The Constitutional Court found no 154 / 2006 Coll.
The Constitutional Court found of 8 March 2006 on the application for annulment of Article 3 and Article 16 of Decree No. 364 / 2004 Coll., on certain conditions for the implementation of measures of the common organisation of the markets in the sugar sector, and on the application for annulment of Article 3 of Decree No. 548 / 2005 Coll., on certain conditions for the implementation of measures of the common organisation of the markets in the sugar sector
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154
FIND
The Constitutional Court
On behalf of the Czech Republic
On 8 March 2006, the Constitutional Court, in plenary composed of Stanislav Balík, František Duchoň, Vlasta Formánková, Vojen Güttler, Pavel Holländer, Ivan Janů, Vladimir Krórek, Dagmar Lastovecká, Jiří Mucha, Jan Musil, Jiří Nykodým, Pavel Rychetský, Miloslav Excellent, Eliška Wagner (Judge of the Rapporteur), on the proposal of the Group of Members of Parliament of the Czech Republic to abolish § 3 and § 16 of the Government Regulation No. 364 / 2004 Coll., on the establishment of certain conditions for the implementation of measures of the common organisation of the sugar sector markets,
as follows:
I. The procedure for the application for annulment of Sections 3 and 16 of the Government Decree No. 364 / 2004 Coll., laying down certain conditions for the implementation of the measures of the common organisation of the markets in the sugar sector is hereby terminated.
II. Paragraph 3 of Decree No. 548 / 2005 Coll., on the establishment of certain conditions for the implementation of measures of the common organisation of the markets in the sugar sector, shall be deleted from the date of publication of this finding in the Collection of Laws.
Reasons
Recital of the proposal
A) The original proposal received by the Constitutional Court on 18 October 2004, a group of 35 Members of the Chamber of Deputies of the Parliament of the Czech Republic requested the annulment of Sections 3 and 16 of the Government Regulation No. 364 / 2004 Coll., on certain conditions for implementing the measures of the common organisation of the markets in the sugar sector.
As suggested by the applicants, the sugar market has been regulated in the Czech Republic for several years. The Government has attempted to regulate the production of sugar by Regulation No 51 / 2000 Coll., laying down measures and the State's share in the creation of conditions for ensuring and maintaining the production of sugar and sugar and stabilising the sugar market, which was in force between 14.3.2000 and 12.3.2001 and was annulled by the Constitutional Court's finding published under No. 96 / 2001 Coll.. Following the repeal of this Regulation, the Government issued Decree No 114 / 2001 Coll., establishing the quota quota quotas for sugar for the quota years 2001 / 2002 to 2004 / 2005, the provisions of which provided for in Sections 4 (3), 5 (3), 7 and 13 of which had been annulled by the Constitutional Court by the finding of No 499 / 2002 Coll., the main reason for the cancellation was found to be an inequality between producers and therefore on products dependent on growers. According to the applicants, the Constitutional Court then stated that the inequality "is already due to the fact that, on the basis of the measure (Decree of Government No. 51 / 2000 Coll.), some producers were already able to increase production for formal reasons of non-constitutional and de facto discrimination, since they were protected from competition which did not have a production quota and could therefore not produce a penalty levy without burden. The government of today's formal correct adjustment for the future maintains the undesirable situation that has triggered its former formal and materially unconstitutional adjustment."
The appellants also referred to the conclusion of the Constitutional Court at the time that the key to the allocation of individual production quotas at that time is found to be contrary to the legal requirement of an objective method of calculation and, in particular, to the constitutional requirement of equality under Article 1 of the Charter of Fundamental Rights and Freedoms (hereinafter referred to as "the Charter '), which, at the same time, provides for the incompatible irregular content of ownership between undertakings enjoying the same freedom of business under Article 26 of the Charter. According to the appellants, the Constitutional Court came to this conclusion on the basis of the finding that the status of individual sugar producers had been influenced by the anti-constitutional legislation under Decree No 51 / 2000 Coll. before its annulment.
On 5 November 2003, a proposal was submitted to the appellant for the annulment of Government Decree No. 114 / 2001 Coll., establishing the production quotas for sugar for quota years 2001 / 2002 to 2004 / 2005, as amended by Government Decree No. 296 / 2002 Coll., the Constitutional Court found No. 499 / 2002 Coll., Government Decree No. 15 / 2003 Coll., Government Decree No. 97 / 2003 Coll. and Government Decree No. 319 / 2003 Coll. In event, the appellants sought the annulment of certain provisions of this legislation.
The Constitutional Court, by its resolution sp. zn. Pl. ÚS 48 / 03 of 23.3.2004, suspended the proceedings for insufficient number of judges and decided on 22.6.2004 to continue the proceedings when the reason for the interruption fell out. However, the contested regulation was repealed with effect from 1 July 2004 by Government Decree No 364 / 2004 Coll., and on 31 July 2004 the appellants asked to wait until the hearing to amend the original proposal. The appellants were convinced that the newly adopted Decree No. 364 / 2004 Coll. followed in substance the previously contested Decree of the Government No. 114 / 2001 Coll., and therefore intended to make a proposal to amend the original proposal. In doing so, they relied on a similar procedure in the case declared by the Constitutional Court under No 528 / 2002 Coll. (formal annulment and identity of the contested law during the proceedings before the Constitutional Court). However, according to the appellants, the Constitutional Court, just before the amendment to the application pursuant to Article 69 (1) of Act No. 182 / 1993 Coll., on the Constitutional Court, as amended, ("the Law on the Constitutional Court '), closed the procedure by order of 14 September 2004.
The applicants therefore express their belief that the newly adopted Decree No. 364 / 2004 Coll., namely its provisions § 3 and § 16, is also contrary to the constitutional order of the Czech Republic. The two provisions, according to the appellants, address the issue of the allocation of quotas, and it is clear from the mere text of the two contested provisions that they are based on the previous legislation (Decree of the Government No 114 / 2001 Coll., in the version already contested by the Constitutional Court). In view of this, the appellants' argument is aimed at the already formally invalid regulation referred to in the contested provisions of the new regulation.
The appellants' fundamental argument relates to the inequality between producers and, therefore, to the products of dependent growers. The method of calculating the quota of individual producers was influenced by the unconstitutional arrangements in force prior to the finding of the Constitutional Court sp. zn. Pl. ÚS 39 / 01, published under No 499 / 2002 Coll., when the period for determining the quotas was taken into account as the applicable period for the determination of the quotas. Producers who did not respect the anti-constitutional arrangements repealed by this finding were, in principle, favoured. This was the same situation as was the case here before the adoption of this finding, when even before it was taken over during the relevant period when the anti-constitutional regulation in the form of Government Decree No. 51 / 2000 Coll.
The legislator, despite the above-mentioned finding of the Constitutional Court published under No 499 / 2002 Coll. did not remedy the situation, while maintaining this unconstitutional situation by reference to the quotas determined under the current legislation in the newly contested regulation.
Government Decree No. 97 / 2003 Coll., amending Regulation No. 114 / 2001 Coll., was set out in § 7 (2) and (3) the key for setting the quota for individual applicants by calculating the quota coefficient for individual applicants as a proportion of the applicant's sugar production capacity and the total of the applicants' sugar production capacity, the quota being fixed by the Fund as the product of the coefficient and the quantity of 415 000 tonnes of sugar. It is clear from that provision that, according to the applicants, the concept of sugar production capacity of the applicant was a decisive criterion for establishing the quota. According to Article 2 (j) of Regulation No 114 / 2001 Coll. by Regulation No 97 / 2003 Coll., the production capacity of sugar was the maximum average quantity of sugar produced by the sugar producer in 24 hours in the sugar factory in which the sugar was produced in November 2001 or October 2002, where it produced sugar in that sugar factory in the quota year 2002 / 2003, but not more than in the demonstrable quantity corresponding to the maximum daily output of the machinery plant (maximum daily output) or in the applicant for a new quota from the reserve (maximum daily output certified by the mark) (ref: sic - correct: or for the applicant for a new quota from the reserve of the maximum daily output, verified by the mark).
The Government therefore took as the operative period for determining the allocation key for individual applicants the period in which the anti-constitutional regulation of Regulation 114 / 2001 Coll. was in force before the effects of the finding No. 499 / 2002 Coll., between 30.3.2001 and 29.11.2002. Therefore, according to the appellants, instead of taking as the decisive period for determining the allocation of individual production quotas a period in which the regulation of the sugar market which distorts the market has not yet been regulated, the Government has arbitrarily and, contrary to the opinions of the Constitutional Court, set as the operative period precisely when the anti-constitutional legislation was in force.
The appellants further expressed their belief that the chosen production criterion in the two selected months over the two years is purely arbitrative, certainly not thoughtful, ignoring natural reasons explaining the different production volumes. The definition of capacity, as foreseen in Section 2 (j) of Decree-Law No 114 / 2001 Coll., according to the volume of sugar production per day in two (at random) months selected, is not decisive in determining the actual capacity of the sugar factory because (1) it does not take into account the various technological processes used in each sugar factory in the production of sugar and (2) the data relevant for determining the capacity fall into the period when the sugar market was regulated in an unconstitutional manner and the production was subject to this regulation.
Not every sugar factory, according to the applicants, produces sugar directly when processing sugar, sugar factories use different sugar production technology, while some technologies consist in the fact that during the campaign it only extracts heavy juice from sugar, which is then stored. The actual production of sugar from juice then takes place throughout the marketing year. Furthermore, the appellants consider that, in order to maintain the principle of equal access to all applicants and the principle of objective calculation, the length of the diabetes processing campaign should also be taken into account when establishing the capacity, since in practice each sugar factory has been processing sugar delivered for different periods of time and has also had more or less time available. The difference in campaign length in the case of individual sugar factories can vary over 40 days, the actual production of sugar (by different technologies) can then take place throughout the year and it is therefore completely unbiased to determine the capacity of the sugar factory on the basis of the quantity of sugar produced within one day.
In the appellants' view, the setting of the criteria for determining the quota was therefore lacking any objective point of view and thus appears to be an expression of absolute libel. For these reasons, the appellants believe that § 2 (j) and § 7 of Decree No. 114 / 2001 Coll. were contrary to the principle of equal access to all applicants for the quota and the principle of objective method of calculation as set out in § 11d (10) (b) of Act No. 256 / 2000 Coll. (originally § 12 (6) of the cited Act). At the same time, these provisions were contrary to the constitutional requirement of equality under Articles 1 and 3 of the Charter, which at the same time established a constitutionally incompatible unequal legal content of ownership of production facilities under Article 11 (1) of the Charter and an unjustifiable distinction between undertakings enjoying the same freedom of business under Article 26 of the Charter. According to the appellants, Article 14 of the European Convention for the Protection of Human Rights and Fundamental Freedoms in conjunction with Article 1 of the Additional Protocol to the Convention has also been infringed.
By taking over the quota system determined according to the arrangements contained in the Government Regulation No. 114 / 2001 Coll., through the appellant contested § 3 of the Government Regulation No. 364 / 2004 Coll., a new regulation was therefore established.
If the appellants question the constitutionality and legality of the determination of individual production quotas, they consider that the reserve referred to in Article 16 of Decree-Law No 364 / 2004 Coll. The current annual quota consists of the sum of individual quotas and reserves (Section 3 of Decree No. 114 / 2001 Coll.). According to the appellants, the allocation of the quota from the reserve provided for in Articles 4 (2) and 12 of Decree 114 / 2001 Coll. was also contrary to the principle of equality and objective calculation, since these provisions did not contain any revisable criteria on the basis of which the Fund was to decide on the allocation of the quota from the reserve.
In other words, the contested provisions of § 3 and § 16 of Decree No. 364 / 2004 Coll. maintain continuity with the previous, according to the appellants, unconstitutional and illegal, regulation contained in the previous Decree of the Government No. 114 / 2001 Coll., which was also challenged by the appellants in the previous proceedings before the Constitutional Court. However, this procedure was terminated by the Constitutional Court in view of the fact that the contested regulation was derogated in the course of the procedure by Decree-Law No 364 / 2004 Coll.
However, the appellants take the view that the inconstitutionality of the contested legislation does not result solely from the inconstitutionality of the previous legislation, since the Government, according to the appellants, has also withdrawn from its competence framework, in breach of Article 78 of the Constitution of the Czech Republic (hereinafter referred to as the Constitution). According to the appellants, by maintaining the existing distribution of quotas in the new legislation, the government interferes with the powers of the body whose jurisdiction to decide on the level of quotas (State Agricultural Intervention Fund) is laid down by the legislation of higher legal force (Act No 256 / 2000 Coll. and EC Council Regulation No 1260 / 2001). Since the new legislation has deleted the legal reason on which the administrative decision to allocate quotas was based in the meantime, it nevertheless left those decisions valid and effective, the new legislation has in addition affected the operative part of those administrative decisions or the operative parts of the administrative decisions have been amended - see the part of the sentence of Paragraph 3 (1) of Regulation No 364 / 2004 Coll.:... "... shall be regarded as the sum of the A quota and the B quota according to European Community rules."
The appellants therefore suggested that the Constitutional Court should abolish the two contested provisions of Decree No 364 / 2004 Coll. on the date of the publication of the finding in the Collection of Laws.
By a communication dated 18 October 2005, the applicants supplemented the original proposal. In this addition, they extended their original argument of the parties to the relationship between the contested provisions of Decree No. 364 / 2004 Coll. and the previous legislation establishing the key to the distribution of the quota contained in Decree No. 114 / 2001 Coll., as amended by Decree No. 97 / 2003 Coll. As the applicants reiterated, they considered the previous legislation to be both unconstitutional and unconstitutional; However, it was terminated before the Constitutional Court with a view to the adoption of new, now contested legislation. The appellants are of the opinion that, in view of the fact that the contested provisions refer to the original legislation, the unconstitutional nature of the original government regulation does indeed persist. The appellants consider that this is a much wider general question as to whether it is acceptable from the point of view of constitutional order that certain legislation, which is unconstitutional, may have legal effects even after its formal annulment, by means of provisions referring to it. Although the normative practice shows that such a legal regulation procedure requires the application of previous legislation already formally repealed, to which only reference is made, is relatively common and, for a number of reasons (e.g. compliance with the requirement to maintain the principle of legal certainty), the other situation is, according to the appellants, where the existing legislation to be applied is unconstitutional in the light of the "reference provision 'contained in the new legislation. The appellants therefore believe that the Constitutional Court must have the power to review the provisions in force in the event that this would mean assessing the constitutional conformity of the legislation already formally repealed. Otherwise, the power of the Constitutional Court would have been substantially narrowed down, or it could have been circumvented in such a way that the legislator would have adopted a new law every time the previous legislation was challenged before the Constitutional Court. It would thus make it impossible for the Constitutional Court to decide on the application for annulment of the original legislation. Where there is a clear link between the original Regulation and the new Regulation, as the appellants believe in the present case, the possibility of assessing the existing legislation through the provisions of the new legislation and the legislation must be given.
At the end of the amendment, the appellants stressed that the Constitutional Court was sufficiently clear in its previous case-law when it laid down the limits of the statutory regulation on the regulation of the sugar market. The appellants consider that the contested legislation does not respect these limits and it is therefore appropriate that the Constitutional Court should remain in its current legal position, since the appellants consider that they did not have such facts as would justify a revision of the position of the Constitutional Court on these issues.
B) On 3 January 2006 the Constitutional Court received submissions by which the appellants responded to the procedure of the Government of the Czech Republic, which on 21 December 2005 adopted Regulation No 548 / 2005 Coll., laying down certain conditions for implementing the measures of the common organisation of the markets in the sugar sector. This Regulation repealed, with effect from 31 December 2005, Regulation No 364 / 2004 Coll., whose provisions § 3 and § 16 were contested by the original proposal of the appellants. By this submission, the appellants extended the original proposal and explicitly proposed the repeal of Paragraph 3 of the new Regulation No 548 / 2005 Coll. In so doing, they stated in their statement that the Government's practice was intended and already repeated to avoid hearing the case before the Constitutional Court. According to the applicants, the legislation still in force did not require any change. The argument that the new regulation was designed in such a way that, under the conditions of the Czech Republic, all the necessary measures of the market organisation system will be implemented, which will be replaced by a new reformed market organisation from 1 July 2006 (according to the applicants, the draft report for the regulation is not justified). According to the appellants, the new regulation will force fundamental changes in the production quota system, in the pricing policy and other instruments of the market organisation, and therefore the amendment of the regulation now adopted. Moreover, the whole form of reform is not yet fully known. The fact that the production quotas have been reduced by Commission Regulation (EC) No 1609 / 2005 has no bearing on the present case. On the contrary, despite this reduction, the appellants consider that the proportion of producers in the production quota is maintained in contravention of the Constitution and the Charter of Fundamental Rights and Freedoms. Therefore, the original system of calculation of the quota is also maintained in the new legislation.
The appellants consider that ceasing the procedure and thus the de facto approval of the Government's procedure would be a purely formalistic approach that the Constitutional Court has always criticised in general courts. They therefore submit an amendment to the original proposal under Section 63 of the Law on the Constitutional Court in conjunction with Section 95 of the Civil Code and propose that the Constitutional Order repeal the provisions of Section 3 of Decree No. 548 / 2005 Coll., on the date of the declaration of the finding in the Collection of Laws.
Presentation of essential parts of the observations of the parties, interveners and other evidence
A) The Government of the Czech Republic, in its observations of 24 November 2004 on the original application for annulment of Sections 3 and 16 of the Decree of the Government No. 364 / 2004 Coll. submitted the following arguments to the Constitutional Court.
The sugar industry in the Czech Republic as well as the sugar beet growers sector, according to the Government, after the accession of the Czech Republic to the EU, are fully governed by the rules of the common organisation of the sugar markets which are part of the EU's common agricultural policy. The rules and mechanisms of the common organisation of the market in sugar have been established by a number of regulations issued by the Council or the EC Commission. Under Article 249 of the EC Treaty, regulations of the Council or of the Commission are directly binding in all their parts and are directly applicable in each EU Member State. As part of the preparation of the Czech Republic for participation in the EU Common Agricultural Policy in the area of the common organisation of the markets in the sugar sector, the Government considered that legal instruments had to be adopted to ensure that, at the time of the accession of the Czech Republic to the EU, the administration of measures in the area of the common organisation of the markets in the sugar sector implemented by the State Agricultural Intervention Fund under Act No. 256 / 2000 Coll., on the State Agricultural Intervention Fund and on the amendment of certain other laws (Act on the State Agricultural Intervention Fund), as amended.
Legal framework for the implementation of the measures Following the accession of the Czech Republic to the EU, the common agricultural policy is given by Act No. 256 / 2000 Coll., Act No. 252 / 1997 Coll., on Agriculture, as amended, by the relevant EC Regulations and Decisions and by Decree No. 364 / 2004 Coll., laying down certain conditions for the implementation of measures of the common organisation of the markets in the sugar sector.
The basic legal instrument for establishing the system of production quotas in force in the law of the Czech Republic was therefore Act No. 256 / 2000 Coll., which authorised the Government to establish, by its regulation, the production quotas and the conditions of the production quota system and, in their determination, respected the scope and time limits resulting from the timetable set out in the negotiations on the accession of the Czech Republic to the EU. The Government therefore based on both the constitutional principle in force (Article 78 of the Constitution), which entitles it to implement the law and, within its limits, to issue the regulation in question, as well as the specific legal authorisation, and acted within the limits of the law.
On the specific complaints of the appellants, the Government stated the following. The Government referred to the finding of the Constitutional Court of 16 October 2001, published under No 410 / 2001 Coll., under which the quota system constitutes a form of control over the use of property, for which the existence of public interest, which justifies the application of the guidelines (control) measures and the selection of detailed rules for (fair) balance between the general interest of the company and the protection of the fundamental rights of the individual, should be carefully considered. The Government also stated that such measures include, for example, measures to organise a market for certain commodities, such as setting minimum or maximum prices, various production, import or export quotas, etc. In the case of the contested regulation, the public interest which legitimises the State to introduce a system of sugar production quotas, to stabilise the sugar market, and to ensure and maintain the production of sugar beet is that of creating conditions for each producer to be disposed of and to receive an adequate minimum price. In the view of the Government, the resources used to achieve this objective and contained in the regulation are then adequate. The determination of the conditions in the contested regulation, which must be met by the applicant for the quota and the applicant for the reserve, is based on the legal authorisation contained in Sections 12 (3) and 11d (10) of Act No. 256 / 2000 Coll. These conditions also affect all applicants. If the applicant, according to the Government, is not provided for a quota because it did not meet those conditions, there is in no way a change in the ownership of that applicant's property - the sugar factory, its ownership still has the same content as that of other applicants. It only occurs that the sugar produced by it is subject to a levy pursuant to § 13 (7) of Act No. 256 / 2000 Coll., which does not in any way affect the right of ownership to the sugar factory and, more importantly, to expropriation which foresees a compulsory restriction on the right to property. In this context, the Government has repeatedly referred to the finding of the Constitutional Court published under No 410 / 2001 Coll., in which the Constitutional Court stated that the restriction on the production of a product constituted a restriction on the right to use that product but does not constitute an expropriation since the owner can continue to dispose of that product. There is no transfer or transfer of ownership rights to another person, the product becomes difficult to sell or not to sell only by regulation. However, entitlement to a certain price on the market is not part of the protected property right. In view of this, the Government is therefore convinced that the infringement of Article 11 of the Charter has not occurred.
In this context, the Government referred to some of the other findings and resolutions of the Constitutional Court, which have dealt more widely with the constitutional protection provided for in Article 26 (1) of the Charter. According to the Government, for example, it follows from the order of the Constitutional Court sp. zn. III. ÚS 363 / 96 [Collection of finds and orders of the Constitutional Court ("the Reports of the Decisions'), Volume 7, Order No 7] that the right of business must be understood only as a right of choice as to whether a particular activity will be pursued as a self-employed activity or as an independent activity in an employment relationship. The right to choose freely does not mean that the entity is not limited in any way in this activity; on the contrary, it can only implement its decision within the limits of the legal order. The rights and freedoms contained in Title Four of the Charter, such as" Economic, Social and Cultural Rights', require synergies in their implementation; does not act directly as the fundamental rights set out in Title II of the Charter. This is quite evident, according to the Government, in Article 26 (2) of the Charter, where the scope of the right to free enterprise is addressed by reference to statutory conditions and restrictions. Standard content of Article 26 (1) The Charter is then limited to Article 41 (1) of the Charter, which means that such a provision can only be invoked as a right within the limits of the laws transposing those provisions (the Constitutional Court's finding sp. zl. ÚS 35 / 95, Reports of decisions, Volume 5, Found No 64; published under No. 206 / 1996 Coll.). The legal definition of these rights is carried out by the law under which the contested regulation is issued. Therefore, as a result of the above, the Government does not see a conflict with Article 26 (1) of the Charter in the contested Regulation.
The Government also rejected the appellants' claim that non-quota producers have difficulty in accessing the market or even closing completely. According to the Government, any entity interested in undertaking sugar production has the possibility to enter the market either by applying for a reserve quota or by acquiring a quota from another producer who is interested in ending production. As is apparent from the findings of the Constitutional Court sp. zn. Therefore, the legislator may, in its view, introduce price or quantitative regulation of production in a particular sector of the economy, define or influence the type, number of operators involved or limit contractual freedom in the application of production on the market or in the purchase of raw materials and production facilities. The Government pointed out that the argument of a group of Members that restrictions can only be qualified was called a disproportionately narrow interpretation by the Constitutional Court in this finding.
The Government further found that the contested regulation maintained continuity with the relevant EC rules and the law. This continuity takes into account the method of establishing the production quotas made before the accession of the Czech Republic to the EU, in accordance with the obligation to determine them, resulting for the Member State from the relevant EC rules, so that, from the beginning of the 2004 / 2005 marketing year (i.e. from 1.7.2004), all mechanisms of the common market organisation in the sugar sector and in the Czech Republic can be applied. In relation to the arguments put forward by the appellants regarding the key to allocating individual production quotas to individual applicants, the Government stated that, although the distribution of production quotas made under the previous Decree of Government No 114 / 2001 Coll., in November 2001 or October 2002, the arrangements applied for the distribution of production quotas made under the previous Decree of Government No 114 / 2001 Coll., but the production quotas fixed at that time for individual sugar producers had no significant effect on the production volume of sugar producers in their sugar factories during those months. The criterion for the allocation of individual production quotas to applicants has become the sugar production capacity of each applicant under Government Regulation No 97 / 2003 Coll., which took effect on 9.4.2003. The starting point was a period of one month, either November 2001 or October 2002, since in the months of October and November each year a substantial part of the production campaign takes place in all sugar factories, with production volume not conditional on the total production planned in those two months, resulting from the allocated production quota, but on the requirement that the maximum output of the machinery of each sugar factory is carried out so that the sugar producer can carry out the campaign in the shortest possible period and thereby minimise its economic costs.
The two-month period was further divided into two months in two different calendar years, on the one hand, with a view to ensuring that a sugar producer is not harmed by any exclusion or interruption of production in one of the two alternative months selected. The basis for determining the capacity of sugar production was then the average quantity produced by the applicant in 24 hours in the sugar refinery or sugar refineries operated by it, by dividing the production in the selected month by the appropriate number of days. This specification for the average daily quantity of production should have been avoided in cases where one producer would have interrupted production in the reference month on some days, which would have been negative on the production indicator for the reference month. In accordance with the described procedure, the capacity of the applicant's sugar production has then been determined in order to progressively determine the maximum performance of the production facilities of each applicant for a quota. The total duration of the campaign in the year in question was thus completely irrelevant in the light of the above.
In order to produce heavy juice sugar, which takes place several months after the end of the campaign, the Government stated that this heavy juice production, according to the arrangements contained in Council Regulation (EC) No 1260 / 2001 of 19.6.2001 on the common organisation of the markets in the sugar sector, as amended, is considered to be sugar production, so that in such cases, sugar production can already be reported, although only heavy juice was produced during the campaign.
The Government further stated that the determination of the criteria for determining the quota made clear efforts to establish objective criteria which would meet the requirements of the law while reflecting the real economic and technological framework for determining them. Ironically, the fact that compliance with the legal requirements for the initial allocation of individual production quotas is very difficult is demonstrated by the appellants themselves, according to the Government, when they propose a period in which the regulation of the sugar market has not yet been regulated as the operative period for determining the allocation key. However, it would not be possible to allocate quotas to those applicants who did not produce sugar at the time. The same is true of the sugar factories which these new sugar producers restarted, although they were previously owned by other companies.
According to the Government, this claim was also confirmed by the Constitutional Court, which, for example, in the case of milk quotas in the finding published under No 410 / 2001 Coll. ruled that... "a certain disadvantage to potential future producers is a natural and irreparable characteristic of all restrictions on the quantity of production and cannot be seen as a breach of the constitutionally guaranteed principle of equality, since - as has been said - equality in modern constitutional systems cannot be understood as a category of absolute but relative..."
The Government therefore concluded that it found the proposal unfounded, taking into account the commitment of the Czech Republic to the EU in the Czech Republic to build a functioning and effective system of production quotas in terms of EU common agricultural policy rules. As stated by the Government, if the relevant provisions of the contested regulation were repealed, the Czech Republic would become a country which, within a market organisation, would not be allocated to individual undertakings production quotas, which would be totally unusual within the EU, and the Government considers that this would result in incalculable and unforeseeable consequences for the Czech Republic with the impact on all sugar growers and sugar producers. The Government therefore proposed that the Constitutional Court reject the proposal as such.
B) The Constitutional Court, pursuant to Paragraph 69 (2) of the Law on the Constitutional Court, also sent a proposal to the Ombudsman to inform the Ombudsman within a legal period of time whether he was intervening. By letter dated 23.11.2004, the Ombudsman expressed his willingness to intervene and at the same time gave his observations to the Constitutional Court. He stated that the Ombudsman had already entered into proceedings in 2002 on the application for annulment of Part of Act No. 256 / 2000 Coll. and for the annulment of Part of Government Decree No. 114 / 2001 Coll. under the Pr. It did so, above all, in view of the fact that private persons approached it with requests to support their efforts to repeal this legislation. The Ombudsman also entered the proceedings for the annulment of Decree-Law No 114 / 2001, in the version in force at the time, which was held by the Constitutional Court under sp. zl. In both cases, the Ombudsman referred to the fact that the application of the legislation in force at that time infringed the principle of equal treatment and the requirement of an objective method of calculating sugar quotas. In this way, in a simple way, there was an inequality between sugar producers. On the current proposal, the Ombudsman stated that the two contested provisions were based on Government Decree 114 / 2001 Coll., which had already been challenged twice before the Constitutional Court. Therefore, the Ombudsman agreed with the appellants' view that the requirement of equal treatment and objective method of calculation was not given, since the new Regulation No 364 / 2004 Coll. refers to the already invalid Regulation No 114 / 2001 Coll., which did not guarantee equality and objectivity. According to the Ombudsman, by issuing a new regulation, the Government has again exceeded the limits laid down in Article 78 of the Constitution.
C) On 31 March 2005, the Constitutional Court requested comparative information from the State Agricultural Intervention Fund on the key to the allocation of individual sugar production quotas and the use of other EU Member States. The State Agricultural Intervention Fund informed the Constitutional Court that the production quotas were first introduced and allocated to undertakings in the Member States of the then EEC pursuant to Regulation (EEC) No 1009 / 1967 on the common organisation of the sugar market. Pursuant to Article 23 of the Regulation, the Member State has determined the basic quota of the undertaking by establishing the share of the undertaking concerned in the total average annual sugar production of that country in the marketing years 1961 / 1962 to 1965 / 1966, i.e. during a period of 5 years. The same procedure was carried out in the case of the acceding States in the 1970s, namely Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland, for which the period of 1965 / 1966 to 1969 / 1970 was the decisive period.
Council Regulation (EEC) No 1785 / 1981 on the common organisation of the markets in the sugar sector introduced the breakdown of the quota of each undertaking into quota A and quota B, with production in the marketing years 1975 / 1976 to 1979 / 1980 as the determining period.
Pursuant to the Treaty of Accession of Spain and Portugal to the EC of 1985, A and B quotas were also allocated to undertakings within the territory of those States, depending on the quantity of production during 1985; However, the exact criterion according to the information provided by the State Agricultural Intervention Fund has not been established. Under the Treaty of Accession of Sweden, Finland and Austria to the EC, quotas were also allocated in those countries, according to production in 1994. The specific criteria were left to the countries concerned.
As regards the countries of the last wave of accession, both in Slovakia and Poland and in Hungary, according to the unverified information available to the State Agricultural Intervention Fund, the reference period for the 1994 / 95 to 1998 / 99 marketing years, i.e. the period of five consecutive marketing years, has always been chosen.
D) The Constitutional Court also requested information from the State Agricultural Intervention Fund on the application of Commission Regulation (EC) No 1609 / 2005 in the Czech Republic on 2 January 2006. The communication of the Fund showed that the Fund had complied with the obligation under Article 1 (3) of the Regulation and had, before 1 November 2005, fixed a reduction for each producer holding quota A and B.
E) On 4 January 2006, the Constitutional Court received a response from the Government to the submissions by which the appellants proposed the amendment to the original proposal for the annulment of Section 3 of Decree of the Government No. 548 / 2005 Coll. In its observations, the Government stated that the results of the present proceedings cannot be the basis for the procedure on the amended proposal, since both regulations differ (Section 3 of Decree No. 548 / 2005 Coll. has a different purpose than the original § 3 of Decree No. 364 / 2004 Coll.). The claim that the Government has repeatedly avoided negotiations and the ruling of the Constitutional Court is not based on the truth as the legislative process was conducted independently of the proceedings before the Constitutional Court; a request for a proposal for a regulation in the abbreviated legislative process was already sent on 1 November 2005, before the government was asked whether it agreed to abandon oral proceedings. The reason for the adoption of the new Regulation was the need to adapt the national adaptation of Commission Regulation (EC) No 1609 / 2005 and, at the same time, to prepare the national adjustment for the new sugar arrangements to be adopted at Community level. In view of the scope of these amendments, the path of the issue of the new regulation was then chosen instead of the amendment of the existing one. The Government therefore proposed that the Constitutional Court should not allow the amendment of the proposal to be suspended.
F) On 12 January 2006, the Government delivered to the Constitutional Court the documents relating to the process of adopting the Decree of Government No. 548 / 2005 Coll., namely the proposal for a regulation and its justification, the clearance of the comments of the relevant points of comment (Ministry of Finance, Ministry of Foreign Affairs, Ministry of Industry and Trade, Office of Government, Directorate-General for Customs), the request of the Minister of Agriculture to discuss the proposal for a proposal for a regulation of 1 November 2005, the authorisation of the Minister and the President of the Legislative Council of the Government to discuss the proposal for a regulation of 3 November 2005, the opinion of the President of the Legislative Council of the draft regulation of 16 December 2005 and the opinion of compatibility of the Authority of the Government on the draft regulation.
In addition, the Government of the Constitutional Court informed the Constitutional Court that it had exercised its right to refrain from the oral hearing, since the proceedings were of particular importance. Although there was already a legislative process at the time, it was not clear whether the regulation would be adopted and when it would become effective. That is why the Government did not disclose this fact to the Constitutional Court and did so only when the regulation was published in the Collection of Laws.
G) On 19 January 2006, the Constitutional Court received a reply to the Government's observations on the proposal for the amendment of the proposal of 3 January 2006, in which the Government proposed, in the event that the amendment of the proposal would be permitted, that the Constitutional Court reject the application for annulment of Article 3 of Regulation No 548 / 2005 Coll. In this submission, the Government summarised the arguments already set out in the original statement as regards the very nature of the calculation of the production quota.
H) On 20 January 2006 the Constitutional Court received its observations on the application for amendment of the proposal and the annulment of Article 3 of Decree No 548 / 2005 Coll. also the intervener, the Ombudsman. He stated that it was first necessary to examine whether the results of the present procedure could be used for the procedure on the amended proposal. In its view, the two regulations are not entirely identical in substance, but it should be admitted that, on the issue of the allocation of individual production quotas, Paragraph 3 takes over in principle the quotas provided for in the previous Regulation, only reducing them while maintaining the relationship. As to the substance itself, the Ombudsman noted that the Constitutional Court had put the Government in a difficult situation with its previous finding, sp. zn. Pl. ÚS 39 / 01. The time-out from the moment the sugar market started to be regulated was already so large that the government could hardly use the volume of production of individual producers before the start of the regulation as a starting point. Nevertheless, the Ombudsman believes that the government had and could have made efforts to find a mechanism that would either eliminate or at least mitigate the previously created inequality. However, the government has not presented any list of solutions models that it may have considered and rejected for various reasons.
The Ombudsman therefore proposed, alternatively, either that the Constitutional Court stop the proceedings and explain the reasons which led him to do so, or, if he accepts the amendment of the proposal and accepts the amended proposal, that it should at the same time postpone the effective date of the finding by 6 months from the date of its publication.
I) Finally, on 8 February 2006, the Constitutional Court received a letter from the State Agricultural Intervention Fund in which the Constitutional Court informed its position on the application. Any radical intervention by the Constitutional Court in the sugar production quota system would, according to the Fund, represent a step towards such a concept of nationally guaranteed fundamental rights that would not have lasted from the perspective of EC law. Furthermore, the State Agricultural Intervention Fund indicated possible scenarios of development that would result from the repeal of the Constitutional Court's finding (the sugar produced could not be regarded as category A and B sugar and would be C sugar that producers would have to export outside the EU, market collapse, the process of collecting the financial levies on sugar production A and B from sugar producers in the Czech Republic, the loss of quotas would result in market losses, etc.).
The conduct of oral proceedings
At the oral hearing on 8 March 2006, the appellants' lawyer referred to the contents of all the proposals and summarised the essential arguments. The proposals are not about abolishing regulation as such, but only about changing the way of regulation. It is essential to choose the relevant period for establishing the individual quota, which in all earlier regulations was the period which the Constitutional Court had previously declared unconstitutional. The selection of the applicable period in the key was arbitrary, as the comparative overview shows that longer periods can be selected. While the appellants' legal representative admitted that absolute equality between producers could not be achieved, a different method of allocation of quotas could be chosen as part of the effort to achieve a maximum approach to equal status among producers.
One of the applicants, Mr M. K., then added that there are two options for regulating the sugar market: the State can either restrict the sugar growers directly or, as the Government has done, sugar producers. According to it, the system of regulating the quantities of beet produced directly by growers would be fairer than the system introduced. The quota system in the Czech Republic cannot be compared to those in other EU Member States where sugar factories are directly owned by growers.
The representative of the Government also referred to the observations of the Government in which the Government clearly stated why it considered the chosen method to be fair. According to him, the methods of calculating the individual quota have been chosen differently in the past, but they have always been questioned and can be expected that even if the government had chosen a different key in the future, it would have been attacked again. According to the Government's representative, there is absolutely no fair method of calculation, and the possible disadvantage of one producer cannot be seen as an unequal position of all producers. Therefore, the Government insists that the proposal is unjustified.
The Ombudsman stated that he could hold somewhat more general positions as an intervener. That is why he referred to his earlier observations, but with his positions being somewhat relativised in the meantime. He stated that he asked himself who was benefiting from this process. In the end, it is not the quotas set for individual producers, but the amount of compensation for not producing sugar. The impact of legislation is not only on sugar producers but also on growers. It therefore insists that the Constitutional Court, if the legislation is repealed, defer the enforceability of the finding.
Finally, in response to the question of the Judge-Rapporteur, the parties submitted in agreement that the national quota for the 2006 / 2007 marketing year was already known.
Active ID of the applicant, admissibility of the proposal
The Constitutional Court first examined whether the condition of the applicant's active legitimacy was fulfilled, whether the application was admissible and whether there were no grounds to terminate the procedure. In doing so, he stated that the proposal was submitted by an authorised body in accordance with Article 64 (2) (b) of the Constitutional Court Act, a group of 35 Members of the Chamber of Deputies of the Parliament of the Czech Republic.
In the context of the assessment of the admissibility of the application and of the conditions for the termination of proceedings, the Constitutional Court was confronted with a situation in which, in the course of the proceedings on the original application and just before the oral hearing, the Government repealed the contested legislation and adopted a new regulation, to which the appellants responded by a proposal to accept the amendment of the original application. The Constitutional Court therefore decided by order of 14 February 2006 that it accepted the amendment of the application, after having been aware of the arguments of the parties and the intervener.
The Constitutional Court was already established in the past before a similar situation in the proceedings sp. zn. Pl. ÚS 8 / 02 (ECR 28, p. 142; found under No 528 / 2002 Coll.), when the Ministry of Finance abolished the contested rent regulation during the proceedings and formally adopted a new regulation, contained in the same form, or in the proceedings sp. zn. Pl. ÚS 49 / 03 (found under No 227 / 2005 Coll. and will be published in Volume 37 of the Reports of the Decision), when the Municipality of Jindřichovice under Smrk also in the proceedings before the Constitutional Court repealed the contested general binding decree and adopted the decree contained therein. In both cases, the Constitutional Court accepted the amendment of the application.
In the present case, the Constitutional Court found the reasons for the same procedure as the Government formally annulled the contested legislation in the course of the original application procedure and adopted a new legislation, a material equivalent to the previous one. Moreover, the Government did so after not agreeing to abandon the oral hearing, just before the deadline for the oral hearing. At the time the draft regulation was drawn up, the Government did not state that, although it had to be aware that the procedure before the Constitutional Court would be significantly affected by the adoption of the regulation. A few days before the oral hearing, only the Constitutional Court informed the Government's representative of the adoption of the new legislation, stating that it is not going to take part in the oral hearing as it expects the proceeding to be terminated.
If the Constitutional Court had accepted such a government procedure and stopped the procedure as the Government had anticipated, this would have meant denying the purpose and meaning of abstract control of standards in the given situation. In accordance with the procedure chosen by the Government, the Constitutional Court could at any time in the future be ruled out in the same way from the possibility of reviewing any contested legislation. In other words, the termination of the procedure would constitute an unacceptable precedent for the process of the state authorities in the future. This would directly thwart the institution's intended function of specialised and concentrated abstract control of standards. Such a procedure would, as a result, weaken overall the protection of constitutionality in the Czech Republic and thus the principle of the material rule of law.
According to the Constitutional Court, Article 3 of Decree-Law No 364 / 2004 Coll. and Article 3 of Decree-Law No 548 / 2005 Coll. is determined by the substance of its own constitutional review, which is the question of the constitutional conformity of the method of calculating individual production quotas. Although the government can therefore agree that the classification of both provisions is different, both provisions implicitly retain the original key to calculating individual production quotas, which was the main subject of constitutional review both in the original and in the amended proposal. The results of the present procedure concerning the review of § 3 and § 16 of Decree No. 364 / 2004 Coll. can therefore also be used in this respect for the procedure for the amended application for annulment of § 3 of Decree No. 548 / 2005 Coll.
In the light of these facts, the Constitutional Court, pursuant to Article 63 of the Law on the Constitutional Court in conjunction with Article 95 (1) of the Civil Code, has complied with the proposal for the amendment.
In relation to the application for annulment of Sections 3 and 16 of the Government Decree No. 364 / 2004 Coll. The Constitutional Court closed the proceedings pursuant to the provisions of § 67 (1) of the Law on the Constitutional Court and continued the proceedings on the application for annulment of § 3 of the Decree of the Government No. 548 / 2005 Coll.
The proposal for the annulment of Article 3 of Decree No 548 / 2005 Coll. is then admissible because it was delivered to the Constitutional Court after the Decree of the Government No 548 / 2005 Coll. was published in the Collection of Laws (Section 66 of the Law on the Constitutional Court and contrario).
Derogation of the contested provisions
The initial proposal to challenge the provisions of Government Regulation No 364 / 2004 Coll., on the establishment of certain conditions for the implementation of measures of the common organisation of the markets in the sugar sector, was:
Quota
(1) Sugar production quota (3) established by sugar producers (hereinafter referred to as "quota holder") From 1 September 2003, the State Agricultural Intervention Fund (hereinafter referred to as "the Fund '), broken down by sugar factories operated by the quota holder or, where appropriate, by the sugar production quota (3), reduced by the Fund quota holder, in accordance with existing legislation (4), shall be regarded as the sum of the A 5 quota and B 5 quota (according to the provisions of the European Communities 1).
(2) Quota A (5) The quota holder is 97% of the quota fixed by the Fund to the quota holder in accordance with the current legislation 4). The quota B 5) of the quota holder shall be 3% of the quota fixed by the Fund to the quota holder in accordance with the existing legislation 4).
(3) The Fund shall notify the quota holder referred to in paragraphs 1 and 2 within 30 days of the date of entry into force of this Regulation the amount of quota A 5) and the amount of quota B 5) for the period laid down in Regulation (EC) No 6 of the European Communities, broken down by quota-holder sugar refineries.
1) Council Regulation (EC) No 1260 / 2001 of 19 June 2001 on the common organisation of the markets in the sugar sector, as amended by Commission Regulation (EC) No 680 / 2002 of 19 April 2002, Commission Regulation (EC) No 2196 / 2003 of 16 December 2003, Commission Regulation (EC) No 39 / 2004 of 9 January 2004 and the Act concerning the conditions of accession of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of Slovenia and the Slovak Republic and the adjustments to the Treaties on which the European Union is founded. Commission Regulation (EEC) No 1043 / 1967 of 22 December 1967 laying down detailed rules for establishing quotas in the sugar sector, as amended by Commission Regulation (EEC) No 1431 / 1968. COMMISSION REGULATION (EEC) No 1265 / 1969 of 1 July 1969 on methods for determining the quality of sugar purchased by intervention agencies. COMMISSION REGULATION (EEC) No 100 / 1972 of 14 January 1972 laying down detailed rules for the denaturing of sugar intended for animal feed, as amended by Commission Regulation (EEC) No 2351 / 1972, Commission Regulation (EEC) No 2847 / 1972, Commission Regulation (EEC) No 3475 / 1980, Commission Regulation (EEC) No 3819 / 1985 and Commission Regulation (EC) No 260 / 1996. Council Decision (EEC) No 583 / 1974 of 20 November 1974 on the monitoring of sugar movements. COMMISSION REGULATION (EEC) No 1516 / 1974 of 18 June 1974 on the supervision by Member States of contracts concluded between sugar producers and sugar beet producers. Commission Regulation (EEC) No 825 / 1975 of 25 March 1975 laying down special detailed rules for the application of the system of export levies in the sugar sector, as amended by Commission Regulation (EEC) No 1714 / 1988 and Commission Regulation (EC) No 1148 / 1998. COMMISSION REGULATION (EEC) No 797 / 1980 of 31 March 1980 adjusting export levies and refunds fixed in advance in the sugar sector, as amended by Commission Regulation (EEC) No 1698 / 1980. Commission Regulation (EEC) No 2670 / 1981 of 14 September 1981 laying down detailed rules for the production of sugar in excess of the quota, as amended by Commission Regulation (EEC) No 1760 / 1984, Commission Regulation (EEC) No 2561 / 1985, Commission Regulation (EEC) No 1714 / 1988, Commission Regulation (EEC) No 3892 / 1988, Commission Regulation (EEC) No 56 / 1991, Commission Regulation (EEC) No 3559 / 1991, Commission Regulation (EEC) No 2177 / 1992, Commission Regulation (EC) No 158 / 1996, Commission Regulation (EC) No 1148 / 1998 and Commission Regulation (EC) No 95 / 2002. Commission Regulation (EEC) No 65 / 1982 of 13 January 1982 laying down detailed rules for the transfer of sugar to the following marketing year, as amended by Commission Regulation (EEC) No 948 / 1982, Commission Regulation (EEC) No 1708 / 1984, Commission Regulation (EC) No 260 / 1996 and Commission Regulation (EC) No 2223 / 2000. COMMISSION REGULATION (EEC) No 1713 / 1993 of 30 June 1993 laying down special detailed rules for the application of the agricultural conversion rate in the sugar sector, as amended by Commission Regulation (EEC) No 2627 / 1993, Commission Regulation (EC) No 2926 / 1994, Commission Regulation (EC) No 59 / 1997 and Commission Regulation (EC) No 624 / 1999. Commission Regulation (EC) No 1464 / 1995 of 27 June 1995 on detailed rules for applying the system of import and export licences in the sugar sector, as amended by Commission Regulation (EC) No 2136 / 1995, Commission Regulation (EC) No 1507 / 1996, Commission Regulation (EC) No 1141 / 1998, Commission Regulation (EC) No 1148 / 1998, Commission Regulation (EC) No 2513 / 2001, Commission Regulation (EC) No 995 / 2002 and Commission Regulation (EC) No 1159 / 2003. Commission Regulation (EC) No 2135 / 1995 of 7 September 1995 laying down detailed rules of application for the grant of export refunds in the sugar sector, as amended by Commission Regulations (EC) No 1729 / 1997, (EC) No 1574 / 1998, (EC) No 1489 / 1999 and (EC) No 1531 / 2000. Commission Regulation (EC) No 2315 / 1995 of 29 September 1995 laying down detailed rules of application for export refunds on certain sugars covered by the common organisation of the markets in the sugar sector used in certain products processed from fruit and vegetables. Commission Regulation (EC) No 779 / 1996 of 29 April 1996 laying down detailed rules for the application of Commission Regulation (EEC) No 1785 / 1981 as regards the transmission of information in the sugar sector, as amended by Commission Regulation (EC) No 995 / 2002, Commission Regulation (EC) No 1140 / 2003 and Commission Regulation (EC) No 1159 / 2003. Commission Regulation (EC) No 800 / 1999 of 15 April 1999 laying down common detailed rules for the application of the system of export refunds on agricultural products, as amended by Commission Regulation (EC) No 1557 / 2000, Commission Regulation (EC) No 90 / 2001, Commission Regulation (EC) No 2299 / 2001, Commission Regulation (EC) No 1253 / 2002, Commission Regulation (EC) No 444 / 2003 and Commission Regulation (EC) No 2010 / 2003. Commission Regulation (EC) No 1291 / 2000 of 9 June 2000 laying down common detailed rules for the application of the system of import and export licences and advance fixing certificates for agricultural products, as amended by Commission Regulation (EC) No 2299 / 2001 and Commission Regulation (EC) No 325 / 2003. Commission Regulation (EC) No 1520 / 2000 of 13 July 2000 laying down detailed rules for the system of granting export refunds and the criteria for fixing the amount of such refunds for certain agricultural products exported in the form of goods not listed in Annex I to the Treaty, as amended by Commission Regulation (EC) No 2390 / 2000, Commission Regulation (EC) No 1563 / 2001, Commission Regulation (EC) No 595 / 2002, Commission Regulation (EC) No 1052 / 2002 and Commission Regulation (EC) No 740 / 2003. Commission Regulation (EC) No 1261 / 2001 of 27 June 2001 laying down detailed rules for applying Council Regulation (EC) No 1260 / 2001 as regards contracts for the supply of sugar beet and price increases and reductions applicable to sugar beet. Commission Regulation (EC) No 1262 / 2001 of 27 June 2001 laying down detailed rules for the application of Council Regulation (EC) No 1260 / 2001 as regards the buying-in and sale of sugar by intervention agencies. Commission Regulation (EC) No 1265 / 2001 of 27 June 2001 laying down detailed rules for the application of Council Regulation (EC) No 1260 / 2001 as regards the granting of a production refund on certain sugar products used in the chemical industry. Commission Regulation (EC) No 1646 / 2001 of 13 August 2001 laying down detailed implementing rules for granting adjustment aid to refineries processing preferential raw sugar and adjusting the adjustment aid and the additional basic aid for refineries, as amended by Commission Regulation (EC) No 1164 / 2002. Commission Regulation (EC) No 314 / 2002 of 20 February 2002 laying down detailed rules for the application of the quota system in the sugar sector, as amended by Commission Regulation (EC) No 1140 / 2003 and Commission Regulation (EC) No 38 / 2004. Commission Regulation (EC) No 192 / 2002 of 31 January 2002 laying down detailed rules for the issue of import licences for sugar and sugar and cocoa mixtures with ACP / OCT and EC / OCT cumulation of origin. Commission Regulation (EC) No 1159 / 2003 of 30 June 2003 laying down detailed rules of application for the 2003 / 2004, 2004 / 2005 and 2005 / 2006 marketing years for the import of cane sugar under quotas and preferential agreements and amending Commission Regulation (EC) No 1464 / 1995 and Commission Regulation (EC) No 779 / 1996.
The newly adopted Government and the appellants challenged by the provisions of Government Regulation No 548 / 2005 Coll., laying down certain conditions for the implementation of the measures of the common organisation of the markets in the sugar sector are:
Production quotas
A sugar producer holding an individual A sugar production quota (hereinafter referred to as "A quota ') and an individual B sugar production quota (hereinafter referred to as" B quota') in accordance with existing legislation (hereinafter referred to as "quota holder ') shall hold, for the 2005 / 2006 marketing year, a A quota and a B quota reduced under Regulation (EC) No 5), a quantity of sugar representing the share of that quota holder in the total reduction of the guaranteed quantity under quotas A and B allocated to the Czech Republic (5).
4) Article 3 of Regulation No 364 / 2004 Coll., laying down certain conditions for implementing the measures of the common organisation of the markets in the sugar sector.
5) Article 1 of Commission Regulation (EC) No 1609 / 2005. '
It is clear from the wording of the contested provision that both the arrangements contained in § 3 of Decree No. 364 / 2004 Coll. and the arrangements contained in § 3 of the Decree No. 548 / 2005 Coll. constitute a breach of the previous legislation or are based on the key to the allocation of individual production quotas, which was amended by the previous Decree No. 114 / 2001 Coll. and thus applied in the relevant proceedings to individual applicants. It is therefore evident that, regardless of the form in which the legislation is in place, any reason for the non-constitutionality may stem from the previous regulation, as the appellants themselves argued in their proposal (see below). Therefore, the Constitutional Court first focused on assessing whether the key established by the Government to the distribution of individual production quotas is in line with the constitutional order of the Czech Republic.
Own review
(A) The wording of the contested provisions only implies that the production quota for sugar provided for by the Fund Decision pursuant to Government Regulation No 114 / 2001 Coll., is to be regarded as being maintained, i.e. after the accession of the Czech Republic to the EC, and that the sum of quota A and quota B under Regulation EC No 1260 / 2001 (Section 3 of Government Regulation No 364 / 2004 Coll.) or that the production quota broken down into quota A and quota B is to be reduced proportionally to individual producers as a result of the reduction of national quota under Commission Regulation (EC) No 1609 / 2005 Coll.).
In this context, the Constitutional Court considers it essential that the Government has already repealed the previous regulation, which set out the original key for the allocation of individual production quotas. Thus, although the government explicitly provides for the contested provisions to maintain the decisions taken pursuant to the previous legislation, it has at the same time repealed the legislative basis for those decisions. The Government has repeatedly (in the adoption of Regulation No 364 / 2004 Coll. and Regulation No 548 / 2005 Coll.) opted for such a procedure, knowing that the key to the allocation of individual production quotas is assessed in the proceedings before the Constitutional Court. Thus, by repealing Decree 114 / 2001 Coll., a constitutional review of the key to the initial distribution of individual production quotas has already been prevented in the past by the Constitutional Court. In other words, although the Government formally repealed the previous arrangement for the allocation of individual production quotas by Decree No 364 / 2004 Coll. through the provision of Section 3 of the Government Decree No. 364 / 2004 Coll. and after its annulment through the provision of § 3 of Decree-Law No 548 / 2005 Coll. its consequences are maintained.
For this reason, the Constitutional Court focused on the examination of the key itself, which the Government has already provided for the allocation of the quota in Regulation 97 / 2003 Coll., which amended Government Decree 114 / 2001 Coll., since this key is directly linked to the provisions of Section 3 of Government Decree 364 / 2004 Coll., and to the provisions of Section 3 of Government Decree 548 / 2005 Coll., although the very provisions defining the actual key of calculation of the quota have been formally deleted by the Government in the past.
The regulation regulating the distribution of sugar production quotas is a sphere in which national regulations follow up on the regulation contained in the acquis communautaire. In other words, while the objectives and purposes of this regulation, which are part of a wider area of the common organisation of the market in agricultural commodities, are included in the common agricultural policy instruments, the definition and selection of the follow-up means by which these objectives are achieved, have left the standards of European law to the Member States. The contested legislation on establishing the allocation key is therefore a domain of national law on the one hand, and is directly linked to European law standards. The Constitutional Court was therefore first faced with the question of the extent to which it is at all entitled to assess the constitutional conformity of such legal standards as follow-up to Community law.
The Constitutional Court is not competent to assess the validity of Community law standards. Such questions fall within the exclusive competence of the European Court of Justice. From the point of view of Community law, as has been interpreted in the past by the European Court of Justice (hereinafter referred to as "the ECJ '), the standards of Community law enjoy the advantages of application over the legal rules of the EC Member States. According to the ECJ case-law, where Community law is the exclusive regulation, that right has priority and cannot be denied through the reference criteria laid down by national law, including those applied in constitutional terms.
Without the Constitutional Court being forced to define itself in this doctrine of the ECJ, it cannot look away from the following circumstances. There are also other circumstances and reasons to consider when considering this issue. First of all, it is not possible to overlook that a number of the highest judicial instances of the original EC Member States, including the founding members such as Italy (cf. Decision of 27.12.1973 No 183 / 73 Frontini v Ministero delle Finanze, Constitutional Court, Decision of 21.4.1989 No 232 / 1989 Fragd v Amministrazione delle Finanze dello Stato, Constitutional Court) and SRN (Decision of 22.10.1986 No 2 BvR 197 / 83 Wuensche Handelsgesellschaft v Solange II; Decision of 12.10.1993 No 2 BvR 2134 and 2159 / 92 z. Vertrag über die Europäische Union), and later acceded members as Ireland (decision of the Supreme Court of 19.12.12.1989 Society for the Protection of Unborn Children (Ireland) Ltd and of 5.3.1992 No 2.
The Constitutional Court is aware that these issues lay the foundations for constitutional exegation throughout the Community and that these issues have certain implications not only in the field of legal but also in the political sphere. These issues may have serious consequences for the further development of judicial practice within the Community, even for the development of the Community or the Union as such, and it should therefore also be the duty of the Constitutional Court, as a judicial body for the protection of the constitutionality of one of the newly acceded members, to try to make a relevant comment on these issues in its case-law. In particular, the question is whether Czech constitutional law and, above all, the essential elements of a democratic rule of law within the meaning of Article 9 (2) The Constitution allows the international organisations to which the Czech Republic has transferred part of its sovereignty to have the possibility of forming a right of priority before the entire Czech constitutional order [see below in Part VI.B] in the areas in which this transmission took place.
As mentioned above, where a common market organisation is the subject of Community law, in this case the agricultural commodity market, the Community enjoys full competence. However, this does not mean an absolute obligation for the Community to regulate any question relating to the area of regulation. On the contrary, the Community is obliged, as a result of the application of the principle of subsidiarity, to a degree of restraint and to leave some part of its competence in the hands of the Member States, or after the Community has taken full competence over the area, to delegate it back, in particular in order to meet the specific objectives of the general "policymaking 'or to administer the general legal regulation of Community law. This is why, in general, where Community legislation has left certain things within the competence of the Member States (i.e. where there is no explicit regulation in Community law) or has delegated these things back explicitly to the Member States, it is for the Member States to adopt and apply their own legislation. Yet it cannot be argued that Community law does not work in these areas. On the contrary, even in those cases where Member States implement part of the Community's own legal instruments, the discrepancy by Member States is limited by the bridging general principles of Community law, which include the protection of fundamental rights (see Case C-260 / 89, Elliniki Radiophonia Tiléorassi AE and Panellinia Omospondia Syllogon Prossopikou v Dimotiki Etairia Pliroforissis and Sotirios Kouvelas and Nicollaos Avdellas and others (1991) ECR I-2925).
In other words, in certain cases, the Community delegates its power back to the Member States in order to implement a measure of Community law or leaves certain issues unaddressed and allows Member States to adopt specific arrangements for implementing European law. In such cases, however, the Czech Republic is bound by the principles of European law. At the same time, however, because it is national legislation, such legislation must also be consistent with the Czech constitutional order.
The Constitutional Court is therefore convinced that, although the relevant legislation is a national regulation to which the criteria arising from the constitutional order of the Czech Republic must be applied, the fact that it is an issue whose origin stems from Community law as a system produced by an international organisation to which the Czech Republic has transferred its entry into the Czech Republic pursuant to Article 10a cannot be ignored. The constitution of some part of state sovereignty. As a result, this system became directly binding on the Czech Republic in these parts even within the legal order of the Czech Republic.
Although the Constitutional Court remains the reference framework for the review of the Constitutional Court after 1 May 2004 of the standards of the constitutional order of the Czech Republic, the Constitutional Court cannot completely ignore the impact of Community law on the creation, application and interpretation of national law, in the field of legislation whose establishment, operation and purpose are directly linked to Community law. In other words, the Constitutional Court interprets constitutional law in this area, taking into account the principles arising from Community law.
A-1) Assessment of the contested rules taking into account the criteria arising from the ECJ case-law
Before the Constitutional Court came to the assessment of the contested legislation in the light of the standards reached in Community law, it examined whether the question of conformity of the key chosen to allocate an individual production quota was not a question which the Constitutional Court should submit directly to the ECJ for consideration under Article 234 EC. However, the other question is whether the Constitutional Court can be regarded as a judicial authority which is called upon to refer questions for a preliminary ruling under Article 234 of the EC Treaty. It should be asked whether, in the case of a court having a narrow point of view in assessing matters such as the Constitutional Court, it is appropriate that it should refer the cases to the ECJ. This question appears to be legitimate, at least in the abstract control procedure, which is also the procedure in the case. For example, the Italian Constitutional Court stated in its 1995 decision that it did not feel like being a court under Article 234 of the EC Treaty (see Decision of 29 December 1995 No 536 / 95, Messaggero Servizi Sr. v Office of Register of Padua). He came out for two reasons. The Constitutional Court is not a court subject to Article 234 of the EC Treaty and Article 234 cannot be applied to certain types of proceedings conducted by the Constitutional Court (abstract standard control proceedings).
On the other hand, it is not possible to ignore the opposite practice of other constitutional courts of Member States which, on the contrary, consider themselves to be a court within the meaning of Article 234 of the EC Treaty and, in a number of cases, raised a preliminary question to the ECJ (Austrian Constitutional Court or Belgian arbitration court) (cf. Bobek, M. - Komárek, J. - Passer, J. M. - Gillis, M.: Preliminary question in Community law. Linde, Praha 2005, str.72 - 73).
The Constitutional Court is aware of the delicacy of finding a reply to the question of whether the Constitutional Court can be regarded as a court under Article 234 of the EC Treaty or in which types of proceedings, as the case may be, and is not deprived of the possibility of a clear answer to this question in the future, i.e. to bring the matter before the ECJ in the various types of proceedings.
However, the Constitutional Court is of the view that, in the present case, one of the exceptions laid down in the ECJ case-law could be applied to the present case [see Case 283 / 81, Srl CILFIT and Lanificio di Gavardo SpA v Ministry of Health, (1982) ECR 3415, recently confirmed in the judgment of 15 September 2005 in Case C-495 / 03 Intermodal Transports BV v Staatssecretartaris van Financiën]. In those decisions, the ECJ argued that a question referred for a preliminary ruling was not necessary when the question 'dealt with the previous established case-law of the ECJ, irrespective of the nature of the proceedings which led to those decisions, and even if the question was not identical'. In other words, this is a situation where the previous ECJ decision has already dealt with the legal issue addressed in the present case (CILFIT paragraph 14). In the case of Intermodal Transports, the ECJ stated that the solution adopted in CILFIT and Others transfers to national courts sole responsibility for assessing whether the proper application of Community law is so obvious that it does not give any room for reasonable doubt and for the decision that it is not necessary to raise a question against the ECJ concerning the interpretation of Community law which has arisen in the present case (see also Bobek, M. - Komárek, J. - Passer, J. M. - Gillis, M.: Preliminary question in Community law. Linde, Praha 2005, p.227 - 231).
In the area of the common agricultural policy and in particular in the area of the establishment of production quotas, there is such a large, consistent and long-standing case-law of the ECJ, which undoubtedly allows the Constitutional Court to examine the rules governing the distribution of production quotas in terms of domestic constitutional law interpreted in the light of Community law or in the light of its compliance with the general principles of Community law. In doing so, the general principles of Community law, expressed in the current ECJ case-law, have been allowed by the Constitutional Court to shine into the interpretation of constitutional law.
Principle and limits of free State discretion
Practically since the start of its activities, the ECJ stressed that the legislation of areas regulated by Community law must be accompanied by appropriate national regulation by the Member States (see joined cases 205 to 215 / 82 - Deutsche Milchkontor GmbH and others v Federal Republic of Germany, ECR 2633, paragraph 17: "According to the guidelines on which the Community institutional system is built and governing relations between the Community and the Member States, Article 5 (now Article 10) Contracts at Member States to ensure that Community legal regulation, in particular concerning the common agricultural policy, is implemented on their territory. Since Community law, including its general principles, does not include general rules to ensure this, it is for national authorities to act according to their national substantive and procedural rules when implementing Community law '. Such a conclusion, on the one hand, corresponds to the needs of a developing rule of law, on the other hand, it also conforms to the idea of leaving certain matters to national or local conditions. As Milchkontor further pointed out, this conclusion is based on the principle of cooperation under Article 10 of the EC Treaty and is particularly applicable in the field of agriculture. In such cases, where national legislation follows on from the Community rules, as the Constitutional Court has already pointed out above, the Member State remains bound by the general principles of Community law, in particular by the post of protection of fundamental rights [Case 5 / 88 - Hubert Wachauf v Bundesamt für Ernährung und Forstwirtschaft. (1989) ECR 2609; Case C-459 / 02 Willy Gerekens and Association agricole pour la promotion de la commercialisation laitière Procola v État du grand-duche de Luxembourg, paragraph 21.
In the field of agriculture, the ECJ has interpreted Community legislation very freely in the past in order to enable Member States, when implementing the relevant agricultural policy instruments, to have a high degree of discretion: "in matters relating to the common agricultural policy, Community legislation has discretionary powers which correspond to the political responsibility of Articles 40 and 43 (now Article 34 and 37) of the EC Treaty (Case C-331 / 88 - The Queen v Minister of Agriculture, Fisheries and Food and Secretary of State for Health, ex parte: Federation and others. (1990) ECR I-4023, paragraph 14; or see paragraphs 13 - 16 of Joined Cases 196 / 88, 197 / 88 and 198 / 88 Daniel Cornée and others v Coopérative agricole laitière de Loudéac / Copall /, (1989) ECR 2309]. In one of the cases concerning the fixing of quantitative quotas by the Member States, the ECJ has interpreted the provision of Community law under which" a Member State must take account of the production plan and the planned development of production ', so that it is a matter of discretion for Member States to grant an additional quota to producers who implement the production plan. Even in cases where a Member State granted such an additional quantitative quota, the ECJ only required that its amount "be proportional to the overall production plan', not to be in the" relationship of strict proportionality '. On the contrary, in relation to the overall amount of production planned, Member States are entitled to take into account other criteria such as social considerations, such as the favourable treatment of smaller producers (see Case C-16 / 89 - G. Spronk v Minister van Landbouw en Visserij (1990) ECR I-3185, paragraph 14 - 16). According to the ECJ case-law, the free discrepancy of States is limited by only three basic criteria: the measure adopted must be in line with the objectives of agricultural policy, must be based on objective criteria and in accordance with the general principles of Community law (see Case C-13 / 99 Gerard Mulligan and others v Minister for Agriculture and Food, Ireland, paragraphs 33-35; see also Case C-16 / 89 - G. Spronk v Minister van Landbouw en Visseri (1990) ECR I-3185, paragraph 13, concerning the discretion of Member States in the area of the fixing of specific quantitative quotas for individual producers).
The discretion of the Member States is thus limited only to the objectives of the common agricultural policy and the general principles of Community law. For example, in the case where the language interpretation of the Community law has led to a breach of the fundamental rights of a producer, the ECJ has ruled that "Community legislation applicable to the case in question leaves sufficient discretion to the competent national authorities (sufficiently wide margin of appreciation) so that Member States can apply the legislation in a manner compatible with the requirement to protect fundamental rights' [Case 5 / 88 - Hubert Wachauf v Bundesamt für Ernährung und Forstwirtschaft. (1989) ECR 2609, paragraph 22).
The high level of discretion of the Member States in implementing Community legislation in the field of agriculture can also be illustrated in the case of milk quotas. In general, Community legislation has established that, in the case of land transfers, the allocated quantitative quota continues to be linked to that land. Ireland has implemented this standard in its domestic legislation by providing for 20% of the allocated quota to return to the national reserve in case of such land transfers. In its decision, the ECJ confirmed that it considered such a measure to be still within the discretion of the Member State (see Case C-313 / 99 Gerard Mulligan and others v Minister for Agriculture and Food, Ireland, paragraphs 33-35).
In light of these principles, The Constitutional Court assessed the alleged breach of the constitutionally protected equal access to quota applicants and concluded that the Government of the Czech Republic's practice in determining the key to the allocation of quotas would stand.
Principle of proportionality
According to the ECJ case law, the principle of proportionality forms an integral part of the general principles of Community law. In its decisions, the ECJ has repeatedly argued that this principle requires "Community legislation to be appropriate and necessary in relation to the objectives legitimately pursued by the relevant regulation [...] and that where there are several alternatives to the measure, the most gentle of them, which is not non-discriminatory in relation to the objectives pursued" [e.g. case 265 / 87, Hermann Schräder HS Kraftfutter GmbH & Co. KG v Hauptzollamt Gronau (1989) ECR 2237, paragraph 21].
It follows from the established case-law of the ECJ that the proportionality criterion does not apply equally to all cases. In particular, in the field of economic policy, it is clear that the ECJ had rather chosen the path of judicial restriction and had left the competent legislative authorities with the main responsibility to determine whether the measure in question met the relevant standards: "Where a complex economic situation such as the present case is assessed, it must be borne in mind, as the ECD has already stated in the past, that it is the Commission, which is entitled to take into account and the Community judiciary, when assessing the illegality of the use of such free discretion, cannot substitute for the considerations that relate to the competent authority, but, on the contrary, it must limit itself to examining whether such discretion of the competent authority is not a manifest error or not a misuse of competence..." [Case C-99 / 99, Italian Republic v Commission of Europe Communities, paragraph 2000].
Such self-restraint is typically used by the ECJ also in the field of agricultural policy: "In matters relating to the common agricultural policy, the Community legislature enjoys a discretion which corresponds to its political responsibility under Articles 40 and 43 (now Article 34 and 37) of the EC Treaty." [Case C-331 / 88 - The Queen v Minister of Agriculture, Fisheries and Food and Secretary of State for Health, ex parte: Federation and others. (1990) ECR I-4023, paragraph 14). In other words, the ECJ has made it clear where the limits of judicial review are.
As a result of such a severely restrained approach, the ECJ leaves a very wide margin of discretion to the legislature when assessing the necessity and appropriateness of the relevant measures: "Where a complex economic situation needs to be assessed, institutions enjoy a wide margin of discretion. In assessing the legality of the use of such discretion, the ECJ cannot replace the competent authority in its decision-making content, but must be limited only to examining whether the assessment made by the competent authority is affected by a manifest error or does not constitute abuse of power, or whether the competent institution has clearly not exceeded the margin of discretion '(Case C-87 / 00 Roberto Nicoli v Eridania SpA, paragraph 37). In practice, therefore, the ECJ rarely concludes that the principle of proportionality has been infringed by the relevant economic policy measures. If it had done so in the past, these cases were brought about not by the Court's disagreement with the clarity of the measure, namely its own content, but by the excessive impact of the measures on fundamental rights and their extreme infringement [see Case 114 / 76, Bela-Mühle Josef Bergmann KG v Grows- Farm GmbH & CO. KG, (1977) ECR 1211, paragraph 7].
The ECJ has also argued directly in the past whether a measure aimed at limiting the production of a particular agricultural commodity constitutes a breach of the principle of proportionality (see Case 138 / 79 SA Roquette Frères v Council of the European Communities (1980) ECR 3333). This particular case was triggered by a situation in which the ECJ had previously declared a specific regulation invalid, and consequently the appellant was also challenged by the Regulation adopted subsequently, on the grounds that the producers concerned were left in doubt as to what such legislation would be, thereby limiting their production. In this case, the ECJ noted that the legitimacy of the objective pursued by the measures should be taken into account. This is to stabilise the relevant market by limiting overproduction. In other words, if the measure pursues this objective, the quota system which is a means of achieving it does not in itself constitute a breach of the principle of proportionality. In relation to the specific arguments put forward by the appellant that the uncertainty regarding the content of the legislation led to a deterioration of its market situation, the ECJ stated that "the Council cannot be required to take into account the incentives, business opportunities and the internal strategy of each individual undertaking when adopting specific measures of general interest '(Roquette Frères, paragraph 30). Moreover, the ECJ added in this case that such an argument could only be relevant if individual producers were able to demonstrate that the conditions of their business and production had indeed changed as a result of unclear legislation.
Since, in the present case, the Constitutional Court moves within the framework of the defined abstract standard control procedure, it is difficult to examine how the contested legislation has, if at all, fallen within the sphere of fundamental rights of individual producers. In this type of procedure, therefore, the Constitutional Court was only able to examine the contested legislation at the point of view of the principles which can be derived from individual fundamental rights, i.e. it did not examine and could not examine any actual interference with the fundamental rights of individual producers.
Principle of the protection of fundamental rights
As mentioned above, it follows from the ECJ case-law that Member States are bound, when implementing Community law, to respect fundamental rights (e.g. cases 5 / 88 - Hubert Wachauf v Bundesamt für Ernährung und Forstwirtschaft (1989) ECR 2609; C-459 / 02, Willy Gerekens and Association agricole pour la promotion de la commercialisation laitière Procola v État du grandduche de Luxembourg, paragraph 21. The ECJ has repeatedly assessed restrictions on fundamental rights by economic policy measures and repeatedly declared that fundamental rights may be subject to substantial restrictions in the implementation of Community policies: "The fundamental rights recognised by the ECJ are not absolute but must be assessed in terms of their social function. As a consequence, restrictions on the exercise of those rights, in particular in the context of the common organisation of the market, may be accepted, provided that those restrictions correspond to the purpose of the general interest pursued by the Community, and do not constitute, in view of this purpose, an unparalleled and unacceptable breach of the very nature of those rights." [e.g. Case 5 / 88 Hubert Wachauf v Bundesamt für Ernährung und Forstwirtschaft (1989) ECR 2609, paragraph 18].
When assessing the admissibility of the restrictions on fundamental rights in the field of agricultural policy, the ECJ considered it essential in the past to weigh and take into account the specific nature of the common market organisation and the quota system within the framework of the common agricultural policy: "The fundamental characteristic of the organisation of the market is its variability, depending on the economic factors affecting market development and the general conditions of the direction of the common agricultural policy." [case 230 / 78 - SpA EridaniaZuccherifici nazionali v Minister of Agriculture and Forestry (1979) ECR 2749, paragraph 21].
In the light of the above, the Constitutional Court has also taken steps to assess whether the contested legislation can be considered to be consistent with the fundamental principles and fundamental rights deriving from Community law which may have been affected by the contested regulation. This is the principle of legitimate expectations, the principle of legal certainty and the prohibition of retroactivity, the prohibition of discrimination, the protection of the right to an uninterrupted exercise of economic activity in the form of business or employment and the protection of property rights.
(a) Principle of legitimate expectations
The principle of legitimate expectations was formulated in the ECJ case-law as a general principle of Community law. As regards the implementation of the agricultural policy, the ECJ concluded that the principle of legitimate expectations could not be interpreted as guaranteeing the individual producer access to the level of production quota that he expected or could claim in terms of his expected production in a particular year [see Case 230 / 78 - SpA EridaniaZuccherifici nazionali v Minister of Agriculture and Forestry (1979) ECR 2749, paragraph 22]. In this case, the ECJ argued that "an individual producer cannot rely on his acquired right to maintain the benefits obtained by establishing a common market organisation '. On the contrary, the ECJ clearly stated that the expectations of producers could be undermined in view of the need for changes to the relevant rules requiring the implementation of the common agricultural policy and that individual producers could be limited by measures resulting from Community law standards, which were adopted even after the approval of the production plan, in particular in the context of market and structural policy requirements." [see decisions in joined cases 196-198 / 88 - Daniel Cornée and others v Coopérative agricole laitière de Loudéac (Copall), paragraph 26].
As the ECJ pointed out in another case: "According to settled case-law in the area of the common organisation of the market, which must be constantly adapted to changes in economic conditions, individual economic actors cannot legitimately expect to be subjected to restrictions resulting from future rules regulating the market and structural policy '[Case C-63 / 93 - Fintan Duff et al. Minister for Agriculture and Food and Attorney General, (1996) ECR I-569, paragraph 20]. In the present case, the ECJ argued that the discrepancy granted to the Member States by the European Regulation in order to allocate a special production quota to individual producers who submitted a production plan does not yet constitute a legitimate expectation that individual producers will receive such a quota [see also Case C-177 / 90 Ralf-Herbert Kühn v Landwirtschaftskammer Weser-Ems (1992) ECR I-0035, paragraph 13]. For the same reason, according to the ECJ, it is not contrary to the principle of legitimate expectations if the reduction of 4,5% allocated, initially introduced as temporary, is then fixed permanently [C-22 / 94 - The Irish Farmers Association and others v Minister for Agriculture, Food and Forestry, Ireland and Attorney General. (1997) ECR I-1809, paragraphs 17 to 25. In other words, in a situation where European institutions or Member States are forced to adapt their agricultural policy to changes in economic conditions or even to reform agriculture as a whole, individual producers must expect such changes and have no legitimate expectation that the status quo will be maintained in terms of their status (see The Irish Farmers Association and others v Minister for Agriculture, Food and Forestry, Ireland and Attorney General, paragraph 25:" if a reasonable and reasonable entrepreneur could have anticipated the adoption of a Community measure likely to affect his interests, he cannot rely on legitimate expectations when such a measure has been adopted'; See also Case C-9 / 02 Willy Gerekens and Association agricole pour la promotion de la commercialisation laitière Procola v État du grand-duche de Luxembourg, paragraph 29).
On the other hand, the principle of legitimate expectations can only be affected by Community legislation if, in the past, the Community itself has created a situation which may have created legitimate expectations [Case C-63 / 93 - Fintan Duff et al v Minister for Agriculture and Food and Attorney General, (1996) ECR I-569, para. 20; Case C-177 / 90 - Ralf-Herbert Kühn v Landwirtschaftskammer Weser- Ems (1992) ECR I-0035, para. 14; Case C-459 / 02, Willy Gerekens and Association agricole pour la promotion de la commercialisation laitière Procola v État du grand- duché de Luxembourg, para. 29]. Such a situation occurred, for example, when the EC forced producers to stop production by compensating for a specific payment, and then a system of quotas, dependent on the amount of production in the year in which the producers temporarily discontinued production, was introduced which led to the effect that those who made use of the possibility of interruption of production lost their right to any quota.
The ECJ found that, given that the Community institutions themselves have only motivated producers to cease production for a certain period of time, these producers had a legitimate expectation that they would be able to continue production after the expiry of this period (Case 120 / 86, J. Mulder v Minister van Landbouw en Visserij, (1988) ECR 2321). On the other hand, where a producer limits or completely stops his activity as a result of his free decision, that is to say, without being motivated by a Community measure in the period considered subsequently as a reference, he does not constitute a breach of legitimate expectations [Case C-177 / 90 - Ralf-Herbert Kühn v Landwirtschaftskammer Weser-Ems (1992) ECR I-0035, paragraph 15]. In this case, production was limited as a result of the transfer of the tenant's holding back to the owner, and the ECJ concluded that the fact that the producer managing the holding changed during the reference period laid down by the Member State, resulting in a reduction in production, does not constitute a breach of legitimate expectations.
The Constitutional Court has so far ruled on the principle of legitimate expectations in accordance with the case law of the European Court of Human Rights, from which the concept of the protection of legitimate expectations is clearly apparent as a property claim which has already been individualised by an individual legal act or is individualised directly on the basis of legislation (cf. Case C-482 / 02 ECR II, ECR 2 / 02, ECR 32, Opinion No 35; published under No 278 / 2004 Coll.). On the basis of these principles, the Constitutional Court notes that the principle of legitimate expectations of the contested regulation was not infringed when the finding in the sp. zn. On the contrary, this finding has left open room for executive redistribution of production quotas. Therefore, it cannot be argued that the contested legislation infringed the principle of legitimate expectations that producers might have incurred on the basis of the previous finding of the Constitutional Court.
(b) Principle of legal certainty and prohibition of retroactivity
In the case-law of the ECJ, the principle of legal certainty and the prohibition of retroactive activity has been interpreted in such a way that, in general, the retroactive legislation adopted by both the EC and the Member States is excluded, unless that legislation is adopted in special circumstances, "when the purpose to be achieved by the measure is required, and where the legitimate expectations of the addressees of the legal standard" (C-459 / 02, Willy Gerekens and Association agricole pour la promotion de la commercialisation laitière Procola v État du grand-duche de Luxembourg, paragraphs 23-24) are duly respected. One of these exceptions is the situation in which a Member State has implemented Community legislation, which has limited time scope, and that legislation has been found to be contrary to Community law, while a Member State has been obliged to adopt legislation covering the past period. If such legislation could not be applied retroactively, "the objective pursued would not be achieved and would jeopardise the effectiveness of such measures' concerning agricultural quotas (C-459 / 02, paragraphs 25 to 26).
This principle was not infringed by the contested regulation, since, although the rules on the distribution of production quotas have changed as a result of the Constitutional Court's case-law, it has always been a measure acting in perspective, not retrospective, and has always been properly published in the Collection of Laws.
(c) Principle of non-discrimination or non-discrimination
In the field of agriculture, the principle of equal treatment is required not only by the general principles of Community law, but also directly by Article 34 (2) (ex Article 40 (3)) of the EC Treaty, which constitutes a "specific expression of the general principle of equality '[see decisions in joined cases 201 and 202 / 85, Martha Klensch and others v Secrétaire d'État à l'Agriculture et à la Viticulture, (1986) ECR 3477, paragraph 9]. The creation of a common organisation of agricultural markets in connection with the implementation of the common agricultural policy requires" the exclusion of any discrimination between producers or consumers within the Community. "This provision covers all measures relating to the common organisation of agricultural markets, irrespective of the authority which provides them. In other words, according to the ECJ, Member States are also obliged to implement the common organisation of the markets [Joined Cases 201 and 202 / 85, Marthe Klensch and others v Secrétaire d'État à l'Agriculture et à la Viticulture, (1986) ECR 3477, paragraph 8].
In assessing compliance with the principle of equality, the ECJ considers two aspects - comparability (comparability) and objective justification (objective justification). If it is a criterion of comparability, the ECJ has in the past argued that "it cannot be regarded as discrimination within the meaning of Article 40 of the Treaty where the inequality in the treatment of individual undertakings corresponds to the inequalities in the factual and factual situation of such undertakings." [case 230 / 78 - SpA EridaniaZuccherifici nazionali v Minister of Agriculture and Forestry (1979) ECR 2749, paragraph 18]. In such a case, the ECJ concluded that the principle of equality was not infringed by the measure laid down in Community law, according to which a 5% reduction in the sugar quota was to be applied throughout the Community, except for Italy, in which Community legislation allowed much more rapid reductions. According to the ECJ's argument, given that "it is generally known that the situation of beet growing and sugar production in Italy differs significantly from that of other states [...], such differences in treatment [...] are based on objective differences resulting from the initial economic situation '(Case 230 / 78, paragraph 18 - 19).
In certain situations, discriminatory and different treatment between producers may also be justified, particularly if it aims to achieve the objectives of the common agricultural policy. Therefore, the ECJ has in the past found different forms of different treatment to be justifiable if they have helped the rational and effective implementation of agricultural policy. For example, in the allocation of quotas, a Member State may favour certain forms of producer associations, except those whose organisation or structure would be easier to violate Community law (see Case C-15 / 95 - EARL de Kerlast v Union régionale de coopératives agricoles (Unicopa) and Coopérative du Trieux. (1997) ECR I-1961, paragraph 39: "Member States must be allowed to exclude forms of companies which facilitate activities which do not comply with Community rules."]
The ECJ has also argued that although the reference period chosen by the Member State may not be ideal for some producers, the resulting difference in treatment may be justified by an interest in sound administration and by a corresponding limitation of the length of the reference period or of the number of years established as reference. In response to the argument of a particular producer that it was discriminated against in relation to other producers, since it did not develop production in a quantity corresponding to its capacity in the year chosen as reference period, the ECJ concluded that "such an effect is justified by the need to limit as far as possible the situation in which the reference period moves from one year to another" [case C-177 / 90 - Ralf-Herbert Kühn v Landwirtschaftskammer Weser-Ems (1992) ECR I-0035, paragraph 18]. A similar problem occurred for producers who implemented the development plan (and increased their capacity), but the quota allocated to them did not correspond to increased production, given that the year before the completion of the plan was taken for the reference period. However, the ECJ stated that it did not consider the situation of these producers objectively to be different from those of those producers who did not implement the development plan, as "it is the reference period currently chosen which is decisive for comparing the situation of the two categories of producers' [Case C-63 / 93 - Fintan Duff et al v Minister for Agriculture and Food and Attorney General, (1996) ECR I-569, paragraph 26]. In other words, the choice of reference period itself was not capable of establishing a breach of the principle of equality between producers.
On the other hand, the ECJ case-law does not allow Member States full discretion in the choice of the reference period. The ECJ stated that a certain selection could result in a breach of the principle of equality. For example, the ECJ decided that the choice of the reference period may result in discrimination prohibited by the principle of equality "if, because of the specific conditions on the domestic market, the implementation of such choice on the territory of the State leads to discrimination between producers throughout the Community '[joined cases 201 and 202 / 85, Martha Klensch and others v Secrétaire d'État à l'Agriculture et à la Viticulture (1986) ECR 3477, paragraph 12]. In this case, the ECJ concluded that the specific choice of reference period favoured larger producers at the expense of small producers.
The issue of equality was also addressed by the ECJ in the context of the transfer of the allocated quota from one producer to another. For example, the ECJ concluded that Community law could not be interpreted in such a way as to allow the transfer of the quota to producers who have ceased production to those who have purchased their production in the past, since such transfer would result in inequality in favour of these operators and at the expense of other operators purchasing production in the production area in question. The quotas should therefore be returned to the national reserve and redistributed in a fairer manner [joined cases 196 / 88, 197 / 88 and 198 / 88, Daniel Cornée and others v Coopérative agricole laitière de Loudéac (Copall) and Laitery coopérative du Trieux, (1989) ECR-2309, paragraphs 21-23].
Finally, it can be pointed out that the ECJ's opinion that only a hypothetical claim cannot be considered that the national measure discriminated against certain producers unless there is concrete evidence that any of these producers, which should have been allegedly affected by the measure, was actually exposed to the negative impact of such a measure [linked cases 196 / 88, 197 / 88 and 198 / 88, Daniel Cornée and others v Coopérative agricole laitière de Loudéac (Copall) and Laiterie coopérative du Trieux, (1989) ECR-2309].
The Constitutional Court found no intervention in the principle of non-discrimination interpreted in the light of the ECJ case law. As it will then be interpreted, the Constitutional Court corrects the present interpretation of the principle of equality arising from Article 1 of the Charter of Fundamental Rights and Freedoms, as set out in the sp. zl.
(d) Principle of the protection of the right to do business and to pursue other economic activities
The ECJ has already stated in its decisions in the past that the right to develop economic activity cannot be interpreted as guaranteeing the right to receive a specific quota amount in relation to the quota system. According to the ECJ, the quotas "do not restrict the economic activity of entrepreneurs, but, in the context of building a common market organisation, fix the quantity of production that can be applied to the market... '. [case 230 / 78 - SpA EridaniaZuccherifici nazionali v Minister of Agriculture and Forestry, (1979) ECR 2749, paragraphs 20 - 21]. Moreover, in view of the variability of the common organisation of the market, the quotas are subject to changes (cf. the above argument concerning the protection of legitimate expectations).
Such restrictions on the right to do business and to pursue other economic activities also comply with the general standard of the limitation of fundamental rights, i.e. those restrictions correspond to the objective pursued by the general interest of the Community and do not constitute, in the light of the objective pursued, non-discriminatory or unacceptable intervention incompatible with the substance of fundamental rights [Case 5 / 88 - Hubert Wachauf v Bundesamt für Ernährung und Forstwirtschaft. (1989) ECR 2609, paragraph 18). The first criterion (compliance with the objective pursued) is respected if the restriction is part of the legislation on the elimination of surplus in the agricultural commodity market, precisely by way of the restriction of overproduction. The second criterion (proportionality) is met if the very nature of the right to do business and to pursue another economic activity is not undermined. In other words, if the quota system does not restrict the right to use the land in question for other purposes or the right to do business in another area of the economy or to trade in other agricultural products, it is compatible with the protection of the right to do business and to conduct other economic activities [C- 177 / 90 - Ralf- Herbert Kühn v Landwirtschaftskammer Weser- Ems (1992) ECR I-0035, paragraph 17; or C-63 / 93 - Fintan Duff et al v Minister for Agriculture and Food and Attorney General, (1996) ECR I-569, paragraph 30, in which the ESD concluded that it was not a breach of that right, if the producer received a quota without regard to the production plan achieved, i.e. a quota which does not meet the objective amount of the producer's production after implementation. The lower quota does not restrict the right to do business, but only limits the possibility of placing production on a market which does not enjoy protection through fundamental rights.] In other words, according to the ECJ case-law, the allocation of a specific quota cannot in itself be regarded as a breach of the fundamental right to do business and to carry out other economic activities.
The principle of the protection of the right to do business is the constitutional order of the Czech Republic and is addressed as an economic law which can be applied only within the limits of the law (Article 41 of the Charter of Fundamental Rights and Freedoms) and the existing case law of the Constitutional Court based on the principle of "self-refraint" fully corresponds to the ECJ approach. Therefore, the Constitutional Court did not bring about a breach of this principle.
A-2) Assessment of the contested legislation in view of the criteria arising from the constitutional order of the Czech Republic in the light of the existing case law of the Constitutional Court
As mentioned above, the establishment of a key for the calculation of an individual production quota constitutes a national achievement of the objectives of the common agricultural policy resulting from Community law, in an area where Community law has left the discretion of the Member States as to what specific instruments will be chosen to achieve the objective (limit sugar production). Therefore, although the allocation of the production quota itself is a matter for national law, the fact that it pursues the purpose of Community law cannot be ignored.
As mentioned above, the Constitutional Court is convinced that, after the Czech Republic has become a full member of the EC or the EU, the constitutional review of issues relating to this area cannot be carried out in a completely isolated manner, regardless of the criteria and limits of regulation laid down by Community law and in the past completed by the ECJ case-law. In other words, when assessing the compliance of the chosen key with the constitutional order of the Czech Republic, it is therefore not entirely possible to ignore the way in which European law and the ECJ are based on production quotas and distribution methods. In contrast to the previous decisions of the Constitutional Court, Community law cannot be treated only as an object of compaction, which would result in indirect arguments in relation to domestic regulation, but Community law currently radiates into the constitutional order of the Czech Republic when it is applied in the field of legal regulation related to Community law.
On the other hand, the previous case-law of the Constitutional Court cannot at present be ignored, on the basis of the principle of legal continuity of its own case-law (see below).
In the sp. zn. The Constitutional Court annulled Government Decree No. 51 / 2000 Coll., laying down measures and the State's share of the conditions for ensuring and maintaining the production of sugar and sugar and stabilising the sugar market. It was a legislation that first introduced regulation of the sugar market in the Czech Republic for the period 1.8.2000 to 30.9.2001. The Constitutional Court concluded in that finding that the Government did not comply with the constitutional limits laid down in Article 78 of the Constitution by this Regulation. The Constitutional Court therefore did not deal with the content of the legal regulation itself and its compatibility with the constitutional order in the present case. The quota amount under the regulation was determined by establishing a reference period of five previous years, namely 1995-1999.
The Constitutional Court dealt with the constitutional conformity of Decree No. 445 / 2000 Coll., on the establishment of milk production quotas for the years 2001 to 2005. The Constitutional Court partially complied with the proposal at the time when it annulled Sections 4 (2) and 14 (2) of the Regulation, again because of the lack of legal authorisation to limit the allocation of production quotas from the reserve to farmers operating in the system of organic livestock farming and the non-constitutional and illegality of the delegation to decide on the amount of the reserve to the Ministry of Agriculture. However, in this finding, the Constitutional Court also expressed its views on the content of milk production quotas as one of the methods of regulating the state's economic policy with a constitutional order, and it did not find this system as such unconstitutional. In doing so, it formulated basic constitutional limits on both the limitation of economic production itself by introducing production quotas and the system for allocating individual production quotas to individual producers. In particular, the Constitutional Court concluded that the legislature may, within the limits of the constitutionally guaranteed fundamental principles, human rights and freedoms, as it considers, introduce price or quantitative regulation of production in a particular sector of the economy, define or influence the type and number of operators involved in it or restrict contractual freedom in the application of production on the market or in the purchase of raw materials and production facilities. At the same time, the Constitutional Court refused that any restriction on the freedom of business could be implemented exclusively by law. On the contrary, he stated that the Constitution, for practical reasons, allows the adoption of substatutory rules when they move within the limits of the laws. The Constitutional Court also rejected that the restriction on production constituted an expropriation which is not justified by the public interest and is without compensation. The ownership of production above the production quota is not withdrawn, it is merely making it difficult to implement on the market. The system of production quotas is a form of control of the use of property, which is monitored by the public interest in stabilising the commodity market. The instruments used, i.e. the system for the allocation of individual production quotas, were then found appropriate.
If it is a system for allocating individual production quotas, the Constitutional Court refused that non-constitutional discrimination would constitute a different legal position for those producers who receive the quota and those who do not request it. It also did not consider unconstitutional natural differentiation between existing and new producers when it stated that the disadvantage of new entrepreneurs (who receive quotas only through quota transfer from the current producer to whom the quota was allocated) was an integral part of any restriction on production. However, discrimination between producers who apply for a quota and who receive it in full and producers to which it will be refused or allocated only in part cannot be excluded. Therefore, Article 12 (6) of Act No. 256 / 2000 Coll., on the State Agricultural Intervention Fund, requires that the method of the initial distribution of production quotas between the applicant be governed by the principle of equality and objective calculation. In addition, the Constitutional Court noted that this general order, which is not but a derivative of the principle of equality under Article 1 of the Charter and Article 1 of the Constitution, must be taken into account by the Government in determining the method of the initial distribution of quotas within the different systems of production quotas, taking into account the characteristics and specificities of the production of commodities subject to restrictions. The Constitutional Court can therefore assess the key used in the original allocation of the quotas, while recognising the annual reference period for the allocation of milk production quotas as appropriate. At the same time, however, the Constitutional Court acknowledged that even a detailed key, which remembers the regular causes of fluctuations in production volume, cannot take account of all circumstances. There may therefore also be injustice in individual cases, but it is not constitutional.
Finally, in the decision sp. zn. With this finding, the Constitutional Court annulled § 4 (3), § 5 (3), § 7 and § 13 of the Regulation and rejected the application for annulment of § 13 of Act No. 256 / 2000 Coll., on the State Agricultural Intervention Fund. The Constitutional Court assessed the key chosen at the time to allocate individual production quotas (based on the production volume of three in terms of the number of most successful production seasons from the last five) as contrary to the legal requirement of an objective method of calculation and the requirement of equality. The reason for such an assessment was the consideration that the position of individual sugar producers affected the legislation under Regulation No 51 / 2000 Coll., which was applied before its annulment by the Constitutional Court, between 30.3.2001 and 29.11.2002. Although this Regulation was repealed for formal reasons, i.e. for lack of legal support, the Constitutional Court further noted that the then distinction between strategic and non-strategic sugar factories could reasonably be regarded as a suspicious qualification, which represented an arbitrary, hardly justifiable distinction between producers. The Constitutional Court further noted that the key chosen by Government Decree 114 / 2001 Coll. is not unconstitutional in itself, but the undesirable effects of the previous method of calculation, which was both formally defective and factually discriminatory, do not remove but merely mitigate the fact that it does not derive a decisive average annual quota from the production volume of all five seasons, but the fact is that some sugar producers were not in operation for all seasons and takes into account the three seasons when they were produced most or those seasons when they were produced when they were produced after three or less seasons. The failure to eliminate the inequality was seen by the Constitutional Court in the fact that, on the basis of a measure already for formal reasons of non-constitutional and de facto discrimination, some producers were able to increase production because they were protected from competition which did not have a production quota and thus could not produce the penalty levy without burden. At the time, the Constitutional Court concluded that the government had already formally corrected for the future to maintain an undesirable situation that triggered its earlier formal and materially unconstitutional adjustment.
Resolution of 14.9.2004 sp. zn. Pl. ÚS 48 / 03 (not published) The Constitutional Court suspended the proceedings on the motion of a group of Members to abolish the relevant parts of Government Decree No. 114 / 2001 Coll., as amended by Government Decree No. 97 / 2003 Coll., by which the Government rearranged the allocation of individual production quotas in response to the previous finding of the Constitutional Court. The Constitutional Court closed the proceedings pursuant to Paragraph 67 of the Law on the Constitutional Court, as the contested regulation was repealed and replaced by Decree No 364 / 2004 Coll., whose provisions of Sections 3 and 16 are contested by the present proposal. In doing so, the legislation contained in Government Decree 114 / 2001 Coll., as amended by Government Decree 97 / 2003 Coll., established a new key for the allocation of quotas, by dividing it on the basis of the sugar production capacity established as the highest average quantity of sugar produced by the producer in 24 hours in the sugar factory in which he produced the sugar in November 2001 or October 2002, provided that he produced the sugar in the quota year 2002 / 2003, but not more than in a demonstrable quantity corresponding to the maximum daily output of the machinery of the sugar factory.
A-3)
The Constitutional Court therefore decides on the constitutional conformity of the key for the calculation of the individual production quota in a situation where its previous case-law lays down certain limits both for the very admissibility of the rules governing production quotas as such and for the allocation of individual production quotas to individual producers. Therefore, the assessment of the current legislation must be carried out, inter alia, at a visual angle, in the present case-law of the Constitutional Court, which is bound by the Constitutional Court, unless the conditions for overcoming it are fulfilled.
As regards the system of quota as such, the Constitutional Court notes that this finding follows the existing quota case-law. However, another is the situation of the assessment of the actual distribution of quotas in terms of constitutional principles, as they were formulated in the previous finding, sp. v. Pl. ÚS 39 / 01.
In his finding sp. zn. Pl. ÚS 11 / 02 (Reports of Decisions, Volume 30, Found No. 87; published under No. 198 / 2003 Coll.) The Constitutional Court formulated the doctrine of continuity of its own case-law, which it based on the essentials of a democratic rule of law, in other words the obligation of the Constitutional Court to be bound by its own decisions, which can only be overcome by its case-law under certain conditions. At the same time, the first possibility where the Constitutional Court can overcome its own case-law is to change the social and economic situation in the country or change their structure or change the cultural image of society. Another option is to change or shift the legal environment consisting of sub-constitutional legal standards which, in summary, affect the view of constitutional principles and principles without, however, avoiding them and, above all, do not restrict the principle of democratic legal status (Article 1 (1) of the Constitution). Another option for amending the case law of the Constitutional Court is to amend or supplement those legal rules and principles which constitute binding reference points for the Constitutional Court, i.e. those contained in the constitutional order of the Czech Republic, unless, of course, changes contrary to the limits laid down in Article 9 (2) of the Constitution, i.e. changes to the essential elements of the democratic rule of law.
The Constitutional Court therefore considered, in the present case, after the confrontation of the established case-law of the ECJ and the present case-law of the Constitutional Court whether there were facts to justify a reassessment of the Constitutional Court's conclusions. As mentioned above, it is clear that the accession of the Czech Republic to the EC or the EU has made a fundamental change within the Czech legal order, since this moment the Czech Republic has taken over the entire mass of European law into its national law. Thus, there has undoubtedly been a shift in the legal environment, consisting of sub-constitutional legal standards, which necessarily must influence the view of the whole of the existing legal order, including constitutional principles and principles, provided that the factors affecting the national legal environment do not themselves conflict with democratic legal status, or the interpretation of these factors must not lead to a threat to democratic legal status. Such a shift would be contrary to Articles 9 (2) and 9 (3) of the Constitution, respectively.
It is clear that the standard of protection of fundamental rights and freedoms, by complying with the principles underlying them within the Community, has undergone a dynamic development from the initial reluctance to provide protection through the means of Community law, also reflected in the ECJ case-law (among others, Decision No 1 / 58, Stork v ECSC High Authority (1959)), through the implementation of the protection of those principles in the ECJ case-law, to efforts to establish a binding catalogue of fundamental rights, which would form part of primary law. It also underwent the dynamic development and reflection of this problem in the case-law of the Constitutional Courts of each Member State, of which the most representative example is changes to the positions of the Federal Constitutional Court of Germany (cf. Decision of 29.5.1974 No 2 BvL 52 / 71, Solange I., and Decision of 22.10.1986 No 2 BvR 197 / 83, Solange II., and Decision of 12.10.1993 No 2 BvR 2134 and 2159 / 92 zum Vertrag über die Europäische Union).
The current standard of protecting fundamental rights within According to the Constitutional Court, the Community does not give rise to any reason to believe that this standard of protection of fundamental rights through the application of the principles arising from them, as well as the above-mentioned ECJ case-law, is of lower quality than the protection provided in the Czech Republic, or that the standard of protection is significantly different from that provided by the Constitutional Court in the national environment. This also follows from the confrontation of the above-mentioned ECJ conclusions on the admissibility of quantitative restrictions on production by establishing production quotas and the conclusions taken by the Constitutional Court on the same issue in the past. The exception, according to the Constitutional Court, is only the conclusion resulting from the finding of the sp. zn.
If this conclusion is confronted with the above-mentioned case-law of the ECJ, it can be considered to be excessive in the sense that the Constitutional Court has embarked on a relatively "thin ice" assessment of the economic variables which it then reflected in the assessment of constitutional law. As is apparent from the case-law cited by the ECJ, this court does not feel entitled to assess these measures with regard to measures forming part of the common agricultural policy. For example, where the ECJ assessed the reference criteria in the light of the alleged inequality between producers, it referred to that this inequality cannot be only hypothetical, but must be specifically substantiated by what it was established in relation to specific producers. Moreover, the conclusion resulting from the finding of sp. zn. There may therefore also be injustice in individual cases, but it does not reach constitutional seriousness. "In the present case, the Constitutional Court therefore did not feel called upon to review its own key to the allocation of the quota in an abstract manner in the framework of the constitutional review.
In other words, in the present case, the Constitutional Court cannot take account of the conclusions that arise directly from the ECJ case-law, from which a principle of constitutional self-restraint can be derived in respect of measures of an economic nature pursuing objectives directly arising from the EC Community policy. Moreover, the Constitutional Court was also aware of this when accepting the finding in question, sp. zn. Pl. ÚS 39 / 01, when it stated in its reasoning that such conclusions could not be accepted as regards the scope of the review activity which would then be an obstacle to the Czech Republic's membership of the European Union, although it denied this self-restraint to some extent by its conclusion.
The Constitutional Court therefore concludes that there are reasons to deviate from the finding in the sp. zn. Pl. ÚS 39 / 01. However, this change does not relate to the content assessment of the key chosen by the Government itself, but to the fact that the Constitutional Court no longer feels that such a key has been called up in the way that the finding of Sp. v. Pl. ÚS 39 / 01 has done so, subject it to constitutional review on an abstract level. However, this does not preclude the fairness of this key being dealt with by the general courts in individual and specific cases of individual producers, provided that it is demonstrated in which specific facts inequality is based.
On the contrary, inspired by the conclusions of the ECJ, which, after 1.5.2004 in the area under consideration, took into account the extent to which it was defined above, and bound by its conclusions reached prior to the finding of sp. zn. Thus, it will not assess whether the government-selected criterion is capable of reflecting fluctuations in the production of individual producers, as the Constitutional Court considers such a question to be so economically professional that it does not feel able to answer it.
In addition, the Constitutional Court - only in the form of obiter dictum, that is to say outside the limits of the constitutional review - states that the finding of sp. zn. Pl. ÚS 39 / 01 did not directly reveal how they tried to submit to the Constitutional Court that the Government was obliged to choose as a reference period the period before it began to regulate sugar production through production quotas, i.e. the period before 2000.
Although the comparative overview requested by the Constitutional Court for the purposes of this procedure shows that most of the countries of Central and Eastern Europe that joined the EC in 2004 have in practice chosen for the reference period 1994-1999, the specificity of the situation in the Czech Republic is given, however, precisely because the key to the allocation of the quota has been repeatedly cancelled by the Constitutional Court (for the first time for reasons of formal, second time for reasons of content). Although the Constitutional Court does not feel called upon to assess these issues, it appears to it that the determination of the reference period in 2004 before 2000 would be technically impossible, perhaps even unreasonable and establishing other grounds for claiming that this reference period is also eligible to establish inequality between producers. On the contrary, the chosen key now challenged by the appellant can, according to the Constitutional Court, be attributed to the government's attempt to select a period that would be feasible as a reference period at all in 2004 and, on the other hand, could eliminate market distortions arising from the previous regulations, as pointed out by the Constitutional Court in the sp. zl.
At the same time, the Constitutional Court considers it necessary to emphasise that the conclusion now adopted does not in any way imply that the Constitutional Court would resign from the constitutional review of national legislation which is complementary to Community law, as has been done in the past by certain courts of the EC Member States [cf. the decision of the Irish Supreme Court in Lawror v Minister for Agriculture 1 (1990) IR 356, cited in Kühn, Z.: The enlargement of the European Union and the relations of 26 constitutional systems. Lawyer 8 / 2004, p. 765]. The move in its conclusions depends on the shift in the whole of the national legal order, which took place after 1 May 2004, and concerns only the matter of the content limits of the constitutional review in the particular case.
It can be concluded that the key to the allocation of individual production quotas was found to be constitutional, which implies that the original proposal of the applicants would have had to be rejected.
B) At the same time, the Constitutional Court could not overlook and accept that the Government did not respect the fact that the accession of the Czech Republic to the EU was based on Article 10a of Regulation No 548 / 2005, which merely paraphrases Article 1 (3) of Commission Regulation (EC) No 1609 / 2005. Constitution for the transfer of powers of national authorities to transnational bodies.
Article 10a, which was inserted into the Constitution by the Constitutional Act No. 395 / 2001 Coll. (so-called Euronovela of the Constitution), constitutes a provision allowing the transfer of certain powers of the institutions of the Czech Republic to an international organisation or institution, namely the EU and its institutions. The moment when the EC Treaty became binding on the Czech Republic as amended by all its revisions and as amended by the Accession Treaty, the powers of the national authorities which under EC primary law are exercised by the EC institutions were transferred to those authorities.
In other words, the transfer of these powers was carried out at the time of the accession of the Czech Republic to the EC by lending these powers to the EC institutions. To the extent that these powers are exercised by the EC institutions, the powers of all competent national authorities have then been limited, irrespective of whether they are legislative or individual decision-making.
However, according to the Constitutional Court, this conferral of part of the powers is conditional, since the Czech Republic, whose sovereignty continues to be constituted by Article 1 (1) of the Constitution, remains the original bearer of sovereignty and the resulting powers. According to him, the Czech Republic is a sovereign, united and democratic rule of law based on respect for the rights and freedoms of man and citizen. According to the Constitutional Court, the cross-compliance of the delegation of these powers is manifested in two levels: formal and material. The first of these planes concerns the very attributes of state sovereignty, the second of which concerns the content components of the exercise of state authority. In other words, a delegation of part of the powers of national authorities may continue as long as those powers are exercised by the EC institutions in a manner compatible with the preservation of the foundations of the national sovereignty of the Czech Republic and in a way which does not jeopardise the very nature of the material rule of law. If one of these conditions for implementing the transfer of powers were not fulfilled, i.e. if developments in the EC or the EU were to jeopardise the very nature of the state sovereignty of the Czech Republic or the essential necessity of a democratic rule of law, it would be necessary to insist that the national authorities of the Czech Republic should re-take those powers, while the Constitutional Court (Article 83 of the Constitution) is called upon to protect constitutional integrity. The words are valid in the dimension of formal constitutional regulation. As regards the essential elements of the democratic rule of law, those laid down in Article 9 (2) of the Constitution lie even outside the disposition of the Constitution itself. The Constitutional Court, already in its first finding, sp. zn. Pl. ÚS 19 / 93 (Reports of Decisions, Volume 1, Found No 1; published under No. 14 / 1994 Coll.) concerning the Act on the illegality of the Communist regime and its resistance to it, stated that the constitutional principles of a democratic society under the Constitution are placed above the legislative power and hence the ultra vires of Parliament. In another find sp. zn. Pl. ÚS 36 / 01 (Reports of Decisions, Volume 26, Found No 80; published under No. 403 / 2002 Coll.) The Constitutional Court stated that no amendment to the Constitution could be interpreted in the sense that its effect would be to limit the procedural level of protection of fundamental rights and freedoms already achieved.
If, therefore, the exercise of delegated powers would be carried out by the EC institutions in a way regressive to the existing concept of essential elements of the democratic rule of law, it would be a violation of the constitutional order of the Czech Republic, which would require the retaking of those powers by the national authorities of the Czech Republic.
However, such a situation did not occur in general or in the present case and according to the Constitutional Court there was no reason for the Government to exercise its legislative powers in a manner which manifested itself by the adoption of the contested provision § 3 of Decree No 548 / 2005 Coll.
The Constitutional Court, after examining the content of the contested provision § 3 of Decree-Law No 548 / 2005 Coll. therefore concluded that, by adopting it, the Government had withdrawn its powers or exercised its legislative powers in an area which, on the basis of Article 10a The Constitution has been delegated to the EC institutions, namely Article 37 (2) and (3) of the EC Treaty and Article 1 (3) of the Treaty of Accession of the Czech Republic to the EU. If Article 3 of Decree-Law No 548 / 2005 Coll. is to be implemented by Commission Regulation (EC) No 1609 / 2005, it is an ultra vires act in relation to Article 78 of the Constitution, since the Government was not entitled to adopt such legislation.
Commission Regulation (EC) No 1609 / 2005 is a Community legislation whereby, pursuant to Article 10 (3) and (4) of Council Regulation (EC) No 1260 / 2001, the Commission has reduced, for the 2005 / 2006 marketing year, the sugar quotas for each Member State. This Regulation takes precedence over the national legal (legal) arrangements and is directly applicable in national law.
The immediate applicability in national law and the preferential application of the Regulation is due to the own dogmatics of Community law, as previously provided in the ECD case-law [cf. Decision 26 / 62 NV Algemene Transport- en Expeditie Orderneming Van Gend en Loos v Nederland Administratie der Belastingen (1963) ECR 1; 6 / 64 Costa v ENEL (1964) ECR 585]. Community law itself determines and specifies, unlike international law, what its national effects are in the Member States.
If membership of the EC entails a certain limitation of the powers of the national authorities for the benefit of the Community institutions, it must necessarily be one of the manifestations of such a limitation as well as of the freedom of the Member States to determine the national effects of Community law (cf. King, R.: Reestablishing the national effects of Community law in the Constitution of the Czech Republic. Legal outlooks, 2004, No 3, p. 111). In other words, the disappearance of the freedom of the Czech Republic is linked to the transfer of certain powers to the EC to determine the national effects of Community law, which are derived in the areas in which this transmission took place, directly from Community law. Article 10a In fact, the Constitution acts in two ways: it forms the normative basis for the transfer of powers, and at the same time it is the provision of the Constitution which opens up the national legal order for the operation of Community law, including the rules concerning its effects within the Czech legal order (cf. Kühn, Z. - Akila, J.: On the basis of which the Community law will operate in the Czech legal order? Legal perspectives, No 2004, No 1, p. 23 - 27; or Kühn, Z.: Once again on the constitutional basis of Community law in the Czech legal order. Legal perspective, 2004, No 10, p. 395 - 397).
The Constitutional Court is of the opinion that, with regard to the application of Community law to national law, an approach must be adopted which would not preserve the effects of Community law in national law. Such an approach would not be consistent with the fact that the dogma of the effects that Community acts produce in national law has passed and is undergoing dynamic development. This concept also ensures best what has been mentioned above, namely the cross-compliance of the transfer of part of the powers.
Pursuant to Article 1 (3) of the Regulation, Member States were required to fix by 1 November 2005 at the latest for each production undertaking to which a production quota was allocated the part by which that quota was reduced. As the Constitutional Court found by asking the State Agricultural Intervention Fund, the quota reduction was notified to all quota holders by an individual act based on the direct application of this provision of Commission Regulation (EC) No 1609 / 2005.
In other words, at the time when the Government adopted the provisions of § 3 of Decree No. 548 / 2005 Coll., the individual production quota for individual producers has long been reduced, on the basis of the direct application of Community law to it by the competent authority, i.e. the State Agricultural Intervention Fund. This provision, on the one hand, cannot in practice give rise to any legal consequences, on the other hand, the Government was neither entitled to adopt it, as it is an area in which authorisation has been delegated to the Community institutions, which have implemented it in the present case by the adoption of Regulation No 1609 / 2005, which, as mentioned above, is directly applicable in the law of the Member States and does not foresee further transposition into national law.
Moreover, it follows from the ECJ case-law that Member States may not, through national legislation, reproduce the provisions of the immediately applicable Community law, or any national measure implementing the regulation, contrary to the immediate applicability of the Regulation [cf. cases 93 / 71, Orsolina Leonesio v Ministero dell'agricoltura e Oreste, (1972) ECR 287; 39 / 72 Commission of the European Communities v Italian Republic, (1973) ECR 101; 34 / 73 Fratelli Variola SpA v Amministrazione italiana delle Finance, (1973) ECR 981].
As the Constitutional Court further found, the examples of other Member States (Germany and Slovakia) show that they have applied Commission Regulation (EC) without proceeding with the regulatory transformation of this Regulation into one of the forms of national law.
By adopting the contested provision, the Government therefore acted ultra vires and infringed Article 78, in conjunction with Articles 10a and 1 (2) of the Constitution, as it implemented an authorisation which was transferred to the Community institutions and which was therefore not available to the Government.
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Regulation Information
| Citation | The Constitutional Court found No 154 / 2006 Coll., on the application for annulment of Sections 3 and 16 of Decree No. 364 / 2004 Coll., on certain conditions for the implementation of the measures of the common organisation of the markets in the sugar sector, and on the application for annulment of Section 3 of the Government Regulation No. 548 / 2005 Coll., on certain conditions for the implementation of the measures of the common organisation of the markets in the sugar sector |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 26.04.2006 |
|---|---|
| Effective from | - |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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