Opinion of Mr advocate-general Trabucchi

Mr President,

Members of the Court,

1. By decision of 20 March 1975, the Commission rejected applications from the Government of the Federal Republic of Germany the purpose of which was to cause the European Agricultural Guidance and Guarantee Fund (the EAGGD) to be debited with the transportation costs incurred through the determination of leases for the storage of cereals from 1 January 1971 to 31 December 1974. The applications were based on the provision in Article 4 (1) (g) of Regulation No 787/69 of the Council on the financing of intervention expenditure in respect of the domestic market in cereals and in rice (OJ L 105, English Special Edition 1966-1972, p. 14). Under this provision, the guarantee section of the EAGGF is to be debited with the total amount of the costs incurred through transportation made necessary after the taking over of goods by the intervention agency and carried out under conditions concerning, in particular, the need for transportation, to be determined according to the procedure provided for in Article 26 of Regulation No 120/67/EEC or Article 26 of Regulation No 359/67/EEC; this amount shall include the costs of placing in and removing from store arising from such transportation, calculated as provided for under (c).

2. The Government of the Federal Republic of Germany seeks annulment of the decision for

3. The provision in subparagraph (g), with its reference to the conditions concerning the need for transportation, might also be interpreted as meaning that it has no application when the said transportation is unavoidable since this is one of the contingencies attracting the standard reimbursement of costs provided for under Article 4 (1) (e). Consequently, subparagraph (g) cannot be regarded as covering contingencies of the kind to which I referred earlier, whether they are accidents such as fire, explosion etc., or connected with voluntary acts, such as withdrawal from a lease on the part of the warehouse owner but all of them being directly related to the conditions in which the goods are placed in storage, including the unavoidable need for them to be moved. This consideration might confirm the Commission's contention that the need for transportation referred to under the provision in subparagraph (g) is essentially related to the situation of the market in the products concerned and to an appreciation of the intrinsic requirements of the common management of the market

4. From this standpoint, which is deliberately based on considerations of expediency and efficiency in the application of the system, the decision adopted by the Commission seems quite proper and logical. For the purposes of applying the provision in subparagraph (g), the decision refuses, as a matter of principle, to take into account transport which has become necessary merely because of the determination of a lease. On the other hand, it reserves the right to assess in each case the need for transfer of the goods from one warehouse to another when the common management of the market in the product is involved. An example of this would occur if it were a case of meeting a threatened shortage which had arisen in another area subject to the same intervention agency, or in order to organize a more rational arrangement of the products in the warehouses if, for instance, a fresh and substantial supply of the product was expected to come on the market and it was, accordingly, essential for the national intervention agencies to have properly organized and equipped warehouses for the reception of the new surplus; see to this effect the Commission Decision of 23 July 1969 (JO L 204, p. 10). In such cases, there is without doubt a close connexion between the transportation and the market situation in the product concerned and there is justification for subjective appraisal of the need for transport in the light of the requirements of sound management of that particular market. It seems reasonable to accept that, especially in respect of situations of this kind, there is every justification for using the control procedure for which provision is made in subparagraph (g).

5. As regards the question whether the transport costs involved are effectively covered under Article 4 (1) (e) all that need be said is that it can be settled on the basis of the definition of the standard amount.

6. In its reply the applicant submits a new argument. It suggests, in the alternative, that even supposing that subparagraph (g) were to be interpreted in accordance with the concept expressed by the Commission, the increase in the number of leases determined during the period covered by the applications for reimbursement is due to the export policy of the Community and that, even when viewed from the Commission's standpoint, the provision in subparagraph (g) therefore authorizes reimbursement of the costs incurred through the said operations. In fact, Community encouragement of cereal exports was responsible for virtually emptying a large number of warehouses; because of this, their owners found it expedient to determine the contracts with the intervention agencies in order to stock them with other goods.

7. Consideration must now be given to the argument based on failure to respect the legitimate expectation of the applicant arising from the fact that, in the contested decision, the Commission departed from its own previous practice.

I conclude with the advice that the Court should dismiss the application as unfounded and order the applicant to pay the costs of the action.

1 Translated from the Italian.