Opinion of Mr Advocate General Van Gerven
Mr President,
Members of the Court,
1. The case in which a question has been submitted to the Court by the College van Beroep voor het Bedrijfsleven (hereinafter referred to as the national court) concerns the validity of Article 13a of Commission Regulation (EEC) No 1687/76, inserted in that Regulation by Regulation (EEC) No 45/84. Regulation (EEC) No 1687/76 contains the Community rules for verifying the use and/or destination of products from intervention.
The Community rules
2. The dispute must be seen in the context of the customs treatment applicable to goods returned to the customs territory of the Community. The second and third recitals in the preamble to the basic Council Regulation applicable, which is Regulation (EEC) No 754/76, state as follows:
3. At the material time the aforementioned Commission Regulation (EEC) No 1687/76 of 30 June 1976 contained the provisions on verification with regard to products from intervention stocks. As I have already mentioned, it was by means of an amending regulation, namely Commission Regulation (EEC) No 45/84 of 6 January 1984, that the contested Article 13a was inserted in Regulation (EEC) No 1687/76. Article 13a is made up of several parts. Article 13a(1) provides as follows:
4. Subsequent to the facts which gave rise to the action before the national court, the Council, by Regulation (EEC) No 1147/86 of 17 April 1986, amended Article 2 of Regulation (EEC) No 754/76 on returned goods by adding, in Article 2(1 )(b) a more general exclusion clause. Since both the plaintiffs and the Commission derive a line of argument from this addition, it is worth comparing the amended provision with the contested Article 13a.
5. In order to give a full chronological account I would also point out that, in spite of the aforesaid amendment to Article 2 of Council Regulation (EEC) No 754/76, the Commission nevertheless reproduced Article 13a of its implementing Regulation (EEC) No 1687/76 in its entirety in Article 19 of its new Regulation (EEC) No 569/88 of 16 February 1988. As already stated, the new Article 19 is, in the Commission's view, a rule implementing the amended Article 2 of Regulation (EEC) No 754/76.
The arguments of the parties
6. Before the national court the plaintiffs put forward four arguments, only one of which has been submitted to the Court: it concerns the Commission's lack of competence to insert the contested Article 13a into Commission Regulation (EEC) No 1687/76 by means of Regulation (EEC) No 45/84. I would refer to the Report for the Hearing for a summary of the observations of the parties. In this Opinion I shall confine myself to the basic reasoning of the plaintiffs and the Commission. Before doing so I would point out that since this question is still of some relevance another argument put forward by the plaintiffs before the national court concerns the breach by the Netherlands authorities of the principles of legal certainty and protection of legitimate expectation (see also paragraph 14 below).
7. The Commission contends that it had power to adopt the Regulation and states that in regard to the common agricultural policy it has a wide implementing power, as was recognized by the Court in the Rau case, and that in this case it adopted a measure to prevent abuse or speculation. It stresses the fact that Commission Regulation No 1687/76, which was amended by Commission Regulation (EEC) No 45/84, contains general rules for controlling agricultural products from intervention in the framework of the various organizations of the market. The wide implementing power enjoyed by the Commission with regard to organizations of the market is therefore the legal basis for the contested Article 13a.
Assessment of the arguments concerning competence
8. The first question which must be answered is whether the judgments of the Court relied upon by the parties are in fact of use in this case. The applicants rely upon the judgment in Tradax, in which the Court stated in the third sentence of paragraph 10 that an implementing regulation not directly based on Article 43(2) of the Treaty could not derogate from the basic regulation to which it was subordinate. The Commission relies upon the judgments in Rau and Franken in which the Court recognized that it had a wide implementing power for the implementation of the basic regulation, that is to say for the implementation of the Council Regulation applicable to a certain agricultural sector which introduces a common organization of the market for that sector.
9. The question of competence which has arisen is essentially a question of the precedence which must be given to two objectives. On the one hand, there is the objective of combating and preventing any abuse in order that Community funds are used as responsibly as possible in an area as sensitive as agriculture, and more especially as regards goods from intervention. On the other hand, there is the objective of treating undertakings fairly on the reimportation of goods into the customs territory of the Community.
10. As regards the second objective, regarding the fair treatment of undertakings when goods are reimported into the customs territory of the Community, it will be remembered that the Council itself had in mind possible speculation in Regulation No 754/76. That is why exemption was in principle refused for goods which were the subject of customs formalities with a view to the grant of refunds or other amounts. Derogation from this principle was allowed only in clearly defined cases where it could be established that the amounts granted were not paid out or were refunded (see paragraph 3 above).
11. In this conflict of aims, which is also a conflict of the powers to attain such aims, precedence must, in my view, be given to the first objective, for the following reasons. However important the second objective may be, the first, that is to say the careful management of Community funds, seems to me to be even more important because it directly affects the general interest. The possibilities referred to by the Commission of the improper use of the arrangements for returned goods in the case of goods from intervention stocks seem to me to be sufficiently real to justify intervention on the part of the Commission. The Commission is directly empowered to do so as a result of its implementing power, to be interpreted widely according to the judgments of the Court, with regard to the organization of agricultural markets, and in particular as regards the verification of the use and destination of products from intervention. That is not altered by the fact that it used this power in a somewhat artificial way in so far as it gave the impression in the wording of Article 13a(2) that it had amended Article 2(1)(b) of Council Regulation (EEC) No 754/76, since the preamble to that Regulation recognized the need to avoid any speculation in determining the arrangements for returned goods (see paragraph 2 above). In this connection, it seems to me to be reasonable that the refusal in principle to exempt from the agricultural levy products which were the subject of customs formalities with a view to the grant of refunds or other amounts, was considered by the Commission to have been given by way of example and that it considered that it was entitled to use its power relating to the verification of products from intervention in the same perspective in order to fill a lacuna which it had identified in the arrangements for returned goods.
12. The observations set out above bring me to the second important argument put forward by the applicants: is the solution introduced by the Commission by means of Article 13a of Regulation (EEC) No 1687/76 proportionately too drastic in relation to the improper use which it was designed to prevent?
13. In paragraph 8 of its judgment of 23 February 1983 in Fromançais SA v Forma, the Court stated as follows:
14. Against this background two factors stand out. In the first place, it becomes clearer what the Commission has in mind when it refers to grounds of administrative simplicity. The facts in the present case support the Commission's statement that when the rules applicable to security are adopted no account may be taken of particular circumstances such as the resale of goods with the contract terms unknown to third parties. Secondly, and more especially, it is clear from the judgments of the Court — in which, in order to assess whether the forfeiture of the entire security is compatible with the principle of proportionality, a distinction is drawn between primary obligations and secondary obligations — does not lead to the conclusion here that the rules adopted on the provision of security with regard to goods from intervention are unnecessary to attain the desired aim. It is a case of imposing a rule to attain a primary aim. In this instance, that aim is not, however, as in the majority of cases brought before the Court, to guarantee that goods exported from the Community actually leave the Community and reach their destination but to discourage the reimportation of goods previously held in intervention. In the Fromançais case cited above, the Court accepted (albeit with regard to the first situation which I have referred to above but nonetheless in general terms) that the forfeiture of the whole security, as a means of preventing speculation, was not disproportionate. Thus where, as in this case, it is a question of discouraging a transaction considered undesirable from the Community point of view, the confiscation of a security equal to 110% of the intervention price of the product in question cannot be considered inappropriate.
Conclusion
15. On the basis of the considerations set out above I propose that the Court should reply to the question put to it by the national court as follows:
1 Original language Dutch
2 Commission Regulation (EEC) No 45/84 amending Regulation (EEC) No 1687/76 laving down common detailed rules for verifying the use and/or destination of products from intervention; OJ 1984. L 7, p 5
3 Commission Regulation (EEC) No 1687/76 of 30 june 1976, OJ 1976, L 190. p 1
4 Sec Council Regulation (EEC) No 1278/84 of 7 May 1984 laying down the implementing rules for 1984 for Regulation (EEC) No 3331/82 concerning food-aid policy and food-aid management, OJ 1984, L 124, p 1. and Commission Regulation (EEC) No 1354/83 of 17 Mas 1983 laying down general rules for the mobilization and supply of skimmed-milk powder, butter and butteroil as food aid, OJ 1983, L 142, p 1, as amended by Regulation (EEC) No 1986/83, OJ 1983, L 187, p 29, see in particular also Commission Regulation (EEC) No 3295/84 of 23 November 1984 on the supply of various lots of skimmed-milk powder as food aid, OJ 1984, L 309, p 16, and Annex E thereto
5 See Annex E cited in footnote 3 above
6 Article 18(2) of Regulation (EEC) No 1354/83, from Article 18(8) of the same Regulation it is moreover clear tbat he must bear the risk of deterioration until the time of shipment
7 It is not clear whether the security was released on the basis of Article 26(2) (proof that the conditions on use and/or destination have been satisfied) or on the basis of Article 26(9) (force majeure) of Regulation (EEC) No 1354/83. The answer to this question is in any event irrelevant for the purposes of the question of law at issue. It is clear from Article 16(3) of the same Regulation that the rights and obligations arising from the award are not transferable. This means that the legal relationship between Schenker and the German intervention agency was not transferred to Vreugdenhil.
8 Council Regulation (EEC) No 75-1/76 of 25 March 1976, OJ 1976, L 89, p 1
9 The rights and obligations arising from the award shall not he transferable
10 Council Regulation (EEC) No 1147/86 amending Regulation (EEC) No 734/76 on the customs treatment applicable to goods returned to the customs directory of the Community, OJ 1986. L 105, p 1
11 These are rules which, instead of providing for export refunds, give the right to import specified quantities of the same product free of import duties. These rules are regularly applied in the heef and veal sector and were for a long time also applied in the fats and oils sector.
12 Article 7 of Commission Regulation (EEC) No 2437/87 of 11 August 1987 providing for the grant of private storage aid fixed at a standard rate in advance in respect of carcasses, half-carcasses, hindquarters and forequarters from adult male bovine animals; OJ 1987, L 225, p. 13.
13 Sec Commission Regulation (EEC) No 3916/88 of 15 December 1988 extending the period of validity of the measures provided for by Regulation (EEC) No 3191/80 on transitional measures concerning non-recovery of the variable slaughter premium for sheepmeat and goatmeat products exported from the Community; OJ 1988, L 347, n. 57.
14 Regulation (EEC) No 569/88 laying down common detailed rules for verifying the use and/or destination of goods from intervention; OJ 1988, L 55, p. 1
15 Judgment of 10 March 1971 in Case 38/70 Tradax v Einfuhr und Vorratsstelle Getreide [1971] ECR 145, chiefly at paragraph 10, second sentence.
16 Judgment of 10 March 1971 in Case 58/70 Compagnie Continentale v Hoofdproduktschap voor Akkerbouwpro-dukten [1971] ECR 163, paragraph 15.
17 This Committee was set up by Article 7 of Regulation (EEC) No 1798/75 of the Council of 10 July 1975 on the importation free of Common Customs Tariff duties of educational, scientific and cultural materials; OJ 1975, L 184, p. 1. Article 9 of that Regulation prescribes the procedure: the Committee gives an opinion on a draft submitted by the Commission. If the proposed measures conform with the opinion of the Committee acting by a weighted majority, the Commission may adopt the text. If the proposed measures do not conform with the opinion of the Committee, the Commission forthwith submits a proposal to the Council, which acts by a qualified majority. If after three months the Council has not acted, the proposed measures are adopted by the Commission.
18 Regulation (EEC) No 2945/76 laying down provisions for the implementation of Council Regulation (EEC) No 754/76 on the customs treatment applicable to goods returned to the customs territory of the Communitv; OJ 1976, L 335, p. 1.
19 Judgment of 11 March 1987 in Joined Cases 279, 280, 285 and 286/84 Ran v Commission [1987] ECR 1069, paragraphs 14 and 15.
20 Judgment of 15 May 1984 in Case 121/83 Zuckerfabrik Franken v Hailptzollamt Würzburg [1984] ECR 2039, paragraph 13.
21 See, for example, Article 11(5) and 26(3) of Regulation No 136/66/EEC of the Council on oils and fats, cued in the preamble to Regulation (EEC) No 1687/76 and, for the milk-products sector, Anicie 6(7) and Article 7(5) of Regulation (EEC) No 804/68, OJ, English Special Edition 1968 (1), p 176
22 See the ludgmcnt of 14 February 1989 in Case 13/88 Knoeckel v Hauplzollamt Landau [1989] ECR 337, in particular paragraph 28.
23 Case 66/82 Fromençais SA v Forma [1983] ECR 395.
24 See, for example, the judgment of 20 January 1979 in Case 122/78 Buitoni v forma [1979] ECR 677; of 21 June 1979 in Case 240/78 Atalanta Amsterdam BVv Produktschap voor Vee en Vlees ĮI979] ECR 2137; of 23 February 1983 in Case 66/82, cited above; and of 24 September 1985 in Case 181/84 The Queen, ex parte Man (Sugar) Limited v Intervention Board for Agricultural Products [1985] ECR 2889.
25 That is apparent, moreover, from Article 16(3) of Regulation (EEC) No 1354/83: The rights and obligations arising from the adjudication are not transferable which I have already cited (in paragraph 1, footnote 7, and paragraph 3).
26 Neither the Court (nor the Commission) has been told of the precise circumstances and conditions of the transaction, such as the identity of the purchasers (Schenker, an insurer, the intervention agency?), the moment at which ownership was transferred, the risks and any insurance against damage or force majeure, the price and whether the security to be lodged may be deducted from it.
27 See, for example, paragraph 20 of the judgment in Case 122/78 Buitoni; paragraph 10 of the judgment in Case 240/78 Atalanta; and paragraphs 20 to 28 of the judgment in Case 181/84 Man (Sugar) Limited, cited in footnote 23 above.
28 In paragraphs 10 to 13 and 18. See also judgment of 2 December 1982 in Case 272/81 RUMI v Forma [1982] ECR 4167, and in particular paragraphs 11 and 12.