JUDGMENT OF 27. 10. 1971 — CASE 6/71 RHEINMÜHLEN v EINFUHR- UND VORRATSSTELLE GETREIDE
In Case 6/71 Reference to the Court under Article 177 of the EEC Treaty by the Bundesfinanzhof for a preliminary ruling in the action pending before that court between
THE COURT composed of: R. Lecourt, President, J. Mertens de Wilmars and H. Kutscher (Rapporteur), Presidents of Chambers, A. M. Donner, A. Trabucchi, R. Monaco and P. Pescatore, Judges, Advocate-General: A. Dutheillet de Lamothe Registar: A. Van Houtte
gives the following
JUDGMENT
Facts
I — Facts and procedure
1. Examination of the provisions applicable during the relevant period
A — Community law
B — German law
2. Facts
3. Operative part of the order referring the matter and the grounds therefor
4. Procedure
II — Observations submitted under Article 20 of the Protocol on the Statute of the Court of Justice of the EEC
1. The first question
2. The second question
3. The third question
Law
The first question
The second question
The third question
Costs
I —. Facts and procedure
1. Examination of the provisions applicable during the relevant period
A —. Community law
B —. German law
6. The country of consumption (Verbrauchsland) is the country in which the goods must be utilized or consumed, treated or processed.
7. The country of consumption is defined as follows:
2. Facts
A —. As set out by the Bundesfinanzhof and the Hessisches Finanzgericht, the facts giving rise to the main proceedings are as follows:
B —. After having complained unsuccessfully against this decision, Rheinmuhlen brought the matter before the Hessisches Finanzgericht. The latter rejected its appeal by a judgment of 12 August 1968 and in particular declared:
3. Operative part of the order referring the matter and the grounds therefor
(1). How is the concept of exports to third countries appearing in the first sentence of Article 20 (2) of Regulation No 19/72 of the Council of 4 April 1962 (OJ 1962, p. 933 et seq.) to be interpreted and how must this concept be defined in relation to the concept of exports to a Member State within the meaning of Article 19 (2) of this regulation?
(2). Is Regulation No 162/64/EEC of the Commission of 29 October 1964 (OJ 1962, p. 2739) invalid in view of the fact that it restricts in the aggregate the refunds in trade between the Member States to certain percentages of the rates of refund permissible under Regulation No 141/64/EEC of 21 October 1964 (OJ 1964, p. 2666), whereas the refunds granted in trade with third countries could reach the full amount of the variable component of the lew applicable to imports?
(3). In the event of a negative reply to Question 2: in view of the limitation introduced by Regulation No 162/64/EEC on the amount of the refund applied in trade between Member States and of the aim pursued by this means (the protection of trade between the Member States and of the markets of importing Member States against price distortions) must the concept of exports to third countries within the meaning of Regulation No 164/64/EEC of 29 October 1964 (OJ 1964, p. 2743) be interpreted otherwise than in the cases mentioned in Question 1, in particular in a narrower sense, and must it be defined more strictly than in those cases in relation to the concept of exports to a Member State?
4. Procedure
II —. Observations submitted under Article 20 of the Protocol on the Statute of the Court of Justice of the EEC
1. The first question
(a). The concept of exports to the Member States and of exports to third countries must have the same meaning in all the Member States. It would be incompatible with the idea of a common organization of the agricultural markets and moreover illogical that the same commercial operation might be considered by the exporting Member State as an intra-Community export and, on the contrary, by the importing Member State as an import from a third country. This is the reason why the national legislature was not itself authorized to define these concepts.
(b). Such means ot proot is the production or non-production of the DD4 certificate prescribed by the decision of 17 July 1962. Consequently, as is shown by an export certificate which Rheinmuhlen put on the Court file, the German administration always required undertakings wishing to benefit from a refund to indicate whether a certificate on form DD4 had been delivered. If this was not the case it granted, without more ado, the refund provided for exports to third countries whilst in the converse case this refund was precluded as a matter of course. Manipulations were therefore absolutely impossible.
(c). Rheinmuhlen protests against the inferences which the Hessisches Finanzgericht drew from the insertion in a certain number of the sale contracts of precise clauses relating to costs and expenses. Thus for instance, a clause such as cif Antwerp, whilst clearly referring to a Member State, nevertheless does not permit of definite conclusions as regards the country of destination, since the port of Antwerp is an outlet.
(d). The reply to be given to the first question of the Bundesfinanzhof ought therefore to be as follows:
(e). The system of refunds provided for under Regulation No 19 was intended to allow exports of cereals coming from Member States which maintain high prices to Member States maintaining low prices and to third countries. The Member States maintaining high prices were not therefore free to refuse refunds or to fix them at an excessively low level. This applies all the more sinco these States could have collected the highest levies and that it was therefore possible to ask of them that they should provide the necessary financial resources. A national system of refunds which subjects exports from one Member State to another to a discrimination in favour of exports coming from third countries is incompatible with Regulation No 19.
2. The second question
3. The third question
1. By order dated 15 December 1970, received at the Court Registry on 3 March 1971, the Bundesfinanzhof referred to the Court for a preliminary ruling several questions on the interpretation of Regulation No 19 of the Council and of Regulation No 164/64/EEC of the Commission as well as on the validity of Regulation No 162/64/EEC of the Commission.
2. The first question asks the Court to interpret the concept of exports to third countries in Article 20 (2) of Regulation No 19 and to define it in particular in relation to the concept of exports to another Member State within the meaning of Article 19 (2) (a) of that regulation.
3. (1) At the time of the transactions at issue the provisions mentioned constituted in the cereals sector the basic rules for the refunds which could be granted for exports to another Member State or for exports to third countries.
4. (2) Regulation No 19 and the measures adopted for its implementation made the intra-Community refund and the third country refund subject to different conditions as regards both the grant thereof and the ceiling applicable.
5. Nevertheless, Articles 19 and 20 of Regulation No 19 provide that a refund may be granted for exports to third countries or exports to another Member State.
6. Therefore the presence of the factors defining exports to a third country within the meaning of Regulation No 19, regardless of what these factors were, was merely a necessary prerequisite to, but not of itself a sufficient ground for, the grant of a refund.
7. Both the provisions of Regulation No 19 and the recitals in the preamble thereto show that the refunds prescribed by the regulation were intended to offset the price differences between the markets in question.
8. It was for the Member States to detennine independently the evidence required to establish that export to a third country had taken place, provided that they did not accept insufficient proof.
9. The nature of the proof which can be regarded as sufficient cannot be exhaustively set out, for it depends to a large extent on the circumstances of each individual case, and in particular on the available evidence as a whole, whether the evidence offered was relevant or not.
10. As regards the certificate DD4, which, moreover, according to the Commission's decision of 17 July 1962 was merely intended to prove the origin of imported goods and not the destination of exported goods, it has been submitted that importers in the Member States had an interest in the application of the Community levy, which was lower than the third country levy, and therefore would only have foregone the issue of the certificate DD4 if they had wished to appear solely as forwarding agents, because the goods had been intended for a third country.
11. With regard to the criterion of non-direct transport, reference need only be made to the example of the export of goods from Germany to Italy or vice versa, which often go through Austria or Switzerland but this fact, arising out of the geographical situation of the States in question, does not turn the transaction into an export to a third country.
12. The second question of the Bundesfinanzhof is whether Regulation No 162/64 of the Commission is rendered invalid by the fact that it restricted the refunds in trade between the Member States on a flat rate basis to certain percentages of the rates of refund permissible under Regulation No 141/64, whereas Regulation No 164/64 did not provide a similar restriction for the refunds granted in trade with third countries.
13. From its wording and from the grounds given in the order referring it, the question assumes that the illegality of Regulation No 162/64 may arise from the fact that the regulation discriminates against trade between Member States or conflicts with the principle of Community preference.
14. (1) The non-discrimination rule would only be infringed if it were shown that the Community legislature had treated comparable situations differently.
15. According to Article 3 (d) of the Treaty the activities of the Community are to include the adoption of a common policy in the sphere of agriculture; the Member States were to develop this policy by degrees during the transitional period and bring it into force by the end of that period at the latest, as stated in Article 40 of the Treaty, which also provides for a common organization of markets for this purpose.
16. The gradual reduction of the intra-Community refunds came fully within the scope of the progressive establishment of such an organization; but this does not apply in the case of exports to third countries. Since the two kinds of refund are accordingly not comparable with one another, the reduction of the ceiling of the intra-Community refund effected by Regulation No 162/64 is not discriminatory.
17. (2) As regards the principle of Community preference, it is true that the ninth recital in the preamble to Regulation No 19 states that the system to be introduced must enable the preference resulting from the implementation of the Treaty to be maintained in favour of Member States.
18. Accordingly, examination of the question submitted by the Bundesfinanzhof does not reveal any factor capable of affecting the validity of Regulation No 162/64.
19. In its third question the Bundesfinanzhof asks the Court to rule whether in view of the limitation introduced by Regulation No 162/64 on the amount of the refund applied in trade between Member States and of the aim pursued by this means (the protection of trade between the Member States and of the markets of importing Member States against price distortions) the concept of exports to third countries within the meaning of Regulation No 164/64 must be interpreted otherwise than in the cases mentioned in Question 1 — that is to say otherwise than in Regulation No 19 — in particular in a narrower sense, and be defined more stricdy than in those cases in relation to the concept of exports to a Member State.
20. Article 1 (1) of Regulation No 164/64 mentions trade with third countries and prescribes rules for the refund which may be allowed on exports of the processed products referred to in Regulation No 141/64/EEC in trade with these countries; thus the expression trade with countries is used here as synonymous with the expression exports to third countries, which also appears in the title of Regulation No 164/64.
21. This regulation, which only applies to third-country refunds, must be interpreted in the light of Article 20 (2) of Regulation No 19, a provision which is its essential basis and to which it is subordinate.
22. Although this regulation provides for the adoption of implementing provisions regarding the conditions for the granting of the refund and the determination of its amount, it does not contain anything that would permit of the conclusion that the draftsmen of these provisions were empowered to give the expression exports to third countries, even if only for one sector, a meaning other than that which it has in Article 20.
23. This conclusion is confirmed by the fact that the expression exports to a Member State has not been defined in any way whatsoever in any of the provisions adopted under Regulation No 19.
24. It must therefore be assumed that in Regulation No 164/64 the expression has the same meaning as in Regulation No 19.
25. The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable, and as the proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the national court, the decision on costs is a matter for that court.
On those grounds, Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the submissions of Rheinmuhlen Diisseldorf, the Einfuhr- und Vorratsstelle fur Getreide und Futtermittel, and the Commission of the European Communities; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the European Economic Community, especially Articles 3 (d), 40 and 177; Having regard to Regulation No 19 of the Council of 4 April 1962 on the progressive establishment of a common organization of the market in cereals, especially Articles 19 and 20; Having regard to Regulation No 162/64/EEC of the Commission of 29 October 1964 restricting the maximum amount of refund on exports to Member States of certain products derived from rice and other cereals; Having regard to Regulation No 164/64 of the Commission of 29 October 1964 determining the conditions for the grant of refunds on exports to third countries of processed products derived from rice and other cereals; Having regard to the Commission Decision of 17 July 1962 instituting special methods of administrative cooperation for the application of intra-Community levies; Having regard to the Protocol on the State of the Court of Justice of the EEC, especially Article 20; Having regard to the Rules of Procedure of the Court of Justice of the European Communities; THE COURT in answer to the questions referred to it by the Bundesfinanzhof of the Federal Republic of Germany by order of that court dated 15 December 1970, hereby rules:
1 The expression exports to third countries within the meaning of Article 20 of Regulation No 19 of the Council of 4 April 1962 presupposed at least that the goods had been or would be put into free circulation in a third country.
2 The Member States were free to require in addition that the goods had been or would be used or consumed, treated or processed in that country.
3 It was for the Member States to determine independently the evidence required to establish that export to a third country had taken place, provided that they did not accept insufficient proof, in particular the mere fact that the goods were exported without a certificate DD4 or were not transported direcdy from one Member State to another.