Court of Justice of the European Communities (including Court of First Instance Decisions)

1 . AGRICULTURE - PROCESSED PRODUCTS - MONETARY COMPENSATORY AMOUNTS - APPLICATION - CONDITION - INCIDENCE OF COMPENSATORY AMOUNTS APPLICABLE TO BASIC PRODUCTS ON PRICE OF PROCESSED PRODUCTS
( REGULATION NO 974/71 OF THE COUNCIL , ART . 2 ( 2 ))
2 . AGRICULTURE - MONETARY COMPENSATORY AMOUNTS - GROUPS OF PRODUCTS - APPLICATION - COMMISSION - DISCRETION

1 . IN ORDER TO JUSTIFY THE APPLICATION OF COMPENSATORY AMOUNTS TO PROCESSED PRODUCTS , IT IS SUFFICIENT FOR THE COMPENSATORY AMOUNTS APPLICABLE TO THE BASIC PRODUCTS TO HAVE A CONSIDERABLE INCIDENCE ON THE PRICE OF THE PROCESSED PRODUCTS .

2 . THE COMMISSION IS NOT BOUND TO FIX COMPENSATORY AMOUNTS FOR ALL THE PRODUCTS IN A GROUP , BUT MAY ASSESS THE NEED TO APPLY COMPENSATORY AMOUNTS EITHER BY PRODUCTS OR BY GROUPS OF PRODUCTS .

IN CASE 11/78
ITALIAN REPUBLIC , REPRESENTED BY ITS AMBASSADOR , ADOLFO MARESCA , ACTING AS AGENT , ASSISTED BY IVO MARIA BRAGUGLIA , AVVOCATO DELLO STATO , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE ITALIAN EMBASSY ,
APPLICANT ,
V
COMMISSION OF THE EUROPEAN COMMUNITIES , REPRESENTED BY ITS LEGAL ADVISER , CESARE MAESTRIPIERI , ACTING AS AGENT , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF ITS LEGAL ADVISER , MARIO CERVINO , JEAN MONNET BUILDING , KIRCHBERG ,
DEFENDANT ,
AND
IRELAND , REPRESENTED BY J . MURRAY , BARRISTER-AT-LAW , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE IRISH EMBASSY ,
INTERVENER ,

APPLICATION FOR THE ANNULMENT OF :
- COMMISSION REGULATION ( EEC ) NO 2657/77 OF 30 NOVEMBER 1977 ON THE APPLICATION OF MONETARY COMPENSATORY AMOUNTS TO CERTAIN PRODUCTS NOT COVERED BY ANNEX II TO THE TREATY ( OFFICIAL JOURNAL 1977 , L 308 , P . 48 );

- COMMISSION REGULATION ( EEC ) NO 800/77 OF 20 APRIL 1977 AMENDING , AS REGARDS PRODUCTS WHICH ARE SUBJECT TO MONETARY COMPENSATORY AMOUNTS , REGULATION ( EEC ) NO 572/76 FIXING THE MONETARY COMPENSATORY AMOUNTS ( OFFICIAL JOURNAL 1977 , L 97 , P . 18 ) IN SO FAR AS IT MAKES PROVISION , THROUGH REGULATION ( EEC ) NO 2657/77 , FOR THE CONTINUED APPLICATION EVEN AFTER 31 DECEMBER 1977 , OF THE MONETARY COMPENSATORY AMOUNTS TO THE PRODUCTS REFERRED TO IN PART 8 OF ANNEX I TO REGULATION ( EEC ) NO 527/76 UNDER TARIFF SUBHEADINGS 17.04 D , 18.06 B , 18.06 C , 19.08 B AND 21.07 C ,

1BY AN APPLICATION LODGED ON 25 JANUARY 1978 , THE ITALIAN REPUBLIC , PURSUANT TO THE FIRST PARAGRAPH OF ARTICLE 173 OF THE EEC TREATY , CLAIMED THE ANNULMENT OF COMMISSION REGULATION NO 2657/77 OF 30 NOVEMBER 1977 ON THE APPLICATION OF MONETARY COMPENSATORY AMOUNTS TO CERTAIN PRODUCTS NOT COVERED BY ANNEX II TO THE TREATY ( OFFICIAL JOURNAL 1977 , L 308 , P . 48 ) AND OF COMMISSION REGULATION NO 800/77 OF 20 APRIL 1977 AMENDING , AS REGARDS PRODUCTS WHICH ARE SUBJECT TO MONETARY COMPENSATORY AMOUNTS , REGULATION NO 572/76 FIXING THE MONETARY COMPENSATORY AMOUNTS , ( OFFICIAL JOURNAL 1977 , L 97 , P . 18 ) IN SO FAR AS IT MAKES PROVISION , THROUGH REGULATION NO 2657/77 , FOR THE CONTINUED APPLICATION , EVEN AFTER 31 DECEMBER 1977 , OF THE MONETARY COMPENSATORY AMOUNTS TO THE PRODUCTS REFERRED TO IN PART 8 OF ANNEX I TO REGULATION NO 572/76 UNDER TARIFF SUBHEADINGS 17.04 D , 18.06 B , 18.06 C , 19.08 B AND 21.07 C .
2THE DISPUTE CONCERNS THE APPLICATION OF THE MONETARY COMPENSATORY AMOUNTS SYSTEM TO CERTAIN PRODUCTS WHICH ARE NOT COVERED BY ANNEX II TO THE TREATY AND ARE THE SUBJECT OF A SPECIFIC ARRANGEMENT UNDER ARTICLE 235 OF THE TREATY ACCORDING TO THE TERMS OF ARTICLE 1 ( 2 ) ( B ) OF REGULATION NO 974/71 OF THE COUNCIL OF 12 MAY 1971 ON CERTAIN MEASURES OF CONJUNCTURAL POLICY TO BE TAKEN IN AGRICULTURE FOLLOWING THE TEMPORARY WIDENING OF THE MARGINS OF FLUCTUATION FOR THE CURRENCIES OF CERTAIN MEMBER STATES ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1971 ( I ), P . 257 ).

3THE SAID PRODUCTS , TO WHICH REGULATION NO 800/77 RELATES , COME UNDER TARIFF HEADINGS 17.04 D ( SUGAR CONFECTIONERY NOT CONTAINING COCOA , OTHER THAN LIQUORICE EXTRACT , CHEWING GUM AND WHITE CHOCOLATE ), 18.06 B ( ICE CREAM ( NOT INCLUDING ICE CREAM POWDER ) AND OTHER ICES CONTAINING COCOA ), 18.06 C ( CHOCOLATE AND SUGAR CONFECTIONERY CONTAINING COCOA ), 19.08 B ( PASTRY , BISCUITS , CAKES AND OTHER FINE BAKERS ' WARES OTHER THAN GINGERBREAD AND THE LIKE ) AND 21.07 C ( ICE CREAM ( NOT INCLUDING ICE CREAM POWDER ) AND OTHER ICES NOT CONTAINING COCOA ).

4IT EMERGES FROM THE SECOND AND THIRD RECITALS IN THE PREAMBLE TO REGULATION NO 800/77 THAT , SINCE ALL THE BASIC AGRICULTURAL PRODUCTS FROM WHICH THOSE GOODS ARE DERIVED WERE SUBJECT TO MONETARY COMPENSATORY AMOUNTS OF A HIGH LEVEL , ' ' THE DIFFERENCE IN PRICES OF THE BASIC PRODUCTS HAD BECOME SO MARKED AS TO HAVE A CONSIDERABLE EFFECT ON THE CONDITIONS OF COMPETITION OF PROCESSED PRODUCTS , HAVING REGARD TO THE CHARACTERISTICS OF THE MARKET IN CERTAIN SENSITIVE PRODUCTS ' ' .

5THE SECOND SUBPARAGRAPH OF ARTICLE 2 ( 2 ) OF REGULATION NO 800/77 PROVIDED THAT IN RESPECT OF THE SAID PROCESSED PRODUCTS ' ' MONETARY COMPENSATORY AMOUNTS SHALL NOT APPLY BEYOND 31 DECEMBER 1977 ' ' .

6THE ADOPTION OF THAT REGULATION , WHICH APPLIED WITH EFFECT FROM 23 MAY 1977 , HAD BEEN PRECEDED BY THE COMMISSION DECISION OF 23 MARCH 1977 AUTHORIZING IRELAND TO TAKE PROTECTIVE MEASURES IN RESPECT OF CERTAIN PROCESSED AGRICULTURAL PRODUCTS UNDER ARTICLE 135 OF THE ACT OF ACCESSION AND ALLOWING THAT MEMBER STATE UNTIL 31 DECEMBER 1977 TO LEVY A CHARGE ON IMPORTS FROM THE UNITED KINGDOM AND GRANT A PAYMENT ON EXPORTS TO THE UNITED KINGDOM OF THE PROCESSED AGRICULTURAL PRODUCTS COMING UNDER THE ABOVE-MENTIONED TARIFF HEADINGS ( OFFICIAL JOURNAL 1977 , L 97 , P . 29 ).

7THE RECITALS IN THE PREAMBLE TO THIS DECISION STATED THAT :
' ' . . . THE COMPENSATORY AMOUNTS CHARGED OR GRANTED . . . ( ON THE ) UNITED KINGDOM AND TO 10.4% IN THE CASE OF IRELAND ; . . . THIS SITUATION , ENTAILING A RELATIVE DISADVANTAGE TO THE MANUFACTURERS . . . IN IRELAND ON THE COST OF THE BASIC PRODUCTS OF 24.3% , MAY LEAD TO DISTORTION IN THE TERMS OF COMPETITION IN TRADE IN THE PROCESSED AGRICULTURAL PRODUCTS REFERRED TO IN THE IRISH APPLICATION BETWEEN THE MEMBER STATES CONCERNED ; . . . THIS SITUATION , IN ITS PRESENT ACUTE FORM SINCE NOVEMBER 1976 , HAS GIVEN RISE TO SERIOUS DIFFICULTIES FOR THE SECTORS CONCERNED IN IRELAND . . . ' '
8THE MONETARY COMPENSATORY AMOUNTS INTRODUCED BY THESE BILATERAL ARRANGEMENTS BETWEEN THE UNITED KINGDOM AND IRELAND WERE ALTERED BY THE COMMISSION DECISION OF 4 MAY 1977 ( OFFICIAL JOURNAL 1977 , L 123 , P . 18 ), ACCORDING TO WHICH THIS SECOND DECISION AS WELL AS THE PRECEDING ONE CEASED TO APPLY ON THE DAY ON WHICH REGULATION NO 800/77 TOOK EFFECT .

9BY A LETTER OF 24 OCTOBER 1977 , THE ITALIAN GOVERNMENT INFORMED THE COMMISSION THAT IT WAS OPPOSED TO THE PROLONGATION OF REGULATION NO 800/77 .
10THIS PROLONGATION , FOR AN INDEFINITE PERIOD , WAS DECIDED BY REGULATION NO 2657/77 OF 30 NOVEMBER 1977 .
ADMISSIBILITY OF THE APPLICATION AS REGARDS REGULATION NO 800/77
11IN ITS APPLICATION THE ITALIAN GOVERNMENT CLAIMS THAT THE COURT SHOULD :
- ANNUL COMMISSION REGULATION NO 2657/77 OF 30 NOVEMBER 1977 ;

- ANNUL COMMISSION REGULATION NO 800/77 OF 20 APRIL 1977 IN SO FAR AS IT MAKES PROVISION , THROUGH REGULATION NO 2657/77 , FOR THE CONTINUED APPLICATION , EVEN AFTER 31 DECEMBER 1977 , OF THE MONETARY COMPENSATORY AMOUNTS TO THE PRODUCTS REFERRED TO IN PART 8 OF ANNEX I TO REGULATION NO 572/76 UNDER TARIFF SUBHEADING 17.04 D , 18.06 B , 18.06 C , 19.08 B AND 21.07 C .
12IN THE LIGHT OF THE PROVISIONS OF ARTICLE 173 OF THE TREATY AND ARTICLE 81 ( 1 ) OF THE RULES OF PROCEDURE ON THE LIMITATION PERIOD FOR THE COMMENCEMENT OF PROCEEDINGS , THE COMMISSION CHALLENGES THE ADMISSIBILITY OF THE APPLICATION IN SO FAR AS IT SEEKS THE ANNULMENT OF REGULATION NO 800/77 .
13THE COMMISSION ALLEGES THAT THE SUBMISSIONS MADE BY THE ITALIAN GOVERNMENT DO NOT CONCERN THE PROLONGATION IN ITSELF OR THE ECONOMIC SITUATION PREVAILING IN NOVEMBER 1977 BUT ON THE CONTRARY RELATE TO THE REASONS WHICH DECIDED THE ADOPTION OF REGULATION NO 800/77 .
14IN FACT , HOWEVER , THE APPLICATION RELATES ONLY TO THE LEGAL SITUATION EXISTING AS FROM 1 JANUARY 1978 BY VIRTUE OF THE PROVISIONS OF REGULATION NO 2657/77 WHICH PROLONGED REGULATION 800/77 FOR AN INDEFINITE PERIOD .

15THEREFORE THIS HEAD OF CLAIM IS ADMISSIBLE .

THE SUBMISSION RELATING TO REGULATION NO 2657/77
16THE ITALIAN GOVERNMENT SUBMITS THAT BY THE SECOND SUBPARAGRAPH OF ARTICLE 2 ( 2 ) OF REGULATION NO 800/77 THE COMMISSION INTENDED TO LIMIT ITS OWN DISCRETIONARY POWER ITSELF , THAT IS TO SAY LIMIT THE EXERCISE OF THAT POWER TO THE PERIOD ENDING ON 31 DECEMBER 1977 WITHOUT THE POSSIBILITY OF ANY PROLONGATION .

17IT ARGUES THAT CONSEQUENTLY , WHEN THE SITUATION HAS NOT GREATLY CHANGED AND THE COMMISSION DECIDES THAT THE COMPENSATORY AMOUNTS ARE TO BE APPLIED FOR AN INDEFINITE PERIOD , IT IS GUILTY OF MISUSE OF POWERS .

18THE ITALIAN GOVERNMENT SUBMITS THAT THERE IS ALSO A BREACH OF THE PRINCIPLE OF LEGITIMATE EXPECTATIONS INASMUCH AS THE FIXING OF THE PERIOD LAID DOWN IN REGULATION NO 800/77 WAS SO IMPERATIVE THAT IT WAS TO BE EXPECTED THAT THE COMPENSATORY AMOUNTS WOULD ' ' NOT APPLY BEYOND 31 DECEMBER 1977 ' ' .

19IT SUBMITS THAT THE FACT THAT REGULATION NO 2657/77 ENTERED INTO FORCE A MONTH BEFORE THAT PERIOD EXPIRED IS NOT SUFFICIENT TO PROTECT LEGITIMATE EXPECTATIONS SINCE IT HAD BEEN DECLARED THAT THE PERIOD COULD NOT BE PROLONGED , THE TERMS OF REGULATION NO 800/77 PROVIDING THAT ' ' MONETARY COMPENSATORY AMOUNTS SHALL NOT APPLY BEYOND 31 DECEMBER 1977 ' ' .

20THE COMMISSION REPLIES THAT AT THE END OF NOVEMBER 1977 IT HAD TO CONSIDER ONLY WHETHER THE CONDITIONS LAID DOWN IN REGULATION NO 974/71 WERE FULFILLED , THAT IS WHETHER THE CONDITIONS WHICH HAD REQUIRED THE COMPENSATORY AMOUNTS TO BE APPLIED STILL PREVAILED .

21IF SUCH WAS THE CASE , THE VALIDITY OF REGULATION NO 2657/77 CANNOT BE CALLED IN QUESTION .

22THE COMMISSION SUBMITS THAT IT WAS NOT IN FACT FACED WITH THE ALTERNATIVE DESCRIBED BY THE ITALIAN GOVERNMENT , AS THE APPOINTMENT OF A TIME-LIMIT MERELY MEANT THAT THE AMOUNTS COULD NOT CONTINUE TO BE APPLIED WITHOUT BEING THE SUBJECT OF A NEW REGULATION .

23THE COMMISSION SUBMITS THAT THE PURPOSE OF THE COMMUNITY PROVISIONS IN FORCE IN THE AGRI-MONETARY SECTOR AND THE RECITALS IN THE PREAMBLE TO THE REGULATION AT ISSUE SHOULD LEAD THOSE CONCERNED TO THE CONCLUSION THAT THE MEASURES TO BE TAKEN AT THE END OF THE YEAR - CONTINUATION , ABOLITION OR ALTERATION OF THE SYSTEM PROVIDED FOR IN REGULATION NO 800/77 - WOULD NECESSARILY BE DEPENDENT UPON THE SITUATION OF THE MONEY MARKETS AT THE RELEVANT TIME .

24EVEN IF ARTICLE 2 ( 2 ) OF REGULATION NO 800/77 HAD THE MEANING WHICH THE ITALIAN GOVERNMENT ATTRIBUTES TO IT , IT COULD NOT RELIEVE THE COMMISSION FROM ITS OBLIGATION TO REVIEW THE SITUATION BY THE END OF THE YEAR .

25THE SIXTH RECITAL IN THE PREAMBLE TO REGULATION NO 800/77 HAD PROVIDED THAT ' ' THE LIST OF . . . PRODUCTS SUBJECT TO MONETARY COMPENSATORY AMOUNTS SHOULD BE REVIEWED BY THE END OF THE YEAR IN THE LIGHT OF THE ECONOMIC SITUATION OF THOSE PRODUCTS ' ' .

26IN THE LIGHT OF THAT RECITAL IT COULD NOT BE INFERRED THAT , IF THE SITUATION REMAINED UNCHANGED , THE APPLICATION OF THE COMPENSATORY AMOUNTS WOULD NECESSARILY BE BROUGHT TO AN END ; ON THE CONTRARY IT COULD BE INFERRED THAT IF THEIR APPLICATIONS WERE TO CONTINUE AFTER 31 DECEMBER 1977 A NEW REGULATION WOULD BE NECESSARY .

27ACCORDINGLY THE SUBMISSION MUST BE DISMISSED AS UNFOUNDED .

THE SUBMISSION RELATING TO REGULATION NO 800/77
28THE ITALIAN GOVERNMENT SUBMITS THAT BY ADOPTING REGULATION NO 800/77 , THE COMMISSION INFRINGED THE PROVISIONS OF ARTICLE 1 ( 3 ) OF REGULATION NO 974/71 , ACCORDING TO WHICH ' ' PARAGRAPH 1 SHALL APPLY ONLY WHERE APPLICATION OF THE MONETARY MEASURES REFERRED TO IN THAT PARAGRAPH WOULD LEAD TO DISTURBANCES IN TRADE IN AGRICULTURAL PRODUCTS ' ' .

29THE ITALIAN GOVERNMENT SUBMITS THAT BY VIRTUE OF THAT PROVISION COMPENSATORY AMOUNTS ON PRODUCTS NOT COVERED BY ANNEX II TO THE TREATY AND FORMING THE SUBJECT OF A SPECIFIC ARRANGEMENT UNDER ARTICLE 235 OF THE TREATY COULD NOT HAVE BEEN INTRODUCED EXCEPT IN ORDER TO AVOID THE RISK OF DISTURBANCES IN TRADE IN THE BASIC AGRICULTURAL PRODUCTS ( SUGAR , CEREALS AND SO ON ) ON WHICH THE PROCESSED PRODUCTS , NAMELY ICE CREAM , CHOCOLATE , BISCUITS AND SO ON , DEPEND .

30THE ITALIAN GOVERNMENT SUBMITS THAT , ACCORDING TO THE RECITALS IN THE PREAMBLE TO REGULATION NO 800/77 , THE COMMISSION ASSESSED NOT THE RISK OF DISTURBANCES IN TRADE IN AGRICULTURAL PRODUCTS BUT THE RISK OF DISTORTIONS IN COMPETITION IN THE PRODUCTS AT ISSUE .

31THE ITALIAN GOVERNMENT ALSO SUBMITS THAT THE STATEMENT OF THE REASONS ON WHICH REGULATION NO 800/77 WAS BASED IS DEFECTIVE INASMUCH AS IT FAILS TO TAKE ACCOUNT OF THE RISK OF DISTURBANCES IN TRADE IN AGRICULTURAL PRODUCTS AND IN THAT IT CONFINES ITSELF TO ESTABLISHING THE RISK OF DISTURBANCES IN THE CONDITIONS OF COMPETITION IN TRADE IN THE PROCESSED PRODUCTS .

32IT IS TRUE THAT IN ORDER TO JUSTIFY REGULATION NO 800/77 THE COMMISSION STATED THAT ' ' IN THE CASE OF THE PROCESSED PRODUCTS NOT SUBJECT TO MONETARY COMPENSATORY AMOUNTS , THE DIFFERENCE IN PRICES OF THE BASIC PRODUCTS HAS BECOME SO MARKED AS TO HAVE A CONSIDERABLE EFFECT ON THE CONDITIONS OF COMPETITION OF THE PROCESSED PRODUCTS . . . ' ' .

33THE WORDING OF ARTICLE 1 ( 3 ) OF REGULATION NO 974/71 AS AMENDED BY REGULATION NO 2746/72 OF THE COUNCIL OF 19 DECEMBER 1972 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1972 ( 28-30 DECEMBER ), P . 64 ) REQUIRES THAT FOR THE APPLICATION OF COMPENSATORY AMOUNTS TO BASIC AGRICULTURAL PRODUCTS , THE MONETARY MEASURES REFERRED TO IN PARAGRAPH 1 ( NAMELY THE FLUCTUATION OF THE EXCHANGE RATE OF A MEMBER STATE ' S CURRENCY ) SHOULD LEAD TO DISTURBANCES IN TRADE IN AGRICULTURAL PRODUCTS .

34AS REGARDS THE PROCESSED PRODUCT , IT EMERGES FROM THE PROVISIONS OF ARTICLE 2 ( 2 ) OF REGULATION NO 974/71 THAT THE COMPENSATORY AMOUNTS APPLICABLE SHALL BE EQUAL TO THE INCIDENCE , ON THE PRICE OF THE PRODUCT CONCERNED , OF THE APPLICATION OF THE COMPENSATORY AMOUNT TO THE PRICE OF THE BASIC PRODUCT ON WHICH IT DEPENDS .

35IT FOLLOWS THAT IN ORDER TO JUSTIFY THE APPLICATION OF COMPENSATORY AMOUNTS TO PROCESSED PRODUCTS , IT IS SUFFICIENT FOR THE COMPENSATORY AMOUNTS APPLICABLE TO THE BASIC PRODUCTS TO HAVE A CONSIDERABLE INCIDENCE ON THE PRICE OF THE PROCESSED PRODUCTS .

36AS REGARDS THE BASIC AGRICULTURAL PRODUCTS FROM WHICH THE PROCESSED PRODUCTS REFERRED TO IN REGULATION NO 800/77 ARE DERIVED , THE RISK OF DISTURBANCES HAD BEEN ESTABLISHED AT THE TIME WHEN THE MONETARY COMPENSATORY AMOUNTS WERE APPLIED TO THOSE BASIC PRODUCTS .

37THE STATEMENT OF THE REASONS ON WHICH THE REGULATION AT ISSUE WAS BASED CLEARLY INDICATES THAT THE APPLICATION OF THOSE COMPENSATORY AMOUNTS TO THE BASIC PRODUCTS CAN HAVE A CONSIDERABLE INCIDENCE ON THE PRICES OF THE PROCESSED PRODUCTS , AND ACCORDINGLY THIS SUBMISSION MUST BE DISMISSED AS UNFOUNDED .

38THE ITALIAN GOVERNMENT SUBMITS THAT THE COMMISSION APPLIED MONETARY COMPENSATORY AMOUNTS TO THE PRODUCTS AT ISSUE NOT IN ORDER TO DEAL WITH THE DIFFICULTIES TO WHICH MONETARY INSTABILITY MIGHT GIVE RISE FOR THE PROPER FUNCTIONING OF THE COMMON ORGANIZATIONS OF THE MARKET , BUT IN ORDER TO DEAL WITH THE DIFFICULTIES COMPLAINED OF BY IRISH PROCESSING INDUSTRIES IN TRADE WITH THE UNITED KINGDOM .

39IT SUBMITS THAT APPLICATION OF MONETARY COMPENSATORY AMOUNTS TO THE PRODUCTS AT ISSUE IN RESPECT OF TRADE BETWEEN MEMBER STATES AND WITH NON-MEMBER COUNTRIES IS NOT JUSTIFIED BY THE SMALL INCIDENCE WHICH THE MONETARY DIFFERENCES MIGHT HAVE ON THE PRICES OF THE PROCESSED PRODUCTS .

40IT SUBMITS THAT THIS CONCLUSION IS SUPPORTED BY THE FACT THAT COMPENSATORY AMOUNTS WERE NOT APPLIED FOR EXAMPLE TO WHITE CHOCOLATE ( TARIFF SUBHEADING 17.04 C ) AND GINGERBREAD ( TARIFF SUBHEADING 19.08 A ) WHICH , AS REGARDS THE INCIDENCE WHICH THE BASIC AGRICULTURAL PRODUCT HAS ON THEM , DO NOT DIFFER FROM THE OTHER PRODUCTS CONCERNED , TO WHICH ON THE CONTRARY COMPENSATORY AMOUNTS WERE APPLIED .

41IT SUBMITS THAT UNDER ARTICLE 14 OF REGULATION NO 1059/69 , THE COUNCIL COULD HAVE TAKEN APPROPRIATE MEASURES EITHER TO DEAL WITH THE POSSIBLE EFFECT ON TRADE BETWEEN MEMBER STATES AND WITH NON-MEMBER COUNTRIES OF SPECIAL MEASURES ADOPTED UNDER THE COMMON ORGANIZATIONS AS REGARDS THE PRICES OF CERTAIN BASIC PRODUCTS , OR TO DEAL WITH A SPECIAL SITUATION WHICH MAY ARISE IN RESPECT OF CERTAIN GOODS .

42IT SUBMITS THAT , IN THE PART CONCERNING THE PRODUCTS TO WHICH THIS APPLICATION REFERS , REGULATION NO 800/77 BREACHES THE PRINCIPLE OF PROPORTIONALITY BECAUSE A MEASURE TAKEN UNDER THE SAID ARTICLE 14 WOULD HAVE BEEN ADEQUATE AND SUFFICIENT TO DEAL WITH THE DIFFICULTIES ENCOUNTERED BY THE IRISH PROCESSING INDUSTRIES IN THE LIMITED SECTOR OF TRADE WITH THE UNITED KINGDOM , WHEREAS THE APPLICATION OF COMPENSATORY AMOUNTS WAS NEITHER NECESSARY NOR IN PROPORTION TO THE AIM PURSUED .

43THE COMMISSION STATES THAT IN 1975 IT ADOPTED A PRACTICE WHEREBY MONETARY COMPENSATION WAS TO BE FIXED ONLY IN RESPECT OF PROCESSED PRODUCTS ON WHICH THE MAXIMUM AVERAGE INCIDENCE OF THE COMPENSATION EXCEEDED 5% .

44ON 1 JANUARY 1977 THE DIFFERENCE BETWEEN THE SO-CALLED GREEN RATES FOR THE POUND STERLING AND THE IRISH POUND WAS 24.3% , WHICH GAVE RISE TO REPEATED REPRESENTATIONS BY THE IRISH GOVERNMENT AND , FOLLOWING THOSE REPRESENTATIONS , TO THE DECISION OF 23 MARCH 1977 AUTHORIZING IRELAND TO TAKE PROTECTIVE MEASURES .

45THE COMMISSION STATES THAT MORE THOROUGH ANALYSIS OF THE LEGAL AND ECONOMIC SITUATION REVEALED THAT THE PROBLEMS POSED COULD NOT BE ADEQUATELY DEALT WITH BY THE DECISION ADOPTED IN RESPECT OF IRELAND .

46IT STATES THAT AT THE TIME WHEN REGULATION NO 800/77 WAS ADOPTED , THE RATES OF DIFFERENCE OF THE VARIOUS CURRENCIES TAKEN INTO ACCOUNT FOR THE FIXING OF THE COMPENSATORY AMOUNTS WERE AS FOLLOWS : POUND STERLING , - 34.7% ; IRISH POUND , - 10.4% ; FRENCH FRANC , - 16.2% ; ITALIAN LIRA , - 21.1% ; GERMAN MARK , + 9.3% ; BELGIAN AND LUXEMBOURG FRANCS , + 1.4% ; NETHERLANDS GUILDER , + 1.4% ; DANISH KRONER , 0 .
47IT EMERGED FROM THIS THAT THE DIFFERENCE BETWEEN THE POUND STERLING AND THE IRISH POUND WAS MUNCH SMALLER THAN THE DIFFERENCE BETWEEN THE POUND STERLING AND ALL THE STRONG CURRENCIES AND BETWEEN THE GERMAN MARK AND THE ITALIAN LIRA .

48FURTHERMORE THE ACTUAL INCIDENCE OF THE MONETARY COMPENSATION ON THE PRODUCTS AT ISSUE EXCEEDED THE 5% LIMIT WHICH WAS REGARDED IN 1975 AS A DECISIVE FACTOR FOR THE ABOLITION OF THE SAID COMPENSATION .

49ARTICLE 14 OF REGULATION NO 1059/69 REFERS TO THE COUNCIL ' S ADOPTING ' ' APPROPRIATE MEASURES ' ' ONLY ' ' TO DEAL WITH THE POSSIBLE EFFECT ON TRADE BETWEEN MEMBER STATES AND WITH THIRD COUNTRIES OF SPECIAL MEASURES WHICH MAY BE ADOPTED UNDER THE COMMON ORGANIZATION OF AGRICULTURAL MARKETS AS REGARDS THE PRICES OF CERTAIN BASIC PRODUCTS ' ' .

50THE COMMISSION SUBMITS THAT CONSEQUENTLY THIS PROVISION IS NOT APPROPRIATE TO DEAL WITH THE RISK OF DISTURBANCES IN TRADE IN PROCESSED PRODUCTS CAUSED BY THE MONETARY SITUATION OF THE MEMBER STATES .

51ON THE POINT THAT THE COMPENSATORY AMOUNTS WERE NOT APPLIED TO CERTAIN OTHER PRODUCTS , THE COMMISSION STATES THAT IT REACHED THE CONCLUSION THAT IT WAS NOT NECESSARY TO BRING THOSE PRODUCTS UNDER THE MONETARY COMPENSATORY AMOUNTS SYSTEM AFTER HAVING WEIGHED UP THE APPROPRIATE FACTORS , SUCH AS THE LIMITED COMPETITION AND THE FACT THAT NO REQUEST FOR THE INTRODUCTION OF COMPENSATORY AMOUNTS HAD BEEN SUBMITTED .

52THE ITALIAN GOVERNMENT HAS NOT CALLED IN QUESTION THE STATISTICAL DATA SUPPLIED BY THE COMMISSION .

53MOREOVER , THE COMMISSION IS NOT BOUND TO FIX COMPENSATORY AMOUNTS FOR ALL THE PRODUCTS IN A GROUP , BUT MAY ASSESS THE NEED TO APPLY COMPENSATORY AMOUNTS EITHER BY PRODUCTS OR BY GROUPS OF PRODUCTS .

54ACCORDINGLY , THIS SUBMISSION MUST BE DISMISSED AS UNFOUNDED .

55SINCE THE ITALIAN GOVERNMENT HAS FAILED IN ITS SUBMISSIONS , THE APPLICATION MUST BE DISMISSED .

56IRELAND , THE INTERVENER , CONTENDED IN SUPPORT OF THE POSITION DEFENDED BY THE COMMISSION THAT THE APPLICATION SHOULD BE REJECTED , BUT DID NOT ASK FOR THE APPLICANT TO BE ORDERED TO BEAR ITS COSTS .

COSTS
57UNDER ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE , THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS .

58THE APPLICANT HAS FAILED IN ITS SUBMISSIONS .

ON THOSE GROUNDS ,
THE COURT
HEREBY :
1 . DISMISSES THE APPLICATION ;

2 . ORDERS THE ITALIAN REPUBLIC TO PAY THE COSTS INCURRED BY THE DEFENDANT .