C-17/67

HAUPTIZOLLAMT Hof/Saale

concerning the validity and interpretation of Regulation No 22, adopted on 4 April 1962 by the Council of the EEC (Official Journal, p. 959), and on the validity of Regulation No 135/62, adopted on 7 November 1962 by the Com­ mission of the EEC (Official Journal, p. 2621);

THE COURT

composed of R. Lecourt (Rapporteur), President, A. M. Donner and W. Strauß, Presidents of Chambers, A. Trabucchi, R. Monaco, J. Mertens de Wilmars and P. Pescatore, Judges,

Advocate-General: K. Roemer Registrar: A. Van Houtte

gives the following

to bring them under heading No 02.02 Since the Neumann undertaking reques­ of the Common Customs Tariff. In ted customs clearance for the chickens addition to the levy (calculated on the in question on 19 November, the Zol­ basis of the rate in force since 5 Novem­ lamt claimed an additional amount of ber 1962) and 'the turnover equalization levy, acting in accordance with the Com­ tax (Umsatzausgleichsteuer) (calculated munity and German provisions. The on the value for customs purposes, ex­ said undertaking made an administrative cluding the levy), the Zollamt (customs appeal against this decision, which was office) claimed by a tax assessment of dismissed. It then made the appeal 13 December 1962 an additional amount which is at present pending before the of levy of 0.25 DM per kg. This addi­ court of last instance, the Bundesfinanz­ tional amount had to be collected from hof, Munich. In the course of the pro­ 19 November 1962, under Regulation ceedings 'before the Federal court, the No 135/62 of the Commission, estab­ Neumann undertaking argues that Regu­ lishing the additional amount of the lation No 135/62 was null and void on levy in respect of slaughtered hens and various grounds. It stated in particular chickens imported from 'third countries that the system relating to the additional (Official Journal of 7 November 1962, levy is contrary to Article 29 (a) of the p. 2621) and of the order made in im­ EEC Treaty and that only the Member plementation of the said regulation by States are authorized to fix an additional the Federal German authorities (Bun- levy under Article 6 (4) of Regulation deszollblatt of 17 November 1962, p. No 22 of the Council (Official Journal 974) 1962, p. 959). Regulation No 135/62, dated 7 Novem­ It is indicated, moreover, that in its ber 1962 and published in the Official opinion Regulation No 109 of the Com­ Journal on the same day, entered into mission (Official Journal 1962, p. 1939), force on the date of its publication by determining the additional amount re­ virtue of Article 2 'thereof. Paragraph 3 ferred to in Article 7 of Regulation. No of the implementing provisions adop­ 20 of the Council and in Article 6 of ted by the German departments, dated both Regulations Nos 21 and 22 of the 15 November 1962 and published on Council, makes it obligatory to take 17 November 1962, is worded as fol­ into account the individual offer price, lows: that is to say, the purchase price of each '3. The delay in publishing Regulation individual importer. Regulation No No 135/62 of the Commission of the 135/62 thus infringes Regulation No EEC has resulted in a situation akin 109/62 on this point. to that of a retroactive increase in a According to the Neumann undertaking, tax, which is questionable on the con­ since Regulation No 135/62 provides stitutional level. In order to permit the in Article 2 thereof that it shall enter free movement of slaughtered poultry, into force on the day of its publication

in the Official Journal, it does not pro taxation (Steuern) or, if neither, vide for derogation either for contracts what are they? previously concluded or for goods in (c) If the answer to the first proposi transit, etc. The Neumann undertaking tion referred to in Question (b) concluded that the general levy system above is in the affirmative: in established by Regulation No 22 is null those circumstances, does the and void, as the levy comes under the Treaty establishing the EEC have fiscal sovereignty of the Member States the effect of transferring to the and thus may only be made compulsory Community the power to legis by the Community institutions by means late, as having partial sovereignty of a directive and that the Council does in fiscal matters? not have the power under Article 43 of 2. If the answer to Question 1 (a) is in the Treaty to issue provisions derogating the affirmative: must Article 6 (3) from Articles 12 et seq and 18 et seq. and (4) of Regulation No 22 of the of that same Treaty.

After recalling the arguments put for the Council and Regulation No 109/ ward by the Neumann undertaking and the Federal Minister of Finance, who 62 of the Commission (Official Jour had been allowed to intervene in the nal, p. 1939), to which it expressly proceedings in place of the refers, on the ground chat, although Hauptzollamt concerned, the Vllth Senate of the those two provisions provide for an Bundesfinanzhof declared that it was additional levy should the offer price 'convinced that the doubts' expressed fall below the sluice-gate price, Regu 'with regard to the constitutionality of lation No 135/62 (according to the defendant's allegations) does not take the German law ratifying' the Treaty into account—or does not take suffi 'are unfounded' and set out the reasons on which it bases its view. ciendy into account—the offer price in fixing the additional levy? Furthermore, it gave its reasons for the choke of questions which it decided to 4.

servations under Article 20 of the (b) If the answer to Question (a) is Statute of the Count. in the affirmative: do the sums Mr Ditges and Mr Ehle (Cologne) ap to be collected by way of levy peared for the Neumann undertaking, constitute charges (Abgaben) in Mr Wohlfahrt for the Council and Mr the sense of customs duties or Ehlermann for the Commission.

After the hearing on 7 November 1967, Fiscal sovereignty has not been trans which was devoted to hearing the par ferred to the EEC and there is no ties under Article 20 of the Statute, the difference of opinion in this respect. Advocate-General delivered his reasoned, The sovereignty of the Member States oral opinion at the hearing on 21 with regard to customs duties has not November. been transferred to the EEC but remains within the competence of the Member States. In view of the absence of an II — Observations submit appropriate legal basis this transfer was

levies must be established. It is possible applicable to the Member States. that the system of levies could only have In the first place it must be recognized been set up by means of a directive. that the Council's general competence The Neumann undertaking indicates to lay down provisions within the above that many works have been written on mentioned limits is based on Article 40 the legal nature of the levy. In par (2) and (3) of the Treaty. The levies ticular, Ebeling arrives at the conclusion are the machinery for stabilizing im that the levy constitutes neither a cus ports or exports which makes it possible toms duty, nor a duty sui generis, but to attain the objectives defined in Article

JUDGMENT OF 3. 12. 1967 — CASE 17/67

dressed to the Member States should implementation of the common agricultural have been used instead of regulations. policy to Article 43 (2) which authorizes

the The plaintiff's argument assumes, inter the Council during the transitional alia, that the same rules of the Com­ period to make regulations, issue directives mon Market in general should be ap­ or take decisions, even to make plied to agriculture. This condition is recommendations, all those legal measures clearly not satisfied, as the powers of being referred to on an equal footing. the institutions of the EEC with regard to agriculture may, under Article 38 (2), regard to the argument that the Community be different from and wider than those does not have fiscal sovereignty

With with regard to the Common Market in during the transitional period, the Council general. observes that if the authors of the In fact, the rules laid down for the Treaty had wished to make a distinction estaiblishment of the Common Market between the periods they would have (including those relating to the adop­ done so expressly, as they have done tion of the Common Customs Tariff) in other spheres. are applicable to agricultural products Council considers that in this connexion 'save as otherwise provided in Articles it is un eces ary to enter into a discus ion

The 39 to 46'. This rule applies not only on the concept of fiscal sovereignty, to the above-mentioned provisions of all the more so as there is no indication the Treaty but also to the legal meas­ in the request for the prelirniniary ures issued in pursuance of them. ruling why fiscal sovereignty must Articles 44 to 46 concern transitional remain wholly with the Member States. measures, whilst Articles 39 to 43 con­ cern the implementation of the common has it been explained why fiscal sovereignty agricultural policy. The principal objectives of Article 38 (2) is therefore to authorize the Community Nor is indivisible or why, unlike other sovereign rights, it should not be transferable.

Since With products. to the framework of the original dispute, Article 189 provides the power to an examination should 'be made exclusively issue certain legal measures 'in accordance of the system of levies on goods with the provisions of the Treaty', coming from third countries. In order reference should be made for to appraise the validity of Regu-

NEUMANN v HAUPTZOLLAMT HOF

This system forms to Articles 38 et seq. and, in particular, part of the common machinery for to Article 40. stabilizing imports or exports which is Since Article 38 (2) provides that 'Save expressly cited by Article 40 (3) as an as otherwise provided in Articles 39 to example of a measure which the com 46, the rules kid down for the establish mon organization may include. It thus ment of the Common Market shall ap constitutes a 'clearly laid down' excep ply to agricultural products', it must tion to the general provision. certainly be recognized that the deroga The unity of the customs system pro tions in question may be express or im vided for in Article 18 et seq. can plied since they may be ascertained ac net be invoked against the argument set cording to the accepted rules of inter

This decis duties, and also to fix the whole sys ion is all the more significant inasmuch tem to be applied to imports from third as it was taken in favour of exceptional countries. On the basis of Article 43 it measures adopted by Member States is therefore possible to determine both acting autonomously. the amount of the duties to be levied On the other hand the present case con and their nature. cerns exceptions in favour of measures Furthermore it is possible to decide adopted by Community bodies for the whether the Member States shall intro establishment of the common organiza duce those duties progressively, like the tion of the agricultural markets. Common Customs Tariff under Article In interpreting Article 38 (2) account 23, or whether they must be applied im must be taken of a basic difference mediately in 'their entirety.

During the second, trade within the Community which it facilitates the attainment of the ob might result in compromising the price jectives of the common agricultural guarantees. Consequently, even if the

levy system does not form an integral effective are 'both the measures and the part of the regulation of prices, it is prospect of adapting it exactly to 'the nevertheless a means indispensable to situation which it has in view. its functioning. Finally, if the complaint were justified, It is also clear from Article 43 (3) (b) all the regulations issued by the Coun that this Article gives the Council the cil concerning agriculture would be in power to regulate completely and in de valid and the common agricultural tail the system of imports from third policy would have no basis.

It With regard to the second complaint, is impossible to draw different con according to which the system of levies clusions from Regulation No 109/62 of could only have been established by the Commission, the authority for which means of a directive, the Commission is also founded on Article 6 of Regula formulates arguments comparable with tion No 22. The preamble expressly those propounded by the Council. refers in this connexion to Article 6 It adds that important reasons militate (4). Although the preamble to and the in favour of the introduction of the sys provisions of Regulation No 109/62 tem of levies applicable to third coun (especially Articles 5 and 6) declare that tries by means of a regulation, the prin the additional amount shall only be cipal reason 'being that the implementa fixed by the importing Member State tion of a system of levies would become until measures are determined jointly, extremely difficult, especially with regard those measures do snot correspond to the to additional amounts, if it were to re extent of the power conferred by Article quire the national legislature to inter

NEUMANN v HAUPTZOLLAMT HOF

problem. The third indent of Article 6 sufficiently into account—the offer price (4) of Regulation No 22 confers in two in fixing the additional levy. successive sentences one set of powers The Commission observes that it was on the Member States and another on obliged to fix a uniform additional the Community. This wording reflects amount under Regulation No 135/62. two stages in fixing the additional Article 6 of Regulation No 22 is vague amounts: during the first the Member and badly translated and this is mo less State is competent and, after notifica true despite the fact that paragraph (4) tion, during the second stage the Com expressly provides that there are 'meas munity is competent. ures to be taken jointly'. This interpretation is confirmed by the It is logical to dismiss the notion that draft versions of Regulation No 22 and the fixing of this amount could relate by Articles 5 and 6 of Regulation No to the individual additional amounts, all 109/62. the more so as it was adopted according Although this regulation was adopted by to the Management Committee pro the Commission and not by the Council, cedure. it was nevertheless made in accordance Furthermore various passages of Regu with the Management Committee pro

In a the Commission and of the Council and judgment of 5 October 1966 (produced in the past the Council has twice given by the Commission) the Bundes rulings on the fixing of additional finanzhof reached the same conclusion. amounts by the Commission. This judgment led to the same attitudes being adopted by the Federal Minister The third question of Finance. The Neumann undertaking also refers finally comparison with the system of to the line of argument expounded on levies set up by other regulations proves this point before the Bundesfinanzhof. that the individual levy does not appear The system of uniform levies established in the general structure of the common by Regulation No 135/62 is also con organization of the agricultural mar trary to Regulation No 22 of the Coun

JUDGMENT OF 3. 12. 1967 — CASE 17/67

the day of its publication. Not only was of an additional uniform levy (although the interval of 20 days ignored, but the it is contrary to the EEC) but the quite regulation entered into force with retro insufficient length of the transitional active effect, having regard to the fact period which had repercussions in the five other Member States and breached that since the Official Journal (p. 2621/62) was printed in Luxembourg the relationship of trust (Vertrauens it could only reach the German sub

The Neumann undertaking deduces from In the Federal Republic of Germany, this provision a principle which, if it is before the Community levy under Regu immediately put into force, requires an lation No 135/62, a national levy was exception to be made for goods in transit imposed on the basis of the well-known or already purchased by the importer. regulation of 7 September 1962. This The Commission considers that it was regulation was based on a quite different possible for Regulation No 135/62 to system, the relation between the import enter into force on the day of its pub

There has foreseen, involving the imposition of a however been no violation of the general fixed levy unrelated to the level of principle of legal certainty, a rule of law prices. This did not allow importers to to be upheld in the application of the amend their contracts with foreign sel Treaty, (judgment in Case 13/61, [1962] lers or in particular to eliminate the E.C_R_ 45) and the different forms of its price increases due solely to the Ger application such as the principle of fore- man procedure. seeability, the possibility of assessing in

advance the effects of the new provision an adaptation had been necessary. Those and the protection to be given to con­ grounds are also valid for fixing an fidence in the existing legal position. additional amount. The legal concept of the Commission The validity of the substitution of a and of the Council corresponds to that general additional amount for the in­ of the Member States as it emerges from dividual additional amounts fixed by the the practice and from the declaration of German authorities cannot be ques­ the Council and of the Commission tioned because of the rash of careless be­ adopted at the 207th meeting of the haviour of importers; the last three sen­ Council on 8 and 9 February 1967; in tences of Article 6 of Regulation No 22 its fourth paragraph this declaration and Articles 5 and 6 together with the recognizes that a regulation might law­ sixth recital in the preamble to Regu­ fully enter into force on the day of its lation No 109/62 show clearly that the publication. Nevertheless it is clear from fixing of an additional amount might this declaration that the institutions of form part of the 'measures to be taken the Community are fully conscious of jointly'. the fact that entry into force on the day Article 12 of Regulation No 22 deals of publication is undesirable. They were exclusively with goods in transit, but however unable to avoid this because not with goods purchased. This deroga­ of the risk of speculation. tion must be restrictively interpreted. The Finanzgencht (Finance Court) Its extension to purchased products is Niirnberg, also indicated in the course legally unjustifiable no matter what of the present proceedings that amend­ grounds might be put forward on the ments to customs duties and taxes must basis of analogy or of economics. The be put into force immediately in order importers must—and up to the con­ to avoid sharp practices. clusion of the contracts of purchase can Owing to its economic function the levy — take into account the fact that an is comparable to customs duties and additional amount might be fixed. The must be adapted, depending on the difficulties which this causes are justi­ nature of the product concerned, at fied by the considerable risks involving short notice to the variations in the mar­ the markets in the Community if this ket situation. This notice was for ex­ action is not taken. In fact those mar­ ample twenty-four hours in the case of kets would then become uncontrollable cereals. In Case 16/65 (Rec. 1965, p, and the national producers would suf­ 1096) it was expressly recognized that fer the consequences.

The first question asks whether the Treaty confers on the institutions of the Community 'the right to establish systems of levy directly applicable in the Member States, as the Council has done by Regulation No 22 of 4 April 1962, and, if the answer is in the affirmative, whether the levies constitute customs duties or taxation and finally whether the Treaty 'had the effect of transferring to the Community the power to legislate' on matters coming under the fiscal sovereignty of the States.

NEUMANN v HAUPTZOLLAMT HOF

out those concepts restrictively. By establishing with regard to agricultural products a system regulating prices and stabilizing the market, the system of levies constitutes one of the bases of the 'common organization of agricultural markets' prescribed by Article 40 (2).

A system of levies which fulfils those conditions is in accordance with the Treaty and, under the express provision of the third subparagraph of Article 43 (2), may form the subject-matter, during the transitional period, of the Council's regulations.

Since the levy is based on the Treaty and not on national law, is applicable simultaneously in all Member States and not only in one, acts as a regulatory device for markets not in a national context but in a common organization, is defined with reference to a price level fixed in the light of the objectives of the Common Market and since its rate is flexible and may vary in terms of the hazards of the market, it therefore appears as a charge regulating external trade connected with a common price policy, whatever similarities it may have to a tax or a customs duty.

According to Article 189, Regulation No 22, establishing the system of levies is 'binding in its entirety and directly applicable in all Member States'. This system must therefore be applied with the same binding force in all the Member States within the context of the Community legal system which they have set up and which, by virtue of the Treaty, has been integrated into their legal systems. The states have thus conferred on the Community institutions power to take measures fixing the levy such as those which form the subject- matter of Regulation No 22, thus submitting their sovereign rights to a corresponding limitation. More particularly to the extent to which this con­ cerns fiscal sovereignty, such a result is perfectly in accordance with the system of the Treaty.

Those provisions distinguish between determining the 'methods of fixing' the additional amounts, on the one hand, and fixing their actual amounts and collect­ ing them, on the other. The procedure for determining the general methods of fixing the additional amounts pertains to the Commission or, if necessary, to the Council after the opinion of the Management Committee has been obtained; this procedure formed the subject-matter of Regulation No 109/62 of the Commission. Fixing the actual amounts is a matter for the importing Member State which has decided to take the measure, whilst it falls within the powers of the Commission or, if necessary, of the Council when a decision has been taken to formulate a measure jointly. The collecting of the additional amounts is a matter for the importing Member State.

There is no contradiction between those distinctions and the provision in Article 6 (3) whereby the amount of the levy shall be increased 'in each Member State' by an additional amount. In fact this provision does not define any powers vesting in the Member State but merely lays down the geographi­ cal bounds of the measure. Regulation No 109/62 organized the procedure for fixing the said amounts on the basis of the powers of the importing Member State, to which must be added the powers of the Commission or, if necessary, the Council in connexion with the measures to be taken jointly within the framework of Article 17 of Regulation No 22.

It is clear, moreover, from the preamble to Regulation No 135/62 that this was the procedure followed in fixing the additional amounts in dispute since, after finding that the Federal Republic of Germany 'is already imposing ad­ ditional amounts on imports of slaughtered hens and chickens from third countries', the Commission fixed a uniform additional amount in accordance with the procedure in Article 17 of Regulation No 22.

Consequendy, the carrying out of an individual import at a price higher than the offer price laid down by Regulation No 135/62 cannot result in calling in question the validity of the latter price which is unaffected by the circum­ stance put forward in the judgment referring the matter whereby the said regulation did not take into account—or did not sufficiendy take into account —the offer price of a given import, effected moreover after the said regulation.

The fourth question

The fourth question asks whether the validity of Regulation No 135/62 is affected by the provision laying down that it shall enter into force on the day

JUDGMENT OF 3. 12. 1967 — CASE 17/67

of its publication in the Official Journal of the European Communities. It was in fact maintained that an immediate entry into force gives rise to legal un­ certainty, that Article 191 of the Treaty, moreover, stipulates that in principle and in the absence of any provision to the contrary regulations shall enter into force on the twentieth day following their publication and finally that the second subparagraph of Article 12 (2) of Regulation No 22 excludes goods in transit from the application of the protective measures.

Under Article 191 of the Treaty regulations 'shall enter into force on the date specified in them, or in the absence thereof on the twentieth day following their publication'. Consequently the Treaty entrusts the institution issuing the regulation with the task of specifying therein the date of their entry into force. Only if the date is not specified in the regulation will it be fixed as the twentieth day following its publication.

NEUMANN v HAUPTZOLLAMT HOF

and 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 Bundes­ finanzhof, the decision on costs is a matter for that court.

On those grounds,

Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the observations of the Council and the Commission of the Communities and those of one of the parties; Upon hearing the opinion of the Advocate-General; Having regard to Articles 18, 23, 38 to 46, 177 and 191 of the Treaty estab­ lishing the European Economic Community together with Annex I thereto; Having regard to the Protocol on the Statute of the Court of Justice of the EEC, especially Article 20; Having regard to Regulation No 22 of the Council (Official Journal 1962, p. 959); Regulation No 135/62 of the Commission of the EEC (Official Journal 1962, p. 2621) and Regulation No 109/62 of the Commission (Official Journal 1962, p. 1939); Having regard to the Rules of Procedure of the Court of Justice of the European Communities,

THE COURT

in answer to the questions referred to it for a prelirninary ruling by the Bundesfinanzhof by decision of 25 April 1967, hereby rules:

Trabucchi Monaco Mertens de Wilmars Pescatore

Delivered in open court in Luxembourg on 13 December 1967.

A. Van Houtte R. Lecourt Registrar President

OPINION OF MR ADVOCATE-GENERAL ROEMER

DELIVERED ON 21 NOVEMBER 19671

Summary

1. Was the Commission competent to fix the addi­ tional amount? 465

2. Is the fixing of a general additional amount lawful? 467

3. Was it possible for Regulation No 135 to enter into force on the day of its publication in the Official Journal? 468

III — Summary 470

1 — Translated from the French version.