(CN) – Overruling the EU’s lower court, the European Court of Justice on Wednesday sided with France and two poultry companies in finding regulators improperly ended subsidies on chicken exports by ramming it through a key committee.
Under EU agricultural law, the difference in prices for farm products on the world market and prices in the European Union may be covered by export refunds. The refund amounts are set by the European Commission, which gradually reduced the export refunds for three categories of frozen chicken from 40 euro cents per kilogram to zero in 2013.
France and two poultry companies balked at the move, and petitioned the European General Court to overturn the commission’s decision. The lower court declined to do so in early 2016, noting the commission’s findings of high poultry prices, better-than-average profit margins for producers and increased worldwide demand for European chicken justified its decision that the EU poultry market was stable and the export refund should be eliminated.
But on Wednesday, the EU’s highest court sided with the poultry companies on a technicality: the commission didn’t give a committee of agricultural managers from member states the required 14 days to examine the plan to end the subsidy.
Instead, the Luxembourg-based high court said the commission foisted the plan on the committee during a meeting scheduled to examine it. By not providing the committee members with the plan in advance, the commission kept them from adequately debating the plan and suggesting amendments, the EU high court said.
The commission had argued the reason for the rush was the risk the plan would be leaked – an excuse the high court rejected.
“To accept that justification would amount to systematically dispensing the commission from compliance with the first time limit, since there is always a risk of leaks as the commission itself affirms,” the high court wrote in its 11-page ruling. “Similarly, to consider that an urgent situation suddenly arises each time an implementing regulation is to be adopted would amount to making the exception provided for routine.”
However, the court ordered the export refund to remain at zero until the commission can come up with a new plan, since annulling the regulation without something to take its place would adversely affect both the implementation of EU law and legal certainty, the court said.