Opinion of Mr Advocate General Warner

My Lords,

Introductory

This is an action brought against the Commission under Article 173 of the EEC Treaty by two German companies, the Kommanditgesellschaft in Firma Hans-Otto Wagner GmbH, Agrarhandel (which I shall call Wagner) and the Kommanditgesellschaft in Firma Schlüter & Maack GmbH & Co. (which I shall call Schlüter).

The action is a sequel to Case 108/77 Wagner v HZA Hamburg-Jonas [1978] ECR 1187, which, Your Lordships may remember, came to this Court by way of a reference for a preliminary ruling by the Finanzgericht of Hamburg.

Wagner is the plaintiff in the proceedings before the Finanzgericht in which that reference was made. It seems that those proceedings are still pending.

In this action Wagner and Schlüter challenge the validity of Commission Regulation (EEC) No 1837/78 of 13 July 1978, which was the third in a series of four Regulations adopted by the Commission following the decision of the Court in Case 108/77. They seek from this Court a declaration that Article 1 of that Regulation is partially invalid.

Your Lordships will remember that Case 108/77 was concerned with the applicablity of Article 4 (3) of Commission Regulation (EEC) No 1380/75 to refunds payable on exportsof sugar from the Community where those refunds had been fixed by tender. Article 4 (3) provided, so far as material, that export refunds fixed in units of account were to be multiplied by a coefficient derived from the percentage used to calculate the monetary compensatory amounts. The Court (differing from the opinion that I had expressed) interpreted the legislation then in force as to the fixing of export refunds on sugar by tender (mainly Regulation (EEC) No 2101/75) as requiring such refunds to be fixed not in units of account but in national currencies. It consequently held Article 4 (3) to be inapplicable to them. The judgment was delivered on 24 May 1978.

In the light of the. judgment, the Commission decided that prompt amendment of the legislation was called for. There seems however to have been some uncertainty in the Commission as to what steps were appropriate.

On 31 May 1978 the Commission adopted Regulation (EEC) No 1182/78 (OJ L 145 of 1. 6. 78, p. 46) which was expressed to have the purpose of supplementing Regulations (EEC). No 1634/77 and (EEC) No 1790/77. Those were the Regulations then in force on standing invitations to tender to determine export refunds for, respectively, white sugar and raw beet sugar.

The contents of the preamble to Regulation No 1182/78 are significant. It contained these recitals:

The reference there to its being essential that monetary coefficients should be applied to refunds fixed by tender was a reference to the fact that, for the reasons explained to us by the Commission in Case 108/77 and again in this case (and which I recorded in my Opinion in Case 108/77) failure so to apply them results in unequal treatment of traders in different Member States who tender in competition with each other. The reference to the practice always followed in the sugar sector was a reference to the circumstance that, except, it seems, in Belgium, monetary coefficients had always been applied by the competent national authorities to such refunds.

Article 1 of Regulation No 1182/78 provided for the insertion in each of the two Regulations on standing invitations to tender of a new Article 7 (a), reading:

Article 2 provided for the Regulation to enter into force on 1 June 1978 and to apply to all refunds awarded under Regulations No 1634/77 and No 1790/77 with the exception of the refunds for which offers were accepted after 24 May 1978 and before 1 June 1978.

The regulation was thus clearly intended to have retroactive effect, the only exception being for traders who might have made tenders in reliance on the judgment in Case 108/77 before the entry into force of the regulation.

On 23 June 1978 the Commission adopted Regulation (EEC) No 1392/78 (OJ L 167 of 24. 6. 78, p. 53). This added a new paragraph to Article 4 of Regulation No 1380/75, in the following terms:

Article 2 (1) provided for the entry into force of the Regulation on the day of its publication in the Official Journal. In the event, that was 24 June 1978. Article 2 (2) provided:

Your Lordships see that under the general rule there stated the new paragraph 5 enabled monetary coefficients to be applied to export refunds fixed before the date of entry into force of Regulation No 1392/78, provided that customs formalities for the export transactions in question were only completed on or after that date. The degree of retroactivity in the case of export refunds on sugar resulting from Article 2 of Regulation No 1182/78 was expressly preserved.

The third measure in the series was Regulation No 1837/78 of 31 July 1978, the measure of which the validity is challenged in this case. In its title it is described as defining the scope of Article 4 (5) of Regulation (EEC) No 1380/75. In fact, the Commission told us, it was the fruit of second thoughts about the degree of retroactivity which had been given to the two earlier measures so far as concerned the sugar sector.

Article 1 of Regulation No 1837/78 provided that:

Article 2 provided:

Article 3 provided that the Regulation should enter into force on the day of its publication in the Official Journal, which was 1 August 1978.

The change made by those provisions in the sugar sector was this. Instead of applying to all refunds awarded under Regulations No 1634/77 and No 1790/77, Article 4 (5) of Regulation No 1380/75 was restricted in scope to operations for which the completion of customs formalities occurred on or after 1 June 1978. The latter was, of course, the date on which Regulation No 1182/78 entered into force. The Commission explained that the exception in Article 2 of that Regulation relating to offers accepted between 24 May und 1 June 1978 was not retained, because there were, in fact, no such offers.

For operations in other agricultural sectors, the position established by Regulation No 1392/78 remained unchanged.

The fourth and last of the Regulations in the series was Regulation (EEC) No 1907/78 of 7 August 1978 (OJ L 217 of 8. 8. 78, p. 13). Its effect was to amend Article 1 (c) of Regulation No 1837/78, in a manner and for reasons that are not here material.

Wagner and Schlüter both held a number of export licences issued to them following the acceptance of tenders made by them in response to invitations to tender published pursuant to Regulation No 1634/77 before 1 June 1978 and which remained unused or only partly used at that date. Examples of those licences are annexed to the application (Annexes 1, 4, 5, 6, 7, 10, 12, 17, 18 and 19). The notices of refund also annexed to the application (Annexes 2, 8, 9, 11, 13, 14, 15 and 16) show that, where exports were made under the licences, the responsible Hauptzollamt applied a monetary coefficient of 0.925. Complaints were said to have been lodged with the Hauptzollamt in all cases where export refunds fixed pursuant to Regulation No 1634/77 had been reduced in this way.

This action, which was started on 28 July 1978, was initially directed against Regulations No 1182/78 and No 1392/78. However, following the adoption by the Commission of Regulation No 1837/78 on 31 July 1978, the applicants amended their claim and switched their attack to that Regulation. They now ask, in effect, that Article 1 of Regulation No 1837/78 be declared void in so far as it provides that Article 4 (5) of Regulation No 1380/75 shall apply so as to reduce export refunds fixed in national currency pursuant to an invitation to tender

1 August 1978 was, of course, the date of entry into force of Regulation No 1837/78, whilst 1 June 1978 and 24 June 1978 were the dates specified by Article 1 of that regulation before which customs formalities must have been completed, as regards respectively operations in the sugar sector and operations in other sectors, if the application of the monetary coefficient was to be avoided.

The Commission argued that, of the applicants' four alternative claims, only the third could possibly succeed. I agree. The first, second and fourth must be excluded because the facts pleaded by the applicants do not concern any sector other than the sugar sector and, as regards the sugar sector, Regulation No 1837/78 did no more than partially preserve the legal situation created by Regulation No 1182/78, which entered into force on 1 June 1978, so that there is no possible element of retroactivity in the application of monetary coefficients to refunds fixed by tender after that date. I shall accordingly confine my attention to the applicants' third claim.

The essence of the applicants' case in support of that claim is that, bproviding for monetary coefficients to be applied to refunds fixed before 1 June 1978, Article 1 (a) of Regulation No 1830/78 interferes retroactively with vested rights in a way that Community law does not permit.

Before I consider the substance of the claim, I must deal with the question of its admissibility, which was raised by the Commission.

I can do so, I think, fairly briefly.

Admissibility

The applicants form part of a limited and identifiable class consisting of those traders who, having submitted tenders between 22 July 1977, which was the date when Regulation No 1634/77 entered into force, and 1 June 1978, in response to invitations to tender made under that regulation, and having had those tenders accepted and export refunds consequently fixed in accordance with them, had not made full use of the resultant export licences by 1 June 1978. I can see no distinction in principle between their position and that of the holders of export licences fixing refunds in advance whose claims were held admissible in Case 100/74 CAM v Commission [1975] 2 ECR 1393 and in Case 88/76 Société pour l'Exportation des Sucres v Commission [1977] 1 ECR 709.

It does not seem to me to matter that the text of Article 1 (a) of Regulation No 1837/78 does not distinguish expressly between traders who had refunds fixed before 1 June 1978 and other traders affected by the provision. If that were material, acts that were by their nature decisions could be converted into regulations by lumping together the various classes of persons thereby affected under a sufficiently broad formula. Indeed the decisions of the Court in Cases 113 and 118 to 121/77 NTN Toyo Bearing Co. Ltd and Others v Council and Commission (29 March 1979, not yet reported) show that an act that is in other respects a regulation applying generally may, in so far as it affects particular persons, constitute a decision concerning them directly and individually.

I am therefore of the opinion that the claim is admissible.

The question is whether it is sound.

Substance

The Commission admits that the fixing of an export refund in consequence of an invitation to tender gives the trader concerned a vested right to receive that refund upon completion of the exportation in the prescribed manner. It submits, however, that the right remains unaffected by the application of the monetary coefficient, which really constitutes the reduction of an m.c.a. that would otherwise have been too high.

The Commission points to the authorities in this Court showing that traders do not have any right to the maintenance in force of a particular system, or of particular rates, of m.c.a.'s and that no right to an m.c.a. arises until the goods are actually exported (Case 74/74 CNTA v Commission [1975] 1 ECR 533, Cases 95 to 98/74, 15 and 100/75 Union Nationale des Coopératives Agricoles de Céréales and Others v Commission and Council [1975] 2 ECR 1615 and Case 96/77 Bauche v Administration Française des Douanes [1978] ECR 383). It concludes that Article 1 (a) of Regulation No 1837/78 cannot be regarded as having had retroactive effect, since it merely altered an element in the system of m.c.a.'s in respect of operations for which customs formalities were completed after 1 June 1978.

I have, after some hesitation, come to the conclusion that the Commission is right.

It is true of course that, if one looks only at the words of Article 4 (3) of Regulation No 1380/75, the application of the monetary coefficient does appear to be directed to a reduction of the refund as such. But those words must be viewed in their context.

The title of Regulation No 1380/75 describes it as laying down detailed rules for the application of monetary compensatory amounts. The regulation was adopted by the Commission in exercise of the power to lay down such rules conferred on it by Article 6 of Council Regulation (EEC) No 974/71, which instituted m.c.a.'s. The group of Articles of which Article 4 forms part is headed Calculation of the monetary compensatory amounts, and Article 4 (3) starts with the word However, indicating that it operates by way of proviso to the preceding provisions of that Article, which are:

Thus the purpose of Article 4 (3) is to reduce the m.c.a. The application of the coefficient to the refund is merely the method by which that purpose is achieved, and a trader cannot have a vested right to prevent that purpose from being achieved. As I explained in my opinion in Case 108/77, and as the Commission explained again in its observations in the present case, the reduction is necessary in order to avoid a situation in which an exporter from a Member State with an appreciated currency receives twice over, or an exporter from a Member State with a depreciated currency pays twice over, the amount reflecting the percentage used to calculate the m.c.a. as applied to the amount of the refund.

Conclusion

In the result I am of the opinion that Article 1 (a) of Regulation No 1837/78 did not, in the correct analysis, have any retroactive effect, and that this action should accordingly be dismissed with costs.