JUDGMENT OF THE COURT (Grand Chamber) 12 September 2006 *

Transcription

1 JUDGMENT OF JOINED CASES C-123/04 AND C-124/04 JUDGMENT OF THE COURT (Grand Chamber) 12 September 2006 * In Joined Cases C-123/04 and C-124/04, REFERENCES for a preliminary ruling under Article 150 E A from the Oberlandesgericht Oldenburg (Germany), made by decisions of 4 February 2004, received at the Court on 8 March 2004, in the proceedings Industrias Nucleares do Brasil SA, Siemens AG v UBS AG (C-123/04), Texas Utilities Electric Corporation (C-124/04), * Language of the case: German. I

2 INDUSTRIAS NUCLEARES DO BRASIL AND SIEMENS THE COURT (Grand Chamber), composed of V. Skouris, President, P. Jann, C.W.A. Timmermans (Rapporteur), A. Rosas and K. Schiemann, Presidents of Chambers, S. von Bahr, J.N. Cunha Rodrigues, R. Silva de Lapuerta, K. Lenaerts, E. Juhász, G. Arestis, A. Borg Barthet and M. Ilešič, Judges, Advocate General: M. Poiares Maduro, Registrar: K. Sztranc-Stawiczek, Administrator, having regard to the written procedure and further to the hearing on 17 January 2006, after considering the observations submitted on behalf of: Industrias Nucleares do Brasil SA, by E. Wagner and J. Curschmann, Rechtsanwälte, Siemens AG, by R. Schultz-Süchting and L. Kröner, Rechtsanwälte, UBS AG, by U. Hornung, F. Bellen and D. Scharma, Rechtsanwälte, Texas Utilities Electric Corporation, by P.-S. Freiling, Rechtsanwalt, and C. Peterson, AL, I

3 JUDGMENT OF JOINED CASES C-123/04 AND C-124/04 the German Government, by C.-D. Quassowski and C. Schulze-Bahr, acting as Agents, and by W. Hertel, Rechtsanwalt, the French Government, by G. de Bergues, E. Puisais and S. Gasri, acting as Agents, the Netherlands Government, by S. Terstal and D.J.M. de Grave, acting as Agents, the Commission of the European Communities, par M. Patakia, A. Bouquet and B. Schima, acting as Agents, after hearing the Opinion of the Advocate General at the sitting on 6 April 2006, gives the following Judgment 1 The references for a preliminary ruling relate to the interpretation of Articles 57 EA, 73 EA, 75 EA, 86 EA, 87 EA, 196 EA and 197 EA. I

4 INDUSTRIAS NUCLEARES DO BRASIL AND SIEMENS 2 These references were made in two disputes between Industrias Nucleares do Brasil SA ('INB') and Siemens AG ('Siemens') and, in the first case, UBS AG ('UBS') and, in the second case, Texas Utilities Electric Corporation ('TUEC'), relating to the release of cylinders of enriched uranium. Legal framework 3 Article 2 EA, which forms part of Title I, headed 'The tasks of the Community' of the EAEC Treaty states: 'In order to perform its task, the Community shall, as provided in this Treaty: (d) ensure that all users in the Community receive a regular and equitable supply of ores and nuclear fuels; I

5 JUDGMENT OF JOINED CASES C-123/04 AND C-124/04 4 Article 57 EA, 73 EA and 75 EA form part of Chapter 6, headed 'Supplies', of Title II, itself headed 'Provisions for the encouragement of progress in the field of nuclear energy', of the EAEC Treaty ('Chapter 6'). 5 Article 73 EA states: 'Where an agreement or contract between a Member State, a person or an undertaking on the one hand, and a third State, an international organisation or a national of a third State on the other, provides inter alia for delivery of products which come within the province of the [Supply] Agency, the prior consent of the Commission shall be required for the conclusion or renewal of that agreement or contract, as far as delivery of the products is concerned.' 6 Article 75 EA provides: 'The provisions of this Chapter shall not apply to commitments relating to the processing, conversion or shaping of ores, source materials or special fissile materials and entered into: (a) by several persons or undertakings, where the material is to return to the original person or undertaking after being processed, converted or shaped; or I

6 INDUSTRIAS NUCLEARES DO BRASIL AND SIEMENS (b) by a person or undertaking and an international organisation or a national of a third State, where the material is processed, converted or shaped outside the Community and then returned to the original person or undertaking; or (c) by a person or undertaking and an international organisation or a national of a third State, where the material is processed, converted or shaped inside the Community and is then returned either to the original organisation or national or to any other consignee likewise outside the Community designated by such organisation or national. The persons and undertakings concerned shall, however, notify the [Supply] Agency of the existence of such commitments and, as soon as the contracts are signed, of the quantities of material involved in the movements. The Commission may prevent the commitments referred to in subparagraph (b) from being undertaken if it considers that the conversion or shaping cannot be carried out efficiently and safely and without the loss of material to the detriment of the Community. The materials to which such commitments relate shall be subject in the territories of the Member States to the safeguards laid down in Chapter 7. The provisions of Chapter 8 shall not, however, be applicable to special fissile materials covered by the commitments referred to in subparagraph (c).' 7 Chapter 7 of Title II of the EAEC Treaty ('Chapter 7') is headed 'Safeguards'. 8 Chapter 8 of Title II of the EAEC Treaty ('Chapter 8'), headed 'Property ownership', includes Articles 86 EA and 87 EA. I

7 9 Article 86 EA states: JUDGMENT OF JOINED CASES C-123/04 AND C-124/04 'Special fissile materials shall be the property of the Community. The Community's right of ownership shall extend to all special fissile materials which are produced or imported by a Member State, a person or an undertaking and are subject to the safeguards provided for in Chapter 7.' 10 Articles 196 EA and 197 EA form part of Title V, headed 'General provisions', of the EAEC Treaty. 11 Article 196 EA states: 'For the purposes of this Treaty, save as otherwise provided therein: (a) "person" means any natural person who pursues all or any of his activities in the territories of Member States within the field specified in the relevant chapter of this Treaty; (b) "undertaking" means any undertaking or institution which pursues all or any of its activities in the territories of Member States within the field specified in the relevant Chapter of this Treaty, whatever its public or private legal status.' I

8 12 Article 197 EA provides: INDUSTRIAS NUCLEARES DO BRASIL AND SIEMENS 'For the purposes of this Treaty: 1. "Special fissile materials" means plutonium 239; uranium 233; uranium enriched in uranium 235 or uranium 233; and any substance containing one or more of the foregoing isotopes and such other fissile materials as may be specified by the Council, acting by a qualified majority on a proposal from the Commission; the expression "special fissile materials" does not, however, include source materials; 2. "Uranium enriched in uranium 235 or uranium 233" means uranium containing uranium 235 or uranium 233 or both in an amount such that the abundance ratio of the sum of these isotopes to isotope 238 is greater than the ratio of isotope 235 to isotope 238 occurring in nature; 3. "Source materials" means uranium containing the mixture of isotopes occurring in nature; uranium whose content in uranium 235 is less than the normal; thorium; any of the foregoing in the form of metal, alloy, chemical compound or concentrate; any other substance containing one or more of the foregoing in such a concentration as shall be specified by the Council, acting by a qualified majority on a proposal from the Commission. I

9 JUDGMENT OF JOINED CASES C-123/04 AND C-124/04 The main proceedings and the questions referred 13 The orders for reference show that INB is a company having its seat in Brazil and that its objects include the acquisition of nuclear fuel for nuclear power stations in Brazil. 14 INB was in a permanent commercial relationship with Urenco Limited ('Urenco'), which has its seat in the United Kingdom. INB supplied Urenco with uranium ore and light-enriched uranium, which Urenco enriched on behalf of INB. The contract governing their commercial relationship provided that title to the uranium was to pass on its delivery. 15 In 1984, Urenco enriched uranium for INB. The uranium was returned to the latter, which transported it to Germany and stored it in premises at Hanau belonging to Siemens, under a storage contract entered into between INB and that company. The uranium was then stored in premises belonging to Advanced Nuclear Fuels GmbH, a subsidiary of Siemens, in Lingen (Germany). 16 As INB did not have any use at the time for the enriched uranium in question, it put the use of nuclear fuels out to tender (including the uranium enriched by Urenco in 1984 and stored in the premises belonging to Siemens). 17 Nuexco Exchange AG ('NEAG'), which has its seat in Olten (Switzerland), submitted a tender, following which a loan agreement on the use of uranium was entered into on 7 March I

10 INDUSTRIAS NUCLEARES DO BRASIL AND SIEMENS 18 Under that agreement, which was governed by Brazilian law, INB was to deliver to NEAG, in instalments, a total of five consignments of enriched uranium. In return, NEAG undertook to supply to INB six consignments of the same kind of enriched uranium at a later date and to pay a fee to INB in the meantime for the use of the uranium. 19 Thereafter, Nuexco Trading Corporation ('NTC'), with its seat in Denver (United States), acted on behalf of NEAG. NTC, which formed part of the same group of companies as NEAG, had full authority to represent the latter. 20 NEAG paid INB the amount due by way of loan fees under the agreement. In addition, the findings of the national court state that a handover by INB to NTC of a number of consignments of uranium took place by way of transfer to the Material Account of Siemens Power Corporation (all of the shares of which are owned by Siemens), and then by transfer to the Material Account of NTC. 21 At the end of summer 1994, NEAG was no longer able to perform its obligation to supply uranium to INB in return, as it was not in a position to pay for the uranium, which was to be supplied by a Russian company. 22 NTC became insolvent in February 1995 and NEAG in April INB brought proceedings before the Landgericht Osnabrück (Osnabrück Regional Court) (Germany) for the release by Siemens of a number of cylinders of enriched uranium held in the latters premises. INB claims to have title to the cylinders, whereas Siemens maintains that it is not required to release the cylinders 'at present'. I

11 JUDGMENT OF JOINED CASES C-123/04 AND C-124/04 24 UBS, a bank having its registered office in Switzerland, has issued an interpleader summons, claiming that it has acquired a right in security over 14 of those cylinders under an agreement entered into with NEAG in TUEC is a company which supplies certain parts of Texas (United States) with electricity and operates a nuclear power station for that purpose. It has also issued an interpleader summons, claiming that it has acquired title to 11 of the cylinders. TUEC refers in that regard to an agreement entered into on 30 June 1992 with NTC. Supplies by TUEC to NTC under that contract were also to entail the return of equivalent material, which was to take place by transfer between matter accounts. 26 By judgments of 17 March 2000, the Landgericht Osnabrück held that, as against Siemens, INB had no right to obtain the release of the cylinders of enriched uranium in question and ordered Siemens to deliver 14 cylinders of enriched uranium to UBS and 11 cylinders of enriched uranium to TUEC. 27 INB brought an appeal against those judgments before the Oberlandesgericht Oldenburg (Oldenburg Higher Regional Court). 28 That court states that it intends to dismiss INB's appeal as unfounded, unless the provisions of the EAEC Treaty preclude the acquisition by UBS of a right in security over the enriched uranium, which is the subject matter of the main proceedings in Case C-123/04, and by TUEC of property in the enriched uranium, which is the subject-matter of the main proceedings in Case C-124/04. I

12 INDUSTRIAS NUCLEARES DO BRASIL AND SIEMENS 29 The national court observes that each of the dispositions at issue, that is to say the transfer of title to the enriched uranium from Urenco to INB, the transfer of title in the uranium from INB to NEAG and the granting of the right in security over the uranium by NEAG to UBS and the transfer of title in the uranium from NEAG to TUEC, could be affected by the provisions of the EAEC Treaty. 30 It also notes that the parties to the main proceedings have not indicated that the authorities of the European Atomic Energy Community ('the Community') were given advance notice of the various transactions. 31 According to the national court, the Community Supply Agency ('the Agency') stated, by letter of 30 May 1995, that the question of civil-law title was not a matter for either the Commission or the Agency and that the dispute concerning title to the material had to be decided under civil law. 32 Those were the circumstances in which the Oberlandesgericht Oldenburg decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling. The questions are identical in both cases: '(1) Do the terms 'processing, conversion or shaping' in the first paragraph of Article 75 [EA] also encompass the enrichment of uranium? (2) Does an undertaking having its seat outside the territory of the... EAEC Treaty pursue all or any of its activities in the territory of the... Community within the I

13 JUDGMENT OF JOINED CASES C-123/04 AND C-124/04 meaning of Article 196(b) [EA] if it maintains with an undertaking having its seat in the territory of the... Community a commercial relationship for (a) the supply of raw material for the production of enriched uranium by, and the procurement of enriched uranium from, the undertaking having its seat in the territory of the Community; (b) the storage thereof with another undertaking having its seat in the territory of the Community? (3) (a) Does Article 75(c) [EA] require the material supplied for processing, conversion or shaping and the material subsequently returned to be identical in substance, apart from the physical changes associated with those processes? (b) Or is it sufficient for the processed material to be commensurate in terms of quantity and quality with the material supplied? (c) Is the application of Article 75(c) [EA] precluded where the material returned cannot be attributed to any material supplied by the consignee? I (d) Is the application of Article 75(c) [EA] precluded where the undertaking carrying out the process acquires title to the raw material on delivery and therefore has to transfer title to the enriched uranium back to the other contracting party on completion of the process?

14 INDUSTRIAS NUCLEARES DO BRASIL AND SIEMENS (4) (a) Is the application of Article 75 [EA] precluded if the persons or undertakings concerned do not fulfil their duty to notify the... Agency under the second paragraph of Article 75 [EA]? (b) Can breach of the duty to notify the... Agency under the second paragraph of Article 75 [EA] be remedied by the persons or undertakings concerned subsequently fulfilling their duty to notify or by the... Agency subsequently becoming cognisant in some other way? (5) (a) Is an agreement or contract within the meaning of Article 73 [EA] invalid if the contracting parties do not obtain the prior consent of the... Commission required thereunder? (b) If so, can the invalidity of the transaction be remedied by the persons or undertakings concerned subsequently obtaining such consent or by the institutions of the Community failing to take action after becoming cognisant in some other way? (6) (a) Is the disposal of materials within the meaning of Article 57(1) [EA] prohibited if the producer does not fulfil his obligation to make an offer to the... Agency under the second sentence of Article 57(2) [EA]? (b) Can breach of the duty to offer materials to the... Agency under the second sentence of Article 57(2) [EA] be remedied by the producer subsequently fulfilling his duty to make an offer or by the... Agency subsequently becoming cognisant in some other way and not exercising its right of option? I

15 JUDGMENT OF JOINED CASES C-123/04 AND C-124/04 (7) Does the concept of "production" in Article 86 [EA] also encompass the enrichment of uranium? (8) Are uranium and light-enriched uranium "source materials" within the meaning of the last phrase of Article 197(1) [EA]? (9) (a) Can civil-law title under Paragraph 903 of the Bürgerliches Gesetzbuch (German Civil Code) be acquired and transferred in respect of materials that have become the property of the... Community under the first sentence of Article 86 [EA]? (b) Does the unlimited right of use and consumption afforded to holders of rights under Article 87 [EA] exist as a property or quasi-property interest sui generis alongside rights in rem under the [German Civil Code]? (10) Does an undertaking pursue any of its activities in the territories of the Member States of the Euratom Community within the meaning of Article 196(b) [EA] if it acquires or disposes of enriched uranium stored there? (11) Does Article 73 [EA] also apply mutatis mutandis to agreements concerning enriched uranium stored within the territory of the Community where all of the parties are nationals of third States?' I

16 INDUSTRIAS NUCLEARES DO BRASIL AND SIEMENS 33 By order of the President of the Court of 30 June 2004, Cases C-123/04 and C-124/04 were joined for the purposes of the written and oral procedure and the judgment. The questions Question 1 34 By Question 1, the national court asks whether the first paragraph of Article 75 E A is to be interpreted as meaning that the terms 'processing', 'conversion' and 'shaping' used in that provision also encompass the enrichment of uranium. 35 It should be pointed out first of all that the first paragraph of Article 75 E A provides that 'the provisions of [Chapter 6] shall not apply to commitments relating to the processing, conversion or shaping of ores, source materials or special fissile materials' entered into in one of the ways described in subparagraphs (a) to (c) of that provision. 36 In the second place, as is clear from the observations submitted to the Court, uranium enrichment consists in the separation of isotopes, either by gaseous diffusion or by centrifuge, in order to raise the uranium 235 content and so to render the uranium suitable for use in a reactor. I

17 JUDGMENT OF JOINED CASES C-123/04 AND C-124/04 37 As Siemens, UBS, TUEC and the Governments which submitted observations to the Court rightly point out, that separation, which it is not suggested affects the overall identity of the material, constitutes a conversion within the meaning of Article 75 EA. 38 First, its result is that the uranium is returned in a different form and, therefore, giving the ordinary meaning to the term, converted. Secondly, as the Advocate General mentions at point 53 of his Opinion, the terms 'processing', 'conversion' and 'shaping' are generic terms. Seen in isolation, they do not lead to the conclusion that certain types of processing, conversion or shaping of minerals, untreated substances or special fissile materials are outside the scope of Article 75 EA, for example by reason of particular technical characteristics peculiar to such processing, conversion or shaping or the value added by them. 39 That analysis is confirmed by the general scheme and purpose of Chapter 6, of which Article 75 EA forms part. That chapter implements the general obligation imposed on the Community institutions by Article 2(d) EA to ensure that all users in the Community receive a regular and equitable supply of ores and nuclear fuels (Case 7/71 Commission v France [1971] ECR 1003, paragraph 22). The effect of Article 75 EA is to remove substances which are the subject of the contract work operations referred to in that provision from the ambit of the provisions relating to the supply system (see Ruling 1/78 [1978] ECR 2151, paragraph 16). 40 It follows that Article 75 EA concerns situations which are deemed not to affect, or not sufficiently to affect, the regular and equitable supply to all users in the Community of ores and nuclear fuels, in order to justify the full application of the system laid down under Chapter 6. That applies to a process, such as that referred to in Article 75(c) EA which involves the enrichment in the Community of uranium I

18 INDUSTRIAS NUCLEARES DO BRASIL AND SIEMENS from a third State which is to be returned to a third State. Such a process is inherently neutral as regards the supply of uranium to users established in the Community. 41 That interpretation is not undermined by the Commission's argument that contracts negotiated on the oligopolistic market for uranium enrichment have potentially significant effects on the security of the long-term supply of the Community and on the equal treatment of users. Even if that view were to be accepted, such reasoning implies that the interpretation of Article 75 EA should depend on market conditions. Such an interpretation of the provisions concerning the supply rules cannot be accepted (see, to that effect, Commission v France, paragraph 43). 42 Nor can INB's argument be accepted that such an interpretation of the terms 'processing','conversion' and 'shaping' in the first paragraph of Article 75 EA renders the concept of the production of special fissile materials, within the meaning of the second paragraph of Article 86 EA devoid of meaning. Neither of those provisions shows that those terms and that concept are mutually exclusive. Furthermore, the connection between Article 75 EA, on the one hand, and Article 86 EA, which forms part of Chapter 8, on the other, is expressly governed by the third paragraph of Article 75 EA, which makes no reference either to those terms or that concept. 43 Similarly, contrary to what the Commission contends, Article 197 EA, which merely defines combustibles in various successive states, does not preclude enriched uranium being classified as a substance which results from a process of conversion. I

19 JUDGMENT OF JOINED CASES C-123/04 AND C-124/04 44 As regards Case C-161/97 P Kernkraftwerke Lippe-Ems v Commission [1999] ECR I-2057 and Joined Cases T-149/94 and T-181/94 Kernkraftwerke Lippe-Ems v Commission [1997] ECR II-161, to which INB and the Commission refer in support of their argument that commitments entered into for the enrichment of uranium do not fall within Article 75 EA, suffice it to hold that, as is clear from paragraph 2 of the latter judgment, that case concerned, not a contract for processing, conversion or shaping within the meaning of that provision, but a contract for the supply of uranium. 45 Lastly, it should be added, that, as the Advocate General states in point 57 of his Opinion, the fact that uranium enrichment constitutes a process, conversion or shaping within the meaning of Article 75 EA does not mean that such a process is free of all forms of control. Under the second paragraph of Article 75 EA, the obligation, as regards the commitments to which that provision applies, to notify the Agency and the Commission may preclude the performance of the commitments referred to in Article 75(b) EA. Furthermore, it is clear from the third paragraph of Article 75 EA that the materials which may form the subject-matter of the commitments referred to in that article are, in any event, subject within the territories of the Member States to the safeguards set out in Chapter The answer to Question 1 must therefore be that the first paragraph of Article 75 EA is to be interpreted as meaning that the terms 'processing', 'conversion' and 'shaping' in that provision also encompass the enrichment of uranium. Question 2 47 By Question 2, the national court essentially asks whether Article 196(b) EA is to be interpreted as meaning that an undertaking having its seat outside the territories of the Member States pursues 'all or any of its activities', within the meaning of that I

20 INDUSTRIAS NUCLEARES DO BRASIL AND SIEMENS provision, in those territories if it maintains with an undertaking having its seat in those territories a commercial relationship either for the supply of raw material for the production of enriched uranium and the procurement of enriched uranium or for the storage of enriched uranium. 48 The orders for reference show that, by that question, the national court wishes to know whether INB may be classified as an 'undertaking' for the purposes of Article 196(b) EA by reason of its commercial relationships with, first, Urenco, as regards uranium enrichment and, secondly, Siemens, as regards the storage of enriched uranium. The purpose of that question is to allow that court to determine whether Article 75(a) EA, which concerns, inter alia, commitments entered into between undertakings or Article 75(c) EA, which concerns, inter alia, commitments entered into between undertakings and nationals of a third State, apply to the commitments entered into by INB. 49 An 'undertaking' is defined by Article 196 EA as meaning any undertaking or institution which pursues all or any of its activities in the territories of Member States within the field specified in the relevant Chapter of the EAEC Treaty. 50 Unless Article 75(c) EA is to be rendered largely devoid of purpose, that definition falls to be interpreted as meaning that the undertaking must pursue all or any of its own activities in the nuclear field in the territories of the Member States. Were, by reason only of a commercial relationship with an undertaking established in the territory of the Member States, a national established in a third State to pursue his activities in those territories and thus to become an undertaking within the meaning of Article 196(b) EA, there would no longer be a need for Article 75(c) EA to lay down specific rules governing commitments entered into between an undertaking and a national of a third State, since that situation would already be regulated by Article 75(a) EA. I

21 JUDGMENT OF JOINED CASES C-123/04 AND C-124/04 51 The answer to Question 2 must therefore be that Article 196(b) EA is to be interpreted as meaning that an undertaking having its seat outside the territories of the Member States does not pursue, within the meaning of that provision, all or any of its activities in those territories if it maintains with an undertaking having its seat in those territories a commercial relationship either for the supply of raw material for the production of enriched uranium and the procurement of enriched uranium or for the storage of that enriched uranium. Question 3 52 By Question 3, the national court asks whether, for the purposes of Article 75(c) EA, the material supplied for processing, conversion or shaping must be identical to the material subsequently returned or whether it is sufficient for the processed material to be commensurate in terms of quantity and quality with the material supplied, although it may be impossible, in some cases, to attribute the material returned to the material supplied. It also asks whether the application of Article 75(c) EA is precluded where the undertaking carrying out the process acquires title to the raw material on delivery and therefore has to transfer title to the enriched uranium back to the other contracting party on completion of the process. 53 As regards the first part of that question, the observations submitted to the Court show that it is impossible, in practice, to determine whether material supplied for enrichment and material subsequently returned is identical. Moreover, as the Advocate General states at point 66 of his Opinion, the principle of fungibility, which means that nuclear raw materials are deemed to be interchangeable, is I

22 INDUSTRIAS NUCLEARES DO BRASIL AND SIEMENS accepted in international practice and recognised in the external relations of the Community. 54 Accordingly, in order to provide a satisfactory interpretation of Article 75(c) EA, it cannot be held that the material supplied for processing, conversion or shaping must be identical to the material subsequently returned. Furthermore, such an interpretation complies with the general scheme and purpose of Chapter 6. Where the material delivered is commensurate in terms of quality and quantity to that supplied, the supply of uranium to users established in the Community is not affected. 55 As regards the second part of the question, it must be held, as UBS, TUEC and the Governments which submitted observations rightly state, Article 75(c) EA applies where the material in question 'is processed, converted or shaped inside the Community and is then returned' to a recipient outside the Community, without requiring that those processes adopt any particular legal form. The provision thus also applies where those operations involve title being transferred twice, which, moreover, does not affect the supply of uranium to users situated in the Community. 56 The answer to Question 3 must therefore be that Article 75(c) EA is to be interpreted as meaning that the material supplied for treatment, conversion or shaping need not be identical to the material subsequently returned and that it is sufficient for the processed material to be commensurate in terms of quality and quantity with the material supplied, although it may be impossible, in some cases, to attribute the material returned to the material supplied. In addition, the provision is to be interpreted as meaning that the application of Article 75(c) EA is not precluded where the undertaking carrying out the process acquires title to the raw material on delivery and therefore has to transfer title to the enriched uranium back to the other contracting party on completion of the process. I-7911

23 JUDGMENT OF JOINED CASES C-123/04 AND C-124/04 Question 4 57 By Question 4, the national court wishes to know what the consequences are where there is a failure to notify the Agency under the second paragraph of Article 75 EA, and what opportunities exist for remedying such a failure. It states that, in so far as it has been possible for it to verify the position in the light of the submissions of the parties to the main proceedings, notification of the contract entered into between INB and Urenco for the purposes of the second paragraph of Article 75 EA did not take place. 58 As the Advocate General notes at point 69 of his Opinion, the Commission confirmed at the hearing that such notification did indeed take place. It follows that a reply to Question 4 is not necessary in order to resolve the legal issues in the main proceedings. Questions 5 to 9 59 By Questions 5 to 9, the national court asks the Court to interpret Articles 57 EA, 73 EA, 86 EA, 87 EA and 197(1) EA, again in the context of commitments entered into by INB relating to uranium enrichment. 60 However, it follows from the answers given to Questions 1 to 3 that a reply to those questions is not necessary to resolve the legal issues in the main proceedings. I

24 INDUSTRIAS NUCLEARES DO BRASIL AND SIEMENS 61 Articles 57 EA, 73 EA, 86 EA and 87 EA form part of Chapters 6 and 8, respectively. It is clear from the first and third paragraphs of Article 75 EA that the provisions of those chapters do not apply to commitments which are governed by Article 75(c) EA. As regards Article 197(1) EA, which is the subject of Question 8, the orders for reference show that that question seeks only to know whether Article 86 EA applies to the main proceedings. 62 It follows that there is no need to answer these questions. Question By Question 10, the national court asks whether an undertaking 'pursues any of its activities' in the territories of the Member States for the purposes of Article 196(b) EA when it acquires or disposes of enriched uranium stored there. 64 The orders for reference show that, by that question, that court wishes to know whether INB and NEAG may be classified as undertakings within the meaning of Article 196(b) EA by reason of being the acquirer or disposer of enriched uranium stored in the territories of the Member States. 65 It follows from paragraph 50 of this judgment that an undertaking is an undertaking within the meaning of Article 196(b) EA only where it pursues all or any of its own I

25 JUDGMENT OF JOINED CASES C-123/04 AND C-124/04 activities in the nuclear field in the territories of the Member States. An undertaking which does no more than acquire or dispose of enriched uranium stored in the territories of the Member States does not fall within that category. 66 The answer to Question 10 must therefore be that Article 196(b) EA is to be interpreted as meaning that an undertaking does not pursue all or any of its activities in the territories of the Member States within the meaning of that provision if it acquires or disposes of enriched uranium stored there. Question By Question 11, which concerns the contracts entered into between UBS and NEAG and between TUEC and NTC, the national court asks whether Article 73 EA applies to agreements concerning enriched uranium stored within the territory of the Community where all of the parties to the contract are nationals of third States. 68 Article 73 EA provides that it applies to agreements and to contracts between a Member State, a person or an undertaking, on the one hand, and a third State, an international organisation or a national of a third State, on the other, which provide inter alia for the delivery of products which come within the province of the Agency. Accordingly, that provision does not apply to agreements between nationals of third States, which, moreover, do not affect the objective of ensuring the security of supplies to the Community. 69 The answer to Question 11 must therefore be that Article 73 EA is to be interpreted as meaning that it does not apply to agreements concerning enriched uranium I

26 INDUSTRIAS NUCLEARES DO BRASIL AND SIEMENS stored within the Community where all the parties to the agreement are nationals of third States. Costs 70 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable. On those grounds, the Court (Grand Chamber) hereby rules: 1. The first paragraph of Article 75 EA is to be interpreted as meaning that the terms 'processing', 'conversion' and 'shaping' in that provision also encompass uranium enrichment. 2. Article 196(b) E A is to be interpreted as meaning that an undertaking having its seat outside the territories of the Member States does not pursue, within the meaning of that provision, all or any of its activities in those territories if it maintains with an undertaking having its seat in those territories a commercial relationship either for the supply of raw material I

27 JUDGMENT OF JOINED CASES C-123/04 AND C-124/04 for the production of enriched uranium and the procurement of enriched uranium or for the storage of that enriched uranium. 3. Article 75(c) EA is to be interpreted as meaning that the material supplied for treatment, conversion or shaping need not be identical to the material subsequently returned and that it is sufficient for the processed material to be commensurate in terms of quality and quantity with the material supplied, although it may be impossible, in some cases, to attribute the material returned to the material supplied. In addition, the provision is to be interpreted as meaning that the application of Article 75(c) EA is not precluded where the undertaking carrying out the process acquires title to the raw material on delivery and therefore has to transfer title to the enriched uranium back to the other contracting party on completion of the process. 4. Article 196(b) EA is to be interpreted as meaning that an undertaking does not pursue all or any of its activities in the territories of the Member States within the meaning of that provision if it acquires or disposes of enriched uranium stored there. 5. Article 73 EA is to be interpreted as meaning that it does not apply to agreements concerning enriched uranium stored within the territory of the European Atomic Energy Community where all the parties to the agreement are nationals of third States. [Signatures] I