J U D G M E N T OF T H E C O U R T ( S E C O N D CHAMBER) 30 SEPTEMBER 1982 '

SA Roquette Frères v Council of the European Communities

(Isoglucose)

Case 242/81

Measures adopted In the institutions — Legal nature — ReguLtion or decision — Criteria

(EEC Treaty, Art. 189)

According to the second paragraph of Article 189 of the Treaty the criterion for distinguishing between a regulation and a decision is whether or not the measure in question has general application. For that purpose it is necessary to consider the nature of the contested measure and in particular the legal effects which it is intended to have or does in fact have.

A measure does not cease to be a regu­lation because it is possible to determine more or less exactly the number or even the identity of the persons to whom it applies at any given time as long as it established that such application takes effect by virtue of an objective legal or factual situation defined by the measure in question in relation to its purpose.

In Case 242/81

SA Rooi'Frrr FRÈRES, a company incorporated under French law, whose registered office is at Lestrem. Pas-de-Calais, represented by Marcel Vcroone and Jacques Dutat. of the Lille Bar. with an address for service in LuxcmDourg at the Chambers of J. Loesch. Advocate. 2 Rue Goethe,

applicant,

1 — 1 *~Hir . · "» Cj.f r'r-^f.

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JUDGMENT OF 35. 9. 1982 — CASE 242/81

V

COUNCIL OF THE EUROPEAN COMMUNITIES, represented by Daniel Vignes, Director of its Legal Department, assisted by Arthur Bräutigam, an administrator in the said department, with an address for service in Luxembourg at the office of H.J. Pabbruwe, Director of Legal Affairs at the European Investment Bank, 100 Boulevard Konrad-Adenauer,

defendant,

and

COMMISSION OF THE EUROPEAN COMMUNITIES, represented by Jean-Claude Séché, Legal Adviser in its Legal Department, with and address for service in Luxembourg at the office of Oreste Montalto, a member of the said department, Jean Monnet Building, Kirchberg,

intervener,

APPLICATION for a declaration that Council Regulation No 1785/81 of 30 June 1981 on the common organization of the markets in the sugar sector (Official Journal 1981, L 177, p. 4) is void,

T H E COURT (Second Chamber)

composed of: O Due. President of Chamber, A. Chloros and F. Grévisse, Judges,

Advocate General G Reischl Registrar H A Ruhl. Principal Administrator

gives the following

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ROQUETTE FRERES v COUNCIL

JUDGMENT

Facts and Issues

The facts of the case, the course of the procedure and the conclusions, sub­missions and arguments of the parties may be summarized as follows:

I — Facts and written procedure

1. The product in question

Glucose which has a high fructose content and is also called "isomerose" or "isoglucose" is a sweetener manu­factured from starch from any source, albeit most often from maize, and its properties allow it to be used as a direct substitute for liquid sugar or syrup for food purposes.

The applicant in the present case is one of the manufacturers of maize starch in the Community and has set up an industrial structure for the manufacture of isoglucose.

2. The Community rules

(al When the manufacture of glucose with a high fructose content (hereinafter referred to as "isoglucose") appeared in the Community the common organ­izations of the markets in sugar on the one hand and cereals on the other were respectively governed by Council Regu­lations Nos lCC9/t>7 of 18 December 1967 and 12C/67 of 13 June 1967 (Official Journal. English Special Edition I9ö7. pp. 304 and 33 respectively).

Those regulations defined their own scope as follows:

As regards sugar Anicie 1 of Regulation No IC09/67 provided:

"The common organization of the market in sugar shall . . . cover the following products:

Common Customs Tariff heading No and description of goods:

(a) . . .

(b) . . .

(c) . . .

(d) ex 17.02 Other sugars (but not including lactose and glucose); sugar syrups (but not including lactose syrup and glucose syrup);

ex 17.05 Flavoured or coloured sugars (but not including lactose and glucose), syrups (but not including lactose syrup and glucose syrup) and molasses . . . ."

As regards cereals Article 1 of Regulation No 12C/67 provided:

"The common organization of the market in cereals shall . . . cover the following products:

(a) . . .

(b) . . .

(c) . . .

(d) the products listed in Annex A to this regulation" (products listed in Annex A include "17.C2 B: glucose and glucose syrup").

(b) That arrangement remained un­changed for several years. In particular. Article 1 (1) of Regulation No 3330/74 of the Council of 19 December 1974 (Official Journal 1974, L 359. p. 1), which repealed Regulation No 1039/67

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JUDGMENT OF 30. 9. 1982 — CASE 242/81

and established a new common organiz­ation of the markets in sugar, excluded lactose syrup and glucose svrup (headings 17.02 C to F and 17.05' C). Regulation N o 2727/75 of the Council of 20 October 1975 (Official Journal 1975, L 281, p. 1) on the common organization of the market in cereals covers inter alia glucose and glucose syrup (Article 1 (d) and Annex A to the regulation).

The fact that in 1976 isoglucose came within the scope of the common organ­ization of the markets in cereals is confirmed inter alia by the regulations implementing Regulation No 2727/75 as regards the payment of production refunds in the cereals sector and in particular the production refunds for isoglucose with a high fructose content: Council Regulation No 1862/76 of 17 July 1976 (Official Journal 1976, L 206, p. 3), which fixed the amount of the refunds for the 1976/77 marketing year and laid down special rules for the manufacture of glucose with a high fructose content; Commission Regu­lation No 2158/76 of 31 August 1976 laving down rules for the application of Regulation No 2742/75 (Official Journal 1976, L 241, p. 21).

h appears from a consideration of those provisions thai the Community legislature in the 1976/77 production vear intended to subiect the production of glucose with a high fructose content to rules derogating from those governing other cereal products, in particular by providing iniţiali« for the pa\ ment of a leaser production refund for isoglucose than for the other products coming under the common organization of the ma r Kets cereais and subsequently, as from the 1977/7t> marketing \ear. for the abolition ot t hi· production refund on isoglucose

(c) Bv Council Regulation No 1110/77 of 17 May 1977 (Official Journal 1977, L 134, p. 1) amending Regulation No 3330/74 on the common organization of the market in sugar, the Community legislature confirmed the exclusion of isoglucose form the scope of the common organization of the markets in sugar. However, Council Regulation No 1111/77 of 17 May 1977 (Official Journal 1977, L 134, p. 4) established common provisions for isoglucose and thus withdrew the production thereof from the scope of the common organ­ization of the markets in cereals (headings Nos 17.02 D I and 17.05 C I).

Parallel to the provisions of the aforesaid Regulation No 1111 /77 establishing a system of external trade and fixing a production levy on isoglucose in the Community, the Council by the adoption of Regulation No 1110/77 amended the provisions on the production levy on sugar (Articles 2 and 4 of Regulation No 1110/77 amending Anieles 8 and 27 (2) of Regulation No 3330/74) and on the fixing of the threshold price for white sugar (Article 3 of Regulation No 1110/77 amending Article 13 (2) of Regulation No 3330/74) to take account of the effects on the sugar market of the production levy on isoglucose recently created bv Article 9 of Regulation No 1111/77. '

It is apparent from a consideration of those regulations that the Community legislature in the 1977/78 marketing year intended to apply special rules to the production of isoglucose, albeit closely connected with those governing the sugar market, to take account of the fact that the two products were linked by virtue of their being substitutes for one another.

That view is clearly supported inter alia bv the fourth recital in the preamble to

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ROQUETTE FRERES v COUNCIL

Regulation No 1110/77, which is as follows :

". . . the production levy on isoglucose provided for in Article 9 of Council Regulation (EEC) No 1111/77 of 17 May 1977 laying down common pro­visions for isoglucose is based essentially on the need for isoglucose producers to share the costs incurred by the sugar sector inasmuch as the substitution of isoglucose for sugar makes it inevitable, in view of the Community sugar surplus, for corresponding quantities of sugar to be exported to third countries; . . . the revenue from the production levy on isoglucose should therefore be set against these marketing losses."

In the same way it is confirmed by the ninth recital in the preamble to Regu­lation No 1111/77, which is worded as follows:

". . . the levy system established by this regulation is complementary to that· established bv Council Regulation (EEC) No 3330/74 of 19 December 1974 on the common organization of the market in sugar, as last amended bv Regulation (EEC) No 1110/77; . . . the envisaged levy on the production of isoglucose is therefore analgous to that provided for in Anicie 27 of Regulation (EEC) No 3330/74 and, consequently, constitutes own resources of the Communities within the meaning of Article 2 of the Council Decision of 21 April 1970 on the replacement of financial contributions from Member States by the Communi­ties' own resources."

Idi The legal position regarding isoplucose »as ¡as: amended by Council Regulation No I7S5/8I or 3: june 1981 on the common organization of the markets in the sugar sector (Official Journal 19* I. L 177. p. 4), which

repealed inter alia Regulations Nos 3330/74 and 1111/77.

Article 1 (1) provides:

"The common organization of the markets in the sugar sector established by this regulation shall cover the following products:

(a) . . .

(b) . . .

(c) . . .

(d) . . .

(e) . . .

(f) 17.C2 D I ' : Isoglucose

(g) 21.07 FIII1: Flavoured or coloured isoglucose syrups."

The second recital in the preamble to Regulation No 1783/81 mentions the need to include isoglucose in the common organization of the markets in sugar. It reads as follows:

".. . the operation and development of the common market in agricultural products must be accompanied by the establishment of a common agricultural policy to include, in particular, a common organization of the agricultural markets which may take various forms depending on the product concerned; . . . isoglucose is a direct substitute for liquid sugar obtained from sugar beet or sugar cane; . . . therefore, the markets in sugar and isoglucose are closely linked; . .. the situation in the Community in respect of sweeteners is characterized bv structural surpluses and any Community decision

1 — Tnr hfasmc Noi auotrc corrcipond io iftoir laid C - · * . Cjutir Rrt.utiiT N J I7Í6/ÍI ol Io Ml>

«* ammoinr Rrfu>jiior> Ne 'SC'oï on ;hc Common Cditcmt lir-M contraumt u^on tur enin mio torce p· fcftw.juo'- \* . I "l i î l (Ottici*. Journjì L 17?. r »:.

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JUDGMENT OF JO. 9. 1982 — CASE 242/81

relating to one of these products inevitably has repercussions on the other; . . . it is therefore necessary to have an organization common to the sugar and isoglucose sectors which takes appro­priate account of production features specific to one or the other sector."

3. Procedure

By application received at the Court Registry on 7 September 1981 SA Roquette Frères [hereinafter referred to as "Roquette"] brought an action before the Court under the second paragraph of Article 173 of the EEC Treaty for a declaration that Council Regulation N o 1785/81 of 30 June 1981 on the common organization of the markets in the sugar sector is void inasmuch as Article 24 thereof fixes production quotas for isoglucose and Anicie 28 establishes a production levy on isoglucose related to the said quotas.

On 13 Januarv 1982 Roquette lodged its reply with the Court.

The Council of the European Communities, the defendant, lodged its defence with the Court on 6 November 1981 and us rejoinder on 18 March 1982; it contends that the action is inadmissible and alternatively unfounded.

By application lodged at the Court Registry on 2 December 1981 the Commission sought to mienené in support of the Council. By order of 22 Januarv \9*2 the Court allowed the intervention The Commission lodged its pleading »uh the Court on 17 March I9s;

l. pon hr anne the we» s oí the Advocate General the court decided bv order of l q Mav I9S2 to assign the case to the Second Chamoer. pursuant to Anide 95 ( I ) ot us Ruies of Procedure

II — Conclus ions of the parties

1. Roquette claims that the Coun should :

Declare the application admissible and well founded;

Declare Council Regulation No 1785/81 of 30 June 1981 void at least to the extent to which its provisions relate to the applicant;

Order the Council to pay the costs.

2. The Council of the European Com­munities asks the Coun to declare the applicant's claim inadmissible, in the alternative to dismiss it because the applicant has no legitimate interest in taking proceedings and, in the further alternative, to dismiss it as unfounded.

The Council funher asks the Coun to order the applicant to pay the costs.

3. The Commission suppons the Council's conclusions that:

The action should be dismissed;

The applicant should be ordered to pay the costs.

I l l — Submissions and argu­ments of the parlies

A — Admissiblity

I. Roquette seeks to anticipate the arguments which might be adduced against it by the Council on the question of the admissibility of its action and states in its application that it considers that us action is admissible inasmuch as us obiect is a declaration that a regu­lation of direct and individual concern to u is void.

In the first place the applicant observes that the Coun, in us judgment of 29 October 1980 in Case 138/79

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ROQUETTE FRERES » COUNCIL

(Roquette v Council) [1980] ECR 3333, held the action directed against Regu­lation No 1111 /77 laying down common provisions for isoglucose to be admissible.

In the second place the applicant seeks to refute the argument to the effect that the general manner of fixing production quotas for each Member State and no longer for each undertaking makes it impossible to identify the producers concerned by the regulation in question.

The applicant points out that, apart from the increase resulting from the enlargement of the Community by the accession of Greece, the number of undertakings producing isoglucose concerned by the regulation in question has not changed since the marketing vears prior to the year 1981, which is governed by the present regulation, and that in each country or production region the producers are easily identifiable since there is only one of them, except in Italy and Greece where there are two. It should not be thought that because the quotas are fixed for each Member State and not for each producer the Community legislature cannot know precisely how production capacity is allocated in the industry. As evidence of the validity of that statement the applicant points to the fact that the quota fixed for France by Regulation No. 1785/81 is simply the quota allocated by the Council to the applicant for the previous production years, which is logical since the applicant is the only producer of isoglucose established in French territory. In addition the applicant points out that as regards Greece the legislature has taken care to determine the breakdown of the national quota bei» een the two undertakings concerned and as tar as concerns Italy the quota granted to that Member State represents the arithmetical sum of the quotas preuouslv allocated to the two producers of isoglucose established in that territory.

The power given by Article 23 (2) of Regulation No 1783/81 to the Member States to alter the quotas allocated to the various producers subject to a limit of 10% cannot in the applicant's opinion affect that analysis. The applicant observes that in its opinion such measures were contemplated by the legislature to enable a production quota to be granted to any new producer who might appear on the market. Since that did not occur, the power given to the Member States by Article 23 (2) has not been exercised and the transitional measures taken by the Commission in the form of Regulation No 3041/81 of 23 October 1981 (Official Journal 1981, L 303, p. 10) habe not the applicant's knowledge been able to take effect.

In any event, the power given to Member States to alter the allocation of quotas subject to a limit of 10% of the amounts specified in Regulation No 1783/81 is to compared with the machinery previously provided for in Article 3 of Regulation No 1293/79 (which inserted a new Article 9 (6) into Regulation No 1111/77) allowing the Council to allot to new undertakings a production quota not exceeding 5% of the quotas allotted to the other producers.

The applicant observes that that machinery, the objectives of which were identical and the terms similar to those of Anicie 25 (2) of Regulation No 1785/81. did not allow the Court to declare inadmissible Roquette's previous action, which was brought against Regu­lation No 1293/79 (Case 138/79 [1980] ECR 3333).

For that reason it considers that, since the situation on the Community market has remained the same as it was in the marketing years prior to 1981. the fixing ot production quotas for each Member State and not for each undertaking in no

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JUDGMENT OF 3C. 9. 1982 — CASE 242/8:

way affects the admissibility of the action previously accepted by the Court in Case 138/79.

2. The Council of the European Communities considers that the action is inadmissible inasmuch as it does not satisfy the terms of Article 173 of the Treaty and the applicant has no legitimate interest in taking proceedings.

In the first place the Council considers that the contested measure is not of direct and individual concern to the applicant. In contrast to previous regu­lations allotting production quotas and imposing a production levy on iso-glucose. Regulation N o 1785/81 does not itself allocate the quotas in question but places the responsibility on the Member States for allocating quotas to the producers established in their territory and for that purpose gives them a "margin of discretion".

The Council states that in order to allow a new producer access to the market the Member States have pursuant to Article 23 of the regulation the power to reduce by not more than \Z:/: the A und B quotas allotted to individual under­takings. In tne Council's opinion that p o » e r breaks tne direi: imk between the applicant and trie contested measure required b\ Amele \T\ of the Treatv for the admissibilité of an action tor a declaration mat a measure is \oid It tol io» s according to tne Council that tne present j ; : i o n must be declared inadmissible

Ir supper· o ' ·:« ; j ir ihr Council puts ! · » aro trr !.· .·» -ng jrc-^rn'.»

Ir. ienira*: t.· ihr rr.a. r n r r i pro\i<ArĆ tor in \fin!f · o ' kremation N o 12»« J< 7·«. »h i . inverted a nr» A r t i c l e 9 te i m Rec u. a O'- N o I I I I / ."" Į;>\ mg tne Council po» r· - inc e ••rv. o ! J ne» producer s arre O* f r ma'ne:. to

allot a new quota restricted to 5 % of the existing quotas, Regulation N o 1785/81 gives the competent authorities of the Member States the power to reduce the quotas which they already fixed for the existing undertakings. It follows that in contrast to the machinery provided for in Regulation N o 1293/79 exercise of the power provided for in Article 25 of Regulation N o 1785/81 may affect the quotas allotted to existing producers and that would be after consideration by the Member States of the situation on the market.

Contrary to what the applicant appears to think, the power conferred bv that provision may be exercised at any time and the reason why the present situation, which appears identical to that in previous marketing years, will remain unchanged, is not that the provision has not yet been implemented. In that respect the Council stresses that the implemen­tation measures necessary for the exercise of the power conferred by Article 25 (2) of Regulation N o 1785/81 already exist in the form of Article 8 of Regulation N o 3331/74 of the Council of 19 December 1974 on the allocation and alteration of the basic quotas for sugar (Official Journal 1974, L 359, p. 18). It states further that the Member States may until the 1985/86 marketing year inclusive still alter the quotas allocated to undertakings pursuant to Anicie 25 (2) and finally that the implementation measures adopted bv the Commission, ' to which the applicant refers in an endeavour to show that no use will be made of that power to alter the quotas allocated, do not concern the application of Anicie 25 (2) of Regu­lation N o 1785/81 but transfers of quotas in the event of undenakings' merging or ceasing to trade.

1 — Commtmo« RcTu-atic V ' 3 C * 1 -' » 1 c: 2> 0,-n>etrr l'·» t tj»inp < » - 'rjntihvX-j rrcrawrt rr*pr.: o' i . r i i :'tr.i'et· .r inf iMtt¿r if.tor tO'i'.ia Ijjrnj' ' » I L J:.<. :

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ROQUETTE FRIRES v COUNCIL

On that issue the Council therefore concludes that the devolution to the Member States of responsibility for fixing the production quotas for each undertaking and the power given to national authorities to exercise ''con­siderable discretion" in the allocation of individual quotas do not allow traders to contend that the provisions of Regu­lation N o 1785/81 are of direct and individual concern to them. The Council concludes that the action by Roquette is inadmissible.

In the second place the Council seeks to show that Roquette has no real interest in bringing the present action for a declaration that the regulation is void.

In the Council's view it is obvious that the applicant's aim in the present action is to escape the production levy to which it is subject. The Council observes that the applicant is not challenging the principle of the levy but its appropriation to the Community budget. The Council accordingly states that the applicant has no interest in the present action since on the assumption that the applicant's submission is well founded the result would be an amendment of the appro­priation of the l e w and not its abolition as a levy intended to limit the production of isoglucose. In addition, the Council emphasizes that even if the levy in question may be regarded as being of direct and individual concern to the applicant it is not possible to contend that us mere appropriation to the Communuv budget as part o! the Communitv's own resources can be of direct and individual concern to the applicant within the meaninp o! tne second paragraph of Anicie l ' . ' of the Treatv. That question of appropriation concerns all actual or poienna. produceri ot sucar and isoglucose and not a limned circie ol producers déterminée on^e and tor all

In addition, the Council challenges tne applicants' statement to the effect thai the machinen established b* -\r.i*!e ÍS

of Regulation N o 1783/81 , that is to say the full financing by the producers of the costs of exporting sugar surpluses, can function only if the levy in question is appropriated to the Community budget as pan of the Community's own resources.

On that issue the Council emphasizes that the regulation in question nowhere provides that the levy is to be regarded as part of the Community's own resources. In the Council's view the objective of the regulation is not to adopt provisions of a financial nature but to set in motion an instrument of the common agricultural polio' , namely machinery to restrict production. In that respect the Council recalls that in paragraph 26 of its judgment in Case 138/79 the Court expressly recognized the power to adopt such measures since the production of isoglucose contributed to the increase in sugar surpluses. In the Council's view such measures are not necessarily to be classified in the category of own resources in the same wav as value added tax or customs dunes. On the contrary, the Council understands the judgments of the Court in Cases 13S/78 [1979] ECR 713 and 66/8C [1981] ECR 1191 as auth­orizing the legislature to classify such instruments of agricultural policy which provide the Communuv with revenue as "intervention measures" which may be brought into the categorv of "other revenue" referrec to ir. the firs: sentence o: Article * ! ot Council Decision

?:':*:•> oí : ¡ Aoni I Q " (Official Journal. English Special Edition 197; Mi, p 22*) In tnr Council's opinion u is therr:..ve a uuestior. o! acncuhural revenue otner injn inat referred io in Artu.r 211 o: i.ir Treat*, »men »as not intended tor »„.n measures ot agri­cultura, recuti'.io- »ut to cuaranter to the M r T ? f Mate* '..-.at jc.ua revenue trom uva · •·' >'" c*"1"1 JPP'i.J'.io" ar.C o', a rrguu.' anu luOMjniij. njtu:e could not Pe ir.uou-ceć m üvour ot tnr general budge: o' tne Communities »itnout tirst De:r.g rj:::.f J n* if-r natior.ai parliaments.

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JUDGMENT OF 30. 9. 1982 — CASE 242/81

In any event, the Council maintains that budgetary techniques other than those consisting of classifying the revenue in question as "own resources" may be used to achieve the result sought by the legislature, that is to say the non-parti­cipation of the Community in the costs of disposing of sugar surpluses and the assumption of responsibility for those costs by the producers. For that reason the Council contends that it is wrong to allege as does the applicant that the system outlined in Articles 28 and 29 of Regulation No 1785/81 can function only if the levy in question is regarded as own resources within the meaning of Decision 70/243 of 21 April 1970.

In the Council's opinion it follows that that argument is in no way relevant to the present case which concerns the validity of Regulation No 1785/81 and that the applicant has not succeeded in showing either in fact or in law that it has a legitimate interest in bringing proceedings against that appropriation.

The Council moreover states that the question of the appropriation of the proceeds of the levy in question is a general measure of public finance applying to all actual or potential producers of isoglucose and cannot be of direct and individual concern within the meaning of the second paragraph of Article 173- of the Treaty to any particular producer.

3. In us reply Roquette on the one hand continues to express the view that the contesied measure is of direct and individui! concern to it and on the other hand seeks to refute the Council's argument to the effect that the action is inadmissible because the applicant has no legitimate interest in bringing the action.

The applicant understands the Council's argument to be based on the view that it is a matter of indifference to the person liable to the production levy to know

where the levy is destined, that is to sav, whether it will be appropriated to the Community budget or to national budgets, and that consequently the possibility of an infringement by the Council of Article 201 of the Treaty on the procedure for creating new resources for the Community has no effect upon the binding nature of the levy which has to be paid.

In that respect the applicant states that the use of taxes which the taxpayer has to pay is of direct concern to him and he has an interest in bringing proceedings with regard thereto. In addition the applicant maintains that the question of the lawfulness of the appropriation of the proceeds of the lew at issue to the Community budget is of primar)' importance in the present case.

Since according to Article 28 (2) and (3) of the regulation the lev}· is intended to cover the financial losses resulting from the export of sugar surpluses, that objective cannot be achieved if the proceeds of the levy are not appropriated to the Community budget. It is therefore essential that the question of the lawfulness of the levy's appropriation be clearly settled in the present action.

For those reasons the applicant considers its action admissible since it is directed against a regulation of direct and individual concern to it.

B — Substance

1. Roquette considers its action to be »ell founded inasmuch as the production levy established by Anicie 28 of Regu­lation No 1785/81 has been imposed on it in breach of the procedure laid down in Anicie 201 of the Treaty and in disregard of Council Decision 70/243 of 21 April 1970 on the replacement of financial contributions from Member Slates by the Communities' own re­sources.

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In the applicant's view Anicie 2 of the decision distinguishes between "agri­cultural levies" and "customs duties" (subparagraphs (a) and (b) of the first paragraph of Article 2) on the one hand and "other charges introduced within the framework of a common poliev·" (last paragraph of Article 2) on the other. It observes that the second class of duties presupposes that when creating new resources for the Community the Council must adopt the procedure provided for in Article 201 of the Treaty.

The applicant considers that the levy in issue can be regarded only either as "other charges" referred to in the last paragraph of Article 2 of Decision No 7C/243 or as "contributions and other duties provided for within the framework of the organization of the markets in sugar" referred to at the end of subpara­graph (a) of the first paragraph of Article 2 of the decision. On that issue the applicant observes that, since the Council when creating the levy in question did not adopt the procedure for creating new resources for the Community as provided in Anicie 201 of the Treaty, the point of law at issue in the present case is confined to the question whether the lew may be regarded as one of the "contributions and other duties provided for within the framework of the organ­ization of the markets in sugar", as the Council and the Member States understood that concept on the adoption of Decision 73/243 of 21 April 1972.

In that respect the applicant observes in the first place thai the choice of the words "contributions and other duurs proz¡dedfor" in subparagraph (al ot ihr ¿irst paragraph ot Anicie 2 oí the decision means the exclusion thcrclrom o! contributions and other duurs on transactions in lhe sugar sector srrJtrJ alter 21 April 19" . ihat i io SJ* ali duties and levies other than iht»»c provided for by Regulation No ~ **· *>~ ol' IS December l%" on the common Organization oí ine market in sugar 1 tir

applicant states that the levy in question was not created until 17 May 1977 when Regulation No 1111/77 was adopted, that is to say seven years after the adoption of Decision 70/243 of 21 April 1970.

In the second place the applicant observes that the levy in question cannot be covered bv the words "contributions and other duties" in subparagraph (a) of the first paragraph of Article 2 of Decision 70/243 since the product on which it is imposed, namely isoglucose, did not exist in 1970. In that respect the applicant observes that when isoglucose appeared it was included in the common organization of the markets not in sugar but in cereals because of its organic origin, namely starch from maize.

The applicant states that isoglucose, which was originally defined as "glucose with a high fructose content", came under the common organization of the markets in cereals until 1977, as is shown by all the regulations concerning the establishment and administration of the organizations of the markets in sugar and cereals. The applicant states that it was not until the adoption of Regulation No 1111/77 of 17 May 1977 that isoglucose was excluded from the scope of the Community rules on cereals and became the subieci-matter of special rules distinct from those appertatmrïg-to" sugar (on that issue the applicant refers to the provisions of Regulation No 1I1C/77 and in particular Anicie 1 thereof) and it was not until the adoption of Regulation No 1785/81, the subirct-maticr ot the present action, that isoglmose »as assigned to the sugar sector on the creation of a common organization in those two sectors.

The applicant maintains therefore that inr Council could not legally assimilate u> "own resources trom the sugar vector" such as provided tor in Decision No 'Z '2-»3 ot' 21 April 1972 a production lrv\ on isoglucose when until lu*l tsocJucosr neser came under that common orgar.:7ation of the markets. It

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JUDGMENT OF 30. 9. 1982 — CASE 242/81

therefore considers that the Council ought to have adopted the procedure provided for in Article 201 of the Treat)' when establishing that levy. In the applicant's view, to accept the contrary argument would be to allow the Council to create a new resource for the Community by simply amending the wording of a tariff heading and thus transferring a product from any common organization to the common organ­ization in the sugar sector.

In that respect the applicant emphasizes that the fact that the levy in question is not described as "own resources" by Regulation No 1785/81 has no effect upon the legal obligation imposed on the Council by Article 201 of the Treaty to observe the procedure provided there­under. In the applicant's view it is clearly apparent both from the eleventh recital in the preamble to the regulation in question and from Article 28 thereof that ine aim pursued by the legislature in creating that levy is to offset the losses incurred by the Community budget in financing the expon of surplus sugar. Accordingly the applicant maintains that such an aim can be achieved only if the proceeds of the levy in question are appropriated to the Community budget as pan of the Communities' "own resources". It observes that, although Regulation No 1785/81 does not actually refer to "own resources" and the appropriation thereof, both are implicit in the obiective ot' the contested regulation.

In the same wjv the applicant referi to the inclusion of isoglucose in the cereals sector until 1 ^77 to reiute the Council's argument that such út jure inclusion yields to the ¡it facto inclusion of isogiucose in the sugar sector. The applicant doei not deny that sugar and isoglucose are c lose K linked as sub­

stitutes, as was pointed out moreover by the Court in its judgments in Cases 125/77 [1978] ECR 1991 and 103 and 145/77 [1978] ECR 2037. However, the applicant considers that the concept of the common organization of the markets is not one of pure fact. The legal concept of the common organization of the markets provided for in Article 40 (2) of the Treaty and applied sector by sector by the adoption of regulations clearly defining their respective scope in fact requires for obvious purposes of legal certainty that the ambiguity indulged in by the Council by the use of the term "sector" or "sugar market" instead of "common organization of the markets in the sugar sector" should be dispelled. In the applicant's view, the fact that the production lev\· on isoglucose was not on 1 January 1971 included in "con­tributions and other duties provided for within the framework of the organ­ization of the markets in sugar" within the meaning of subparagraph (a) of the first paragraph of Article 2 of Decision 70/243 prevents the levy, imposed sub­sequent to 1 January 1971, from being regarded as legally payable pursuant to that decision.

The applicant agrees with the Council that the legal framework laid down by Decision 70/243 must allow the necessary adaptation of the financial law of the Communities to technological development resulting in the appearance on the market of new products and the creation of new situations. However, the applicant maintains that such adaptation must take place with due regard to the rules and procedures defined by Com· muniiv law and that Decision 7C/243 of 21 April 1970 gives plenty of scope for that purpose.

The applicant understands that the effect ot Article 2 of the decision is:

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ROQUETTE FRÈRES » COUNCIL

On the one hand, definitively to transfer to the Communities the revenue from levies, premiums, compensator)· amounts and other duties, including those levied under the Common Customs Tariff, "to be established . . . in respect of trade with non-member countries";

On the other, expressly to reserve the creation of other charges subject solely to the obligation on the Communities to observe the procedure provided for in Article 201 of the Treaty.

It states that the creation of the production levy on isoglucose came within the second category and it does not see why the appearance and development of isoglucose should have been so unforeseeable that the charge imposed upon that new product for the purpose of financing the surpluses of another product which already existed could not have been adopted pursuant to the machinen' laid down at the end of subparagraph (b) of the first paragraph of Article 2 of Decision 70/243.

For those reasons the applicant considers that in so far as Regulation No 1785/81 imposes a production levy on isoglucose in breach of the provisions of Anicie 201 of the Treaty and Decision 7C/243 of the Council of 21 April 1970 it should be declared void.

2. The Council of the European Communitiei considers thai the action is unrounded.

The Council seeks to show on the one hand that the levy in question is not general budgetarv revenue the transfer of which the national parliaments must necessanlv approve and on the other hand that, even it supar and isoplucose have not al»avs lepaliv come under the same common organization, tor the purposes of both the administration of the common agricultural polio and the application ot the financial rules thereof

they have as a matter of fact always been part of the same sector, namely sugar.

On the first issue the Council states that Regulation No 1785/81 nowhere provides that the levy in question is to be regarded as part of the Communities' own resources. In the Council's view the destination of the levy is laid down in Article 4 of Regulation No 1110/77, which provides that the object of the levy-on isoglucose is to reduce the losses from the expon of sugar surpluses and consequently to reduce the burden on the producers of sugar; its classification as part of the Communities' own resources is clear from the ninth recital in the preamble to Regulation No 1111/77 and its appropriation to the Community budget is a result of the adoption of the Community budget. The Council observes that the applicant's action is directed only against Regulation No 1785/71 and not against any of the measures referred to above.

Further the Council points out that the nature of the production lew on isoglucose was substantially amended by the adoption of Regulation No 1785/81 inasmuch as Anicie 28 thereof provides that the levies on sugar and isoglucose must henceforth fully cover the financial losses resulting from the exportation of the sugar surpluses and no longer simply contribute to the reduction of those losses. In the Council's view it follows that the levy in question constitutes a "genuine instrument for the adminis­tration of the common agricultural policy" and not own resources the creation of which is a matter for the decision of the national parliaments under Amele 2CI of the Treaty. On that issue the Council refers to the argument which it put forward on the question of the applicant's interest in bringing proceedings ' and contends that the case-law of the Court allows revenue originating in the application of such measures of intervention or admin-

I — Sr- rafft .*:!· u· )*ľ: jr.'* f

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JUDGMENT OF 30. 9. 1982 — CASE 242/81

isiraiion to be regarded as "other revenue" within the meaning of the first sentence of Article 4(1) of Decision 70/243 of 21 April 1970.

In a general way the Council emphasizes that revenue from measures regulating the market in the sugar sector was appropriated to the Community budget well before the adoption of Decision 70/243 of 21 April 1970 so that it may be said that that decision "was not really responsible for the appropriation of the levy to the budget". In that respect the Council states that the first sugar levy was established by Regulation N o 1009/71 without there being any provision as to its destination; it was appropriated to the Community by Article 1 of Regulation N o 1892/68 of the Council of 26 November 1968 (Official Journal, English Special Edition 1968 (II), p. 575), which required the Member States, being responsible for its collection, to pay 90 °/o thereof by way of their financial contribution to the financing of the Guarantee Section of the European Agricultural Guidance and Guarantee Fund. In the Council's view that precedent confirms that measures of the kind in question are not to be understood as own resources to be established on the basis of Article 201 of the Treaty but rather as measures regu­lating the agricultural markets which may be adopted by the Council solely on the basis of Article 43 and which may give rise to revenue for the Community.

In the second place the Council relies on the fact that sugar and isoglucose in fact came under the same economic sector, namely sugar, to counter the applicant's argument to the effect that the production levy on isoglucose, on the assumption that u is to be regarded as part of the Communities' own resources, necessitated. on its creation, the

adoption of the procedure provided for the creation of new own resources.

In the Council's view, before Regulation No 1785/81 established a common system for isoglucose and sugar, isogluose de facto came under the economic sector for sugar. In that respect the Council states that, although at first isoglucose legally came under tne organization of the markets in cereals, by the adoption of Regulations Nos 1110/77 and 1111/77 it became the subject of a special system closely associated with the svstem for sugar, as is evidenced inter alia by Article 4 of Regulation No 1110/77, which provides that revenue from the levy on isoglucose will go to reduce, within the framework of the basic regulation on sugar, the losses from the financing of the exports of sugar surpluses. The Council emphasizes that the factual dependence of isoglucose on the sugar sector arises from the fact — which can hardly be contested — that the two products are close substitutes for one another with the result that the system relating to isoglucose has no real independent existence and is explicable only with regard to the common organization of the markets in the sugar sector.

In the Council's view, that fact and the de facto connection of isoglucose with sugar were recognized by the Court inasmuch as in its judgment in Case 125/77 [1978] ECR 1991 it held that in formulating the common agricultural policy the institutions were entitled to take account of the interplay of different markets (paragraph 43 of the judgment) and in its judgment in Joined Cases 103 and 145/77 [1978] ECR 2037 it held that the Council was free to take anv necessary measures compatible with Community law for ensuring the proper

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ROQUETTE FRÈRES v COUNCIL

functioning of the market in sweeteners, that is to say, sugar and isoglucose (paragraph 86 of the judgment) and, finallv, in its judgments in Case 138/79 [1980] ECR 3333 and Case 139/79 [1980] ECR 3393 it expressly recognized tht lawfulness of measures of the kind in issue as part of the common agricultural policy.

From that poini of view the Council considers that the production lew on isoglucose did not require the adoption of the procedure for ratification by the national parliaments as provided in Anicie 201 of the Trean'. The Council considers that in ratifying the first paragraph of Article 2 of Decision 70/243 the national parliaments approved the definitive transfer, to the Community budget as part of the Communities' own resources, of the proceeds of the levy payable "within the framework of the organization of the markets in sugar" provided that the levy was a necessary part of that organ­ization. In support of that argument the Council refers to the opinions of Mr Advocate General Reischl in Case 125/77 [1978] ECR 2008 (at p. 2022, point (b)) and Mr Advocate General Mayras in Case 138/78 [1979] ECR 725 (at p. 729, right-hand column, first paragraph). To contend, as does the applicant, that the arrival on the sugar market of a new product, a perfect sub­stitute for sugar, requires the adoption of the procedure for creating a new resource for the Communities would in the Council's opinion be a very formahstic and unconvincing approach. The Council considers that such an interpretation »ould lead to an appreciable reduction in the scope of the Communities' own resource in respect of «.upar as technological development briiueh: on to the market products «.umnenne with sugar and that this «ouid involve a contradiction, namely mat the Council would be legally empowered under the existing rules on the organization of the markets in sugar

to create a levy on the new product but would not be allowed to apply to that levy the same financial rules as those previously applicable to the sugar levy.

For that reason the Council considers that the submission made by the applicant is quite unfounded since it is based on an artificial and formalistic distinction between two products which are close substitutes for one another and for the purposes of the common agri­cultural policy and the financial rules appertaining thereto come under the same sector, namely that of sugar.

In addition the Council considers that in any event the submission is inadmissible as being irrelevant since it is aimed at measures which have created and ap­propriated the levy in question and which are in no way at issue in the present case.

3. The Commission of the European Communities, intervening in support of the conclusions of the Council, briefly recites the background to the Com­munity rules on isoglucose and contends that the action should be dismissed as unfounded.

First, the Commission considers that it is not possible to interpret subparagraph (a) of the first paragraph of Article 2 of Decision 70/243 of 21 April 197C in such a narrow and literal way as the applicant seeks to do. In the Commission's view the verv words of that provision show-that the legislature did not intend to "freeze" the levies and customs dunes transferred to the Community budget as the Communities' own resources in the state in which ihev were on 21 April 197C. The general principle which guided the legislature was that the dunes

3227

JUDGMENT OF 30. 9. 1982 — CASE 242/81

and levies "established or to be established" should be appropriated to the Communities. The Commission contends that the machinery has a dynamic character which clearly appears from the wording of the provision, especially as regards the market in sugar concerning which the choice of the words "contri­butions and other duties provided for" shows that the Council did not intend to restrict the transfer which was thereby made solely to the levy on the sugar production in 1971. On the contrary, the Council maintains that the transfer covered all contributions and other duties likely to be established in the sugar sector in order to help to achieve the aims of the common policy.

In the Commission's view that is the position in the present case. The fact that liquid sugar and isoglucose are perfect substitutes for one another, as recognized by the Court in paragraphs 62 and 86 of its judgment in Joined Cases 103 and 145/77 11978] ECR 2037 and confirmed by the inclusion of isoglucose in the organization of the markets in sugar created by Regulation No 1785/81, shows that the rules concerning isoglucose cannot be regarded as a collection of independent measures but on the contrary as an indispensable supplement to the common organization of the markets in sugar in order to ensure that the objectives of that organization may be achieved. For thai reason the Commission, referring to the opinion of Mr Advocate General Reischl in Case 125/77 [1978] ECR 2C-8 (point (b) at p. 2022), considers that the Council could lawfully describe the contested lew as "a contribution . . . provided for »ithin the framework of the organization of the markets in sugar" within the meaning of subparagraph (a) of the first parigraph of Anicie 2 of Decision 7: /2 ·0 ot 21 April 1970 in vie» of the át facto close connection between sugar and isogiucose.

The Commission states secondly and in the alternative that'even after the entry

into force of Decision 70/243 of 21 April 1970 the Community has the power to impose financial charges on traders simply on the basis of the provisions establishing the various common policies and that it may deal with the revenue from such levies by appropriating them to a particular use. The Commission sees confirmation of that statement in the judgment of the Court in Case 138/78 [1979] ECR 713 and in the opinion of Mr Advocate General Mavras in the same case ([1979] ECR 725, at p. 730, left-hand column).

In the Commission's view the levy in question falls exactly within that category, since the validity of financial charges imposed on isoglucose producers has already been recognized by . the Court and the connection between the revenue from the isoglucose levy and the financing of the common policy for sugar is beyond dispute, as that levy is expressly intended to finance the expor­tation of sugar surpluses (Article 28 of Regulation No 1785/81).

Accordingly the Commission expresses the opinion that, on the assumption that the levy in question is not pan of the Communities' own resources, it is nevertheless lawfully imposed since it comes within the category of "other revenue" from the application of the measures for regulating the agricultural markets adopted to achieve the objectives of the common agricultural policy.

In the Commission's view it follows that the action must be dismissed as unfounded.

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IV — Oral procedure

At the sitting on 1 July 1982 Roquette, represented by M. Veroone of the Lille Bar, the Council of the European Communities, represented by D. Vignes, a director in its Legal Department, assisted by A. Bräutigam, an adminis­trator therein, and the Commission of

the European Communities, represented by R. Wainwright, Legal Adviser, assisted by F. Lamoureux, a member of its Legal Department, presented oral argument.

The Advocate General delivered his opinion at the sitting on 23 September 1982.

Decision

1 By application lodged at the Court Registry on 7 September 1981 SA Roquette Frères, a company incorporated under French law, asked the Court pursuant to the second paragraph of Anicie 173 of the Treaty to declare void Council Regulation No 1785/81 of 30 June 1981 on the common organization of the markets in the sugar sector (Official Journal 1981, L 177, p. 4).

2 According to Article 1 (1) thereof, the regulation covers inter alia "isoglucose", which comes under subheading 17.02 D I of the Common Customs Tariff, and "flavoured or coloured isoglucose syrups", which come under subheading 21.07 F III. The applicant is one of the main producers of isoglucose in the Community.

> In its defence lodged on 6 November 1981 the Council contended that the action was inadmissible. In the Council's view the action does not satisfy the conditions of the second paragraph of Anicie 173 of the Treaty inasmuch as the contested measure is not a decision in the form of a regulation and is not of direct and individual concern to the applicant.

The applicant claims that the contested measure is in fact a decision taken bv the Council with regard to isoglucose producers in the Communitv and is aimed at limiting their production by the establishment ot quotas and levies. The undertakings, of which there are nine in the whole of the Communitv, are known to the Council and are perfectly identifiable. The production quotas allotted to the regions are in fact equal to those of the undertakings.

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JUDGMENT OF 3C. 9. 1982 — CASE 242/81

For that reason the applicant maintains that although the contested measure is in the form of a regulation it is of direct and individual concern to the applicant as a producer of isoglucose and the applicant may in consequence bring an action under the second paragraph of Anicie 173 for a declaration that the decision is void.

5 To decide between those two opposite views it is necessary first of all to recall the established case-law of the Court on the criteria distinguishing a regulation from a decision, including one in the form of a regulation.

« According to the second paragraph of Article 189 of the Treaty the criterion for distinguishing between a regulation and a decision is whether or not the measure in question has general application. For that purpose it is necessar­io consider the nature of the contested measure and in particular the legal effects which it is intended to have or does in fact have.

: As the Court held in its judgment of 26 February 1981 in Case 64/80 F. Giuffrida and C. Campogrande [1981] ECR 693, a measure does not cease to be a regulation because it is possible to determine more or less exactly the number or even the identity of the persons to whom it applies at any given time as long as it is established that such application takes effect by virtue of an objective legal or factual situation defined by the measure in question in relation to its purpose.

. Although the application is for a declaration that Regulation No 1785/81 is void, the applicant maintains simply that the production levy on isoglucose provided for bv Anicie 28 thereof has been established in breach of the procedure laid 'down in Anide 2C1 of the Treaty and in disregard of Decision 7C/243 of the Council of 21 April 1970 on the replacement of financial contributions from Member States by the Communities' own resources (Official Journal. English Special Edition 197C (I), p. 224). Thus the case is solely concerned with the production levy on isoglucose.

- Anicie 2S of Regulation No 1785/81 does not fix the amount of the levy for each producer of tsoglucose. Moreover, the amount cannot be directly inferred from us provisions; on the contran, it provides that the amounts of the levies are to be adopted in accordance with the procedure laid down in

3 2 3 0

ROQUETTE FRERES v COUNCIL

Anicie 41, that is to say a procedure involving the Commission, the Management Committee for Sugar and, if necessary, the Council. According to the provisions of Article 28 the amounts of the levies depend on objective factors, albeit complex ones which vary with each marketing year and take into account in particular the production of sugar and isoglucose in the Community, the export costs borne by the Community and the production levies on sugar and isoglucose.

10 It follows from that that the provisions of the regulation the legality of which the applicant is challenging are of general application and do not in themselves have individual and direct effects for the applicant.

ii Pursuant to the second paragraph of Article 173 of the Treaty the application must therefore be dismissed as inadmissible.

Costs

1 2 Under Article 69 (2) of the Rules of Procedure the unsuccessful paru· is to be ordered to pay the costs if they have been asked for in the successful party's pleading. Since the applicant has failed in its submissions, it must be ordered to pay the costs including those of the intervener.

On those grounds.

THE COURT (Second Chamber)

hereby:

1. Dismisses the application as inadmissible;

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OPINION OF MR RUSCHI — CASE 242/81

2. Orders the applicant to pay the costs including those of the intervener.

Due Chloros Grévisse

Delivered in open in Luxembourg on 30 September 1982.

J. A. Pompe Depun- Registrar

O. Due President of the Second Chamber

OPINION OF MR ADVOCATE GENERAL REISCHL DELIVERED ON 23 SEPTEMBER 1982 '

Air President, Members of the Court,

The case which I turn to now also concerns isoglucose.

The subiect of the dispute on this occasion is Regulation No I7S3/S1 of 30 June 1"81 (Official Journal 1981. L 177, p * on the common organization of the markets in me sugar sector, which entered into lorce on 1 Julv 1981

I: applies hot h to \uzir and to isoglucose Anicie Ii a r. ti torv.jim in partierna: in

\nuir 2* ei »e.; a »» stem of quota» and provision» i,'n> e rr.inr; a production lew .- rr*.[->r>·. .·· :ne marKeting ».ears 1 * * 1 * 2 Į *•*» * *·>

lhe under a»...-.c Roqurttr frère». » nich aiso Drouţn: Li\e 11* í l ar.c in u

submitted that the introduction of a production lew for isoglucose by means of Regulation No 387/81 (Official Journal 1981, L 44, p. 1) was unlawful because the Council did not have the power to create own revenue of that nature, takes the view that the same applies to Regulation No 1783/81 and to the system of levies applying to isoglucose contained in it.

It has therefore brought the matter before the Court and is seeking a declaration that Regulation No 1785/81 is »oid. at least in so far as us provisions concern the applicant. On the basis of the introductor».· observations in the application, this is to be understood as meaning that the applicant seeks a declaration of nullit» ot Articles 24 and 2;> in so far as those articles contain a svsiem of quotas and levies for isogiucose.

3232