ECJ 1 Agriculture – Common organization of the markets – Beef and veal – Import rules – Community tariff quotas – Conditions of eligibility for operators other than traditional importers – Export thresholds higher than those required for the two preceding quotas – Misuse of powers – None – Principle of proportionality – Principle of the protection of legitimate expectations – Duty to state reasons – Breach – None (Council Regulation No 130/94; Commission Regulation No 214/94, Art. 1(2))
2 Agriculture – Common organization of the markets – Discrimination between producers or consumers – Import rules governing eligibility for the Community tariff quota for certain kinds of frozen beef – Possibility for traditional importers to cumulate rights of access to the quota in the case of company mergers – Other operators not permitted to do so – No discrimination (EC Treaty, Art. 40(3); Commission Regulation No 214/94, Art. 2(2))
3 Since the purpose of Regulation No 130/94 opening a Community tariff quota for certain kinds of frozen beef is to guarantee equal and continuing access to the quota for all interested operators within the Community, the Commission did not exceed the powers conferred on it by that regulation when it provided in Article 1(2) of Regulation No 214/94 laying down detailed rules for the application of Regulation No 130/94 that the part of the quota available to operators other than traditional importers was to be restricted to applicants who could furnish proof of having exported to third countries during the reference period a minimum quantity of beef greater than that required for the two preceding quotas. Although the criteria of eligibility for the quota which the Commission was called upon to lay down were required to be such as to guarantee equal and continuing access only for operators who had imported or exported significant amounts, Regulation No 130/94 did not require it to link export thresholds directly to developments in trade with third countries. Furthermore, the criteria laid down by the Commission rightly deter the proliferation of `paper companies’ reflecting the artificial fragmentation by certain traders of their economic structure, which is liable to disrupt the scheme because it increases the number of applications and thereby reduces the quantities available for genuine small operators, who thus risk being excluded from the quota altogether. The raising of the export thresholds by the Commission did not breach the principle of proportionality, either, because in the light of the purpose of the scheme it was reasonable that the effect of the change be to deprive of the right to participate in the quota a large number of undertakings created artificially for the sole purpose of obtaining a larger share of the quota, there being no proof that the increase prevented a large number of genuinely small operators from obtaining a share of the quota. Likewise, it did not breach the principle of the protection of legitimate expectations because any prudent and diligent trader must know that the export thresholds may be altered whenever a new annual quota is adopted, and the premature announcement of the new eligibility criteria would encourage the creation of `paper companies’ precisely to meet the new thresholds, thus enabling large groups to obtain maximum advantage from the quota. Finally, the duty to state reasons for the increase was complied with, since the preambles to Regulations No 130/94 and No 214/94 state clearly the considerations which led the Commission to alter the eligibility criteria for operators other than traditional importers. 4 The fact that Article 2(2) of Regulation No 214/94 laying down detailed rules for the application of the import rules opening a Community tariff quota for certain kinds of frozen beef deprives companies resulting from mergers who wish to obtain a share of the quota for non-traditional operators of the possibility of cumulating past performance obtained by each of them, a possibility which is available to traditional importers, does not constitute discrimination prohibited by Article 40(3) of the Treaty. The way in which the quota for traditional importers is distributed is not comparable to the way in which the quota reserved for other operators is distributed. The first is allocated among eligible operators in proportion to the imports achieved by each of them, whereas the second is allocated in proportion not to imports or exports, but to the quantities applied for, subject to a maximum per application. Consequently, the cumulation of rights to a share in the traditional quota is not intended to determine the eligibility for the quota of companies arising from mergers which would not otherwise be eligible, but to permit them to cumulate quota shares already held separately by the undertakings involved in the merger.
Citations:
C-241/95, [1996] EUECJ C-241/95
Links:
European, Agriculture
Updated: 03 June 2022; Ref: scu.161630