JUDGMENT OF 5. 4. 1979 — CASE 157/78 TRAWIGO v HAUPTZOLLAMT AACHEN-NORD
In Case 157/78 REFERENCE to the Court under Article 177 of the EEC Treaty by the Finanzgericht [Finance Court] Düsseldorf for a preliminary ruling in the proceedings pending before that court between
THE COURT, composed of: J. Mertens de Wilmars, President of the First Chamber, acting as President, Lord Mackenzie Stuart (President of the Second Chamber), P. Pescatore, M. Sørensen, A. O'Keeffe, G. Bosco and A. Touffait, Judges, Advocate General: H. Mayras Registrar: A. Van Houtte
gives the following
JUDGMENT
Facts and Issues
I — Facts and written procedure
A — The framework of the regulations
B — The facts
C — The question referred for a preliminary ruling
II — Summary of the written observations submitted to the Court under Article 20 of the Protocol on the Statute of the Court of Justice of the EEC
A — Observations submitted by Trawigo GmbH & Co. KG
1. Breach of the authorizing rule
2. Breach of the principle of proportionality
3. Breach of the prohibition on discrimination laid down in Article 40 (3) of the Treaty
B — Observations submitted by the Irish Government
C — Observations submitted by the Italian Government
D — Observations submitted by the Commission
Decision
Costs
I —. Facts and written procedure
A —. The framework of the regulations
B —. The facts
C —. The question referred for a preliminary ruling
II —. Summary of the written observations submitted to the Court under Article 20 of the Protocol on the Statute of the Court of Justice of the EEC
A —. Observations submitted by Trawigo GmbH & Co. KG
1. Breach of the authorizing rule
2. Breach of the principle of proportionality
3. Breach of the prohibition on discrimination laid down in Article 40 (3) of the Treaty
B —. Observations submitted by the Irish Government
C —. Observations submitted by the Italian Government
D —. Observations submitted by the Commission
1. By an order of 7 July 1978 which was received at the Court on 26 July 1978, the Finanzgericht Düsseldorf referred a question to the Court of Justice for a preliminary ruling under Article 177 of the EEC Treaty on the validity of Commission Regulation No 800/77 of 20 April 1977 amending, as regards products which are subject to monetary compensatory amounts, Regulation No 572/76 fixing the monetary compensatory amounts (Official Journal 1977, L 97, p. 18).
2. This question was raised in the context of a dispute over the charging of monetary compensatory amounts of DM 66.50 in respect of the importation into the Federal Republic of Germany on 1 August 1977 of compressed tablets, jelly confectionery and gums coming under tariff heading 17.04 D of the Common Customs Tariff, which had been bought in Belgium and Italy by Trawigo GmbH & Co. KG, the plaintiff in the main action, at a price of DM 11351 in all.
3. The dispute concerns the application of the monetary compensatory amounts system to certain products which are not covered by Annex II to the Treaty and are the subject of a specific arrangement under Article 235 of the Treaty according to the terms of Article 1 (2) (b) of Regulation No 974/71 of the Council of 12 May 1971 on certain measures of conjunctural policy to be taken in agriculture following the temporary widening of the margins of fluctuation for the currencies of certain Member States (Official Journal, English Special Edition 1971 (I), p. 257).
4. The adoption of that regulation, which applied with effect from 23 May 1977, had been preceded by the Commission Decision of 23 March 1977 authorizing Ireland to take protective measures in respect of certain processed agricultural products under Article 135 of the Act of Accession and allowing that Member State until 31 December 1977 to levy a charge on imports from the United Kingdom and grant a payment on exports to the United Kingdom of the processed agricultural products coming under the above-mentioned tariff headings (Official Journal 1977, L 97, p. 29).
5. The question asked by the Finanzgericht Düsseldorf is the following:
6. The plaintiff challenges the validity of the application, pursuant to the provisions of Regulation No 974/71, of monetary compensatory amounts to processed products which are not agricultural products within the meaning of Annex II to the Treaty but are derived from agricultural products.
7. Regulation No 974/71 of the Council of 12 May 1971, as amended by Regulation No 2746/72 of the Council, is based upon the Treaty establishing the European Economic Community, and in particular Articles 28, 43 and 235 thereof.
8. The plaintiff and the Italian Government submit that by adopting Regulation No 800/77, the Commission infringed the provisions of Article 1 (3) of Regulation No 974/71, according to which paragraph 1 shall apply only where application of the monetary measures referred to in that paragraph would lead to disturbances in trade in agricultural products.
9. It is true that in order to justify Regulation No 800/77 the Commission stated that in the case of the processed products not subject to monetary compensatory amounts, the difference in prices of the basic products has become so marked as to have a considerable effect on the conditions of competition of the processed products ….
10. The wording of Article 1 (3) of Regulation No 974/71 as amended by Regulation No 2746/72 of the Council of 19 December 1972 (Official Journal, English Special Edition 1972 (28 -30 December), p. 64) requires that for the application of compensatory amounts to basic agricultural products, the monetary measures referred to in paragraph 1 (namely the fluctuation of the exchange rate of a Member State's currency) should lead to disturbances in trade in agricultural products.
11. The plaintiff and the Italian Government submit that the Commission applied monetary compensatory amounts to the products at issue not in order to deal with the difficulties to which monetary instability might give rise for the proper functioning of the common organizations of the market, but in order to deal with the difficulties complained of by Irish processing industries in trade with the United Kingdom.
12. The Commission states that in 1975 it adopted a practice whereby monetary compensation was to be fixed only in respect of processed products on which the maximum average incidence of the compensation exceeded 5 %.
13. The plaintiff and the Italian Government have not called in question the statistical data supplied by the Commission.
14. The plaintiff submits that the extension of the monetary compensation system to confectionery products is not justified by the fact that the compensatory amounts applied to the basic products also led to price differences and distortions at the stage of the processed products, because the Commission failed to state why it extended the compensatory amounts system to certain processed agricultural products but not to other important groups of products — such as, in particular, pasta, marmalade, jam and preserved fruit containing sugar.
15. However, the Commission is not bound to fix compensatory amounts for all the products in a group, but may assess the need to apply compensatory amounts either by products or by groups of products.
16. The costs incurred by the Irish Government, the Italian Government and the Commission of the European Communities, which submitted observations to the Court, are not recoverable.
On those grounds, THE COURT, in answer to the question referred to it by the Finanzgericht Dusseldorf by an order of 7 July 1978, hereby rules:
1 Translator's note: This is a corrected version of the text appearing in the Official Journal, which is defective; cf. Mr Advocate General Warner's comments in Case 29/77 Roquette 1977 ECR 1835. at p. 1847.