Report for the Hearing in Case C-34/92

I — Facts and Procedure

1. Legal background

According to Article 1 of Commission Regulation (EEC) No 2773/82 of 13 October 1982 fixing the export refunds on beef and veal (OJ 1982 L 292, p. 20), The list of products on which the export refund referred to in Article 18 of Regulation (EEC) No 805/68 (Council Regulation of 27 June 1968 on the common organization of the market in beef and veal (OJ 1968 L 148, p. 24)) is granted and the amount of that refund shall be as set out in the Annex hereto.

In that list, under the heading ex 02.01 A II of the Common Customs Tariff (Meat of bovine animals), subheading a) (Fresh or chilled), paragraph 4 (Other), ex bb), there is reference to Boned or boneless (cuts), excluding the thin flanks, the shin and the shank, each piece individually wrapped (7) (in the German version: Teilstücke ohne Knochen, jedes Stück einzeln verpackt ... mit Ausnahme von Fleisch-und Knochendünnung und der Hesse (7)).

Note 7 to the same annex states: Boned cuts which consist, entirely or partially, of thin flanks, shin or shank are ineligible for the refund (in the German version: Die Erstattung wird nur für Teilstücke ohne Knochen gewährt, die weder vollständig noch teilweise die Fleisch-und Knochendünnung oder/und die Hesse enthalten).

Commission Regulation (EEC) No 1315/84 of 11 May 1984 (OJ 1984 L 125, p. 38), which replaced Regulation No 2773/82 with effect from 12 May 1984, contains no change on this point.

However, in the German version of Commission Regulation (EEC) No 2891/84 of 15 October 1984 (OJ 1984 L 273, p. 5), which replaced Regulation No 1315/84 with effect from 16 October 1984, the words Fleisch-und Knochendünnung were replaced by Fleischdünnung in the two places indicated above.

2. The main proceedings

In May 1984, the company GruSa Fleisch GmbH&Co. KG, Import-Export (GruSa) declared five consignments of beef to the Hauptzollamt (Principal Customs Office) Hamburg-Jonas (Hauptzollamt) with a view to having them stored in a bonded warehouse intended for the storage of meat eligible for refunds on account of their exportation to nonmember countries.

In the same month, the Hauptzollamt accepted the applications for storage together with two later applications for two supplementary consignments of beef on 30 May and 1 June of the same year respectively.

In its declarations, GruSa described the goods in the following terms: Boned or boneless cuts of domestic bovine animals, chilled, each piece individually wrapped, excluding the thin flanks (Fleisch-und Knochendünnung), the shin and the shank MO No 0201 152040, No 0201 A II a 4 bb of the Common Customs Tariff.

Having obtained advance payment of the refunds in question from the Hauptzollamt, GruSa exported the goods to Egypt.

Upon receipt of the documents required for the grant of the export refunds, the Hauptzollamt released the security provided for the advance payment and thereby made the export refunds for the consignments of meat definitive.

By seven amending decisions of 19 October 1987, the Hauptzollamt demanded repayment of the export refunds previously granted, on the grounds that the consignments of beef contained Knochendünnung for which no refund was provided.

By five decisions of 10 March 1989 and two decisions of 25 April 1989, the Hauptzollamt withdrew its demand for a 20% increase on the total amount of the refunds, which it had initially demanded, but by decision of 22 August 1989, given in response to a complaint by GruSa, maintained its demand for repayment of the refunds.

It was against that decision that GruSa brought the action currently pending before the national court.

For its part, the Hauptzollamt contended that the action should be dismissed. In support of its argument, it relied on its decision of 22 August 1989, mentioned above, adding the following observations.

Firstly, there was no substance in GruSa's argument that the German version of the regulation fixing the export refunds in force at the material time excluded Knochendünnung from eligibility for export refunds because of a mistake in the translation of the term flanchet which appears in the French version of the regulation, a mistake confirmed by comparison with the other language versions.

Secondly, Regulation No 2891/84 which removed the word Knochendünnung from the cuts ineligible for the refund, could not be applied retroactively because there was nothing in the regulation to support that it could.

Finally, the exclusion of Knochendünnung, which appeared in the German version of the regulations preceding Regulation No 2891/84, could not be regarded as bringing about discrimination between German meat exporters and those of other Member States — contrary to Article 40 of the Treaty — since the Court of Justice had accepted the legitimacy under Community law, of having regard to different national methods of cutting and boning beef and veal when defining anatomically those cuts of meat which qualify for export refunds (Case 327/82 Ekro [1984] ECR 107).

The national court observed that the refundfixing regulations applicable to this case were Regulations No 2773/82 and No 1315/84 (in force from 1 November 1982 to 11 May 1984 and from 12 May 1984 to 27 July of the same year, respectively), given that it was during this period that the customs export formalities were completed for the export consignments in question.

According to the national court, there is no provision in Community law determining what cut of meat is defined by the term Fleisch-und Knochendünnung. This was confirmed by the judgment in Ekro in which the Court held, concerning an earlier regulation indicating the cuts of meat ineligible for export refunds, that that regulation impliedly referred to national and regional cutting and boning methods.

According to the relevant cutting method, described in the manual on the cutting-up of beef carcases, issued by the Deutsche Landwirtschaftsgesellschaft, the Knochendünnung is a portion cut from between the eighth and ninth ribs back to the hindquarters, and including the tissue attached to the next five ribs, whereas Fleischdünnung is understood to mean the soft parts of the belly, delimited by the junction with the leg, the Knochendünnung and (above) the sirloin.

The national court considered that if, under Regulations No 2773/82 and No 1315/84, the cut taken from between the eighth and ninth ribs to the thirteenth rib was Knochendünnung and, as such, excluded from the refund in Germany during the period in question, there were doubts as to whether that interpretation of Community law was correct.

Firstly, it was not in dispute between the parties that in versions other than the German version the cut described as flanchet in the corresponding text (or thin flanks in the English version, la pancia in Italian and vang in the Dutch version), consisted largely of Fleischdiinnung within the meaning attributed by the manual on the cutting-up of beef carcases. Since the correct interpretation of a provision of Community law involved a comparison of the different language versions (Case 283/81 CILFIT [1982] ECR 3415), there was some uncertainty as to the true scope of the German version of the provision in question.

Secondly, it followed from the judgment in Ekro, cited above, concerning the regulation preceding the regulations in question, that the purpose of the derogating provisions was to disqualify low-value meat from the refund. The Hauptzollamt had not challenged the contention that the cut taken from the ninth to the thirteenth ribs was of the same quality as one taken from the first to the eighth ribs, for which a refund was indisputably granted. Moreover, it could scarcely be doubted that Fleischdiinnung was of lower quality.

Finally, it followed from the judgment in Ekro that, for the purpose of defining the cuts of meat excluded from the refund, regard might be had to national particularities only if the resultant differences were of no more than minor importance and that anything more would constitute an unlawful encroachment on the principle of uniform application of Community law and the principle of equal treatment. In this case, the cut situated between the ninth and the thirteenth ribs was significant because of its weight and, moreover, to accept that regard might be had to national particularities to define the meat excluded from the refund would result in that cut not receiving subsidies in Germany, whereas it would do so in the other Member States.

The national court considered that if Regulations No 2773/82 and No 1315/84 were to be interpreted as meaning that Knochendünnung was excluded from the refund in Germany, the question would arise as to whether Regulation No 2891/84, which removed Knochendünnung from the categories of excluded products, might be applied retroactively.

Article 18(2) of Regulation No 805/68 provided that the refund was to be the same for the whole Community. Should Regulation No 2891/84 not be retroactive, that objective could be called in question by exclusion from the refunds in one of the Member States. According to the case-law of the Court, such retroactivity was permissible if it clearly followed from the terms, objective or scheme of the provision in question that such effect must be given to them (Joined Cases 212/80 and 217/80 Salumi [1981] ECR 2735).

The national court considered, finally, that if the regulation fixing the refunds did not provide for the possibility of the cut of meat in question qualifying for the refund, they might infringe the prohibition of discrimination laid down in Article 40 of the Treaty, read in conjunction with Article 18(2) of Regulation No 805/68.

In the light of these uncertainties, the Finanzgericht Hamburg decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:

3. Procedure before the Court

The order for reference was lodged at the Court Registry on 10 February 1992.

Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were submitted by the applicant in the main proceedings, represented by Dietrich Ehle, Rechtsanwalt, Cologne, and by the Commission of the European Communities, represented by Ulrich Wölker, of its Legal Service, acting as Agent.

Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry and, pursuant to Article 95(1) and (2) of the Rules of Procedure, to assign the case to the Third Chamber. However, it requested the Commission to reply in writing to one question.

II — Written observations submitted to the Court

1. The first question

GruSa maintains, first of all, that the wording of Regulations No 2773/82 and No 1315/84, in the various official languages other than German, shows that Knochendiinnung, namely the cut taken from the ninth to thirteenth ribs of a beef carcase, was not, unlike Fleischdünnung, which corresponds, for example, to the French term du flanchet, the Dutch vang and the English thin flanks, used in the respective versions of the regulations in question, excluded from the refund.

GruSa considers that this divergence between the German text and the other texts — in particular the French text which was the original version of the draft of these regulations — is the result of a mistake in translation by a translation department not technically competent in the matter. GruSa adds that it is to be regretted that the Commission only rectified this mistake in 1984, despite repeated proposals to that effect by the German delegation.

Secondly, GruSa maintains that apart from a comparison of the different language versions of a regulation and its historical background, it is its objective (see, in particular, Case 80/76 North Kerry Milk Products [1977] ECR 425) and the intention of the legislature (Case 55/97 Moksel [1988] ECR 3845) which are decisive in determining its content -whilst complying with the requirement of uniform interpretation of regulations in all Member States.

GruSa observes, in this respect, that in Ekro, cited above, the Court accepted the Commission's view that the objective of the regulations providing for export refunds for beef and veal is to prevent the payment of those refunds on low-value cuts of meat for which there are wide outlets in the Community. If the Commission did not, in the various language versions other than German, exclude Knochendiinnung from the refunds, it was because it did not consider that cut to be of low value.

GruSa considers that the cut of a beef carcase taken from the ninth to the thirteenth ribs, which weighs an average of 12 kg, is in all respects of a similar value to that taken from the first to the eighth ribs, with an average weight of 23 kg. The Knochendiinnung is a supplementary cut designated by the term poitrine in French, which should never be equated with Fleischdünnung, which weighs about 4 kg, representing one-third of the weight of the cut of meat in question.

GruSa concludes from this that the ineligibility of the last mentioned cut of meat for the refund clearly contradicts the intention of the legislature and the purpose of the Regulation, which, moreover, is confirmed by the rectification, in the German version of Regulation No 2891/84, effected by the Commission with some delay, notably due to the divergence in national interests in question.

GruSa therefore proposes that the Court reply to the first question as follows:

The Commission considers that during the currency of Regulations No 2773/82 and No 1315/84, which apply to the main case, Knochendiinnung was not one of the cuts of beef or veal qualifying for the refunds in Germany, as may clearly be seen from the German version of the regulations in question.

Nor, the Commission adds, do the other language versions or the spirit or objective of the regulations in question preclude such exclusion.

First of all, the thin flanks (Fleisch-und Knochendiinnung) and the shin and the shank are cuts of low value, intended primarily for the meat-processing industry and for which there is sufficient demand in the Community, making payment of export refunds unjustified.

Next, the determination of the shape and exact size of what the regulations refer to as Fleisch-und Knochendiinnung, flanchet etc. depends, as do the different methods for cutting and boning bovine carcases, on national or regional customs.

The Commission observes that, since those differences are only of minor importance, the Court accepted in Ekro, as regards the regulation preceding Regulation No 2773/82, that, for the precise anatomical definition of the cut of meat called Fleisch-und Knochendiinnung, the regulation referred by implication to the customs mentioned above and that it was for the national court to establish what that definition was.

In the Commission's opinion, the differences in definition of the cuts ineligible for the refund are the result of the acceptance of definitions which have not been harmonized. According to the Commission, moreover, it is not always easy to make a qualitative assessment of the different cuts.

The Commission considers that the essential point is that the differences between the Member States and regions should not become too significant. In the case in the main proceedings, the effects of the various definitions of the cut ineligible for the refund are of little significance.

On the one hand, it is not true that the definition of that cut corresponds in all Member States exclusively to Fleischdiinnung within the meaning of the German definition. On the other hand, the excluded cut never represents more than 4% of all the meat produced in the Member States.

The Commission adds that the only new factor since Ekro is the removal in the German version of Regulation No 2891/84 of the word Knochendünnung as a cut ineligible for the refund. Although under no obligation to do so, the Commission, acting on initiative by the German Government, removed that word in order to ensure a degree of harmonization of the definitions of cuts ineligible for the refunds.

The Commission therefore proposes that the Court reply to the first question as follows:

2. The second question

GruSa observes at the outset that the Community institutions are not, in principle, inclined to rectify errors and faults by way of regulations endowed with retroactive effect, but prefer to leave it to the Court to decide on the possibility of such an effect.

The competent German Federal Ministers have maintained that the adaptation of the German text to the other versions should be regarded as an amendment to — and not a rectification of — the German text in order not to prevent decisions made before that change from now having to be rectified.

GruSa emphasizes that the Court has repeatedly declared that substantive rules of Community law in the field of external trade which contained or gave rise to an error were applied retroactively by virtue of higher-ranking principles such as those of nondiscrimination, proportionality or respect for the objective of the regulation in question.

GruSa emphasizes, without regard, that it follows, particularly from the judgment in Gedelfi (Case 135/79 [1980] ECR 1713), delivered in regard to a system of levies on the importation of orange juice, that where a single trading system is established at the frontiers of the Community, as is also the case here, the requirement of uniform application of the provisions in question implies that they must be interpreted in a uniform manner.

According to GruSa, the need for Regulation No 2891/84 to be applied retroactively also follows from the judgment in FKF (Case 154/84 [1985] ECR 3165, paragraph 28), in which the Court, basing itself on the objective of the legislation in question, affirmed that an amending regulation had retroactive effect.

The retroactivity of Regulation No 2891/84 does not conflict, according to GruSa, with the Court's reasoning in Ekro. First of all, it should be noted that in the German version of the judgment the word vang is wrongly translated by Fleisch- und Knochendünnung and in fact only covers Fleischdiinnung.

The Court then declared, in that judgment, that a reference to the national cutting and boning methods is possible only in exceptional cases, in order to safeguard the independent and uniform application of Community law.

On that point, such a reference is, according to GruSa, possible only if the difference as compared with other cutting methods is only of minor importance (paragraph 13 of the judgment). However, as may be seen from what GruSa has said earlier, the cut referred to as Knochendünnung is significant because of its weight and cannot therefore be equated with Fleischdiinnung.

On the other hand, the difference in interpretation must be compatible with the purpose of the refund system in question (paragraphs 9 and 11 of the same judgment), which is no longer the case in the main proceedings.

GruSa therefore proposes that the Court reply as follows to the question put in the alternative by the Finanzgericht Hamburg's question;

The Commission emphasizes that Article 2 of Regulation No 2891/84 clearly indicates the date on which that regulation entered into force and contains no other indication to suggest that the regulation might apply retroactively.

Moreover, such retroactivity would be contrary to the principle of legal certainty.

The Commission therefore proposes that the second question be answered as follows:

3. The third question

GruSa considers that if the answers to both the first and second questions are in the negative, Regulations No 2773/82 and No 1315/84 should be declared invalid to the extent that the exclusion of Knochendünnung from the refunds in Germany is contrary to Article 40(3) of the Treaty — which prohibits all discrimination between producers or consumers in the common organization of markets (see Case 125/77 Koninklijke Scholten-Honig [1978] ECR 1991) —, to Article 18(2) of Regulation No 805/68 — which provides that the refund is to be the same for the whole Community — and to Council Regulation (EEC) No 885/68 of 28 June 1968 laying down general rules for granting export refunds on beef and veal and criteria for fixing the amount of such refunds (OJ 1968 L 156, p. 2), the fifth recital of which states that to avoid distortions of competition between Community traders, the administrative conditions under which they operate must be identical throughout the Community.

GruSa maintains that the arbitrary nature of the discrimination was not called in question in Ekro, which was concerned solely with the cut of meat designated in Dutch as vang, which corresponds to Fleischdünnung. It is not possible therefore to add a further cut — the Knochendünnung — to the list of excluded products which, in the opinion of the Commission itself and the Court, is not one of the lower-value cuts (see paragraph 12 of Ekro).

GruSa therefore proposes that, if the answer to the first two questions is in the negative, the Court should reply to the third question as follows:

The Commission considers that it follows from Ekro (paragraph 11) and from its observations on the first question there is nothing of a discriminatory nature, contrary to Article 40 of the Treaty in Regulations No 2773/82 and No 1315/84.

The Commission therefore proposes that the Court reply to the third question as follows:

III — Reply by the Commission to the question put by the Court

1. Question

2. Reply

1 Language of the case: German.