Opinion of Mr Advocate General Mayras

Mr President,

Members of the Court,

The requests for preliminary rulings submitted to the Court by the Tribunal Administratif [Administrative Court], Châlons-sur-Mame, the Tribunal Administratif, Orléans, and the Tribunal d'Instance [District Court], Lille, all concern the methods of calculating the monetary compensatory amounts charged on the exportation from France of products derived from basic agricultural products (products of the milling industry, maize and wheat, on the one hand, and starch products on the other).

The first two cases directly challenge the validity of Regulation No 2744/75 of the Council of 29 October 1975 on the import and export system for products processed from cereals and from rice and above all that of Commission Regulations Nos 1910/76 of 30 July 1976 and 2466/76 of 8 October 1976 altering the monetary compensatory amounts.

In the third case, although the Court was not expressly requested to give a ruling on the validity of any particular Community provision, the questions submitted to it, which concern the interpretation of Commission Regulation No 652/76 of 24 March 1976 changing the monetary compensatory amounts following changes in exchanges rates for the French franc, ovérlap the first two questions to a large extent. I have therefore taken the liberty of dealing with the three together in my opinion, although the Court did not comply with the request of the Italian Government to join the cases.

The problem in question has given rise to observations not only from the parties to the main actions and from the institutions which enacted the measures to be interpreted or whose validity is challenged but also from two Governments of Member States with soft currencies, France and Italy, which have an interest in obtaining the reduction or even the abolition of negative compensatory amounts. On the other hand, naturally no Member State with a hard currency has submitted observations.

Since the facts have been set out in great detail by the Judge-Rapporteurs and replies have been given in writing to the questions asked by the Court matters have been clarified in large part.

I propose to group my comments round the following themes:

1. According to Article 2 (2) 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 the compensatory amounts to be charged (or granted) on products of which, on the one hand, the prices are dependent on those of products covered by intervention arrangements under the common organization of agricultural markets and which, on the other, are governed by a common organization of the market or are the subject of specific arrangements under Article 235 of the Treaty, shall be equal to the incidence, on the prices of the product concerned, of the application of the compensatory amount to the prices of the product for which provision has been made for intervention measures and on which they depend.

2. The Commission replies to that criticism with a whole series of arguments.

3. The Commission then sets out a series of considerations whereby it endeavours to show that the fixing of the processing coefficient at issue was effected through the exercise of the largely discretionary power, which, according to the case-law of the Court of Justice, it enjoys in this field.

4. What is the precise position with regard to that discretionary power claimed by the Commission?

5. The choice of the coefficient adopted for calculating the compensatory amounts applicable to processed products is not neutral from the point of view of trade. The method adopted in the contested regulations necessarily entailed distortion in trade between Member States and thus constituted discrimination between producers contrary to Article 40 (3) of the Treaty. A system which over-compensates for the effects of currency depreciation favours traders in countries with hard currencies at the expense of those in countries with soft currencies.

6. In fact the Commission had already been prompted in Regulation No 1771/77 of 29 July 1977 to reduce the coefficient from 1.80 to 1.60. By Regulation No 746/79 of 11 April 1977, which came into force on 28 May 1979 as the result of a thorough study, it again reduced the compensatory amounts applicable to maize groats and maize meal together with those on other products processed from cereals (in particular maize starch and wheat starch):

There are two other grounds which might conduce to the view that the contested regulations are invalid. One has already been put forward by the French Government in its written observations in the first two cases; it concerns the failure to take account of the production refund on starch. The other was treated in particular in the third cases; it concerns the choice of the basis for the calculation.

1. The plaintiff in the main action in Case 145/79 states that with regard to maize starch (tariff heading 11.08 A I), the calculation of compensatory amounts does not take account of the production refund on such starch. Regulation No 2727/75 of the Council of 29 October 1975, the basic regulation, contains the following (eighth) recital:

2. Whilst the compensatory amount applicable to wheat is calculated on the reference price of common wheat of minimum bread-making quality at which wheat of bread-making quality may be purchased by the intervention agencies, the compensatory amounts applicable to wheat starch (tariff heading 11.08 A III) and secondary products are calculated on the threshold price after deduction of the production refund and not on the reference price after deduction of that refund. The reference price for common wheat of bread-making quality was introduced by Council Regulation No 1143/76 of 17 May 1976 amending basic Regulation No 2727/75. Nevertheless under Council Regulation No 1151/76 of 17 May 1976 no special reference price was fixed for the 1976/77 marketing year; that price is equal to the single intervention price of common wheat.

It remains to consider the case of sorbitol which contains more than 2% mannitol and is manufactured from maize, and the case of isoglucose, which is also manufactured from maize.

The two products in question are derived from starch and have numerous industrial outlets which are continually expanding. This special sector of the maize starch industry is characterized by an advance level of technology and is much more closely related to the processing industries than the agricultural sector in general.

(1). Sorbitol is a product obtained from glucose, dextrose or fructose and is used in pharmaceuticals and for the preparation of vitamin C. it comes either under Chapter 29, Organic Chemicals (tariff heading 29.04 C), or Chapter 38, Miscellaneous chemical products (tariff heading 38.19 T). Accordingly, it does not constitute an agricultural product for the purposes of Annex II to the Treaty: nevertheless it comes under the embryonic common organization of the market set up by Regulation No 1059/69 of the Council of 28 May 1969 laying down the trade arrangements applicable to certain goods resulting from the processing of agricultural products, adopted on the basis of Article 235 of the Treaty, because it contains more than 2% mannitol which is itself manufactured from maize.

(2). The plaintiff in the third case argues that the cost price of isoglucose depends upon the price of maize and not on that of sucrose and that accordingly the compensatory amount on that product must be based on the compensatory amount applicable to the basic product, maize. The Commission maintains that isoglucose is in competition with liquid sugar. Consequently, the price of isoglucose is, it claims, in fact determined by the intervention price of isoglucose is, it claims, in fact determined by the intervention price of sugar and not by that of maize, and the criticisms concerning the compensatory amounts applied to that product are unfounded.

In the third case submitted to the Court of Justice the Tribunal d'Instance, Lille, raises the question of principle concerning the detailed rules on the award of default interest on sums improperly levied on traders. If the contested regulations are held to be invalid the national court, before ordering repayment of the sums paid but not owed, including interest, wishes to ascertain that the charge will ultimately be paid from the Community budget.

The same question has been submitted in Case 130/79, Express Dairy Foods, in which case the parties recently, on 12 February 1980, presented oral argument.

The Commission considers that this question which concerns the relationship between the Member States and the Community institutions cannot be settled in the context of proceedings before a national court between an individual and the administration of a Member State and cannot therefore be referred to the Court for a preliminary ruling. Furthermore, it considers that the reply to this question is of no assistance to the national court in settling the main action.

This point of view of the Commission appears to me a novel argument and, if it were upheld, it would mean that the Court of Justice would have to declare that it had no jurisdiction in a large number of cases submitted to it under Article 177. It is all the more surprising since, in the Roquette case in which the Court delivered judgment on 21 May 1976 ([1976] ECR 686), in contending that an application for compensation for non-payment of default interest was inadmissible, the agent of the Commission had argued that the appropriate method appears rather to submit a fresh question to the Court of Justice for a preliminary ruling as to whether the French State was obliged to pay to the applicant the interest ancillary to the principal improperly levied for which the European Agricultural Guidance and Guarantee Fund would immediately become liable.

For my part I shall make a distinction between the very principle of the award of default interest an the problem to whose budget it should be charged. The Court of Justice in any case has jurisdiction to reply to the first part of the question.

As this Court ruled in the above-mentioned judgment of 21 May 1976 in the Roquette case, it is clear from the provisions on the Communities' own resources, that is to say, the Decision of the Council of 21 April 1970 and Regulation No 2/71 of the Council of 2 January 1971 in implementation thereof in conjunction with Regulation No 729/70 of 21 April 1970 on the financing of the common agricultural policy that the national authorities must ensure on behalf of the Community and in accordance with the provisions of Community law that monetary compensatory amounts are collected.

Those amounts are collected by the Member States in accordance with their laws, regulations and administrative provisions. Proceedings for the repayment of amounts collected on behalf of the Community accordingly fall within the jurisdiction of the national courts and must be settled by them by applying their national law in so far as no provision of Communty law settles the matter.

With regard to the charging of the interest to the national budgets or, alternatively, to the Community budget, there existed only a proposal for a regulation submitted by the Commission to the Council on 14 February 1973 on interest on sums paid and repayable. This proposal, which was never published in the Official Journal of the European Communities, was altered by amendments sent to the Council on 20 September 1973 but was finally withdrawn by the Commission on 8 December 1976. From the point of view of the European accounting system this constitutes a disturbing legal vacuum which gives rise to distortion and which should be made good at the Community level.

The budgetary arrangements for negative compensatory amounts were, at the time, as follows: the compensatory amounts charged in trade between Member States were considered, with regard to the financing of the common agricultural policy, as forming part of the intervention intended to stabilize the agricultural markets (Article 7 (2) of Regulation No 974/71). The European Agricultural Guidance and Guarantee Fund was required to account for the difference between the amounts granted and the amounts levied by each Member State.

In trade with non-member countries the compensatory amounts charged on exports were deducted from the export refund (Article 4 (a)). The total sum of the amounts to be deducted from the refunds could be determined in accordance with a general method. For the purposes of accounting under the Community budget that sum was deemed to have been deducted from the refunds and only the proportion exceeding that sum was considered as own resources.

In the present state of affairs it is for the national authorities to settle with regard to the repayment of charges improperly levied all subsidiary questions concerning such repayment, such as any payment of default interest. The Tribunal d'Instance, Lille, is thus the only court having jurisdiction to settle the award of interest; nothing prevents it, if French law enbables it to do so or if, as I think, a principle of natural justice common to the legal systems of the Member States so requires, from reaching a decision, like that of the Finanzgericht Hamburg on 16 May 1978 concerning amounts improperly granted, that the duty to repay sums improperly levied extends to default interest on such sums.

I am of the opinion that the Court should rule as follows in answer to the questions which have been submitted to it: to the extent indicated above:

1 Translated from the French.