Select Committee on European Communities Thirteenth Report


APPENDIX 3

DRAFT COUNCIL DECISION AMENDING DECISION 88/591/ECSC, EEC, EURATOM ESTABLISHING A COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES

EXPLANATORY NOTE

  In accordance with Article 3 of Council Decision 88/591/ECSC, EEC, Euratom of 24 October 1988 establishing a Court of First Instance of the European Communities, as amended by Council Decision 93/350/Euratom, ECSC, EEC of 8 June 1993 and Council Decision 94/149/ECSC, EC of 7 March 1994, the Court of First Instance is to exercise at first instance the jurisdiction conferred on the Court of Justice, inter alia, in actions for annulment, for failure to act and for damages brought by natural or legal persons pursuant to the EC, ECSC and Euratom Treaties. Jurisdiction in respect of these same actions, where brought by Member States or by institutions, is vested in the Court of Justice.

  This allocation of jurisdiction originates in the former wording of Articles 168a of the EEC Treaty, 32d of the ECSC Treaty and 140a of the Euratom Treaty, under which actions brought by natural or legal persons only could be assigned to the Court of First Instance.

  In the meantime, amendments made to these provisions by the Maastricht Treaty made it possible also to give the Court of First Instance the task of hearing and determining certain classes of direct actions brought by the Member States or the institutions.

  A number of considerations justify the present proposal to use this possibility of enlarging the jurisdiction of the Court of First Instance.

  First, the present allocation of jurisdiction can, in certain cases, lead to actions for annulment of the same act being brought simultaneously before the Court of Justice and the Court of First Instance ("parallel actions"). A decision of the Commission adopted in the field of State aid may thus be challenged simultaneously before the Court of First Instance by the undertaking concerned and before the Court of Justice by the Member State to which the decision is addressed. Situations in which Member States and individuals are prompted to bring actions against the same act may also arise in other fields, such as the competition law applicable to undertakings, transport policy, trade protection measures and the management of certain Community financial operations such as the structural funds.

  In such situations, and more generally where the Court of Justice and the Court of First Instance are seised simultaneously of related cases, there is a risk of contradictory decisions being given. In order to reduce this risk, and with a view to procedural economy, the third paragraph of Article 47 of the EC Statute of the Court of Justice and the corresponding provisions of the ECSC and Euratom Statutes provide that the Court of Justice or the Court of First Instance may take three types of measure. None of these, however, is entirely satisfactory from the point of view of the efficient administration of justice.

  If the Court of First Instance stays proceedings, the private applicant, who cannot intervene in the proceedings before the Court of Justice, is deprived of the right to be heard before the Court of Justice gives judgment. On the other hand, where the Court of Justice stays proceedings, the Court of First Instance will examine and in its judgment find the facts that are relevant to review of the validity of the contested act. These findings cannot be challenged on appeal, and the Court of Justice will thereafter have to verify the same facts in the proceedings before it. Such a situation does not accord with the requirements of procedural economy. The risk of the two Courts arriving at differing assessments cannot be excluded. Finally, where the Court of First Instance declines jurisdiction and refers the case to the Court of Justice, private applicants lose the benefit of having their case heard at first and second instance, and improvement in the judicial protection of individual interests, one of the objectives of the creation of the Court of First Instance, is thus set aside.

  Second, in certain classes of case at present falling within its jurisdiction the Court of Justice frequently has to undertake a close examination of complex facts, a task which is one of the reasons for which the Court of First Instance was created. This occurs primarily in actions for annulment of decisions of the Community institutions applying general rules to specific cases (Community financing, antidumping, etc.)

  The assignment of those classes of case to the Court of First Instance would accord with one of the purposes of creating that Court, namely, to maintain the quality and effectiveness of judicial review in the Community legal order, by enabling the Court of Justice to concentrate on its fundamental task of ensuring the uniform interpretation of Community law.

  Third and finally, it does not seem appropriate for disputes to remain within the jurisdiction of the Court of Justice which, while falling within the jurisdiction of the Community courts, are essentially concerned with the application of rules of national law.

  Taken together, all these considerations make it possible to identify certain classes of action which it would be appropriate to transfer to the Court of First Instance. It is proposed to transfer jurisdiction solely[25] for certain actions for annulment brought by Member States. Disputes between institutions and actions against Member States for failure to fulfil Treaty obligations are not in issue, since as a general rule they are institutional in character. Actions for failure to act brought by Member States are infrequent and have not so far given rise to parallel actions. This justifies their exclusion from the proposed transfer.

  As regards actions for annulment brought by Member States, there must be clear and simple criteria for allocating jurisdiction between the two Courts. It does not seem possible to establish a general criterion for delineating the whole range of actions where transfer could be justified. Such a general criterion could give rise to problems of interpretation, which would be incompatible with legal certainty and the need to determine the competent court without difficulty. So it seems more appropriate to take a pragmatic approach which confines itself to precisely identified categories, with respect to which one or more of the three considerations set out above appear particularly relevant.

  Accordingly, it is proposed to transfer to the Court of First Instance jurisdiction in actions for annulment of acts falling within certain fields of Community law and to limit the transfer, within these fields, to actions against certain categories of act, excluding in particular actions against normative acts of general application. Criteria for identifying, in the different fields covered by the proposal, the classes of action where transfer of jurisdiction to the Court of First Instance would be appropriate are: the legal basis on which an act was adopted, the institution that adopted it and the form it takes. These criteria have the advantage of clarity and of making it possible to identify at once which court has jurisdiction in an action brought against the act in question.

  The fields of Community law which have been selected are those relating to the common transport policy, the competition rules applicable to undertakings, State aid, trade protection measures and, finally, the field relating to the funds, financial instruments and action programmes which provide for the grant of Community financial support.

  First, it is proposed to transfer jurisdiction to the Court of First Instance in actions brought by Member States against Commission decisions on the clearance of accounts with respect to expenditure financed by the European Agricultural Guidance and Guarantee Fund, "Guarantee" Section. These actions concern the application of Community law to specific situations, in a field where the applicable legislation is technical, and they often call for the appraisal of complex questions of fact, falling within the ambit of the task specifically entrusted by the Community legislature to the Court of First Instance.

  The second class of action is in the field of transport. The legislation adopted by the Council[26] in the context of the establishment of a common transport policy empowers the Commission and the Council to adopt decisions inter alia for implementing that legislation and for taking action in the event of disturbances. Parallel actions have already been brought by Member States and individuals against measures in this field, and it is proposed to transfer to the Court of First Instance jurisdiction in actions brought by Member States against decisions adopted on the basis of such acts.

  As regards the competition rules applicable to undertakings, transfer of jurisdiction is proposed in actions by Member States against decisions applying the competition rules and addressed to undertakings. Actions by Member States and actions by individuals against such decisions raise similar questions of fact and law for which examination by the Court of First Instance is appropriate. "Parallel" actions are possible particularly in the field of merger control. In contrast, actions by Member States against decisions addressed to them, which are of a different nature and more liable to raise institutional questions, are not included in the proposal.

  Actions against Commission decisions in the field of State aid are the class of action which is potentially the most affected by the present fragmentation of jurisdiction, depending on the status of the applicant, in respect of actions brought against the same act. The proposal is directed to actions against decisions adopted in the context of the procedure for examining aid under Article 93(2) and (3) of the EC Treaty, including decisions on aid based on a decision under Article 92(3)(e) of the Treaty. In addition, the proposal takes account of the possibility of the adoption by the Council, on the basis of Article 94 of the EC Treaty, of a basic regulation for the application of Article 93 of the Treaty. The proposal also covers cases involving implementation of the "codes" adopted on the basis of Article 95 of the ECSC Treaty.

  As regards the common commercial policy, it is proposed to transfer jurisdiction to the Court of First Instance in actions by the Member States relating to trade protection measures against imports which are the subject of dumping or subsidies or to measures which may be adopted pursuant to Council RegulationNo 3286/94[27]. In contrast, actions relating to other possible trade protection measures, such as Community safeguard or surveillance measures within framework of the common rules for imports[28], or measures concerning the management of quotas in respect of products subject to quantitative restrictions in the context of the adoption of such safeguard measures[29] are not covered by the proposal. Such measures also exist outside the sphere of the common commercial policy, for example within the framework of the common organisations of the agricultural markets. Jurisdiction should be identical in respect of all measures of this type. However, competence with respect to the implementation of these rules is shared between the Community and the national authorities. Actions by individuals challenging the validity of acts adopted by the Community institutions therefore fall most frequently within the jurisdiction of the national courts and of the Court of Justice on a reference for a preliminary ruling on validity, rather than that of the Court of First Instance. That being so, the concern to avoid dispersal of jurisdiction in "parallel" or related cases militates in favour of maintaining the jurisdiction of the Court of Justice in respect of actions by Member States relating to these regimes.

  It is also proposed to transfer to the Court of First Instance jurisdiction in actions by Member States against decisions adopted on the basis of acts creating funds, financial instruments or action programmes providing for the grant of Community financial support. These measures are implemented essentially by means of decisions concerning specific plans and projects and the appraisal of the validity of such decisions often calls for an examination of complex facts. The most important class of action to which this proposal is directed is that of actions against decisions concerning the management of funds and other financial instruments with a structural objective, referred to in Title XIV of Part Three of the EC Treaty. However, acts authorising the grant of financial support have been adopted in numerous other fields of Community activity on the basis of various provisions of the EC Treaty, including Article 235. Although the detailed rules for implementing this financial support may vary from one body of legislation to another, the mechanisms provided in each case are none the less similar in many instances and the implementing decisions are often likely to be the subject of actions brought both by individuals and by Member States.

  Finally, it is proposed to extend the jurisdiction of the Court of First Instance to all actions based on an arbitration clause, including those brought by an institutional applicant. Under Article 3 of Council Decision 88/591, as amended, the Court of First Instance is to exercise the jurisdiction conferred on the Court of Justice in respect of actions brought under an arbitration clause where those actions are brought by natural or legal persons. Jurisdiction in such actions is vested in the Court of Justice where they are brought by an institution. Under this allocation of jurisdiction, disputes arising from the performance of one and the same contract fall within the jurisdiction of the Court of Justice and the Court of First Instance according to the status of the applicant. This situation is unsatisfactory from the point of view of efficient administration of justice.

  Rather than simply add provisions concerning the new spheres of jurisdiction of the Court of First Instance to the existing text of Article 3 of Council Decision 88/591, it is proposed to restructure this article in order to make it as clear as possible and to avoid repetitions.

  The proposed text regroups in four subdivisions the classes of action in respect of which a transfer of jurisdiction to the Court of First Instance is envisaged.

  The first of these subdivisions covers jurisdiction in respect of disputes between the Communities and their servants (at present Article 3(a)).

  The second encompasses the heads of jurisdiction in respect of actions brought by natural and legal persons. Points (a) to (c) correspond to points (b) to (d) of the present Article 3 but eliminate the reference to Articles 42 of the ECSC Treaty, 181 of the EEC Treaty and 153 of the Euratom Treaty relating to arbitration clauses (see below). Point (d) is concerned with the jurisdiction of the Court of First Instance in actions in the field of intellectual property brought pursuant to Article 63 of Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark and Articles 73 or 74 of Council Regulation (EC) No 2100/94 of 27 July 1994 on plant variety rights. It also concerns, as is already the situation under the existing legislation, the Community bodies which may yet be created by a Community act of secondary law. It is however necessary to reserve to the Community legislature the possibility, as is already the case under the legislation at present in force, of providing that in the event of the creation of a new body the Court of Justice rather than the Court of First Instance is to have jurisdiction.

  The third subdivision encompasses the newly proposed heads of jurisdiction in respect of actions brought by Member States.

  The fourth is concerned with jurisdiction in actions brought pursuant to an arbitration clause. The restructuring of the text covers all these actions, since the distinction between actions brought by natural and legal persons and those brought by institutions which results from the old version of Articles 32d of the ECSC Treaty, 168a of the EEC Treaty and 140 of the Euratom Treaty becomes no longer necessary.

  Articles 2, 3 and 4 of the draft decision concern the entry into force and the applicability ratione temporis of the new allocation of jursidiction between the Court of Justice and the Court of First Instance.

  As regards actions brought pursuant to an arbitration clause, the second paragraph of Article 3 of Council Decision 93/350 had limited the transfer of jurisdiction in respect of actions brought by individuals to those brought on the basis of an arbitration clause contained in a contract concluded after the date on which that decision entered into force. There does not, however, appear to be any justification for attaching a similar restriction to actions brought by institutions pursuant to an arbitration clause. Since the Court of First Instance already has jurisdiction in actions by individuals which are based on such clauses, jurisdiction in actions by institutions may be entrusted to it as from the entry into force of the decision.

  The immediate effect of the transfer of jurisdiction respects the intentions of the parties to the contract. In including such a clause, the parties choose to confer on the Community courts rather than the national courts jurisdiction in respect of disputes arising out of their contract. This freedom of choice is accorded to them by Article 181 of the EC Treaty and the corresponding articles of the ECSC and Euratom Treaties. In contrast, according to those provisions, the parties have no choice between the jurisdiction of the Court of Justice and that of the Court of First Instance. The competent court is determined not by the intention of the parties but, at present, on the one hand, by the allocation of jurisdiction as prescribed in the old version of Article 168a of the EC Treaty and the corresponding articles of the ECSC and Euratom Treaties and, on the other hand, by the status of the applicant, which is not foreseeable at the time when the contract containing the arbitration clause is concluded. In reality, the parties to a contract containing an arbitration clause have already accepted that their disputes may be heard and determined by the Court of First Instance.

  It is, in addition, necessary to put an end to the fragmentation, imposed by the old version of the Treaties, of jurisdiction depending on the status of the applicant in respect of actions brought on the basis of the same contract. A solution similar to that adopted in Decision 93/350 would mean that, for many years, disputes arising out of the same contract would fall within the jurisdiction of different courts depending on the status of the applicant, which is manifestly contrary to the requirements of efficient administration of justice. The immediate entry into force of the transfer of actions brought by institutions would enable this problem to be resolved in part. In order to resolve it completely, it is however necessary also to transfer to the Court of First Instance jurisdiction in respect of actions brought by individuals on the basis of "old" arbitration clauses.

  For this reason, it is proposed, in Article 2 of the draft decision, to repeal the second paragraph of Article 3 of Council Decision 93/350.

  As regards cases pending before the Court of Justice, Article 4 of the draft decision provides for the referral to the Court of First Instance of those cases falling within the jurisdiction transferred in which, on the date of entry into force of the amendments, the written procedure is not yet closed. This solution has been preferred to that set out in Article 14 of Decision 88/591 and Article 4 of Decision 93/50, that is to say the referral back to the Court of First Instance of the cases in which the preliminary report has not yet been presented on the date in question, because it is both more objective and, for the parties, more transparent. Since the preliminary report is an internal document, the date of its presentation is not known to the parties. It is proposed to add a provision providing for such referral also in the case of proceedings brought by Member States which have been stayed because a related case is pending before the Court of First Instance.

  Finally, it is proposed to adapt the aforementioned decision in a number for formal respects to the amendments made by the Treaty on European Union.

  The Treaty on European Union made a number of amendments which should be taken into account in the drafting of Council Decision 88/591. The amendments in question are concerned with the formal title of the EC Treaty, with Article 173 of the EC Treaty and Article 146 of the Euratom Treaty and also with Article 6 of the Treaty establishing a single Council and a single Commission of the European Communities, repealed by Article P of the Treaty on European Union.

  Such is the object of Article 1(1) and of certain drafting amendments set out in Article 1(2) of the present draft decision.

COUNCIL DECISION OF ........................ AMENDING DECISION 88/591 ECSC, EEC, EURATOM, ESTABLISHING A COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES

  The Council of the European Union,

  Having regard to the Treaty establishing the European Community, and in particular Article 168a thereof,

  Having regard to the Treaty establishing the European Coal and Steel Community, and in particular Article 32d thereof,

  Having regard to the Treaty establishing the European Atomic Energy Community, and in particular Article 140a thereof,

  Having regard to the request of the Court of Justice,

  Having regard to the opinion of the Commission,

  Having regard to the opinion of the European Parliament,

  Whereas in certain fields falling within the scope both of the EC Treaty and the ECSC Treaty the same act may become the subject of a number of actions for annulment, brought by the Member States, on the one hand, and by natural or legal persons, on the other hand;

  Whereas, in such cases, the action brought by a Member State falls within the jurisdiction of the Court of Justice while the action brought by a natural or legal person falls within the jurisdiction of the Court of First Instance by virtue of Article 3 of Council Decision 88/591/ECSC, EEC, Euratom of 24 October 1988, establishing a Court of First Instance of the European Communities, as amended by Council Decisions 93/350/Euratom, ECSC, EEC[30] and 94/149/ECSC, EC[31];

  Whereas such a situation creates, with regard to the requirements of efficient administration of justice, problems to which the third paragraph of Article 47 of the (EC and ECSC) Statutes of the Court of Justice does not provide a satisfactory solution;

  Whereas, as with actions in which the same relief is sought and which are brought by natural and legal persons, such actions brought by Member States generally call for close examination of complex facts and involve review of the administrative activity of the institutions;

  Whereas actions brought by the Member States against Commission decisions relating to the clearance of accounts with respect to the expenditure financed by the European Agricultural Guidance and Guarantee Fund, "Guarantee" Section, also call for close examination of complex facts and involve the application of provisions of Community law to specific cases;

  Whereas the extension of the system of two courts and, as a consequence, of the jurisdiction of the Court of First Instance to actions brought by Member States in the fields concerned corresponds to the objectives pursued by the establishment of the Court of First Instance as specified in the preamble to Council Decision 88/591/ECSC, EEC, Euratom, and whereas Article 168a of the EC Treaty and Article 32d of the ECSC Treaty, in the version resulting from the Treaty on European Union, enables jurisdiction to hear and determine those actions to be conferred on the Court of First Instance;

  Whereas, as matters now stand, the Court of First Instance has jurisdiction in actions brought pursuant to an arbitration clause within the meaning of Article 42 of the ECSC Treaty, Article 181 of the EC Treaty and Article 153 of the Eurotom Treaty only where those actions are brought by natural or legal persons, and whereas the fact that the disputes which may arise out of one and the same contract fall, in part, within the jurisdiction of the Court of Justice and, for the rest, within the jurisdiction of the Court of First Instance is liable to create difficulties with respect to the requirements of efficient administration of justice;

  Whereas Article 168a of the EC Treaty, Article 32d of the ECSC Treaty and Article 140a of the Euratom Treaty now make it possible to confer on the Court of First Instance, subject to an appeal on points of law only to the Court of Justice, jurisdiction to hear and determine such actions where they are brought by institutions;

  Whereas, furthermore, account should be taken, in the drafting of Decision 88/591/ECSC, EEC, Euratom, of certain amendments made by the Treaty on European Union and concerning the formal title of the EC Treaty and the numbering of the various paragraphs of Article 173 of the EC Treaty and Article 146 of the Euratom Treaty and also of the repeal, by Article P of the Treaty on European Union, of Article 6 of the Treaty establishing a single Council and a single Commission of the European Communities;

  HAS DECIDED AS FOLLOWS:

Article 1

  Decision 88/591/ECSC, EEC, Euratom shall be amended as follows:

  1.  (a)  Throughout the text of the Decision the words "EEC Treaty" shall be replaced by the words"EC Treaty";

    (b)  In Article 2(5) the words "Article 6 of the Treaty establishing a single Council and a single Commission of the European Communities" shall be replaced by the words "Article 29 of the ECSC Treaty, Article 154 of the EC Treaty and Article 123 of the Euratom Treaty";

  2.  Article 3 shall be replaced by the following text:

Article 3

The Court of First Instance shall exercise at first instance the jurisdiction conferred on the Court of Justice by the Treaties establishing the Communities and by the acts adopted in implementation thereof:

(1)  in the disputes referred to in Article 179 of the EC Treaty and Article 152 of the Euratom Treaty;

(2)  in actions brought by natural and legal persons

(a)  pursuant to the second paragraph of Article 33, to Article 35 and to the first and second paragraphs of Article 40 of the ECSC Treaty;

(b)  pursuant to the fourth paragraph of Article 173, to the third paragraph of Article 175, and to Article 178 of the EC Treaty;

(c)  pursuant to the fourth paragraph of Article 146, to the third paragraph of Article 148 and to Article 151 of the Euratom Treaty;

(d)  against bodies established under Community law and created pursuant to an act adopted in implementation of the Treaties establishing the Communities, save where a provision in that act provides to the contrary.

(3)  in actions brought by a Member State pursuant to the second paragraph of Article 173 or to the first paragraph of Article 33 of the ECSC Treaty and concerning:

(a)  decisions of the Commission relating to the clearance of the accounts of the Member States with respect to the expenditure financed by the European Agricultural Guidance and Guarantee Fund, "Guarantee" Section;

(b)  decisions adopted pursuant to an act of the Council founded on Title IV of Part Three of the EC Treaty, relating to transport;

(c)  decisions addressed to undertakings or to associations of undertakings relating to the competition rules of the EC Treaty applicable to undertakings, including the rules relating to the control of concentrations of undertakings, or to Articles 65 and 66 of the ECSC Treaty;

(d)  decisions concerning aid granted by States and adopted pursuant to Article 93(2) and (3) of the EC Treaty, to a Council Regulation based on Article 94 of the EC Treaty or to an act of the Commission based on the first and second paragraphs of Article 95 of the ECSC Treaty;

(e)  acts adopted pursuant to a Council regulation concerning measures to protect trade within the meaning of Article 113 of the EC Treaty or to an act of the Commission relating to measures to protect trade in the sense contemplated by Article 74 of the ECSC Treaty, in cases of dumping, subsidies or in the exercise of the Community's rights under international trade rules in order to react against barriers to trade;

  (f)  decisions adopted pursuant to an act of institution creating a fund, a financial instrument or an action programme authorising the grant of Community financial support;

(4)  in the actions referred to in Article 42 of the ECSC Treaty, Article 181 of the EC Treaty and Article 153 of the Euratom Treaty, brought pursuant to an arbitration clause.

Article 2

  The second paragraph of Article 3 of Decision 93/350/Euratom, ECSC, EEC is repealed.

Article 3

  This Decision shall enter into force on the first day of the second month following its publication in the Official Journal of the European Communities.

27 October 1998





25   With the exception of actions brought pursuant to an arbitration clause (see infra). Back

26   See in particular:

- Council Regulation (EEC) No 3118/93 of 25 October 1983 laying down the conditions under which non-resident carriers may operate national road haulage services within a Member State (OJ L 279 of 12.11.1993, p1);

- Council Regulation (EEC) No 684/92 of 16 March 1992 on common rules for the international carriage of passengers by coach and bus (OJ L 74 of 20.3.1992, p1), as amended by Council Regulation (EC) No 11/98 of 11 December 1997 (OJ L 4 of 8.01.1998, p1);

- Council Directive 91/440/EEC of 29 July 1991 on the development of the Community's railways (OJ L 237 of 24.08.1991, p25);

- Council Directive 96/75/EC of 19 November 1996 on the systems of chartering and pricing in national and international inland waterway transport in the Community (OJ L 304 of 27.11.1996, p12);

- Council Regulation (EEC) No 4055/86 of 22 December 1986 applying the principles of freedom to provide services to maritime transport between Member States and between Member States and third countries (OJ L 378 of 31.12.1986, p1);

- Council Regulation (EEC) No 2408/92 of 23 July 1992 on access for Community air carriers to intra-Community air-routes (OJ L 240 of 24.08.1992, pp8-14). Back

27   Council Regulation (EC) No 3286/94 of 22 December 1994 laying down Community procedures in the field of the common commercial policy in order to ensure the exercise of the Community's rights under international trade rules, in particular those established under the auspices of the World Trade Organisation (WTO) (OJ L 349 of 31.12.94, p71). Back

28   Council Regulation (EC) No 3285/94 on the common rules for imports and repealing Regulation (EC) No 518/94 (OJ L 349 of 31.12.1994, p53);

Council Regulation (EC) No 517/94 on common rules for imports of textile products from certain third countries not covered by bilateral agreements, protocols or other arrangements, or by other specific Community import rules (OJ L 67 of 10.03.1994, pp 1-75);

Council Regulation (EC) No 519/94 on common rules for imports from certain third countries and repealing Regulations (EEC) Nos 1765/82, 1766/82 and 3420/83 (OJ L 67 of 10.03.1994, pp89-103). Back

29   Council Regulation (EC) No 520/94 establishing a Community procedure for administering quantitative restrictions (OJ L 66 of 10.03.1994, p1). Back

30   OJ L 144 of 16 June 1993, p21. Back

31   OJ L 66 of 10 March 1994, p29. Back


 
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