clarity — an issue which was never raised, for good reason — or if the motivation is not clear (see below). Furthermore, all legislation is based not on scientific evidence, but rather on values and objectives. In the present case, in exercising its discretionary power, the Community legislature took into consideration the overwhelming rejection by consumers of the use of hormones. Such rejection was expressed in particular by the European Parliament, the Economic and Social Committee and consumers' unions in Europe and the USA. The Commission adds that no scientist can say that certain hormonal substances could never affect adversely human health; they may be harmful if improperly used or abused, or if administered in unsatisfactory conditions.

2. The second question (principle of proportionality)

a) According to the applicants in the main proceedings, the contested directive is unlawful because it infringes the three aspects of the principle of proportionality, namely: suitability, necessity and proportionality in its narrow sense. According to the applicants, the outright prohibition is unsuited, from two points of view, for the purpose of allaying any supposed consumer anxieties regarding hormone-treated meat. First, it has created a widespread black market in illegal substances of a potentially dangerous nature, administered unprofessionally and in uncertain dosages. Secondly, it is almost impossible to detect the application of the five hormonal substances in question through the testing of animals, due to dosages naturally contained in those animals. The applicants refer to statements made under oath which the national court has made available to the Court. The applicants consider that the prohibition goes beyond what is necessary to relieve any consumer anxieties which may have existed; those anxieties could have been allayed by the dissemination of information and advice. The applicants state, by way of example, that numerous scientific studies on the safety of the five substances could have been published and the evidence that the consumption of lean beef, achieved by the administration of the five hormonal substances, serves to improve human health could have been disseminated. Moreover, the Council could have insisted that meat treated with the five hormonal substances should be labelled accordingly, following the guidelines contained in the law relating to the free movement of goods. As to the objectives of harmonization and removal of distortions of competition, there is no necessity, in their view, for seeking to achieve them by prohibiting the five substances rather than authorizing them. With regard to proportionality in its narrow sense, a balance must be struck between any injury to individual rights and any gain to the Community. According to the applicants, the prohibition has had the following negative consequences: the pharmaceutical companies who formally manufactured and marketed the five prohibited substances have suffered irrevocable losses; farmers have become unprofitable; veterinarians have lost income; consumers develop diseases as the result of meat with a higher fat content; the black market described above has been created; the pharmaceutical industry has curtailed research and development due to the possibility of further prohibitions without any scientific basis; trade problems with the United States have arisen. In so far as the directive in question is based upon an actual risk to health, the applicants point out that it lacks any proper foundation and they consider that there is no countervailing benefit to match the abovementioned disadvantages. The same is also true, in the applicants' opinion, for the objective of increasing consumption. In so far as the directive is based upon the desire to remove anxieties concerning health, the applicants consider that the negative consequences render the prohibition manifestly disproportionate. As regards the objective of harmonization, the applicants maintain that since it may be achieved equally well by way of a uniform permission, uniformity as a neutral concept should be discounted when the various interests are weighed up. Furthermore, very little weight can be given to the prohibition as a way of removing distortions of competition since the same objective could have been achieved by enforcing the law under Article 30 of the Treaty (see below).

b) The United Kingdom essentially supports the applicants' arguments. It considers in addition that the directive contravenes the principle of proportionality because natural hormones exist in all cattle and in certain cases they exist in even greater quantities than after treatment with hormones. Thus a consumer with a normal diet will inevitably ingest large quantities of naturally occurring hormones. Consequently, a measure which prohibits the use of those hormones in order to assuage consumer fears about hormones is not, in the United Kingdom's view, suited to attain that objective.

c) The Italian and Spanish Governments and the Council and the Commission consider that the contested directive is consistent with the principle of proportionality. The Italian Government contests that a different solution could have brought about the same result with fewer sacrifices. The Spanish Government emphasizes that the adverse pecuniary effects cannot be regarded as disproportionately harmful by comparison with the protection of human health. As for the risk that other substances will be administered secretly, the Spanish Government takes the view that cattle breeders who infringe the law should be prosecuted and penalized. In the view of the Council, less radical means would not have been sufficient because any system of controlled use would have been very expensive and there could be no guarantee of its effectiveness. As regards the financial aspects, the Council points out that one of the objectives of the directive is to bring about an increase in consumption of meat resulting eventually in financial benefits for the farming interest. As regards veterinarians, the directive provides them with a monopoly on action in the therapeutic field and consequently with a guaranteed income. As early as 1981, following the adoption of Directive 81/602, producers and manufacturers of hormonal substances should have been aware of the risk of a total prohibition of the five substances at issue. Even after Directive 85/649 had been adopted, they had at least two more years — the time allowed for the implementation of the directive — in which to adapt themselves to the prohibition. Moreover, it was likely that a prohibition would be imposed because only the United Kingdom still permitted the use of all five substances and three other Member States permitted the use only of the three natural substances. The Council emphasizes that a prohibition which exists at national level can be justified with even greater force at Community level for imperative reasons related to the free movement of goods. Moreover, the Council cites the judgment of the Court in Case 240/83 Procureur de la République v ADBHU [1985] ECR 531, paragraph 12, in which the Court stated that ‘the principle of freedom of trade is not to be viewed in absolute terms but is subject to certain limits justified by the objectives of general interest pursued by the Community’. The Council points out that there are other prohibitions of marketing and manufacture which were introduced, for example, for reasons of consumer health or safety or of risk to the environment. In response to the argument that there is a danger that certain hormonal substances will be applied clandestinely, the Council points out that the enforcement of the prohibition is a matter for the Member States. In that regard, the Commission observes that the framework of control measures was established by Directive 85/358/EEC of the Council of 16 July 1985 supplementing Directive 81/602/EEC concerning the prohibition of certain substances having a hormonal action and of any substances having a thyrostatic action (Official Journal 1985 L 191, p. 46), and by Council Directive 86/469/EEC of 16 September 1986 concerning the examination of animals and fresh meat for the presence of residues (Official Journal 1986 L 275, p. 36). Moreover, every prohibition entails the risk of infringement. Even if the five substances in question were not prohibited, there would be a black market for other substances which are uncontestedly dangerous but cheaper. According to the Commission, the measures provided for in the contested directive are certainly not manifestly unsuitable for achieving its objectives. The prohibition is the only means to ensure proper protection of the consumers who have themselves asked for such a prohibition through the European Parliament, the Social and Economic Committee and the BEUC (Bureau européen des unions de consommateurs). In those circumstances, it would have been unsuitable for the use of the hormones to have been authorized in order to diminish the fat content of the meat. Apart from the question whether that suggestion is correct, such an attitude would not protect the consumer, but patronize him. The Commission also states that the prohibition is appropriate and necessary to attain the other objectives of the directive. No other less stringent measure could have eliminated the trade barriers. Besides the practical problems, labelling would not have brought an end to the prohibition of hormonized meat by some Member States under Article 36 of the Treaty. The prohibition was also appropriate inasmuch as it promotes the production of high-quality products. The Commission points out that although the interests of economic operators may be protected by fundamental rights such as the right to property, those rights are subject to restrictions such as those defined in the judgment of the Court in Case 44/79 Hauer [1979] ECR 3727. The objectives of general interest pursued by the prohibition are much more important than the pecuniary interests mentioned by the applicants. No one is deprived of his rights as an owner and it would be possible to use the industrial equipment for the production of substances other than the prohibited hormones. As far as veterinarians are concerned, even if their income might be diminished, the Commission points out that Article 3(b) of the directive in question provides them with a monopoly to administer the substances still allowed for therapeutic treatment. It cannot therefore be argued that their right to property or their right to exercise their profession is impinged upon.

3. The third question (principle of equality)

a) The applicants in the main proceedings maintain that there are marked differences between the Member States in the conditions, circumstances and practices of cattle breeding (see the statements made under oath which the national court has made available to the Court) and that, consequently, the same is also true for the effects of the contested directive on the practices and traditions which exist in those States. The applicants consider that the uniform application of the prohibition has placed cattle farmers in the United Kingdom, Spain, France and the Republic of Ireland at a competitive and commercial disadvantage to cattle farmers in other Member States. There is no objective justification for those unequal consequences. According to the judgment of the Court in Joined Cases 32 and 33/58 Snupat v High Authority [1959] ECR 127, any intervention attempting to distort or actually distorting competition artificially and significantly is discriminatory. Treating different situations identically is just as discriminatory as treating similar situations differently (judgment in Case 13/63 Italy v Commission [1963] ECR 165). In the present case, the discrimination consists of a prohibition which is uniform in its application but discriminatory in its effect. The situation is comparable to the situation in Case 114/76 Bela-Miihle [1977] ECR 1211. According to the applicants, the Council also infringed Article 39(2) (a) of the Treaty by failing to take account of regional disparities, even though such disparities are very marked in the present case.

b) The United Kingdom, while agreeing that the applicants' submission is based on a correct factual premiss, does not share their view of the law with regard to discrimination. The United Kingdom considers however that, as it observed in its application in Case 68/86, by reason of the dissimilar effect of the prohibition in the Member States, the directive infringes the principle of proportionality.

c) The Spanish and Italian Governments and the Council and the Commission do not deny that the effects of the prohibition in question vary from one Member State to another, but they claim that such variations are inherent in any harmonization measure which is intended precisely to replace the disparate national regulations, but that those differences do not constitute discrimination since the Community provisions apply, as in the present case, in the same manner in all the Member States.

4. The fourth question (misuse of power)

a) The applicants in the main proceedings maintain that the Council misused its powers by seeking to justify the imposition of the ban on the use of the five hormones by reference to the objectives of the common agricultural policy as laid down in Article 39 of the Treaty, whereas in fact the inspiration for the ban was the desire to reduce beef production (see statements made under oath made available to the Court). Such an objective is not one authorized by Article 39 and can only properly be pursued pursuant to Article 100. Moreover, according to the applicants, the directive is based on political expediency and convenience, which are not objectives which the Council is entitled to pursue. According to the applicants, all those factors constitute a misuse of power, the principle of the misuse of power not being confined to a case where a power is used for the purpose of circumventing a procedure laid down in the Treaty. The applicants accept that the objectives enunciated in the preamble to the directive are of a kind which would bring the measure within the ambit of Articles 39 and 43, including the objectives of public interest in matters of health and quality; this is implicit in the judgment in Case 68/86, which, however, according to the applicants, does not resolve the problem arising in this case. The directive is not capable of furthering any of those objectives, nor any other objective mentioned in Article 39. On the contrary, in their view, agricultural productivity will be diminished, technical progress will be impaired and the standard of living for the agricultural community will decrease. Of course, there may be situations in which it is necessary to accept such adverse consequences, but only when there is an overwhelming need to advance the public interest, particularly in the matters of health and quality. However, the applicants claim that in the present case the five hormones present no risk to health and that the quality of meat will be harmed if not treated with hormones.

b) The United Kingdom, Spain and Italy as well as the Council and the Commission maintain that the directive at issue is not invalid by reason of a misuse of powers. In their view, that is evident principally from the judgment in Case 68/86 in which the Court stated that Directive 85/649 contributed to the realization of the objectives of the common agricultural policy laid down in Article 39 of the Treaty and that the Council had the power to adopt it on the basis of Article 43 of the Treaty alone. The United Kingdom, the Council and the Commission also refer to the judgment in Case 5/73 Balkan-Import-Export v Hauptzollamt Berlin-Packhof [1973] ECR 1091, paragraph 24, in which the Court stated that ‘the Community institutions must secure the permanent harmonization made necessary by any conflicts between these aims [of Article 39] taken individually and, where necessary, allow any one of them temporary priority’. With regard to the definition of a misuse of power, the United Kingdom refers to the judgment in Joined Cases 140, 146, 221 and 226/82 Walzstahl-Vereinigung and Thyssen v Commission [1984] ECR 951, paragraph 27). According to the United Kingdom, the facts and matters on which the applicants rely do not disclose the use of powers with a view to evading the procedure prescribed by the Treaty.

5. The fifth question (adequate statement of reasons)

a) The applicants in the main proceedings consider that the considerations contained in the preamble to the directive at issue, namely considerations of consumer anxiety, harmonization and an increase in consumption of meat, were secondary to the primary purpose which was to reduce the profitability of beef production and thereby reduce the structural surplus of beef in the Community. Since the latter objective is not mentioned in the preamble, the directive fails to state adequately the reasons on which it is based. The complaint concerning the statement of reasons advanced by the United Kingdom in Case 68/86 and rejected by the Court is, in the applicants' view, distinct from their complaint in the present case.

b) According to the United Kingdom, Italy, the Council and the Commission, the judgment in Case 68/86 removed any doubt concerning the contested directive's statement of reasons by ruling that the recitals in the preamble to Directive 85/649, which are identical to those of the directive at issue in the present case, give a sufficiently clear statement of the objectives pursued. The Spanish Government reaches the same conclusion on the basis of the case-law of the Court on the subject of Article 190 of the Treaty. The United Kingdom adds that the reduction of structural surpluses was not the exclusive aim or principal object of the Council; rather, it was only an anticipated incidental effect, welcomed by some members of the Parliament and of the Commission's staff. The Commission states that a reduction in profitability was not the primary purpose, but that the Council was not unaware that such a consequence could be a result of the application of the directive.

6. The sixth question (infringement of essential procedural requirements)

a) The applicants in the main proceedings claim that the directive in question is invalid by reason of its infringement of essential procedural requirements. They consider that the Court's declaration in Case 68/86 that Directive 85/649 was void means that all preparatory acts, including the proposal from the Commission and the opinion of the European Parliament, are also of no effect. Consequently, the Council could not adopt the contested directive on the basis of those preparatory acts. The applicants also maintain that a new proposal from the Commission and a new opinion from the European Parliament were necessary because the constitution of those institutions had changed in the meantime as a result of the accession of Spain and Portugal, countries which have animal husbandry traditions different from those of the rest of the Community, and because scientific and other knowledge has developed since those previous preparatory acts were adopted.

b) The United Kingdom considers that neither the declaration that Directive 85/649 was void nor the change in the composition of the Commission could prevent the Council from adopting the contested directive on the basis of the proposal which led to the adoption of the directive declared void since no useful purpose would have been served by repeating the proposal and since a proposal is made by the Commission as an institution or college. With regard to the opinion of the Parliament, the United Kingdom maintains its submission in Case 68/86, with which the Court did not find it necessary to deal, namely that the Council should have obtained a new opinion from the Parliament following the modification of the Commission's proposal in 1985 after the opinion of the Parliament. The United Kingdom considers that that failure constitutes an infringement of an essential procedural requirement which renders the directive invalid.

c) According to the Spanish and Italian Governments, the Council and the Commission, there was no infringement of essential procedural requirements. The Spanish Government points out that the two new Member States took part in the drafting of the directive in question as members of the Council and that Spain was totally in agreement with the content of the directive even before accession, having amended its legislation as early as 22 January 1984. According to the Italian Government, the principle of economy of legal action requires the retention of measures which are in conformity with the law. In the present case, the invalidity of Directive 85/649 by reason of a breach of procedure could not have affected the opinion of the Parliament or the proposal of the Commission. The Commission's proposal remains unchanged if the Commission chooses not to modify it in accordance with Article 149(3) of the Treaty. Moreover, the judgment in Case 68/86 left those concerned waiting for and confident of prompt action on the part of the Council which was required to take the necessary measures to comply with the judgment under Article 176 of the Treaty. The Council maintains that it remained within the margin of appreciation which exists under Article 176 of the Treaty when it considered that the fact that Directive 85/649 had been annulled for a procedural irregularity did not invalidate the stages preceding the adoption of that directive and that, consequently, the preparatory acts pertaining thereto remained valid. Moreover, the Council points out that the Commission participated fully in the work of the Council and did not modify its proposal under Article 149(3) of the Treaty and that no request for reconsultation was made by the Parliament. As far as the change of composition of the Commission is concerned, the Council considers that any change, either at the end of its term or following upon an enlargement of the Community, cannot have any automatic legal consequences upon existing proposals. According to the Council, that has always been the practice. The Commission also maintains that none of the stages of procedure prior to the Council's decision to apply the written procedure — the only ground on which the Court declared Directive 85/649 void — were affected by the judgment. The Council was thus obliged under Article 176 of the Treaty to take up the procedure at that same stage. The Commission, unless it wished to alter its proposal in conformity with Article 149(3) of the Treaty, did not even have the legal possibility of resubmitting its proposal, as the Council had not validly acted on it. According to the Commission, the same considerations apply with respect to the Parliament. Furthermore, there was no longer any obligation to consult the Parliament again after the amendment of the proposal in 1985, on the lines of the conclusions given in the opinion of the Parliament. The idea that the Commission must re-adopt proposals when its composition is changed is, according to the Commission, not only in conflict with long-established practice but is also inconsistent with the status of the Commission as an institution which acts continuously (see Article 155 of the EEC Treaty and the third paragraph of Article 12 of the Single European Act). Moreover, by participating in the session of the Council which adopted the directive, the Commission has shown its agreement with the continuance of its old proposal.

7. The seventh question (the principle that legislation should not be retroactive in effect)

a) Only the applicants in the main proceedings consider that the directive at issue is invalid by reason of its inconsistency with the fundamental principle, enshrined in Article 7 of the European Convention on Human Rights and reflected in Community law, that legislation which is criminal must not be retrospective in effect. The directive — which was adopted on 7 March 1988 and which required implementation by 1 January 1988 at the latest — imposes an obligation upon Member States to legislate with retroactive effect, thus exposing citizens to criminal penalties in respect of acts committed during a period in which no valid prohibition existed. The applicants maintain that the ex post facto authorization and validation of national measures of a criminal nature imposing penalties for an act which in fact was not punishable at the time it was committed was declared unlawful in the judgment in Case 63/83 Regina v Kirk [1984] ECR 2689, paragraphs 21 and 22. The judgments in Case 98/78 Firma A. Räcke v Hauptzollamt Mainz [1979] ECR 69 and Case 101/78 Granaria BV v Hoofdproduktschap voor Akkerbouwprodukten [1979] ECR 623 cannot be translated from the civil to the criminal sphere.

b) The United Kingdom, Spain and Italy as well as the Council and the Commission conclude that they do not consider the directive to be invalid for breach of the principle that legislation should not be retrospective in effect. The United Kingdom points out that Directive 85/649 was in force until 23 February 1988, the date on which it was annulled. A prosecution could therefore have been initiated between 1 January and 23 February 1988 on the basis of the national legislation implementing Directive 85/649 and again from 11 March 1988, the date on which the disputed directive was notified. Therefore the directive could have given rise to retrospective effect for a period of only 17 days. Even though the rule against retrospectivity constitutes a general principle of Community law, the United Kingdom considers that in the present case respect for the principle can be assured otherwise than by annulling the measure; the measure need only be read in the light of the principle in question. So construed, Article 10 of the directive cannot be understood as requiring Member States to impose criminal penalties on individuals in respect of acts done between 23 February and 11 March 1988. On the other hand, in all other respects, for example the register prescribed by Article 4, Article 10 requires full application with effect from 1 January 1988. The Spanish Government emphasizes the exceptions to the principle that legislation should not be retroactive in effect. For example, a retroactive effect may exceptionally be accepted where the purpose to be achieved so demands and where the legitimate expectations of those concerned are duly respected (judgment in Case 99/78 Weingut Gustav Decker KG v Hauptzollamt Landau [1979] ECR 101). According to the Spanish Government, the 13 days which elapsed between the annulment of Directive 85/649 and the entry into force of the new directive were hardly sufficient for those concerned to have acquired vested rights qualifying for protection. According to the Italian Government, the retroactivity of Article 10 of the contested directive has no direct effect on the position of the interested parties, who are subject to the obligations and penalties laid down by the national implementing legislation. In the particular circumstances of the present case, since the national provisions enacted to give effect to the directive — which were not directly affected by the annulment of Directive 85/649 — were already in force when the contested directive was adopted, it is not possible to hold that there has been a breach of the principles of legal certainty and legitimate expectation, which may constitute a bar to the acceptance of retroactive effect. The Council also maintains that in principle it is the national implementing measures which produce effects for individuals rather than the directive itself. Thus, in the United Kingdom, at no time were the applicants subjected to legislation of a retroactive nature under national law since on 13 April 1988 SI 1988 No 705, cited above, revoked and replaced SI 1986 No 1876, cited above. Even if regard should be had to the directive itself, the Council takes the view that there is no reason to declare it void for reasons of retroactivity. The Council refers to the judgment in Case 108/81 Amylum v Council [1982] ECR 3107, in which the Court stated that retroactivity may be acceptable, exceptionally, where the purpose to be achieved so demands and where the legitimate expectations of those concerned are duly respected. In the Council's opinion those conditions are met in the present case. Having regard to the nature of the substances at issue and the imperative requirement of consumer protection, it was necessary to avoid a legal vacuum in order to prevent the recurrence of distortions of competition and serious barriers to trade after Directive 85/649 had been annulled. Moreover, the period of 17 days from the date of annulment to the notification of the contested directive was too short for the applicants to have acquired a legitimate expectation that the substances in question would be made legal. The Commission submits that the directive does not have a retrospective effect vis-à-vis the applicants as it did not oblige the United Kingdom to implement its provisions prior to the date of its notification, but only authorized it to do so. Whether the United Kingdom was entitled, under national law, to use this authorization, is not a question raised in the present proceedings. Even if a retrospective effect could be attributed to the directive, it is justified by the case-law of the Court (for example, the judgment in Case 224/82 Meiko-Konservenfabrik v Germany [1983] ECR 2539). Furthermore, the hormone ban demanded that there should not be an interruption in that ban. The reasons given for the adoption of Directive 85/649 in 1985 persisted; moreover, if hormones had been legal for a period following the annulment of that directive, the Community would have had for some years to face a problem with the meat stemming from livestock legally treated with hormones during the period in question. The Commission also considers that there were no legitimate expectations to be respected. In fact, the administration of hormones was prohibited well before 1 January 1988. Since the first directive was annulled for procedural reasons, easy to repair, and since there was no indication that the predominant opinion in the Community institutions or public opinion as a whole would change on the desirability of the ban, the applicants could not expect that the situation of fact would change, especially since the time period before the adoption of the new directive was extremely short. Finally, the Commission observes that the directive itself does not include penal provisions and does not necessarily require them if the implementation of the directive can be ensured by administrative measures. Any penal provisions in the national measures implementing that directive must observe the principle that legislation may have no retrospective effect, which is one of the general principles of Community law.

8. Proposed answers

In conclusion, the applicants in the main proceedings take the view that Directive 88/146 is void because of the Council's failure to take account of the known facts concerning health and quality, its reliance on irrational anxiety (for which the evidence is, at best, uncertain) and the severely damaging and intrusive effects of the directive are factors which combine together to suggest that the Council should have considered other ways of educating and protecting customers and of harmonizing the law. Directive 88/146 is also tainted by procedural defects which render it void.

The United Kingdom concludes that the Court should declare that Directive 88/146 is invalid by reason of its infringement of legitimate expectations, alternatively by reason of its inconsistency with the principle of proportionality, alternatively by reason of its infringement of an essential procedural requirement and that the Court should declare that the remaining questions submitted by the High Court do not call for an answer.

The Spanish Government, the Council and the Commission, which — like the Italian Government —consider that Directive 88/146 is valid, propose that the answer to be given by the Court should be that consideration of the questions raised by the High Court has disclosed no factor of such a kind as to affect the validity of Directive 88/146.

G. C. Rodriguez Iglesias

Judge-Rapporteur

1 Language of the case: English.