Opinion of Mr Advocate General

Mr President,

Members of the Court,

1. It is well known that within the common organizations of the agricultural markets Community goods may be exported and imported only on presentation of licences, which are issued by the competent national authorities subject to the lodging of a security by the trader. The main purpose of that security is to ensure that the obligation to import or export the product during the period of validity of the licence is in fact complied with. In addition, the system allows the Community authorities to monitor permanently trade with nonmember countries in order to be able to assess its evolution and to take any measures which may become necessary.

2. On 27 July 1983 E. D. & F. Man (Sugar) Ltd (hereinafter referred to as Man Sugar), a large British firm of sugar traders, sent by telex to the Intervention Board for Agricultural Produce (hereinafter referred to as the Board) seven tenders for export and, at the same time, lodged the requisite security of 9 ECU per 100 kg in the form of a bank guarantee. The following day the Board informed Man Sugar that five tenders had been accepted for a total of 30000 tonnes of sugar for export. The applications for the relevant licences should therefore have reached the Board not later than 12 noon on Tuesday, 2 August 1983. In fact the Board received the applications after 3 p.m. on that day: a delay of a few hours, which, as Man Sugar explained to the Court, was due to an unusual and unforeseeable combination of circumstances. The telexes containing the applications had been prepared in time by the staff of the undertaking, but, that Tuesday, the employee who had always been responsible for sending telexes did not come to work for serious and well-founded personal reasons. The person assigned to replace her, already handicapped by lack of experience in those duties, was faced with even greater difficulties because he was unexpectedly overburdened with work just at the time when the telexes should have been sent. The stress caused by such circumstances and the extreme heat proved too much for the otherwise conscientious employee and he did not send the telexes until the early afternoon.

3. Conceding that the circumstances which resulted in the licence applications being submitted late do not amount to force majeure, Man Sugar puts forward two arguments to establish the invalidity of the provision. The first relates to the nature of the obligation to apply for an export licence. According to Man Sugar, that obligation represents an administrative formality of little importance. The penalty prescribed for failure to comply with it cannot therefore be equal to the penalty — forfeiture of the entire security — which is imposed for breach of the obligation to export the goods.

4. The Commission rejects those arguments. It claims in the first place that far from being a mere formality designed to furnish proof that the tenderer intends to fulfil his commitments, the obligation to apply for a licence performs a role of great importance in the present system. The previous system proved to be incapable of guaranteeing the proper management of the export market in sugar. For example, numerous licences, corresponding to considerable quantities of sugar, remained unused towards the end of 1980, which led to losses in export levies and compelled the Community to export the sugar at a higher cost. Indeed, it was to avoid those or similar problems that the new system divided the exporter's obligation into two complementary stages: the licence application and the exportation proper. The first stage is no less important than the second. If, after acceptance of the tender, the trader does not apply for a licence the Commission is immediately aware that the quantity of sugar covered by the tender will not be exported and it is in a position to prevent the damage which would result by taking appropriate administrative and financial measures.

5. At this point it should be noted that Mr Justice Glidewell questions the validity of Article 6 of Regulation No 1880/83 on one specific ground, namely the possible conflict between the penalty imposed for failure to comply with the time-limit for submitting the licence application and the principle of proportionality. Man Sugar and the United Kingdom have, however, taken the opportunity to criticize the present system of issuing export licences and argue that under that system the obligation to apply for a licence no longer has any raison d'être.

6. In the light of the foregoing considerations, I propose that in reply to the question submitted by Mr Justice Glidewell of the Queen's Bench Division of the High Court by an order of 18 June 1984 the Court should declare Article 6 (3) of Commission Regulation (EEC) No 1880/83 of 8 July 1983 invalid.

1 Translated from the Italian.