OPINION OF MR REISCHL — CASE 55/75 BALKAN-IMPORT EXPORT v HAUPTZOLLAMT BERLIN-PACKHOF

Mr President,

Members of the Court,

Balkan-Import Export, which has a registered office in Berlin, regularly imports from Bulgaria into the Federal Republic of Germany cheese of sheep's milk on the basis of a long-term contract made with the Bulgarian national trade department Rodopa-Impex for which the price is agreed in German marks. In accordance with Community rules which were to be examined, from various points of view, in cases before the Court for a preliminary ruling the sum of DM 9244-62 was charged by way of a monetary compensatory payment at the frontier on a consignment which was cleared into free circulation on 25 April 1974.

Balkan-Import Export does not regard this as permissible and it therefore brought an action before the Finanzgericht Berlin.

In support of its contention, which I will later examine in greater detail, it argues that the products concerned here produce no risk of disturbance within the meaning of Regulation No 974/71 (OJ, English Special Edition 1971 (I), p. 257) since cheese of sheep's milk is not a product in competition with cow's milk cheese for which the protection of the monetary compensation rules in the cheese sector was primarily intended. Moreover it must be taken into consideration that the production of cheese of sheep's milk is vary labour-and-wage intensive and that its price has for some time risen to such a level that the revaluation effect may be regarded as superseded. However, if in view of the incidence of currency measures compensation is sought, this is contradictory to the purpose of the compensatory rules which is to spread over a period of time the effects of a sudden change in currency rates.

The defendant Principal Customs Office contests this with the argument that there is competition between cheese of sheep's milk and other types of cheese and that it is therefore not impossible that the level of prices of products which are subject to intervention measures may be endangered by the importation of cheese of sheep's milk. Further, the Principal Customs Office refers to judgments of the Court of Justice delivered in respect of the time before 1 July 1970, in particular that in Case 5/73 (Balkan-Import Export GmbH v Hauptzollamt Berlin-Packhof [1973] II ECR 1091). According to that judgment it is above all essential that for reasons of practicability the compensatory rules could only have been formulated in an abstract and general manner and that they therefore had to be based on groups of products. It was thus clear that examination of the risk of disturbance could not be required for each individual product.

In this case the national court was evidently impressed by the plaintiff's submission. It regards the doubts as to the validity of the monetary compensatory amounts fixed by the Commission as well founded, particularly so as regards imported cheese of sheep's milk because, since May 1973, certain varieties of cheese which are of greater importance on the market than cheese of sheep's milk have been exempted from monetary compensation.

Therefore by an order of 4 June 1975 the Finanzgericht Berlin stayed the proceedings and referred the following questions for a preliminary ruling in accordance with Article 177 of the EEC Treaty:

If question 1 is answered in the affirmative:

Before answering these questions I should first like to make some preliminary observations which, so to speak, serve to delineate the matters at issue.

In the proceedings before the Court the imposition of monetary compensatory amounts on the importation of cheese of sheep's milk in April 1974 was contested by the plaintiff in the main action with a series of arguments which I did not set out in full above. May I say immediately that, in my opinion, it is not necessary to examine all these reasons in the present proceedings.

Two considerations are decisive in this respect.

In proceedings such as this where the validity of Community measures are at issue, the subject-matter and the limits of the examination are determined by the court making the order for reference. The parties to the main action do not have any right of initiative and are not able to make any substantial alteration or addition to the formulation of the questions. This has been emphasized repeatedly in the decided cases. However, if one considers the order for reference made by the Finanzgericht Berlin in this light it is immediately evident that the crux of the considerations of the Finazgericht is the fact that since May 1973 certain Italian types of cheese and the better varieties of Swiss cheeses have been exempted from monetary compensatory amounts. It is largely in view of this fact that the Finazgericht asks whether the imposition of monetary compensatory amounts on Bulgarian cheese of sheep's milk is still admissible.

On the other hand it is relevant that the same plaintiff has already criticized the system of monetary compensatory amounts in Case 5/73. In so far as the Court of Justice discovered no foundation for this criticism at the time there is, in principle, no ground for re-examining it, in particular as there are no fresh arguments or facts.

For those reasons I did not think it necessary to examine a number of questions in the present context.

All that may be regarded as criticism of the principles of monetary compensation as laid down in the basic Council regulation may be ignored for the validity of the system in itself was not put in question by the court making the reference. We need therefore not concern ourselves with the plaintiffs submissions, in part with reference to decided cases, with regard to the temporary nature of the system and its justification solely on exceptional grounds and its alleged purpose merely of ensuring swift adaptation to sudden fluctuations in currency rates. Of equally little concern is what the plaintiff has said as regards the purpose of the rules — to moderate the effects of monetary measures — and as regards the necessity to provide for a gradual abolition in connexion with which it has in mind periods which do not exceed six months. It should, however, be noted in this respect that the impression may arise that the original nature of the system of monetary compensatory amounts has altered on account of continuing difficulties in the sphere of currencies, since in the meantime the rules have become firmly embedded in the context of the common agricultural policy. Moreover, it must not be forgotten — and this applies to the observation of the plaintiff that all is now quiet on the currency front — that fluctuations still occur in the relationship of the so-called snake currencies with other currencies and that in this respect monetary compensatory amounts fluctuate considerably.

Similarly there is no need to go any further into the fact raised by the plaintiff that the import contracts in question were concluded in German marks or into the need it emphasized to take into consideration that the effects or the revaluation of the German mark were less significant as third countries had also revalued and that in countries which had revalued favourable effects for agriculture resulted from the reduction in the price of means of production. The Court of Justice had in fact to deal with similar arguments in Case 5/73. In the judgment it was emphasized on the one hand that the individual characteristics of particular import transactions could not be considered and reference could not be made to individual products, but on practical grounds a flat-rate basis for the compensatory rules was unavoidable ([1973] ECR (II) 1111). Furthermore it was not contended — for example with regard to Article 39 (1) (e) and Article 110 of the EEC Treaty — that because favourable effects of the currency measures are left out of account an increase in the monetary compensation might result. In this respect I refer to passages in the judgment on page 1112 of the 1973 volume of Reports of Cases before the Court and to statements in the Advocate-General's opinion on page 1127 of the same volume. I need say no more about these points.

1. If we now return to the individual questions then, within the context of the first question, it must be examined whether the imposition of monetary compensatory amounts on imports of cheese of sheep's milk from third countries in April 1974 was still compatible with Community law, and in particular — and this, as I have said, is the crux of the matter — in view of the exemption of other varieties of cheese which occurred in May 1973.

2. The second question seeks to examine the justification of imposing compensatory amounts of DM 63·80 per 100 kg on 25 April 1974 on imports of cheese of sheep's milk and to examine whether it is arithmetically justified.

3. I therefore propose that the following answer be given to the questions referred by the Finanzgericht Berlin:

1 Translated from the German.