Franz Egenberger GmbH Molkerei und Trockenwerk v Bundesanstalt für Landwirtschaft und Ernährung.

• Jurisdiction: European Union
• Court: Court of Justice (European Union)
• Writing for the Court: Levits
• ECLI: ECLI:EU:C:2005:733
• Docket Number: C-313/04
• Date: 01 December 2005
• Procedure Type: Reference for a preliminary ruling

OPINION OF ADVOCATE GENERAL

GEELHOED

delivered on 1 December 2005 (1)

Case C-313/04

Franz Egenberger GmbH Molkerei und Trockenwerk

v

Bundesanstalt für Landwirtschaft und Ernährung

(Reference for a preliminary ruling from the Verwaltungsgericht Frankfurt am Main (Germany))

(Validity of Articles 25(1) and 35(2) of Commission Regulation (EC) No 2535/2001 of 14 December 2001 laying down detailed rules for applying Council Regulation (EC) No 1255/1999 as regards the import arrangements for milk and milk products and opening tariff quotas – Issue of an import certificate, for which an application may be submitted only in the United Kingdom, for New Zealand butter subject to the requirement of presentation of an Inward Monitoring Arrangement (IMA 1) certificate – Infringement of Articles 28, 34(2) and 82, first paragraph, EC and of Articles 26(2) and 29(2) of Council Regulation (EC) No 1255/1999 – Infringement of Article XVII: 1(a) of the GATT Agreement – Infringement of Article 1(3) of the Agreement on Import Licensing Procedures)

I – Introduction

1. The present case, a reference from the Verwaltungsgericht Frankfurt am Main (Frankfurt Administrative Court) (Germany), concerns the validity of certain aspects of Commission Regulation No 2535/2001 laying down detailed rules for applying Council Regulation No 1255/1999 as regards the import arrangements for milk and milk products and opening tariff quotas. The case raises a number of important questions of principle. First, what is the proper standard of judicial review of Commission legislation in the agricultural field for compliance with higher Community law norms, in particular that of non‑discrimination? More specifically, should judicial review in all circumstances be limited in this field? Second, to what extent can the Commission be bound by the Community competition rules, and in particular Article 86(1) EC, in enacting legislative measures? Third, should the Court reconsider its own jurisprudence specifying the circumstances in which Community secondary legislation can be judicially reviewed for compliance with WTO law? This raises again the delicate issue of the interrelation between the Community legal order and WTO law. I will return to these issues after describing the background to the case.

II – Historical and legal background to the reference

A – Historical background

2. Prior to its accession to the European Economic Community in 1973, the United Kingdom was the traditional export market for New Zealand butter. In order to preserve this market, Protocol 18 to the Act of Accession of Denmark, Ireland and the United Kingdom (‘Protocol 18’) allowed for fixed quotas for New Zealand butter and cheese to be imported into the United Kingdom at reduced custom duties for an initial period of five years. (2) By Article 1(4) of Protocol 18, it was a condition of these reduced levies that products imported into the United Kingdom under the Protocol could not be traded within the Community or re‑exported to third countries. The initial restrictions to trade were gradually removed: imported New Zealand butter could be used for processing (not only for direct consumption) in the United Kingdom following Council Regulation No 3667/83, and could be freely traded within the Community (not only within the United Kingdom) following Council Regulation No 3841/92. (3) By a number of Council Regulations adopted on the basis of Article 5(2) of Protocol 18, the import regime provided for in the Protocol was prolonged until 1995.

3. From 1 July 1995, tariff quotas for milk and milk products were governed by the Agreement on Agriculture concluded in the framework of the Uruguay round of multilateral trade negotiations of the General Agreement on Tariffs and Trade (GATT) and the World Trade Organisation (WTO). As regards the European Communities, the settlement included tariff concessions for certain milk products, to be imported into the Community at reduced duty, which are set out in the form relevant to the present case in schedule CXL drawn up pursuant to negotiations conducted under Article XXIV(6) of the GATT (‘Schedule CXL’). The tariff quotas provided by this settlement for the import of New Zealand butter into the Community were implemented into Community law by Commission Regulations. (4)

B – Applicable Community law

Council Regulation No 1255/1999

4. Regulation No 1255/1999, adopted on the base of Article 37 EC, sets out the regime governing the common market organisation of milk and milk products. (5) This regime provides for an internal Community market of milk and milk products based on an intervention principle (Title I, Regulation No 1255/1999), as well a uniform trading system in these products with third countries (Title II, Regulation No 1255/1999). By recital 17 in the preamble to Regulation No 1255/1999, this trading system is based on the undertakings accepted by the Community under the Uruguay Round of multilateral trade negotiations.

5. Article 26(1) of Regulation No 1255/1999 provides that ‘imports into the Community of any of the products listed in Article 1 shall be subject to the presentation of an import licence. Exports from the Community of any such products may be made subject to presentation of an export licence.’ By Article 26(2), ‘licences shall be issued by Member States to any applicant, irrespective of his place of establishment in the Community and without prejudice to the measures taken for the application of Articles 29, 30 and 31. Import and export licences shall be valid throughout the Community …’. Article 26(3) of Regulation No 1255/1999 provides that the Commission shall adopt a list of products in respect of which export licences are required, the term of validity of the licences, and other detailed rules for the application of the Article, in accordance with the procedure set out in Article 42. Article 29(1) of Regulation No 1255/1999 provides that ‘tariff quotas for the products listed in Article 1 resulting from agreements concluded in accordance with Article 300 of the Treaty or from any other act of the Council shall be opened and administered in accordance with detailed rules adopted under the procedure laid down in Article 42.’ Possible methods for quota administration are set out in Article 29(2), which specifies that these methods ‘shall avoid any discrimination between the operators concerned …’. (6) By Article 44 of Regulation No 1255/1999, the Regulation ‘shall be so applied that appropriate account is taken, at the same time, of the objectives set out in Articles 33 and 131 of the Treaty’.

Commission Regulation No 2535/2001

6. Regulation No 2535/2001, adopted on the bases of Articles 26(3) and 29(1) of Regulation No 1255/1999, lays down rules for the implementation of the import arrangements for milk and milk products, as well as for the opening of tariff quotas. Title 2 of Regulation No 2535/2001 provides for specific rules on imports at reduced duty. This Title sets out three alternative import regimes, each of which applies to certain defined products and attracts a reduced duty.

7. The first possible regime (Chapter I of Title 2) provides for a system of imports under quotas opened by the Community made on the basis of an import licence alone, application for which must be made to the Commission via Member State authorities. The second possible regime (Chapter II of Title 2) provides for a system of non‑quota preferential imports made on the basis of an import licence alone. The third possible regime (Chapter III of Title 2) provides for a system of imports made under an import licence covered by a so‑called ‘inward monitoring arrangement’ (IMA 1) certificate. This Chapter comprises two separate sections: Section 1, a general section setting out the IMA 1 certificate regime; and Section 2, which applies only to imports of New Zealand butter.

8. By Article 24 of Section 1, the imports to which Section 1 applies extend to those made under the quotas for specified countries of origin listed in the CXL Schedule, which, as detailed in Annex III(A) to Regulation No 2535/2001, includes imports of New Zealand butter. This Annex details the duties to be applied to each category of product listed therein and, where appropriate, the maximum annual quantities to be imported. Article 25(1) of Section 1 provides that ‘Import licences for the products listed in Annex III at the rate of duty indicated shall be issued only on presentation of a corresponding IMA 1 certificate, for the total net quantity indicated therein. IMA 1 certificates must meet the requirements laid down in Article 40(1) for butter under quota 09.4589 referred to in Annex III(A) (hereinafter: “New Zealand butter”) and in Articles 29 to 33 for other products. Import licences must show the number and date of issue of the corresponding IMA 1 certificate.’

9. Article 30 of Section 1 provides for certain formal requirements to be met by IMA 1 certificates. By Article 30(2), these certificates shall be printed and completed in one of the official languages of the Community, and may also be printed and completed in the official language or one of the official languges of the exporting country. By Article 32(2), IMA 1 certificates shall be valid only if completed and authenticated by an issuing body listed in Annex XII, which, in the case of New Zealand, is the MAF Food Assurance Authority of the New Zealand Ministry of Agriculture and Forestry (‘MAF’).

10. Section 2 of Chapter III, which applies solely to New Zealand butter, provides by Article 35(2) that ‘Import licence applications may be submitted only in the United Kingdom. The United Kingdom shall monitor all IMA 1 certificates issued, cancelled, amended, corrected, or in respect of which copies have been issued. It shall ensure that the total quantity for which import licences are issued does not exceed the quota for any import year.’ Article 38 of Section 2...