CJEC, November 23, 1999, No C-89/96

THE COURT,

1 By application lodged at the Court Registry on 21 March 1996, the Portuguese Republic brought an action under the first paragraph of Article 173 of the EC Treaty (now, after amendment, the first paragraph of Article 230 EC) for the annulment of Annex V, on cottage industry and folklore products (`the contested annex') to Commission Regulation (EC) No 3053-95 of 20 December 1995 amending Annexes I, II, III, V, VI, VII, VIII, IX and XI of Council Regulation (EEC) No 3030-93 on common rules for imports of certain textile products from third countries (OJ 1995 L 323, p. 1).

2 The fifth and sixth indents of Article 1 of Regulation No 3053-95 replace Annex VI of Regulation (EEC) No 3030-93 of 12 October 1993 (OJ 1993 L 275, p. 1) by the contested annex and also repeal Annex VIa of that regulation as from 1 January 1995.

3 By Commission Regulation (EC) No 1410-96 of 19 July 1996 concerning the partial withdrawal of Regulation (EC) No 3053-95 (OJ 1996 L 181, p. 15, `the withdrawal regulation'), the Commission, in Article 1(1), withdrew the fifth and sixth indents of Article 1 of Regulation No 3053-95 with retroactive effect from 1 January 1995.

4 However, Article 1(2) of the withdrawal regulation provides that the partial withdrawal of Regulation No 3053-95 is not to affect the rights to which its adoption may have given rise for its intended beneficiaries in the period from 1 January 1995 until the date of entry into force of the withdrawal regulation, namely 21 July 1996.

5 According to the first recital in the preamble to the withdrawal regulation, the amendments provided for in the fifth and sixth indents of Article 1 of the withdrawal regulation had been adopted at a time when, by virtue of Article 19 of Regulation No 3030-93, the Commission was not yet entitled to adopt such amendments, the Council not yet having decided to conclude or apply provisionally the arrangements for access to the market for textile products negotiated by the Commission with the Republic of India and the Islamic Republic of Pakistan. The Commission therefore considered that Regulation No 3053-95 contained a procedural defect that warranted at least its withdrawal or partial annulment.

6 In its reply, which was lodged on 26 August 1996, the Portuguese Government requests the Court to adjudicate on the merits of the present application, notwithstanding the withdrawal of part of the contested regulation. The Portuguese Government claims that when it lodged its application it knew that when the Council adopted a decision concerning the conclusion of arrangements with the Republic of India and the Islamic Republic of Pakistan on access to the market for textile products the Commission could lawfully adopt an implementing measure whose material content would be the same as that of the contested annex.

7 The Portuguese Government further claims that the withdrawal of the contested annex does not render its application entirely devoid of purpose, since Article 1(2) of the withdrawal regulation maintains the rights to which that annex may have given rise for its intended beneficiaries between 1 January 1995 and the date of its entry into force.

8 In its rejoinder the Commission requests the Court to declare that there is no need to adjudicate on the present application, which has become devoid of purpose.

9 It should be noted that by Article 1 of the withdrawal regulation the fifth indent of Article 1 of Regulation No 3053-95, which provides that Annex VI to Regulation No 3030-93 is to be replaced by the contested annex, was withdrawn with retroactive effect from 1 January 1995, but that such withdrawal is not to affect the rights to which that annex may have given rise for its intended beneficiaries.

10 It follow ce3 s that, contrary to what the Commission claims, the application is not devoid of purpose in so far as certain effects of the contested annex subsist.

11 Since the Portuguese Republic's action is aimed at removing from the Community legal order not only the contested annex but also all the effects which it has produced, the Court must adjudicate on the application.

12 As the Commission expressly acknowledged in the first recital in the preamble to the withdrawal regulation, at the time when Regulation No 3053-95 was adopted it was not entitled to replace Annex VI to Regulation No 3030-93 by the contested annex.

13 In that regard, it should also be noted that it is not open to a Community institution which has adopted a measure without being competent to do so to withdraw that measure when its legality is challenged before the Court and at the same time essentially to preserve the effects which it has produced, in order thereby to achieve the objective which it sought to achieve by adopting it, notwithstanding the withdrawal of the illegal measure.

14 It follows that the Portuguese Government's application must be upheld.

15 As regards the Commission's alternative claim, that the effects of Regulation No 3053-95 should be maintained, it has failed to demonstrate the need to protect the rights to which the adoption of that regulation may have given rise for the intended beneficiaries. The Commission admitted, in response to a question on that point at the hearing, that it did not know of any specific situations which it was necessary to protect.

16 Accordingly, Article 1 of Regulation No 3053-95 must be annulled in so far as it replaces Annex VI to Regulation No 3030-93 by Annex V.

Costs

17 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. Since the Portuguese Republic applied for the Commission to be ordered to pay the costs and the Commission has been unsuccessful, it must be ordered to pay the costs.

On those grounds,

THE COURT

hereby:

1. Annuls Article 1 of Commission Regulation (EC) No 3053-95 of 20 December 1995 amending Annexes I, II, III, V, VI, VII, VIII, IX and XI of Council Regulation (EEC) No 3030-93 on common rules for imports of certain textile products from third countries in so far as that provision replaces Annex VI to Regulation No 3030-93 by Annex V;

2. Orders the Commission of the European Communities to pay the costs.