JUDGMENT OF 27. 9. 1984 — CASE 38/83 VREELAND v HOOFDPRODUKTSCHAP VOOR AKKERBOUWPRODUKTEN
In Case 38/83 REFERENCE to the Court under Article 177 of the EEC Treaty by the College van Beroep voor het Bedrijfsleven [administrative court of last instance in matters of trade and industry], The Hague, for a preliminary ruling in the proceedings pending before that court between
THE COURT (Third Chamber) composed of: Y. Galmot, President of Chamber, U. Everling and C. Kakouris, Judges, Advocate General: CO. Lenz Registrar: J. A. Pompe, Deputy Registrar
gives the following
JUDGMENT
Facts and Issues
I — Facts and procedure
1. The Community rules in question
2. The currency developments leading to the proceedings before the national court
3. Facts and procedure before the national court
4. Procedure before the Court
II — Written observations
1. First question
2. Second question
3. Third question
4. Fourth question
III — Oral procedure
Decision
The first and second questions
Third and fourth questions
Costs
I —. Facts and procedure
1. The Community rules in question
1. In the case of an alteration to the value of the unit of account or an adjustment of agricultural prices pursuant to the fourth paragraph of Article 3 of Regulation (EEC) No 653/68:
2. In cases where the provisions of paragraph 1 (a) apply, any amounts referred to therein which have been fixed in advance for a transaction still to be carried out after the alteration in the value of the unit of account or adjustment of agricultural prices shall where necessary be recalculated and refixed by the Commission in like manner as laid down in those provisions; however, any person who has obtained advance fixing of such amounts for a specific transaction may, by written application which must reach the competent authority within 30 days of the entry into force of the measures fixing the recalculated amounts, obtain cancellation of the advance fixing and of the relevant document or certificate.
1. In the case of an alteration of the relationship between the parity of the currency of a Member State and the value of the unit of account, the Member State concerned, using the new parity relationship and without prejudice to the application of Article 1 (2), shall adjust the following amounts, given in units of account, if they appear in national currency in the documents or certificates issued in pursuance of the common agricultural policy or the special trade systems for goods processed from agricultural products:
1. The provisions of Regulation (EEC) No 1134/68 in respect of an alteration of the relationship between the parity of the currency of a Member State and the value of the unit of account shall apply.
2. However, the second subparagraph of Article 4 (1) of Regulation (EEC) No 1134/68 shall apply only if the application of the new representative rates is disadvantageous to the party concerned.
1. For the purposes of Article 4 of Regulation (EEC) No 878/77, there shall be a disadvantage where, following the application of the new representative rate, the alteration in terms of national currency in the sum total, or where appropriate the balance, of the amounts applicable to a particular transaction results in:
2. Cancellation of an advance fixing and of the relevant document or certificate, provided for in the last subparagraph of Article 4 (1) of Regulation (EEC) No 1134/68, may be requested only if
3. ...
2. The currency developments leading to the proceedings before the national court
3. Facts and procedure before the national court
1. Article 1 (2) of Regulation (EEC) No 1134/68 enables cancellation of the advance fixing and the relevant certificate to be obtained in cases where the provisions of paragraph (1) (a) apply. Upon a proper construction of that paragraph, was there such a case when :
2. Article 4 (1) of Regulation (EEC) No 1134/68 enables cancellation of the advance fixing and of the relevant certificate to be obtained in the case of an alteration of the relationship between the parity of the currency of a Member State and the value of the unit of account. Upon a proper construction of Article 4 (1), was there such a case when the value of the ECU changed on 23 March 1981?
3. Upon a proper construction of Article 1 (1) of Regulation (EEC) No 1054/78, must the monetary compensatory amounts not fixed in advance also be taken into consideration for the purposes of calculating the disadvantage referred to in Article 1 (1) when comparing the situation of the person concerned before and after the new rates and prices came into force?
4. Upon a proper construction of Article 1 (1) of Regulation (EEC) No 1054/78, must the purchase price also be taken into consideration for the purposes of calculating the disadvantage referred to in Article 1 (1) when comparing the situation of the person concerned before and after the new rates and prices came into force?
4. Procedure before the Court
II —. Written observations
1. First question
(a). BV Verwerkings Industrie Vreeland considers that the first question calls for an answer in the affirmative since Article 1 (2) of Regulation No 1134/68 must be regarded as applicable.
(b). The Hoofdproduktschap voor Akkerbouwprodukten proposes that the first question should be answered in the negative. The possibility of cancelling advance fixing provided for in Article 1 (2) of Regulation No 1134/68 depends on whether Article 1 (1) thereof is applicable. The alteration of the value of the ECU which occurred on 23 March 1981 does not fall within the scope of the latter provision.
(c). The Commission takes the same view as the Hoofdproduktschap and considers that the first question should be answered in the negative. In the present case there was no alteration to the value of the unit of account or adjustment of agricultural prices within the meaning of Article 1 (1) of Regulation No 1134/68.
2. Second question
(a). BV Verwerkings Industrie Vreeland considers that the second question should be answered in the affirmative.
(b). The Hoofdproduktschap voor Akkerbouwprodukten proposes that the second question should be answered in the negative.
(c). The Commission agrees with the Hoofdproduktschap in considering that the second question should be answered in the negative.
3. Third question
(a). B V Verwerkings Industrie Vreeland considers that the third question should be answered in the affirmative.
(b). The Hoofdproduktschap voor Akkerbouwprodukten proposes that the third question should be answered in the negative.
(c). The Commission agrees with the Hoofdproduktschap in considering that the third question should be answered in the negative.
4. Fourth question
(a). BV Verwerkings Industrie Vreeland considers that the fourth question also calls for an answer in the affirmative in that when calculating the disadvantage in accordance with Article 1 (1) of Regulation No 1054/78 it is necessary to take account of an alteration in prices caused, as a result of an increase in the intervention prices, by an alteration in the representative rates.
(b). The Hoofdproduktschap voor Akkerbouwprodukten proposes that the fourth question should be answered in the negative.
(c). The Commission considers that the answer to the fourth question is implied in the reply to the third question, in that for the purposes of Article 1 (1) of Regulation No 1054/78 it is necessary to take account only of the amounts fixed in advance to which the new green rate is applied.
III —. Oral procedure
1. By order of the College van Beroep voor het Bedrijfsleven dated 25 February 1983, which was received at the Court on 10 March 1983, the College van Beroep voor het Bedrijfsleven [administrative court of last instance in matters of trade and industry], The Hague, referred to the Court of Justice for a preliminary ruling under Article 177 of the EEC Treaty four questions on the interpretation of certain provisions in Council Regulation No 1134/68 of 30 July 1968 laying down rules for the implementation of Regulation (EEC) No 653/68 on conditions for alterations to the value of the unit of account used for the common agricultural policy (Official Journal, English Special Edition 1968 (II), p. 396), and of Commission Regulation (EEC) No 1054/78 of 19 May 1978 laying down detailed rules for the application of Regulation (EEC) No 878/77 on the exchange rates to be applied in agriculture and replacing Regulation (EEC) No 937/77 (Official Journal L 134, p. 40), as amended by Commission Regulation (EEC) No 1509/78 of 30 June 1978 (Official Journal L 178, p. 50).
2. Those questions were raised in proceedings brought against the Hoofdproduktschap voor Akkerbouwprodukten, The Hague, by the limited liability company BV Verwerkings Industrie Vreeland (hereinafter referred to as Vreeland) whose registered office is at Vreeland, in the Netherlands. On 30 December 1980 and 2 and 5 January 1981 Vreeland obtained certificates for export to nonmember countries of three consignments of butter in the form of food preparations coming under tariff subheadings 21.07 G VII (a) and 21.07 G VIII (a). The certificates fixed in advance the refund applicable on the day of issue and were valid until 31 May 1981 and 30 June 1981 respectively.
3. On 23 March 1981 the Italian lire was devalued by 6% and the pound sterling revalued by 22.64%, which led to a relative devaluation of the Netherlands guilder in relation to the ECU of 2.4906%. Those alterations brought about at the same time an alteration in the relation between the exchange rates of the currencies concerned and their representative rates, which remained unchanged in the present case. In the case of the Netherlands guilder, in particular, the new central rate was less than its representative rate. Nevertheless, the Commission did not abolish the positive monetary compensatory amounts it had previously applied to the Netherlands; on the contrary, in expectation of an adaptation of the representative rates, it kept the amounts unchanged until 5 April 1981 pursuant to Regulation No 801/81 of 27 March 1981 (Official Journal L 82, p. 17).
4. It was not until 6 April 1981 that the Council adjusted the representative rates by means of Regulation No 850/81 of 1 April 1981 (Official Journal L 90, p. 1). In the case of the Netherlands guilder the representative rate was fixed at the level of the new central rate.
5. Likewise with effect from 6 April 1981, the target prices for milk and the intervention prices for milk products were fixed for the 1981/82 milk year by Council Regulation No 851/81 of 1 April 1981 (Official Journal L 90, p. 6), and the new export refunds in the milk and milk products sector were fixed by Commission Regulation No 922/81 of 3 April 1981 (Official Journal L 93, p. 10).
6. Vreeland alleged that because of the above events it was no longer possible to export at a profit on the basis of the refunds fixed in advance and therefore on 21 April 1981 requested the annulment of the said advance fixing and the certificates thereof in so far as the certificates had not then been used.
7. When that request was rejected by the Hoofdproduktschap by decisions of 18 June and 25 August 1981, Vreeland brought an action challenging the decisions before the College van Beroep voor het Bedrijfsleven, which stayed the proceedings and referred the following questions to the Court of Justice for a preliminary ruling:
8. With the first and second questions, which it is convenient to take together, the national court seeks essentially to know whether, and if so subject to what conditions, Articles 1 and 4 (1) of Council Regulation No 1134/68 of 30 July 1968 gives a right to cancellation of the advance fixing of export refunds and the certificate thereof in the event on the one hand of an alteration in the value of the currencies composing the ECU inter se and in their relation to the ECU and on the other of a fresh fixing of the target and intervention prices and the export refunds in the sector concerned.
9. In that respect the plaintiff in the main action maintains in substance that the ECU represents the unit of account used in the common agricultural policy pursuant to Council Regulation No 652/79 of 29 March 1979. It follows that an alteration in the value of the currencies composing the ECU inter se or in relation to the ECU constitutes both an alteration to the value of the unit of account within the meaning of Article 1 of Regulation No 1134/68 and an alteration of the relationship between the parity of the currency of a Member State and the value of the unit of account within the meaning of Article 4 (1) of the said regulation. Moreover, the increase in intervention prices and the reintroduction of export refunds in the sector which occurred on 6 April 1981 constitute an adjustment of agricultural prices within the meaning of Article 1 of the aforesaid regulation.
10. The Hoofdproduktschap voor Akkerbouwprodukten and the Commission on the other hand, consider that the terms unit of account and parity are no longer relevant. The unit of account, based on the concept of fixed parities and defined in relation to a specific quantity of fine gold, has been replaced by the ECU which expresses the relative rates between the currencies of the Member States fluctuating inter se within certain margins. In addition, monetary events no longer directly affect agricultural prices, which are fixed under the present system by means of representative rates. Further, the concept of adjustment of agricultural prices within the meaning of Article 1 of Regulation No 1134/68 covers only an adjustment which the Council decides to make when dealing with an alteration in the value of the unit of account following an alteration in the parity of the currency of one or more Member States. That concept thus does not cover decisions in relation to prices such as those taken on 6 April 1981 on the basis of the agricultural regulation as part of the annual review of agricultural prices.
11. In that respect it must be remembered that Article 1 of Regulation No 1134/68 gives a right to cancellation of the advance fixing of inter alia export refunds and the relevant certificate in two cases, namely on die one hand in the case of an alteration to the value of the unit of account and on the other in the case of an adjustment of agricultural prices pursuant to the fourth paragraph of Article 3 of Regulation (EEC) No 653/68. Article 4 (1) thereof gives a right to cancellation moreover in the case of an alteration of the relationship between the parity of the currency of a Member State and the value of the unit of account.
12. In the first place, in so far as the questions relate to the currency alterations which occurred on 23 March 1981 it must be observed that the aforesaid provisions refer expressly only to alterations in the value of the unit of account or in the relationship between that value and the parity of the currency of a Member State.
13. Further, the aforesaid provisions of Regulation No 1134/68 are intended to allow the Community institutions and the competent national authorities to take the appropriate measures to deal with currency alterations which have a direct effect upon agricultural prices. That is not the case, however, with alterations in the value of the ECU or the currencies composing it, because since the entry into force of Council Regulation No 878/77 of 26 April 1977 agricultural prices have ceased to depend on the official parities and central rates or effective exchange rates respectively and are based on the representative rates of the national currencies, which in the present case remained unchanged during the period from 23 March to 5 April 1981. Under the present system set up by the aforesaid Regulations Nos 878/77 and 652/79 the conversion of the ECU into a national currency for the purposes of the common agricultural policy is made on the basis of the representative rates, the difference in which in relation to the central rates and effective exchange rates respectively is compensated for by the payment of monetary compensatory amounts.
14. That conclusion is confirmed by the fact that Article 4 of Regulation No 878/77 states, albeit subject to certain reservations, that the provisions of Regulation No 1134/68 in respect of an alteration of the relationship between the parity of the currency of a Member State and the value of the unit of account are to apply to alterations in the representative rates, whereas there is no such reference in the rules substituting the ECU for the unit of account for the purposes of the common agricultural policy.
15. In the second place, as regards the questions relating to the agricultural decisions taken with effect from 6 April 1981, it suffices to observe that Article 1 of Regulation No 1134/68 is concerned only with an adjustment of agricultural prices pursuant to the fourth paragraph of Article 3 of Regulation No 653/68, that is to say, an adjustment necessary as a result of an alteration in monetary matters having a direct effect on the level of agricultural prices and effected, in derogation of the existing agricultural regulations, outside the normal decisions adopted under the common organization of the markets. That is not so in the present case since the decisions in question have been adopted not as a result of the monetary events of 23 March 1981 but as part of the annual review of prices at the beginning of the new milk marketing year.
16. That is confirmed by the fact that the measures adjusting the agricultural prices under the fourth paragraph of Article 3 of Regulation No 653/68 can be adopted only after a lapse of three days following the announcement by the Member State concerned of an alteration in the parity in question. In the present case the target and intervention prices were increased and new refunds established only after the expiry of a period of two weeks following the monetary events of 23 March 1981.
17. The first and second questions must therefore be answered to the effect that Articles 1 and 4 (1) of Council Regulation No 1134/68 of 30 July 1968 give no right to the cancellation of the advance fixing of export refunds and of the certificate attesting thereto either in the case of an alteration in the value of the currencies composing the ECU inter se and in relation to the ECU, or in the case of the fixing afresh of the target and intervention prices or export refunds in the sector concerned in so far as the new rates and prices are fixed as part of the annual review of agricultural prices under the common organization of the markets.
18. The third and fourth questions, which must be taken together, ask in substance whether iń calculating the disadvantage, for the purpose of cancelling the advance fixing, referred to in the combined provisions of Article 4 of Council Regulation No 878/77 of 26 April 1977 and Article 1 (1) of Commission Regulation No 1054/78 of 19 May 1978, it is also necessary to take account of the monetary compensatory amounts which have not been fixed in advance and the purchase price.
19. In that respect the plaintiff in the main action points out that the definition of disadvantage contained in the first paragraph of Article 1 (1) of Regulation No 1054/78 as amended by Regulation No 1509/78 refers to the sum total... of the amounts applicable to a particular transaction. It thus also covers monetary, compensatory amounts not fixed in advance especially as a disadvantage may result from such amounts not being fixed in advance. Furthermore, the wording of the second paragraph of the aforesaid provision, which stipulates that the disadvantage should be determined by comparing the situation of the interested party before and after the new rates and prices have taken effect shows that a disadvantage may also result from an alteration in the level of the market prices caused, through an increase in intervention prices, by an alteration of the representative rates.
20. The Hoofdproduktschap voor Akkerbouwprodukten and the Commission, on the other hand, maintain that Article 1 (1) of Regulation No 1054/78 defining what constitutes a disadvantage falls within the scope of Article 4 of Regulation No 878/77. That provision refers only to amounts fixed in advance and applicable to the transaction concerned, to which the new representative rate is applied to the exclusion of any amounts not fixed in advance such as monetary compensatory amounts not fixed in advance and prices.
21. In that respect it must be observed that, as the Hoofdproduktschap and the Commission maintain, Commission Regulation No 1054/78 must be interpreted in the light of the basic Council Regulation. Article 4 of Council Regulation No 878/77 states that the provisions of Council Regulation No 1134/68 on alterations in the relationship between the parity of the currency of a Member State and the value of the unit of account — in the present case Article 4 (1) thereof — are to apply to alterations in the representative rates. As far as the present case is concerned Article 4 applies only to amounts which have been fixed in advance for transaction. In the light of the relationship between those provisions, neither monetary compensatory amounts not fixed in advance nor the purchase price may be taken into account in calculating the disadvantage as there defined.
22. That consideration is not altered by the fact, to which the plaintiff in the main action referred, that according to Article 1 (1) of Regulation No 1054/78 as amended by Commission Regulation No 1509/78 the disadvantage shall be determined by comparing the situation of the interested party before and after the new rates and prices have taken effect, since it is apparent from the place of that provision in the context of the rules in question that it is confined to stating the situations to be compared for the purpose of determining the disadvantage without introducing new factors relating to the basis of that comparison.
23. That conclusion is, moreover, borne out by the very wording of Article 1(1) of Regulation No 1054/78, as amended, which refers only to an alteration in the amounts applicable to the transaction which results in the levying of a greater amount, or the granting of a lesser amount, than that applicable before entry into force of the new representative rate. It is well known that the purchase price is not taken into account in calculating the amounts to be levied or granted.
24. The third and fourth questions must therefore be answered to the effect that in calculating the disadvantage, with a view to cancelling advance fixing, for the purposes of Article 4 of Council Regulation No 878/77 of 26 April 1977 in conjunction with Article 1 (1) of Commission Regulation No 1054/78 of 19 May 1978, no account must be taken either of monetary compensatory amounts not fixed in advance or of the purchase price.
25. 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 gounds, THE COURT (Third Chamber) in answer to the questions submitted to it by the College van Beroep voor het Bedrijfsleven, The Hague, by Order of 25 February 1983, hereby rules:
1 Articles 1 and 4 (1) of Council Regulation No 1134/68 of 30 July 1968 give no right to the cancellation of the advance fixing of export refunds and of the certificate attesting thereto either in the case of an alteration in the value of the currencies composing the ECU inter se and in relation to the ECU, or in the case of the fixing afresh of the target and intervention prices or export refunds in the sector concerned in so far as the new rates and prices are fixed as part of the annual review of agricultural prices in the common organization of the markets.
2 In calculating the disadvantage, with a view to cancelling advance fixing, for the purpose of Article 4 of Council Regulation No 878/77 of 26 April 1977 in conjunction with Article 1 (1) of Commission Regulation No 1054/78 of 19 May 1978, no account must be taken either of monetary compensatory amounts not fixed in advance or of the purchase price.