Report for the Hearing in Case C-l 10/89

I — Background to the dispute, pre-litigation procedure and procedure before the Court

A — Background to the dispute

The dispute concerns the circumstances under which the Greek authorities allegedly restricted or prohibited maize exports by private traders during the autumn of 1985 while, over the same period, permitting exports of maize by the Central Office for the Management of National Products (hereinafter referred to as ‘KIDEP’).

(a) Community law

The applicable provisions are those of Regulation (EEC) No 2727/75 of the Council (subsequently amended) of 29 October 1975 on the common organization of the market in cereals (Official Journal 1975 L 281, p. 1), in the version in force at the material time (September to December 1985).

The Commission also relies on Article 34 of the EEC Treaty, which prohibits quantitative restrictions on exports and all measures having equivalent effect between Member States.

In view of the fact that it was cited by the parties, Council Regulation (EEC) No 2102/77 of 20 September 1977 introducing a Community export declaration form (Official Journal 1977 L 246, p. 1) must also be mentioned.

The purpose of that regulation was to introduce a Community form standardizing the information which exporters were required to supply ‘in order to facilitate the accomplishment by its users of the residual formalities in intra-Community trade’ (first recital in the preamble).

(b) National law

Decision No E4/10110/1.40 of the Minister of Commerce of 4 December 1980 abolished, with effect from 1 January 1981, ‘all quantitative restrictions applicable to exports and all measures having equivalent effect’.

That decision, in conjunction with Decision No B3.1871 of the Minister of Commerce of 12 December 1980, provided that, for purposes of exchange control, exporters would nevertheless be required to fill out an ‘export declaration and invoice’ form and have it endorsed by a bank.

So far as exports of maize in particular were concerned, a telex from the Bank of Greece dated 2 September and addressed to merchant banks required ‘prior endorsement by the export control department’ of the Bank of Greece.

B — Pre-litigation procedure

Following complaints which it had received from traders, the Commission, on 25 November 1985, served notice on the Hellenic Republic in accordance with the first paragraph of Article 169 of the Treaty.

The statement of notice referred to the ban on maize and barley exports imposed on traders between November 1983 and January 1984, and to the excessive delays recorded in the processing of applications for ‘export declaration and invoice’ endorsements during the period from spring 1984 to April 1985. In the Commission's view, the procedure of systematic prior control of exports and the manner in which that procedure was used by the Greek authorities to prohibit or delay exports amounted to a breach of Articles 34 and 106(1) of the Treaty and of the provisions of Regulation No 2727/75, cited above.

The Commission, however, decided not to continue with the proceedings for a finding that there had been a failure to fulfil obligations on the ground that the matters on which the statement of notice had been based had not been sufficiently established (Breach Classification Letter No A.429/85).

By telex of 2 December 1985, the Commission informed the Hellenic Republic that it had received fresh complaints from traders concerning the refusal or withdrawal of bank endorsements required for the export of maize. Those complaints also referred to newspaper articles which quoted public statements by the Secretary of State for Commerce to the effect that exports of maize were to be prohibited after 1 September 1985. KIDEP, the only organization exempted from that prohibition, had obtained permission at the beginning of November 1985 to export between 30000 and 50000 tonnes of maize, only one day after the Greek authorities had withdrawn permission from a private trader to export an identical quantity of maize.

By letter of 24 March 1986, the Office of the Permanent Representative of the Hellenic Republic to the European Communities stated, in reply to the above telex, that there had been no prohibition of maize exports. Any delays referred to by traders were, in its view, attributable to the introduction of the Community procedure for export declarations set out in Regulation No 2102/77, cited above. Finally, statistics showed that exports were set to reach a high level during 1985 and that, having regard to the volume of domestic production and imports, which made it possible to satisfy domestic requirements, there was no reason to restrict exports.

On 11 November 1986, the Commission sent a formal letter of notice to the Hellenic Republic, in which it recapitulated the arguments set out in its telex. According to the Commission, Regulation No 2102/77, which was designed to reduce the formalities within intra-Community trade, could not in any way be relied on to justify restrictions in that trade. The barriers placed in the way of maize exports by private traders formed part of a policy to channel maize exports towards semipublic bodies such as KIDEP. Such a policy, in the view of the Commission, failed to take account of the provisions of Regulation No 2727/75 and the principle of the ‘open market’, as developed in the case law of the Court.

In its reply of 13 January 1987, the Hellenic Republic questioned the connection between this letter of notice and the statement of notice of 25 November 1985. It also pointed out that, during the last quarter of 1985, 69102 tonnes of maize had been exported by various traders, and not only by KIDEP. The contention that semipublic bodies had benefited was, in its opinion, incorrect, since such bodies were subject to ordinary law and consequently to national procedures applicable to the export of cereals; in addition, endorsement applications made by other traders had been duly processed. Finally, no export endorsement had been withdrawn during the last quarter of 1985.

The Commission took the view that those arguments could not be accepted in the absence, in particular, of detailed information concerning the dates of endorsement applications and their approval; accordingly, on 10 December 1987, it issued a reasoned opinion which evoked a negative response from the Hellenic Republic on 2 February 1988.

In those circumstances the Commission brought the present application, which was lodged at the Court Registry on 6 April 1989.

C — Procedure before the Court

Following the lodgment on 20 September 1989 of the Hellenic Republic's statement of rejoinder, the Commission, by a procedural application of 28 March 1990, sought permission under Article 91 of the Rules of Procedure to lodge additional documentation.

By a statement lodged on 14 May 1990, the Hellenic Republic submitted that that application should be rejected.

By order of 21 November 1990, the Court in part upheld the Commission's procedural application by granting it permission to place on file two letters of 12 December 1985 and 14 January 1986 from the Cargill undertaking to the Bank of Greece. The Hellenic Republic was allowed 15 days within which to submit written observations on the contents of those letters.

By a statement lodged on 10 January 1991, the Hellenic Republic submitted its observations on those two letters.

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 preliminary inquiry. However, it requested the Commission and the Hellenic Republic to answer a number of questions prior to the oral procedure.

II — Forms of order sought by the parties

The Commission claims that the Court should:

i) declare that, by restricting and prohibiting exports of maize by private persons during the autumn of 1985 (September to December 1985) while at the same time permitting KIDEP to export maize, the Hellenic Republic has failed to fulfil its obligations under Community law, in particular under Regulation No 2727/75 — of which Article 34 forms an integral part — and the corresponding implementing regulations ;

ii) order the defendant to pay the costs.

The Hellenic Republic claims that the Court should dismiss the application and order the applicant to pay the costs.

III — Summary of the submissions and arguments of the parties

A — The subject-matter of the dispute

The Commission points out that the application for a declaration that the Hellenic Republic has failed to fulfil its obligations relates solely to the facts set out in the formal letter of notice of 11 November 1986.

It also stresses that the application does not relate to the provisions of Greek legislation applicable to maize exports, but rather to the circumstances in which those provisions were applied by the Greek authorities.

B — The facts in dispute

(a) Their context

Referring to other cases decided by the Court (judgments in Case C-281/87 Commission v Greece [1989] ECR 4015, Case C-35/88 Commission v Greece [1990] ECR I-3125 and Case C-32/89 Greece v Commission [1991] ECR I-1321), the Commission submits that KIDEP was the body through which the Greek authorities intervened on the market in cereals and, more particularly, in the market in feed grain. The deficit which resulted from the sale at a guaranteed loss by those authorities to KIDEP was covered by the national budget, as is clear in particular from the 1985 report of the Bank of Greece.

With regard to maize exports, the Commission argues that these were totally prohibited by the Greek authorities until the spring of 1985. It claims that KIDEP experienced major difficulties when export restrictions were lifted in June 1985.

Those difficulties were attributable to the high prices offered to maize producers by private exporters, who enjoyed favourable prices for maize on foreign markets and benefited from the devaluation of the drachma and the resultant obligation imposed on KIDEP by the Greek authorities to meet the requirements of the domestic market. The situation was aggravated by the fact that a fall in domestic maize production was recorded in 1985.

It was for those reasons that the Greek authorities decided to restrict to KIDEP the right to export during the last quarter of 1985; such a restriction had, in particular, the advantage of allowing the State to reduce the financial costs of supporting KIDEP.

The Hellenic Republic accepts that there was a fall in domestic maize production during 1985 (1907954 tonnes compared to 2161560 tonnes for 1984). That situation, however, did not in any way justify a restriction on exports.

Contrary to the claims made by the Commission, the defendant did not introduce any discriminatory treatment in favour of KIDEP and did not facilitate trade in cereals through that body.

(b) The facts referred to in the application

The Commission claims that the Greek authorities restricted or prohibited maize exports by private traders during the last quarter of 1985 while permitting KIDEP to export maize during that same period.

Those restrictions were applied to traders during the various stages of the export procedure. In that connection, the issue of an endorsement by the Bank of Greece constituted a framework within which the Greek authorities could easily intervene. The issue of the endorsement was refused or unreasonably delayed when the application was made by private traders, whereas it was issued when the application was made by KIDEP.

Thus, during the first week of November 1985, KIDEP exported between 30000 and 50000 tonnes of maize only one day after authorization had been withdrawn from a private trader to export an identical quantity of maize.

In its statement of reply, the Commission points out that the mere fact that private traders were able to export maize during the relevant period does not at all mean that they could not have been subjected to discrimination by the Greek authorities in one or more specific cases.

According to the Hellenic Republic, there was no prohibition on the export of maize during the period in question. No endorsement was issued during the first week of November 1985 for the exportation of between 30000 and 50000 tonnes of maize. Along with other exporters, KIDEP had exported maize during that week on the basis of endorsements issued in August 1985.

From 1 September 1985 to 31 December 1985, private traders exported appreciable quantities of maize.

According to information from the customs authorities, Kadinopoulos AE exported 20000 tonnes of maize to Italy and Cargill EPE exported 11000 tonnes to the Netherlands.

According to the Hellenic Republic, there is no truth in the claim made by the Commission that authorization granted to a private trader to export between 30000 and 50000 tonnes of maize was withdrawn in November 1985. That trader had in fact used the contents of newspaper articles alleging a ban on exports in order to justify unilateral rescission of his own contractual undertakings.

The Hellenic Republic argues that the Commission, in its statement of reply, has reverted to the main allegation on which it based its application, to the effect that a prohibition on exporting maize was imposed on private traders. In so far as the Commission intended only to complain that the Hellenic Republic had discriminated against one or more private traders in specific cases, such a complaint ought to have been the subject of a separate application for a finding that the Hellenic Republic had failed to fulfil its obligations.

(c) The evidence

The Commission first of all submits that the Hellenic Republic has never provided the specific and precise information, requested on several occasions, regarding the number of endorsement applications for exports of maize made during the period in question and what became of them. The Hellenic Republic merely produced general data for 1985 and a table covering the last quarter of 1986. Contrary to undertakings given during a visit by Commission officials in March 1988, it has failed to supply precise information concerning the last quarter of 1985. That information must be known to the customs authorities without there being any need for the defendant to carry out additional inquiries.

Apart from constituting a failure to comply with the duty of cooperation set out in Article 5 of the Treaty, this refusal to supply precise information has to be treated as confirmation of the reports in the press anieles and of the complaints made by private traders, which form the basis of the present proceedings.

Also of significance is the persistent refusal of the Greek authorities to allow Commission officials to check on the activities of KIDEP.

The Commission also relies on the following items of evidence:

i) The minutes of the 36th general meeting of KIDEP held on 12 and 13 December 1986; these describe the general role of KIDEP within the cereals market and the circumstances in which the decision was taken to restrict maize exports at the end of 1985 and to permit only exports by KIDEP.

ii) Press articles (which have not been refuted) from four newspapers of different views, which reported this State intervention in maize exports and the public statements of the Secretary of State for Commerce admitting that there was a ban on maize exports at the end of 1985.

iii) The telex of 2 September 1985 sent by the Bank of Greece to all merchant banks, which made maize exports subject to prior endorsement by the central authorities of the Bank of Greece. Moreover, this procedure had been used in the past to restrict or prohibit exports; this much was admitted by senior Greek officials during the visit by Commission representatives to Greece in March 1988. The Commission doubts whether that telex, as claimed by the Hellenic Republic, had as its sole purpose to keep a better statistical track of exports. In the first place, it is difficult to understand why, if that was the case, the procedure was limited exclusively to exports of maize. Secondly, it has to be emphasized that that telex was sent during a period in which the market situation was not favourable to KIDEP. During that period, private traders lodged complaints relating to a ban on maize exports. Finally, the fact that the procedure had a statistical function did not in any event exclude the possibility that it might be applied in a discriminatory manner to private traders.

iv) The telex of 7 November 1985 from KIDEP requesting private traders to submit tenders for the immediate export of 30000 tonnes of maize. The Hellenic Republic has failed to provide any explanation for that telex.

The Hellenic Republic disputes the evidence adduced by the Commission:

i) Precise information on maize exports during the last quarter of 1985 could not be sent because it proved impossible to obtain from the customs authorities separate data for each month. The statistical table covering the last months of 1986 was inadvertently sent to the Commission. Finally, inquiries from the relevant local authorities ought to make it possible to calculate the total volume of exports effected by private exporters from 1 September 1985 to 31 December 1985.

ii) The alleged statements by the Secretary of State for Commerce were derived from journalistic information lacking in any probative value. Furthermore, the newspaper articles which referred to those statements contained no precise information on the respective areas of competence, with regard to exports, of the Minister for Agriculture and the Minister for Commerce.

iii) The telex of 2 September 1985 from the Bank of Greece to merchant banks was intended solely to enable a better statistical track to be kept of maize exports.

In support of its own claims that private traders did export maize during the last quarter of 1985, the Hellenic Republic produces administrative documents relating to the exports effected by the undertakings Kadinopoulos AE and Cargill EPE, which have already been referred to.

C — The failure to comply with provisions of Community Uw

According to the Commission, the principle of the open market, which is defined in the Court's case-law and forms the basis of the common organization of the market in cereals, precludes any State intervention which has the effect of interfering with free movement of goods within the Community or of creating distortions in intra-Community trade. That principle also precludes any intervention by a Member State or lower regional authorities which has the effect of conferring unjustified advantages on certain categories of producers or consumers to the detriment of the economies of other Member States or other economic groups within the Community. Finally, in a sector where a common organization of the market has been introduced, the Community is the only authority which is competent to decide on the maintenance of any national intervention measures (see, in particular, the judgments in the following cases: Case 82/71 Pubblico Ministero della Repubblica Italiana v Società Agricola Industria Latte [1972] ECR 119; Case 111/76 Officier van Justine v Van den Hazel [1977] ECR 901; Case 154/77 Procureur du Roi v Dechmann [1978] ECR 1573; Case 83/78 Pigs Marketing Board v Redmond [1978] ECR 2347; Case 177/78 Pigs and Bacon Commission v McCarren [1979] ECR 2161).

The Commission argues that the intervention by the Greek authorities with respect to maize exports during the last quarter of 1985 failed to comply with those principles. The measures taken, which had the effect of channelling exports towards one single body supported by public authorities, were at variance with the principle of the open market. In addition, by conferring advantages on KIDEP at a time when private traders were prevented from exporting or were being subjected to particularly harsh treatment by the Greek authorities, those measures were of such a kind as to disrupt or weaken, through their discriminatory nature, the operation of the common organization of the market in cereals.

The Hellenic Republic does not dispute that the intervention of which it stands accused would, if shown to have existed, amount to a failure to comply with the provisions of the common organization of the market in cereals. However, it denies, on the grounds outlined above, the actual existence of such intervention.

IV — Observations of the Hellenic Republic on the documents allowed to be produced pursuant to the Order of the Court of 21 November 1990

The Hellenic Republic submits that:

1) the two letters of 12 December 1985 and 14 January 1986 from Cargill merely express and formulate the personal views and positions of that company;

2) the ‘system’ governing exports in force at that time and at present is as follows:

a) Contrary to the allegations made by the Commission, in the case of each export operation information on current international prices is provided in the form of a price-conformity certificate issued by the chamber of trade and industry in the place where the undertaking has its registered office. This certificate plays a crucial role in preventing possible underestimates.

b) The main purpose behind the lodgment of the ‘export declaration and invoice’ forms is to ensure:

i) a statistical track of exports;

ii) supervision of exports trends.

c) In order to ensure more direct control and more rapid centralization of information concerning exports of the product in question, lodgment of the export declaration and invoice forms is made through the Bank of Greece and its 27 branches throughout the country.

From this the Hellenic Republic concludes that those documents neither add nor subtract anything whatever, particularly since no prohibition on the export of maize existed or was in fact applied during the relevant period.

V — Replies by the parties to the questions put by the Court

A — Replies made by the Hellenic Republic

First question

The Hellenic Republic is requested to state whether maize exports were, between September and December 1985, subject to types of administrative or bank approval other than endorsement of the ‘export declaration and invoice’ form by the Bank of Greece.

Reply

Pursuant to Decision No E4/10110/80 of the Minister of Commerce, maize is exported freely to the European Community on the basis of the export declaration and invoice forms subject to endorsement, irrespective of the branch of the merchant bank acting as intermediary.

Second question

The Hellenic Republic is requested to provide figures, covering the period 1 September 1985 to 31 December 1985, in respect of the following:

a) maize exports effected, including those effected by KIDEP, specifying in each individual case the name of the trader, the amounts of maize in question and their destination, the date on which the trader requested endorsement from the Bank of Greece and the date on which endorsement was notified to the trader;

b) in so far as they are not covered by the reply to the matters in heading (a), the applications for endorsements of maize exports submitted to the Bank of Greece during that period, specifying in each individual case the name of the trader, the amounts of maize in question and their destination, the date on which the trader requested endorsement, the nature of the decision taken by the Bank of Greece, the date on which that decision was notified to the trader and, where appropriate, the grounds on which endorsement was refused;

c) in the event that exports and, in particular, actual exports of maize were made subject to types of administrative approval other than endorsement by the Bank of Greece, in respect of each of the operations referred to in the replies to the matters set out in headings (a) and (b), the dates on which the requests for authorization were submitted by the exporter, the dates on which the decisions on those requests were notified to the exporter and, where appropriate, the reasons for which authorization was refused;

d) the exact reasons justifying the period of time between submission of the endorsement applications and, where relevant, the requests for authorization referred to in the replies to the matters set out in the three headings (a), (b) and (c) above, and the dates on which decisions were taken on those requests and applications.

Reply

Heading (a) — The replies are contained in the documents designated ‘EXEL’ attached to the statement of defence (Annex HI).

According to those documents, authorizations were issued in August 1985 and, pursuant to normal procedure, were notified directly to the applicants. The three export operations were carried out at a later date: the second in November (11 November 1985) and the first and third in December (12 and 16 December 1985).

During the period in question, the following export operations were carried out by individuals through Customs Office D in Thessaloniki:

i) Export Declaration No 20385 of 27 September 1985; Exporter: P. Kadinopoulos AE; Country of destination: Italy; Quantity: 20000 tonnes;

ii) Export Declaration No 21810 of 14 October 1985; Exporter: Cargill EPE; Country of destination: the Netherlands; Quantity: 5500 tonnes;

iii) Export Declaration No 21811 of 14 October 1985; Export also effected by Cargill EPE to the same country of destination and in respect of the same quantity of 5500 tonnes.

Heading (b) — Information relating to export endorsement applications is not kept by the Bank of Greece since such applications were processed by other banks operating as intermediaries.

Heading (c) —Exports were not made subject to any administrative authorization other than endorsement of the export declaration and invoice form.

Heading (d) — There is no difference between endorsement and authorization.

Endorsement of the export declaration and invoice form is the procedure in force at present. Delays may possibly arise between the endorsement of the export declaration and invoice form, which in normal cases is issued immediately and without any difficulty, and completion of the export operation. The latter aspect is normally connected with procedures before the customs authorities.

Third question

The Hellenic Republic is requested to state whether it is correct, as reported in the newspaper articles produced by the Commission, that the Kadinopoulos undertaking received an endorsement on 27 September 1985 authorizing it to export maize and, if this was the case, whether it is true that that undertaking unsuccessfully attempted to obtain clearance from the customs authorities and the Ministry of Commerce in order to export the quantities of maize which were the subject of that endorsement.

Reply

Reference is made to the reply to the second question under heading (a)(i) concerning exports effected via Customs Office D in Thessaloniki. The P. Kadinopoulos company is recorded as having exported 20000 tonnes of maize to Italy. The press articles annexed to the Commission's statement of reply do not make it clear whether they relate to this particular case or to another.

Fourth question

The Hellenic Republic is requested to set out the exact reasons why the Cargill company was unable to obtain a maize export endorsement in the circumstances described in its letters of 12 December 1985 and 14 January 1986, as produced by the Commission.

Reply

Reference is made to the defendant's written observations on the contents of those documents, production of which was authorized by order of the Court of 21 November 1990.

B — The Commission's replies

First question

The Commission is requested to indicate precisely whether, in its opinion, the Greek authorities prohibited or restricted maize exports over the period from 1 September 1985 to 31 December 1985 by using methods other than those available to them under the procedure for endorsement of ‘export declaration and invoice’ forms by the Bank of Greece.

Reply

1) The applicable export procedures are those laid down in Ministerial Decisions No E4/10110 of 4 December 1980 and No B3.1871 of 12 December 1980. Those procedures apply uniformly to all products. Under Paragraph 4 of Decision No E4/10110 of 4 December 1980, an export declaration and invoice form must be submitted to the customs authorities for all exports of products, whether of Greek or other origin. The export declaration and invoice form must be endorsed (that is to say, approved) by the merchant bank acting on behalf of the trader in order to make it possible to check that the exporter has met his obligations with regard to currency exchange. By way of derogation from the above, the same paragraph provides that the export declaration and invoice form must, in certain clearly specified cases which are exhaustively listed in the above decision, also receive the prior endorsement of the Bank of Greece under conditions set out in special directives issued by the Ministry of Commerce. Those derogating provisions do not appear to be applicable to maize exports and the Hellenic Republic has not in any case ever argued that they were so applicable. It follows that maize exports could normally be subjected only to the procedure of endorsement of the export declaration and invoice form by a merchant bank.

2) With regard to the telex sent by the Bank of Greece on 2 September 1985 to the merchant banks, the Commission makes the following observations on the argument put forward by the Hellenic Republic that the sole purpose of that telex was to enable a statistical track to be kept of maize exports and that its purpose was not to prevent exports.

a) Questions must be asked as to the Bank of Greece's competence to issue instructions to merchant banks to make every export of maize subject to prior approval. Pursuant to Greek law, it is necessary for the Bank of Greece to be given prior powers or, as is more likely, that a special decision of the competent minister should confer on it the powers necessary for that purpose. This is provided by Paragraph 4 of Decision No E4/10110 of 4 December 1980. It is for that reason necessary that there should be a special prior decision or an administrative directive from the Ministry of Commerce or any other ministry conferring the relevant powers on the Bank of Greece. At the present stage of proceedings, the Hellenic Republic has not notified any such decision or internal directive to the Commission.

b) Given that the procedure for the endorsement of export declaration and invoice forms, as introduced by Ministerial Decision No E4/10110 of 4 December 1980, was already in force during the period relevant to the present proceedings, one must ask what the other reasons could be which led the Bank of Greece to send the telex of 2 September 1985 to the merchant banks. The reason cannot lie in supervision of exchange control requirements, since the export declaration and invoice forms already had to be endorsed by the merchant banks for that purpose. Nor could the reason be statistical in nature, as the export declaration and invoice procedure operated from 1981 to 1985 without any obvious problem. Furthermore, the telex from the Bank of Greece nowhere makes it clear that prior endorsement is required for statistical reasons, a matter which would be readily comprehensible. Finally, it is not at all obvious why every export of maize must receive prior endorsement from the central office of the Bank of Greece. If the reasons were purely statistical in nature, subsequent transmission of the information by the regional branches of merchant banks would be sufficient. The telex of 2 September 1985 does not refer expressly to the export declaration and invoice procedure, but rather to ‘prior endorsement by the export control department’ of the Bank of Greece in respect of every export of maize. A literal interpretation would suggest that the telex does not refer to endorsement of the export declaration and invoice forms but rather introduces an additional system of prior authorization by the ‘exports’ department (rather than the ‘exchange’ department) of the central office (and not the regional branches) of the Bank of Greece, a system which is quite separate from the export declaration and invoice procedure. It is apparent from all the documents in the case that an initial endorsement is made on the export declaration and invoice form by the acting merchant bank, which then sends it, along with the export application, to the central office of the Bank of Greece. It is for the latter to approve not only the export declaration and invoice form, but also the export as such. The endorsement is then returned to the acting bank, and subsequently from that bank to the exporter in order to enable him to export the goods in question. The customs authorities do not permit maize to be exported unless it is accompanied by a properly endorsed export declaration and invoice form and by authorization from the Bank of Greece.

c) The telex of 2 September 1985 is extremely wide in its scope since it applies to every export operation without specifying the conditions, the criteria and time-limits with which the Bank of Greece must comply when examining applications. Consequently, the Bank of Greece has complete discretionary power over the approval of exports. This is what emerges clearly from all the letters which the Commission produced before the Court in connection with its procedural application and in particular from the two letters which the Court allowed to be produced through its order of 21 November 1990. The result of that procedure was to confer on the Bank of Greece the discretion to delay and indeed, quite simply, to ban exports in a manner at variance with Community law (see the judgment in Case 68/76 Commission v France [1977] ECR 515).

3) Even if it is accepted that the object of the telex of 2 September 1985 was to enable a statistical track to be kept of exports, the procedure introduced was very rigid and departed from the principle of the free movement of goods. The Hellenic Republic, which has the onus of proof in this regard, has failed to demonstrate that there were no other procedures which were less restrictive than the procedure at issue and which would have allowed a statistical track to be kept of exports.

4) The public statement by the Secretary of State for Commerce, to the effect that maize exports would be banned from 2 September 1985, itself had the effect of impeding exports. In view of the heightened professional risk involved in the export of maize, that statement discouraged exporting companies. For that reason, it constitutes a measure having an effect equivalent to a quantitative restriction on exports within the meaning of Article 34 of the Treaty (see the judgment in Case 249/81 Commission v Ireland [1982] ECR 4005).

Second question

The Commission is requested to specify the exact cases to which it was referring when it made the following statement in its reply of 11 July 1989 (page 7 of the French transtation) :

‘Furthermore, the discrimination in favour of KIDEP did not, according to the Commission, occur exclusively during the period when export authorizations were being issued but also during later stages of the procedure (for instance, in the form of various and excessive administrative delays during export operations carried out by private traders, the revocation of authorizations already granted, the failure to clear export schedules of private traders, the refusal on the part of the Bank of Greece to issue endorsements, etc.).’

Reply

A —) With regard to the discriminatory treatment to which exporters other than KIDEP were subjected, the Commission makes the following submissions.

1) The exports by the Kadinopoulos and Cargill undertakings, cited by the Hellenic Republic, were in fact carried out pursuant to authorizations issued before the export ban came into force. Evidence of this is supplied by the copies of the export declaration and invoice forms placed on the case file. Thus, Cargill exported 11000 tonnes of maize on 14 October 1985 pursuant to export licences issued on 16 August 1985. On 2, 12 and 17 October 1985, Kadinopoulos exported a total of 22000 tonnes of maize pursuant to licences issued on 1 August 1985.

2) It is clear from the letters annexed to the Commission's procedural application that the procedure of prior endorsement by the Bank of Greece resulted in considerable delays and that no explanation was given to the exporters concerned. Cargill's case is a typical example of a trader/exporter whose export declaration and invoice form was never endorsed; it never received an explanation for that refusal, since no reply was ever made to the letters which it had sent.

3) The case of Kadinopoulos constitutes a typical example of withdrawal of authorization to export. It appears from the information which the complainant sent to the Commission that the Bank of Greece inadvertently approved the company's export declaration and invoice form for the export of 20000 tonnes of maize on 27 September 1985, that is to say, during the period of the ban. When it became aware of its technical mistake, however, the Bank of Greece requested withdrawal of the authorization already granted. Finally, it would appear that the Minister for Commerce had to intervene personally to force the company not to make use of its export licence. This episode is also related in the extract from the 11 November 1985 edition of the newspaper Ta Nea (Annex I to the reply).

B —) So far as concerns the privileged treatment accorded to KIDEP, this, it is claimed, is attributable to the special economic and administrative ties which bind it to the public authorities of the State (see, on this point, the judgments in Case C-281/87 Commission v Greece [1989] ECR 4015 and in Case C-35/88 Commission v Greece [1990] ECR I-3125). It was precisely by reason of its privileged relations with the Greek authorities that KIDEP was quickly and effectively informed of the ban which was about to be imposed on exports of maize. KIDEP was thus placed in a position where it was able correctly to programme its exports, not only before the entry into force of the ban, but also prior to the discontinuation of that ban. The Greek authorities had a direct financial interest in ensuring that KIDEP, in preference to other commercial companies, should have access to facilities enabling it to export profitably, since the Greek Government used State budget revenue to cover losses incurred by KIDEP in respect of the management of maize and feed grain. This may provide an explanation for the fact that KIDEP issued an invitation to tender on 7 November 1985 for the immediate expon of 30000 tonnes of maize. While private traders were unable to obtain an endorsement from the Bank of Greece or to export on the basis of the authorizations already granted to them (see the case of Kadinopoulos), KIDEP issued an invitation to tender on 11 November 1985 for the immediate export of maize. This discriminatory treatment in favour of KIDEP did not go unnoticed in the press, as is demonstrated by the article published on 10 November 1985 in the newspaper I Nafiemporiki (Annex VII to the reply).

F. Grévisse

Judge-Rapporteur

1 Language of the case: Greek.