JUDGMENT OF 5. 3. 1980 — CASE 38/79 BUTTER- UND EIER-ZENTRALE NORDMARK / HAUPTZOLLAMT HAMBURG-JONAS

In Case 38/79 REFERENCE to the Court under Article 177 of the EEC Treaty by the Finanzgericht Hamburg [Finance Court, Hamburg] for a preliminary ruling in the action pending before that Court between

THE COURT composed of: H. Kutscher, President, A. O'Keeffe and A. Touffait (Presidents of Chambers), J. Mertens de Wilmars, P. Pescatore, Lord Mackenzie Stuart, G. Bosco, T. Koopmans and O. Due, Judges, Advocate General: F. Capotorti Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts and Issues

I — Facts and written procedure

II — Written observations submitted to the Court

A — Observations of the plaintiff in the main action

B — Observations of the Commission

Ill — Oral procedure

Decision

Costs

I —. Facts and written procedure

1. The request from the Finanzgericht Hamburg for a preliminary ruling is concerned with whether the exception in regard to the destruction of goods in transit by reason of force majeure, provided for in Article 6 (1) of Regulation No 192/75 on export refunds, which was applied by analogy to accession compensatory amounts in the judgment of the Court of 11 July 1978 in Case 6/78 Union Française des Céréales v Hauptzollamt Hamburg-Jonas [1978] ECR 1675, may also be applied to monetary compensatory amounts which become payable on importation into a Member State but which are granted by the exporting State.

2. The monetary compensatory amount payable in the case of exportation from a Member State the currency of which has appreciated above the margin of fluctuation to a Member State the currency of which has depreciated below that margin is composed of two elements: one, granted by the exporting State, is payable when the goods are exported and the other, granted by the importing State, is payable when the goods are imported (Article 1 (1) 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)).

3. The corresponding provisions in regard to payment of accession compensatory amounts are contained in Regulation No 269/73 of the Commission of 31 January 1973 laying down detailed rules for the application of the system of accession compensatory amounts (Official Journal, L 30, p. 73), Article 5 (1) of which provides that:

4. In the field of export refunds, Article 6 (1) of Regulation No 192/75 of the Commission of 17 January 1975 laying down detailed rules for the application of export refunds in respect of agricultural products (Official Journal, L 25, p. 1) provides that:

5. In its judgment of 11 July 1978 in Case 6/78 Union Française des Céréales, the Court, in applying by analogy Article 6 (1) of Regulation No 192/75, ruled that:

6. At the beginning of November 1977, Butter- und Eier-Zentrale Nordmark e.G., the plaintiff in the main action in the present case, sold 18160 kg of butter to a British undertaking. The sale price, which was calculated on the basis of the domestic purchase prices less the accession compensation for the United Kingdom, the monetary compensation for Germany and the monetary compensation for the United Kingdom, was agreed cif Manchester. On 10 November 1977 the goods were loaded on board the Hero at the Danish port of Esbjerg. On 13 November 1977 the ship sank to the northwest of Heligoland. The insurance company reimbursed the cif price of the goods. The plaintiff received from the German customs authorities DM 14617.63 by way of the United Kingdom accession compensation and DM 10734.38 by way of the monetary compensation for the Federal Republic of Germany, that being in respect of the exportation of the goods. The Hauptzollamt Hamburg-Jonas, the defendant in the main action in this case, refused, however, to pay the monetary compensation of DM 17307.56 for importation into the United Kingdom.

7. In respect of that refusal the plaintiff in the main action instituted proceedings before the Finanzgericht Hamburg.

8. By order of 20 February 1979 the Finanzgericht stayed proceedings before it and made reference to the Court of Justice under Article 177 of the EEC Treaty for a preliminary ruling on the following question:

9. It appears from the order making the reference that the Finanzgericht is of the opinion that the wording of the relevant provisions supports the argument of the defendant in the main action.

10. The order making the reference was received at the Registry of the Court on 8 March 197.9.

II —. Written observations submitted to the Court

A —. Observations of the plaintiff in the main action

B —. Observations of the Commission

Ill —. Oral procedure

1. The Commission stated in reply to a written question from the Court that, apart from the butter sold by the plaintiff in the main action, agricultural products from Denmark were aboard the shipwrecked vessel. According to information given to the Commission by the Danish customs authorities no monetary compensatory amounts were paid in respect of those other goods, despite the fact that the United Kingdom and Denmark had made use of the option provided in Article 2a of Regulation No 974/71 of the Council to have the monetary compensatory amount to be granted on import paid by the exporting Member State.

2. At the sitting on 11 December 1979 the plaintiff in the main action, Butter- und Eier-Zentrale Nordmark e.G., represented by B. Festge, and the Commission, represented by J. Sack, a member of its Legal Department, acting as Agent, submitted oral argument.

3. The plaintiff in the main action supplemented its written observations by stating that, if Article 2a of Regulation No 974/71 had not been put into effect, it would have calculated its sale price at the level of the authorized margin of fluctuation so that the seller would not have been affected in that event by the fact that the goods perished.

4. The Advocate General delivered his opinion at the sitting on 16 January 1980.

1. By order of 20 February 1979, which was received at the Court on 8 March, the Finanzgericht Hamburg submitted for a preliminary ruling under Article 1 77 of the EEC Treaty a question concerning the interpretation of Article 11 (2) of Regulation No 1380/75 of the Commission of 29 May 1975 laying down detailed rules for the application of monetary compensatory amounts (Official Journal, L 139, p. 37).

2. The question is put in the context of litigation between, on the one hand, an undertaking which exported from the Federal Republic of Germany 18160 kg of butter which, following a shipwreck in the North Sea, failed to arrive at its destination in the United Kingdom and, on the other hand, the German customs authorities who refused to pay to the exporting company the monetary compensatory amounts in respect of importation into the United Kingdom on the ground that that company had failed to furnish proof, as required by the abovementioned provision, that customs import formalities had been completed. As the price which was to be paid by the British purchaser, and which was reimbursed by the insurance company, had been calculated on the basis of the price level in the United Kingdom, the exporting firm suffered a loss equivalent to those amounts.

3. The exporting company, the plaintiff in the main action, particularly contended before the Finanzgericht that, in accordance with the principle laid down by the Court in its judgment of 11 July 1978 in Case 6/78 Union française des Céréales v Hauptzollamt Hamburg-Jonas [1978]. ECR 1675, Article 6 (1) of Regulation No 192/75 of the Commission of 17 January 1975 laying down detailed rules for the application of export refunds in respect of agricultural products (Official Journal, L 25, p. 1) should be applied by analogy in the present case. That Article 6 provides that, in certain cases, payment of the refund is subject to the condition that the product has been imported into a third country, and, where appropriate, into a specific third country, but it provides at the same time an exception for goods which have perished in transit as a result of force majeure.

4. In Case 6/78 the Court applied that clause on force majeure by way of analogy in interpreting Regulation No 269/73 of the Commission of 31 January 1973 laying down detailed rules for the application of the system of accession compensatory amounts (Official Journal, L 30, p. 73), Article 5 (2) of which provides that, in certain cases, payment of the compensatory amount is subject to proof that import formalities have been completed in the Member State of destination. In its judgment the Court proceeded, in particular, on the principle of Community preference, the observance of which principle, in trade between the Community as originally constituted and the new Member States before the full and complete integration of the latter into the common organization of agricultural markets, the temporary system of accession compensatory amounts was intended to ensure.

5. In the present case the Finanzgericht considers that Regulation No 1380/75 displays the same lacuna and has therefore invited the Court to rule upon the following question:

6. In its observations the Commission has contended in particular that although there was a marked similarity capable of justifying an analogy between refunds on exports to nonmember countries and the accession compensatory amounts granted during the transitional period on exports to the new Member States, such is not the case in regard to monetary compensatory amounts. Above all, the principle of Community preference, which was the basis both of accession compensatory amounts and refunds on exports to third countries, does not play an essential part in the system of monetary compensatory amounts.

7. In fact, the system of refunds on exports to nonmember countries was introduced in order to ensure that, subject to special considerations relating to the different products, Community exporters would enjoy a level of prices similar to that within the Community market and accordingly, for certain products, significantly higher than the level of prices on the world market. As the Court stressed in the judgment which it gave in Case 6/78 in relation to accession monetary compensatory amounts, it would be incompatible with the principle of Community preference for the exporter in the Community to be refused the refund after the goods had perished in transit as a result of force majeure. Whether he bore that loss himself or whether he had insured against that risk, the exporter would be in an unfavourable competitive position in relation to a seller in a nonmember country, which is precisely what the system of refunds is intended to prevent.

8. On the other hand, the function of the system of monetary compensatory amounts is wholly different. That system was introducted in order to remedy, in a general manner, a monetary situation which threatens the existence of the Community system of prices for agricultural products. It was not conceived in order to give individual traders security against all the risks which flow from fluctuations in exchange rates or to indemnify them for any loss suffered as a result of these fluctuations.

9. Having regard to these differences between the system of refunds on exports to nonmember countries and the system of monetary compensatory amounts, there is no reason to apply by analogy a rule expressly laid down for refunds in order to indemnify the plaintiff in the main action for a loss which normally constitutes one of the commercial risks which traders must themselves assume, by taking out, where appropriate, a suitable insurance.

10. Thus the answer to the question submitted by the Finanzgericht Hamburg should be that Article 11 (2) of Regulation No 1380/75 of 29 May 1975 is to be interpreted as meaning that where goods exported from a Member State have perished in transit as a result of force majeure, the exporter is not entitled to the same monetary compensatory amounts as would have been due to him if the goods had reached their destination and if customs import formalities had been completed there.

11. The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the national court, the decision on costs is a matter for that court.

On those grounds, THE COURT in answer to the question submitted to it by the Finanzgericht Hamburg by order of 20 February 1979, hereby rules: