JUDGMENT OF 11. 7. 1973 — CASE 3/73 HESSISCHE MEHLINDUSTRIE v EINFUHR- UND VORRATSSTELLE GETREIDE
In Case 3/73 Reference to the Court under Article 177 of the EEC Treaty by the Hessischer Verwaltungsgerichtshof, VIIth Senate, for a preliminary ruling in the action pending before that court between:
THE COURT composed of: R. Lecourt, President, R. Monaco and P. Pescatore, Presidents of Chambers, A. M. Donner, J. Mertens de Wilmars, H. Kutscher, C. Ó Dálaigh (Rapporteur), M. Sørensen and A. J. Mackenzie Stuart, Judges, Advocate-General: J. P. Warner Registrar: A. Van Houtte
gives the following
JUDGMENT
Issues of fact and of law
I — Facts and procedure
A — Regulation No 172/67 of the Council To qualify for the premium, denaturing should be effected in agreement with the intervention agency and under its supervision.
B — Regulation No 1403/69 of the Commission The granting of a denaturing premium shall be subject to supervision by the intervention agency of the process of denaturing of common wheat, or of its admixture, unaltered, with compound feedingstuffs falling within Heading No 23.07 of the Common Custom Tariff… (Art. 4 (3)).
II — Written Observations submitted before the Court under Article 20 of the Statute
A — The plaintiff
B — The Commission
C — The German Government
Grounds of judgment
(a) As to the first part of the question
(b) As to the second part of the question
Costs
I —. Facts and procedure
A —. Regulation No 172/67 of the Council To qualify for the premium, denaturing should be effected in agreement with the intervention agency and under its supervision.
B —. Regulation No 1403/69 of the Commission The granting of a denaturing premium shall be subject to supervision by the intervention agency of the process of denaturing of common wheat, or of its admixture, unaltered, with compound feedingstuffs falling within Heading No 23.07 of the Common Custom Tariff… (Art. 4 (3)).
(a). By paragraph 5 of the German law of 30 June 1967, implementing the Community provisions in connection with cereals etc. (Bundesgesetzblatt BGBl I, p. 1617), the new wording of which was drawn up by the amending law of 30 July 1968 (BGBl, p. 874) and which is now replaced by paragraphs 6 to 9 of the Law of 31 August 1972 implementing the common organization of the markets (Marktorganisationsgesetz — MOG) (BGBl I, p. 1617), the German legislature authorized the Federal Minister of Food, Agriculture and Forestry (hereinafter called the Minister) to draw up rules on the conditions and the procedure for granting and the amount of denaturing premiums …, in so far as the adoption of such rules is necessary for the implementation of the comon organization of the markets.
(b). In pursance of this authorization, the Minister issued the decree of 8 August 1968 (The applicant and in so far as he is not himself in charge of the denaturing, the person in charge of it, must satisfy the requirement of reliability necessary for effecting denaturing in accordance with the law) on the denaturing premium for cereals (Bundesanzeijer No 148 of 10 August 1968, mentioned in BGBl 1968 I p. 968), a Decree of 13 March 1970 amending the former Decree (Bundesanzeiger No 58 of 25 March 1970, mentioned in BGBl 1970, I, p. 310) and the Decree of 19 November 1971 on the denaturing premium for cereals (BGBl, I p. 1831). These decrees ensure that denaturing operations, for which the persons concerned intended to claim a premium, are only carried out (i) in recognized denaturing plants, (ii) only at times notified to the German intervention agency, the defendant in the main action, and (iii) on condition that such agency can send inspectors to the denaturing plant. The right to the premium is not however subject to actual supervision of the denaturing by an inspector. The forms drawn up by the Einfuhr- und Vorratsstelle (hereinafter called the Cereals Office) in cases of supervision by its own officials envisage supervision (Überwachung) either (i) by complete supervision on the spot, or (ii) by supervision on the spot by means of sampling or (iii) by inspection of books. These are the three methods of supervision prescribed in the forms for cases in which supervision is entrusted to independent authorities.
(c). In cases where there has been no actual supervision, or incomplete supervision, the denaturing permium is granted on the mere basis of a denaturing certificate completed by the denaturing plant.
(d). Under Paragraph 4 (1), second sentence, No 4, of the Decree of 19 November 1971, the recognition of denaturing plants is not only subject to their having the requisite equipment and qualified staff, but also to the condition that
II —. Written Observations submitted before the Court under Article 20 of the Statute
A —. The plaintiff
B —. The Commission
C —. The German Government
1. By order dated 20 November 1972, received at the Court on 23 January 1973, the Hessischer Verwaltungsgerichtshof referred, under Article 177 of the EEC Treaty to the Court, for a preliminary ruling on the interpretation of Regulation No 172/67/EEC of the Council of 27 June 1967 (OJ No 130 of 28 June 1967, p. 2602) on general rules governing the denaturing of wheat and rye of bread-making quality and of Regulation No 1403/69/EEC of the Commission of 18 July 1969 laying down detailed rules for the application of the provisions concerning denaturing of common wheat and rye of breadmaking quality.
2. Article 2 of Regulation No 172/67/EEC provides that the methods employed for denaturing must ensure that denatured wheat and rye can no longer be used for human consumption and that these methods must be at least as effective as a standard method to be determined.
3. Regulation No 1403/69/EEC fixes the standard method for denaturing by colouring, provides that in the case of denaturing otherwise than by colouring the means used must be at least as reliable as the standard methods, outlines the compound feedingstuffs to be used in denaturing by admixture, and defines the quality of cereals qualifying for a premium.
(a). As to the first part of the question
4. The provisions are restricted to indicating that supervision is indispensable without specifying in what manner and by what method the national intervention agencies are to fulfil their obligations of supervision.
5. Different methods of supervision such as sampling, audit, or recognition of denaturing plants can, individually or in combination, be equally effective even though none of them constitutes an absolute guarantee.
6. The Community legislature refrained from enacting provisions regulating the procedure for supervision in detail, leaving the Member States the power to regulate the detailed rules of supervision under their own legal system and on their own responsibility by choosing the most appropriate solution, without requiring the constant presence of an official throughout the denaturing process.
7. It follows that the first part of the question must be answered in the negative.
(b). As to the second part of the question
8. There is no rule of Community law opposed to a Member State subjecting the possibility of a denaturing plant benefiting from the system provided to the condition of special recognition.
9. In view of this, the intervention agencies can demand that the managers of plants possess the personal qualities necessary to avoid the risks of abuse.
10. It follows that the second part of the question must be answered in the affirmative.
11. The costs incurred by the Commission of the European Communities and by the Government of the Federal Republic of Germany, which have submitted observations to the Court, are not recoverable and as these 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 Hessischer Verwaltungsgerichtshof, 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 oral observations of the defendant in the main action; the Commission of the European Communities and the Government of the Federal Republic of Germany; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the European Economic Community, especially Article 177; Having regard to Regulation No 172/67 of the Council of the European Communities of 27 June 1967; Having regard to Regulation No 1403/69 or the Commission or the European Communities of 18 July 1969; Having regard to the protocol on the statute of the Court of Justice of the European Communities, 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 question referred to it by the Hessischer Verwaltungsgerichtshof by order dated 20 November 1972, hereby rules:
1 Article 7 of Regulation No 172/67/EEC of the Council of 27 June 1967 and Article 4 (3) of Regulation No 1403/67/EEC of the Commission of 18 July 1969 do not require that the entire denaturing process be carried out under the personal supervision of an official of the intervention agency.
2 The requirement of supervision imposed by the Regulations in question may be satisfied if the intervention agency merely ensures the possibility of an inspection of the denaturing operation at any moment, but requires reliability (Zuverlassigkeit) on the part of the person in charge of the denaturing plant.