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

1 . AGRICULTURE - COMMON ORGANIZATION OF THE MARKETS - FRUIT AND VEGETABLES - ADOPTION OF PROTECTIVE MEASURES APPLICABLE TO IMPORTS OF PRESERVED MUSHROOMS - REGULATION NO 1102/78 - PURSUIT OF OBJECTIVES OF THE COMMON COMMERCIAL POLICY - PERMISSIBILITY
( EEC TREATY , ART . 39 , ART . 40 ( 3 ), SECOND SUBPARAGRAPH , AND ART . 110 ; COMMISSION REGULATION NO 1102/78 )
2 . EEC - EXTERNAL RELATIONS - PRINCIPLE OF NON-DISCRIMINATION - ABSENCE - RELATIVE DIFFERENCE IN TREATMENT OF COMMUNITY TRADERS - PERMISSIBILITY - CONDITIONS
( EEC TREATY , ART . 40 ( 3 ), SECOND SUBPARAGRAPH )
3 . COMMON COMMERCIAL POLICY - ALTERATION IN COMMERCIAL RELATIONS WITH NON-MEMBER COUNTRIES - MARGIN OF DISCRETION OF COMMUNITY INSTITUTIONS - PROTECTION OF LEGITIMATE EXPECTATION - LIMITS
( EEC TREATY , ART . 113 )

1 . IN ADOPTING REGULATION NO 1102/78 ADOPTING PROTECTIVE MEASURES APPLICABLE TO IMPORTS OF PRESERVED MUSHROOMS FROM NON-MEMBER COUNTRIES , THE COMMISSION WAS NOT OBLIGED , UNDER ARTICLE 40 ( 3 ) OF THE TREATY , TO LIMIT ITSELF TO PURSUIT OF THE OBJECTIVES SET OUT IN ARTICLE 39 BUT WAS ALSO ENTITLED TO SEEK TO ACHIEVE OBJECTIVES RELATING TO THE EXTERNAL COMMERCIAL POLICY .



2 . THERE EXISTS IN THE TREATY NO GENERAL PRINCIPLE OBLIGING THE COMMUNITY , IN ITS EXTERNAL RELATIONS , TO ACCORD TO NON-MEMBER COUNTRIES EQUAL TREATMENT IN ALL RESPECTS . IF DIFFERENT TREATMENT OF NON-MEMBER COUNTRIES IS COMPATIBLE WITH COMMUNITY LAW , DIFFERENT TREATMENT ACCORDED TO TRADERS WITHIN THE COMMUNITY MUST ALSO BE REGARDED AS COMPATIBLE WITH COMMUNITY LAW , WHERE THAT DIFFERENT TREATMENT IS MERELY AN AUTOMATIC CONSEQUENCE OF THE DIFFERENT TREATMENT ACCORDED TO NON-MEMBER COUNTRIES WITH WHICH SUCH TRADERS HAVE ENTERED INTO COMMERCIAL RELATIONS .

3 . SINCE COMMUNITY INSTITUTIONS ENJOY A MARGIN OF DISCRETION IN THE CHOICE OF THE MEANS NEEDED TO ACHIEVE THEIR COMMERCIAL POLICIES , TRADERS ARE UNABLE TO CLAIM THAT THEY HAVE A LEGITIMATE EXPECTATION THAT AN EXISTING SITUATION WHICH IS CAPABLE OF BEING ALTERED BY DECISIONS TAKEN BY THOSE INSTITUTIONS WITHIN THE LIMITS OF THEIR DISCRETIONARY POWER WILL BE MAINTAINED .

IN CASE 52/81
OFFENE HANDELSGESELLSCHAFT IN FIRMA WERNER FAUST , HAMBURG , REPRESENTED BY H . W . SAMUEL , G . HOREIS , D . MANKOWSKI , K.-D . QUACK AND J . D . HISAM , RECHTSANWALTE IN HAMBURG , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF E . ARENDT , 34B RUE PHILIPPE-II ,
APPLICANT ,
V
COMMISSION OF THE EUROPEAN COMMUNITIES , REPRESENTED BY M . HILF , A MEMBER OF ITS LEGAL DEPARTMENT , ACTING AS AGENT , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF O . MONTALTO , A MEMBER OF ITS LEGAL DEPARTMENT , JEAN MONNET BUILDING , KIRCHBERG ,
DEFENDANT ,

APPLICATION FOR DAMAGES UNDER THE SECOND PARAGRAPH OF ARTICLE 215 OF THE EEC TREATY ,

1 BY APPLICATION LODGED AT THE COURT REGISTRY ON 10 MARCH 1981 OFFENE HANDELSGESELLSCHAFT IN FIRMA WERNER FAUST ( COMMERCIAL PARTNERSHIP , TRADING AS WERNER FAUST ) ( HEREINAFTER REFERRED TO AS ' ' FAUST ' ' ), HAMBURG , BROUGHT AN ACTION UNDER THE SECOND PARAGRAPH OF ARTICLE 215 OF THE EEC TREATY SEEKING COMPENSATION FROM THE EUROPEAN ECONOMIC COMMUNITY FOR THE DAMAGE WHICH IT CLAIMS TO HAVE SUFFERED AS A RESULT OF CERTAIN COMMISSION REGULATIONS ADOPTING OR RELAXING PROTECTIVE MEASURES RELATING TO IMPORTS INTO THE TERRITORY OF THE COMMUNITY OF PRESERVED MUSHROOMS FROM NON-MEMBER COUNTRIES .

2 FAUST IS AN UNDERTAKING ESTABLISHED IN THE FEDERAL REPUBLIC OF GERMANY WHOSE BUSINESS ACTIVITY CONSISTED SOME YEARS AGO TO A LARGE EXTENT IN IMPORTING ON BEHALF OF PRINCIPALS PRESERVED MUSHROOMS FROM TAIWAN .

3 IMPORTS INTO THE COMMUNITY OF PRESERVED MUSHROOMS FROM NON-MEMBER COUNTRIES WERE SUBJECTED FOR THE FIRST TIME TO PROTECTIVE MEASURES WITH EFFECT FROM 26 AUGUST 1974 BY REGULATION ( EEC ) NO 2107/74 OF THE COMMISSION OF 8 AUGUST 1974 ( OFFICIAL JOURNAL 1974 , L 218 , P . 54 ), WHICH MADE ALL IMPORTS SUBJECT TO SUBMISSION OF AN IMPORT LICENCE ISSUED TO EACH PARTY APPLYING THEREFOR IN RESPECT OF A QUANTITY CALCULATED BY REFERENCE TO THE QUANTITIES IMPORTED IN A PRECEDING PERIOD . TAIWAN , WHICH IN 1973 HAD SENT TO THE COMMUNITY 25 544.6 TONNES OF PRESERVED MUSHROOMS , WAS STILL ABLE , UNDER THE SYSTEM OF REFERENCE QUANTITIES , TO EXPORT TO THE COMMUNITY 15 808.5 TONNES IN 1974 , 18 174 TONNES IN 1975 AND 7 830.8 TONNES IN 1976 .
4 THE PROTECTIVE MEASURES WERE RELAXED WITH EFFECT FROM 1 JANUARY 1977 BY COMMISSION REGULATION ( EEC ) NO 3096/76 OF 17 DECEMBER 1976 ( OFFICIAL JOURNAL 1976 , L 348 , P . 26 ). FOLLOWING THE RELAXATION OF THOSE MEASURES , TAIWAN WAS ABLE TO EXPORT TO THE COMMUNITY IN 1977 10 353.9 TONNES OF PRESERVED MUSHROOMS .

5 ON 25 MAY 1978 THE COMMISSION , USING THE POWERS DELEGATED TO IT BY COUNCIL REGULATION ( EEC ) NO 516/77 OF 14 MARCH 1977 ON THE COMMON ORGANIZATION OF THE MARKET IN PRODUCTS PROCESSED FROM FRUIT AND VEGETABLES ( OFFICIAL JOURNAL 1977 , L 73 , P . 1 ), ADOPTED REGULATION ( EEC ) NO 1102/78 ( OFFICIAL JOURNAL 1978 , L 139 , P . 26 ) LAYING DOWN FRESH PROTECTIVE MEASURES CONSISTING IN THE IMMEDIATE SUSPENSION OF THE ISSUE OF IMPORT LICENCES FOR PRESERVED MUSHROOMS . ARTICLE 2 ( 1 ) OF REGULATION NO 1102/78 PROVIDED THAT THE PROHIBITION OF IMPORTS WAS NOT TO APPLY TO ' ' PRESERVED MUSHROOMS ORIGINATING IN THIRD COUNTRIES WHICH THE COMMISSION ACCEPTS AS BEING ABLE TO ENSURE THAT THEIR EXPORTS TO THE COMMUNITY DO NOT EXCEED A LEVEL AGREED BY THE COMMISSION ' ' . COMMISSION REGULATION ( EEC ) NO 1213/78 OF 5 JUNE 1978 ( OFFICIAL JOURNAL 1978 , L 150 , P . 5 ), BY WHICH THE COMMISSION ACKNOWLEDGED THAT TAIWAN SATISFIED THE AFOREMENTIONED CONDITION , WAS REPEALED ALMOST IMMEDIATELY BY COMMISSION REGULATION ( EEC ) NO 1449/78 OF 28 JUNE 1978 ( OFFICIAL JOURNAL 1978 , L 173 , P . 25 ). DURING 1978 TAIWAN WAS ABLE TO EXPORT TO THE COMMUNITY 14 727.2 TONNES OF PRESERVED MUSHROOMS .

6 IN 1979 , IN THE ABSENCE OF A AGREEMENT ON VOLUNTARY RESTRAINT BETWEEN THE COMMISSION AND TAIWAN , IMPORTS OF MUSHROOMS FROM THAT COUNTRY WERE MUCH REDUCED ( TO 55.3 TONNES ), SINCE THE PROTECTIVE MEASURES CONTINUED TO APPLY TO NON-MEMBER COUNTRIES WHICH WERE NOT PREPARED VOLUNTARILY TO RESTRICT THEIR EXPORTS TO THE COMMUNITY . IN 1980 , AFTER FINDING THAT THE COMMISSION DID NOT INTEND TO ALLOW IT TO EXPORT TO THE COMMUNITY MORE THAN 1 000 TONNES OF PRESERVED MUSHROOMS , TAIWAN AGREED TO RESTRICT ITS EXPORTS TO THE COMMUNITY TO THAT QUANTITY .

7 FAUST ARGUES THAT IF PATTERNS OF TRADE HAD CONTINUED TO DEVELOP NORMALLY AND , IN PARTICULAR , IF THE SYSTEM OF REFERENCE QUANTITIES HAD BEEN MAINTAINED IN FORCE , IT MIGHT HAVE EXPECTED ITS MARKET SHARE TO REACH 19.12% OF THE IMPORTS OF PRESERVED MUSHROOMS FROM TAIWAN AND THAT , IN THE RESULT , THE DRACONIAN REDUCTION IN THOSE IMPORTS INFLICTED ON IT IN 1979 AND 1980 A LOSS OF FORESEEABLE COMMISSION AMOUNTING TO USD 114 930 . FAUST CLAIMS THAT IT SUFFERED THAT DAMAGE AS A RESULT OF COMMISSION REGULATIONS NOS 3096/76 , 1102/78 AND 1449/78 MENTIONED ABOVE , WHICH IT SAYS ARE CONTRARY TO COMMUNITY LAW AND THEREFORE RENDER THE COMMUNITY LIABLE UNDER THE SECOND PARAGRAPH OF ARTICLE 215 OF THE EEC TREATY .

8 FAUST DISPUTES FIRST OF ALL THE VALIDITY OF REGULATION NO 3096/76 , STATING THAT THE ABANDONMENT OF THE SYSTEM OF REFERENCE QUANTITIES CONTRAVENES THE PRINCIPLES OF EQUALITY AND NON-DISCRIMINATION WHICH , IN ITS OPINION , ARE APPLICABLE EVEN TO THE EXTERNAL RELATIONS OF THE COMMUNITY AND THUS OBLIGE THE LATTER TO ACCORD TO NON-MEMBER COUNTRIES EQUAL TREATMENT IN ALL RESPECTS . IN FAUST ' S VIEW , THE INVALIDITY OF REGULATION NO 3096/76 ENTAILS THE INVALIDITY OF THE SUBSEQUENT REGULATIONS WHICH REFER TO IT .

9 THE COMMISSION REPLIES WITH JUSTIFICATION THAT THE MEASURES WHICH IT ADOPTED DO NOT CONTRAVENE SUPERIOR RULES OF COMMUNITY LAW . IN FACT , THE COUNCIL REGULATIONS PURSUANT TO WHICH THOSE MEASURES WERE ADOPTED EXPRESSLY PERMITTED A SELECTIVE APPLICATION IN FAVOUR OR TO THE DETRIMENT OF CERTAIN NON-MEMBER COUNTRIES , THUS LEAVING TO THE COMMISSION A WIDE MEASURE OF DISCRETION . FURTHERMORE , IT MUST BE EMPHASIZED THAT FAUST HAS ADDUCED NO EVIDENCE TO SHOW THAT , IN ADOPTING REGULATION NO 3096/76 RELAXING THE PROTECTIVE MEASURES ADOPTED BY REGULATION NO 2107/74 , THE COMMISSION MANIFESTLY AND GRAVELY EXCEEDED THE LIMITS OF THE DISCRETION WHICH IT ENJOYS WITH RESPECT TO THE APPRAISAL OF ECONOMIC INFORMATION .

10 FAUST THEN DISPUTES THE VALIDITY OF REGULATION NO 1102/78 , WHICH LAID DOWN PROTECTIVE MEASURES WITH EFFECT FROM 25 MAY 1978 , AND REGULATION NO 1449/78 , WHICH RE-INSTATED THOSE MEASURES WITH REGARD TO TAIWAN ONLY THREE WEEKS AFTER THE COMMISSION , BY ADOPTING REGULATION NO 1213/78 , HAD ACKNOWLEDGED THAT TAIWAN MIGHT BE EXCLUDED FROM THE APPLICATION OF THOSE MEASURES BY VIRTUE OF ARTICLE 2 ( 1 ) OF REGULATION NO 1102/78 .
11 AS FAR AS REGULATION NO 1449/78 IS CONCERNED , IT SHOULD FIRST BE OBSERVED THAT THE EFFECTS OF THAT REGULATION ARE RESTRICTED TO 1978 , SINCE IT REPEALS REGULATION NO 1213/78 , WHICH HAD BEEN ADOPTED PURSUANT TO AN UNDERTAKING GIVEN BY TAIWAN NOT TO EFFECT ANY MORE EXPORTS IN 1978 AND REFERRED THEREFORE SOLELY TO 1978 . SINCE FAUST SEEKS COMPENSATION MERELY FOR THE DAMAGE WHICH IT CLAIMS TO HAVE SUFFERED IN 1979 AND 1980 , AN EXAMINATION OF THE VALIDITY OF THAT REGULATION IS UNNECESSARY .

12 IN THOSE CIRCUMSTANCES , THERE MERELY REMAINS TO BE EXAMINED REGULATION NO 1102/78 , WHOSE VALIDITY IS CONTESTED BY FAUST PRIMARILY ON THE GROUND THAT THE INFORMATION AT THE COMMISSION ' S DISPOSAL AT THE END OF MAY 1978 DID NOT JUSTIFY THE ADOPTION OF PROTECTIVE MEASURES .

13 IN DISPUTING THE ACCURACY OF THE REASONS SET FORTH BY THE COMMISSION IN THE PREAMBLE TO THAT REGULATION , FAUST CLAIMS IN PARTICULAR THAT :
THE APPLICATIONS FOR IMPORT CERTIFICATES WHICH , ON 23 MAY 1978 , COVERED A QUANTITY OF 40 914 TONNES , COULD NOT GIVE ANY RELIABLE INDICATION OF THE QUANTITY WHICH WOULD ACTUALLY BE IMPORTED AND THE COMMISSION WAS THEREFORE WRONG TO CONCLUDE FROM THOSE APPLICATIONS THAT IMPORTS IN 1978 WOULD BE GREATLY IN EXCESS OF THOSE IN 1977 , WHICH AMOUNTED TO 32 900 TONNES ;

THE OFFER PRICES FOR PRESERVED MUSHROOMS FROM NON-MEMBER COUNTRIES WERE NOT LOWER THAN THE COST PRICES IN THE COMMUNITY INDUSTRY ;

STOCKS OF PRESERVED MUSHROOMS PRODUCED IN THE COMMUNITY WERE NOT IN 1978 GREATLY IN EXCESS OF THOSE RECORDED IN 1977 .
14 AS TO THE FIRST ARGUMENT , IT SHOULD BE POINTED OUT THAT , WHILST THE APPLICATIONS FOR IMPORT CERTIFICATES DID NOT ALLOW AN ACCURATE FORECAST TO BE MADE OF THE QUANTITIES WHICH WOULD ACTUALLY BE IMPORTED , SINCE CERTAIN CERTIFICATES MIGHT NOT SUBSEQUENTLY BE USED , THEY DID , HOWEVER , REVEAL A CLEAR TENDENCY TOWARDS INCREASING IMPORTS WHICH WAS CAPABLE OF DISTURBING THE MARKET .

15 AS FAR AS THE PRICE LEVELS ARE CONCERNED , IT SHOULD BE BORNE IN MIND THAT THE COMMISSION COMPARED THE FREE-AT-FRONTIER OFFER PRICES OF PRODUCTS FROM NON-MEMBER COUNTRIES WITH FRENCH COST PRICES ( FRANCE BEING THE LARGEST PRODUCER OF PRESERVED MUSHROOMS WITHIN THE COMMUNITY ), WHEREAS FAUST COMPARES THE SALE PRICES ( INCLUDING DUTY ) OF PRODUCTS FROM NON-MEMBER COUNTRIES WITH THE SALE PRICE OF COMMUNITY PRODUCTS . THE METHOD ADOPTED BY THE COMMISSION APPEARS TO BE JUSTIFIED INTER ALIA BY THE FACT THAT THE COMPARISON BETWEEN SALE PRICES MADE BY FAUST DOES NOT TAKE INTO ACCOUNT THE FALL IN SALE PRICES SUFFERED BY COMMUNITY PRODUCTS AS AN INEVITABLE RESULT OF MASSIVE AND PROLONGED PRESSURE FROM CHEAPER IMPORTS . A SOMEWHAT HIGH PRICE FOR A COMMUNITY PRODUCT MAY IN FACT INDICATE THE PRESENCE , RATHER THAN THE ABSENCE , OF A DISTURBANCE OF THE MARKET . MOREOVER , IT SHOULD BE OBSERVED THAT THE STATISTICAL INFORMATION RELIED UPON BY FAUST RELATES TO A WHOLE YEAR , WHEREAS THE COMMISSION WAS OBLIGED TO HAVE REGARD TO THE SITUATION OF THE MARKET AT THE TIME WHEN IT CONTEMPLATED ADOPTING PROTECTIVE MEASURES AND AT THAT TIME THE SALE PRICES OF PRODUCTS FROM NON-MEMBER COUNTRIES WERE LOWER THAN THE SALE PRICES OF COMMUNITY PRODUCTS .

16 AS FAR AS THE STOCKS ARE CONCERNED , THE COMMISSION ' S STATEMENT THAT AT THE END OF MAY 1978 THE LEVEL OF STOCKS OF PRESERVED MUSHROOMS PRODUCED WITHIN THE COMMUNITY WAS 40 TO 50% HIGHER THAN THE LEVEL IN 1977 HAS NOT BEEN CONCLUSIVELY CHALLENGED BY FAUST AND MUST THEREFORE BE REGARDED AS CORRECT .

17 IN VIEW OF THE FOREGOING CONSIDERATIONS , IT MUST BE STATED THAT NO FACTORS HAVE BEEN DISCLOSED WHICH SUPPORT THE PROPOSITION THAT THE INFORMATION AT THE COMMISSION ' S DISPOSAL IN MAY 1978 DID NOT JUSTIFY THE ADOPTION OF PROTECTIVE MEASURES .

18 FAUST HAS CLAIMED , HOWEVER , THAT EVEN IF THE PROTECTIVE MEASURES ADOPTED BY REGULATION NO 1102/78 WERE JUSTIFIED THE REGULATION WOULD NEVERTHELESS BE VITIATED BY NULLITY ON THE GROUNDS OF MISUSE OF POWERS , BREACH OF THE PRINCIPLES OF PROPORTIONALITY , PROHIBITION OF DISCRIMINATION AND PROTECTION OF LEGITIMATE EXPECTATION .

19 IN THE FIRST PLACE FAUST SAYS THAT THE COMMISSION MISUSED ITS POWERS BY STRUCTURING AND APPLYING THE PROTECTIVE MEASURES FOR THE PURPOSE NOT MERELY OF AVOIDING A DISTURBANCE OF THE MARKET BUT ALSO OF CREATING DISTINCTLY FAVOURABLE CONDITIONS FOR THE DEVELOPMENT OF TRADE WITH CERTAIN NON-MEMBER COUNTRIES , IN PARTICULAR THE PEOPLE ' S REPUBLIC OF CHINA WITH WHICH THE COMMUNITY ENTERED INTO A TRADE AGREEMENT ON 3 APRIL 1978 . UNDER ARTICLE 40 ( 3 ) OF THE TREATY , A COMMON ORGANIZATION OF THE MARKET IS TO BE ' ' LIMITED TO PURSUIT OF THE OBJECTIVES SET OUT IN ARTICLE 39 ' ' , WHICH DO NOT INCLUDE OBJECTIVES OF EXTERNAL COMMERCIAL POLICY .

20 THE APPLICANT ' S ASSERTION IS , HOWEVER , REFUTED BY ARTICLE 39 ( 2 ) ( C ) OF THE TREATY , WHICH STATES THAT ' ' IN THE MEMBER STATES AGRICULTURE CONSTITUTES A SECTOR CLOSELY LINKED WITH THE ECONOMY AS A WHOLE ' ' ; BY THE PENULTIMATE RECITAL IN THE PREAMBLE TO COUNCIL REGULATION NO 516/77 OF 14 MARCH 1977 ON THE COMMON ORGANIZATION OF THE MARKET IN PRODUCTS PROCESSED FROM FRUIT AND VEGETABLES , WHICH STATES THAT ' ' THE COMMON ORGANIZATION OF THE MARKET IN PRODUCTS PROCESSED FROM FRUIT AND VEGETABLES MUST TAKE APPROPRIATE ACCOUNT , AT THE SAME TIME , OF THE OBJECTIVES SET OUT IN ARTICLES 39 AND 110 OF THE TREATY ' ' ; AND BY ARTICLE 3 OF COUNCIL REGULATION NO 521/77 OF 14 MARCH 1977 LAYING DOWN DETAILED RULES FOR APPLYING PROTECTIVE MEASURES IN THE MARKET IN PRODUCTS PROCESSED FROM FRUIT AND VEGETABLES ( OFFICIAL JOURNAL 1977 , L 73 , P . 28 ) ACCORDING TO WHICH THE APPLICATION OF PROTECTIVE MEASURES MUST ' ' RESPECT THE COMMUNITY ' S OBLIGATIONS UNDER INTERNATIONAL AGREEMENTS ' ' .

21 AS REGARDS THE COMPLAINT ALLEGING A BREACH OF THE PRINCIPLE OF PROPORTIONALITY , FAUST MAINTAINS THAT THE COMMISSION COULD HAVE ACHIEVED THE OBJECTIVE PURSUED , THAT IS TO SAY AVOIDANCE OF DISTURBANCES OF THE MARKET , SIMPLY BY MEANS OF QUANTITATIVE RESTRICTIONS , BY RETAINING THE REFERENCE SYSTEM WITHOUT THE IMPOSITION OF ANY LIMITS , AND THAT THERE WAS NO REASON FOR ABANDONING THAT SYSTEM AND EXCLUDING DEVELOPING PATTERNS OF TRADE FROM THE IMPORT QUOTAS IN AN ARBITRARY AND GENERAL MANNER .

22 IN THAT RESPECT IT SHOULD BE STATED THAT THE COMMISSION COULD NOT IN ANY EVENT HAVE ' ' RETAINED ' ' THE REFERENCE SYSTEM SINCE REGULATION NO 3096/76 HAD RELAXED WITH EFFECT FROM 1 JANUARY 1977 THE PROTECTIVE MEASURES ON THE BASIS OF WHICH THAT SYSTEM WAS OPERATED . THE APPLICANT ' S COMPLAINT MUST THEREFORE BE CONSTRUED TO THE EFFECT THAT THE COMMISSION OUGHT TO HAVE PURSUED ITS OBJECTIVES BY PROPORTIONATE MEANS , FOR EXAMPLE BY APPLYING AT THE SAME TIME AS THE FRESH PROTECTIVE MEASURES ADOPTED IN 1978 A SYSTEM OF REFERENCES TO THE IMPORTS EFFECTED IN THE PRECEDING YEARS FROM EACH OF THE NON-MEMBER COUNTRIES CONCERNED .

23 IN VIEW OF THE FACT THAT THE COMMISSION SOUGHT BY MEANS OF THE CONTESTED MEASURES TO ACHIEVE TWO EQUALLY LEGITIMATE OBJECTIVES , NAMELY STABILIZATION OF THE MARKET AND IMPLEMENTATION OF A COMMUNITY POLICY RELATING TO EXTERNAL TRADE , THE MEASURES ADOPTED CANNOT BE CONSIDERED TO BE DISPROPORTIONATE TO THE OBJECTIVES PURSUED . IT IS AN UNAVOIDABLE FACT THAT CHANGES IN COMMUNITY POLICIES RELATING TO EXTERNAL TRADE HAVE REPERCUSSIONS ON THE PROSPECTS OF TRADERS IN THE SECTOR CONCERNED .

24 AS FAR AS THE COMPLAINT OF DISCRIMINATION IS CONCERNED , IT MUST BE STATED THAT THE LAWFULNESS OF THE SYSTEM OF VOLUNTARY RESTRAINT PROVIDED FOR BY REGULATION NO 1102/78 HAS NOT BEEN CALLED IN QUESTION . IN REALITY FAUST IS CHALLENGING THE WAY IN WHICH THE COMMISSION OPERATED THAT SYSTEM , IN PARTICULAR THE FACT THAT THE COMMISSION ARBITRARILY FIXED THE IMPORT QUOTA GRANTED TO EACH NON-MEMBER COUNTRY WITHIN THE CONTEXT OF VOLUNTARY RESTRAINT , WITHOUT ANY REFERENCE TO THE IMPORTS FROM THOSE COUNTRIES EFFECTED IN THE PRECEDING YEARS . AN EXAMINATION OF THE VALIDITY OF REGULATION NO 1102/78 FROM THE POINT OF VIEW OF THE PRINCIPLE OF NON-DISCRIMINATION MUST THEREFORE TAKE INTO ACCOUNT THE WAY IN WHICH THE COMMISSION APPLIED THAT REGULATION IN THE YEARS 1978 , 1979 AND 1980 . FOR THE PURPOSES OF THE PRESENT CASE , SUCH AN EXAMINATION IS HOWEVER NECESSARY ONLY IN RESPECT OF THE YEARS 1979 AND 1980 SINCE IN ITS APPLICATION FAUST DOES NOT REFER TO ANY DAMAGE SUFFERED BY IT IN 1978 .
25 ALTHOUGH TAIWAN CERTAINLY APPEARS TO HAVE BEEN TREATED BY THE COMMISSION LESS FAVOURABLY THAN CERTAIN NON-MEMBER COUNTRIES , IT SHOULD BE REMEMBERED THAT THERE EXISTS IN THE TREATY NO GENERAL PRINCIPLE OBLIGING THE COMMUNITY , IN ITS EXTERNAL RELATIONS , TO ACCORD TO NON-MEMBER COUNTRIES EQUAL TREATMENT IN ALL RESPECTS . IT IS THUS NOT NECESSARY TO EXAMINE ON WHAT BASIS FAUST MIGHT SEEK TO RELY UPON THE PROHIBITION OF DISCRIMINATION BETWEEN PRODUCERS OR CONSUMERS WITHIN THE COMMUNITY CONTAINED IN ARTICLE 40 OF THE TREATY . IT NEED MERELY BE OBSERVED THAT , IF DIFFERENT TREATMENT OF NON-MEMBER COUNTRIES IS COMPATIBLE WITH COMMUNITY LAW , DIFFERENT TREATMENT ACCORDED TO TRADERS WITHIN THE COMMUNITY MUST ALSO BE REGARDED AS COMPATIBLE WITH COMMUNITY LAW , WHERE THAT DIFFERENT TREATMENT IS MERELY AN AUTOMATIC CONSEQUENCE OF THE DIFFERENT TREATMENT ACCORDED TO NON-MEMBER COUNTRIES WITH WHICH SUCH TRADERS HAVE ENTERED INTO COMMERCIAL RELATIONS .

26 THE APPLICANT FINALLY CLAIMS THAT THE ALMOST TOTAL PROHIBITION OF IMPORTS FROM TAIWAN CONTRAVENED THE PRINCIPLE OF THE PROTECTION OF LEGITIMATE EXPECTATION WHICH REQUIRES IN THE PRESENT CASE THAT TRADITIONAL TRADING RELATIONS BE MAINTAINED .

27 THAT COMPLAINT MUST ALSO BE REJECTED . SINCE COMMUNITY INSTITUTIONS ENJOY A MARGIN OF DISCRETION IN THE CHOICE OF THE MEANS NEEDED TO ACHIEVE THEIR POLICIES , TRADERS ARE UNABLE TO CLAIM THAT THEY HAVE A LEGITIMATE EXPECTATION THAT AN EXISTING SITUATION WHICH IS CAPABLE OF BEING ALTERED BY DECISIONS TAKEN BY THOSE INSTITUTIONS WITHIN THE LIMITS OF THEIR DISCRETIONARY POWER WILL BE MAINTAINED . IN THE PRESENT CASE , THERE CAN BE NO QUESTION OF A BREACH OF THE PRINCIPLE OF THE PROTECTION OF LEGITIMATE EXPECTATION , PARTICULARLY SINCE THE COMMERCIAL AGREEMENT ENTERED INTO ON 3 APRIL 1978 BETWEEN THE COMMUNITY AND THE PEOPLE ' S REPUBLIC OF CHINA , PUBLISHED IN THE OFFICIAL JOURNAL OF 11 MAY 1978 ( OFFICIAL JOURNAL 1978 , L 123 , P . 2 ) WAS OF SUCH A NATURE AS TO ALERT TRADERS TO AN IMMINENT CHANGE OF DIRECTION IN THE COMMUNITY ' S COMMERCIAL POLICY AND , IN THE ABSENCE OF ANY OBLIGATION ON THE PART OF THE COMMUNITY TO ACCORD EQUAL TREATMENT TO NON-MEMBER COUNTRIES , NO INFORMED TRADER WAS ENTITLED TO EXPECT THAT PATTERS OF TRADE EXISTING WHEN THE PROTECTIVE MEASURES WERE ADOPTED WOULD BE RESPECTED .

28 IN THE LIGHT OF THE FOREGOING CONSIDERATIONS IT MUST BE CONCLUDED THAT THE APPLICANT HAS NOT BEEN ABLE TO PROVE THAT THE REGULATIONS WHICH , IN ITS VIEW , GAVE RISE TO THE DAMAGE FOR WHICH IT CLAIMS COMPENSATION ARE UNLAWFUL . THE APPLICATION MUST THEREFORE BE DISMISSED .

COSTS
29 UNDER ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE AN UNSUCCESSFUL PARTY IS TO BE ORDERED TO PAY THE COSTS . SINCE THE APPLICANTS HAS FAILED IN ITS SUBMISSIONS IT MUST BE ORDERED TO PAY THE COSTS .

ON THOSE GROUNDS ,
THE COURT ( FIRST CHAMBER )
HEREBY :
1 . DISMISSES THE APPLICATION .

2 . ORDERS THE APPLICANT TO PAY THE COSTS .