C-16/70

JUDGMENT OF THE COURT 28 OCTOBER 1970<apnote>1</apnote>

Coöperatieve Vereniging 'Necomout' GA v Hoofdproduktschap voor Akkerbouwprodukten and Another<apnote>2</apnote> (Reference for a preliminary ruling by the College van Beroep voor het Bedrijfsleven)

Case 16/70

Summary

Agriculture — Common Agricultural Policy — Levies and refunds — Advance fixing — Cancellation in the case of an alteration of the unit of account — Conditions (Regulation No 1134/68 of the Council, Article 7)

The second paragraph of Article 7 of quota still outstanding at the date when the Regulation No 1134/68 of the Council of application is made, but only to such the European Communities of 30 July 1968 balance in its entirety, and may not relate must be interpreted as meaning that to amounts previously imported or ex­ cancellation of an advance fixing of levies ported. or refunds may relate to the balance of the

1 — Language of the Case: Dutch. 2 — CMLR.

JUDGMENT OF 28. 10. 1970 — CASE 16/70

No 653/68 on conditions for alterations to the value of the unit of account used for the common agricultural policy,

THE COURT,

composed of: R. Lecourt, President, A. M. Donner and A. Trabucchi, presidents of Chambers, R. Monaco and J. Mertens de Wilmars (Rapporteur), Judges,

Advocate-General: K. Roemer

NECOMOUT ν HOOFDPRODUKTSCHAP AKKERBOUWPRODUKTEN

8. On 29 April 1968 Necomout of Amster 5. However, taking into account the fact dam, an undertaking exporting malt, that the application of the new parities to obtained advance fixing of export refunds current contracts might disturb the financial on 2 500 000 kg of malt at the sum of Fl 19.95 arrangements of such contracts, Regulation per 100 kg, increased in July 1968, after No 1134/68 enables the persons concerned adjustment of the threshold price, to on an alteration in parities referred to in Fl. 20.31. The certificate covered the the regulation to obtain cancellation of period to 31 March 1969. the advance fixing and of the relevant On 4 August 1968, the date on which document which means that with regard Regulation No 1134/68 entered into force, to the administration they are released there remained a balance of 1 520 000 kg from the obligation to import or export, or, not yet exported, 330 000 kg of which were if they do so, that they will pay or receive exported on 12 August 1968. the amount of the levy or refund in force on the day of the import or export effected. 9. By a circular letter of 28 August 1968 the Hoofdproduktschap voor Akkerbouw

4 August 1968; concluded an agreement with an inter vention agency for a transaction still to (b) that the cancellation related only to be carried out after that date may, by quantities which had not yet been written application which must reach imported or exported at the time of the the competent authority within thirty application; days of the entry into force of this regulation, obtain cancellation of the (c) that no import or export to which the advance fixing and of the relevant said fixing related had been affected document or certificate, or cancellation

JUDGMENT OF 28. 10. 1970 — CASE 16/70

for August and this was increased to and the date of lodging the application Fl. 21.82 for September. for cancellation?

cellation? 12. Necomout brought the matter before the College van Beroep voor het Bedrijfsleven (d) If the reply to Question (a) is in the and requested it to give a ruling on its negative, must the second paragraph of application. In the course of the proceedings Article 7 be taken to mean that it is Necomout declared that, although this also possible to cancel the advance restrictive condition did not appear in fixing with regard to one or more Article 7, it might as an alternative request import or export transactions which a decision under the terms of which the were effected between 4 August 1968 cancellation might relate only to the and the date of lodging the application quantities still in its possession when the for cancellation? application was lodged.

September 1970. (b) If the reply to Question (a) is in the The Advocate-General delivered his opinion affirmative, is cancellation also avail at the hearing on 13 October 1970. able if, between 4 August 1968 and the date of lodging the application for cancellation, the quota to which the II — Observations submitted under advance fixing relates has been entirely Article 20 of the Statute or partially imported or exported, or is it only possible if no import or export has been effected within the framework The observations submitted to the Court of the said fixing between 4 August 1968 may be summarized as follows:

A — Observations submitted by the Com transitional provision the essential object mission of the European Communities of which is to protect traders who, in accordance with the general trend of Community legislation, were entitled to 1 — The rationale of Article 7 rely on the permanency of advance fixings. It relates rather to a legal interest whilst the option to cancel provided by articles 1, The Commission observes that the first 2 and 4 is intended to avoid the actual paragraph of Article 7 of Regulation prejudice resulting from an alteration in No 1134/68 lays down a provision with monetary parities. regard to its application in time declaring that it applies to all legal relationships established before 4 August 1968 thus 2 — The replies to the questions appreciably modifying the legal conditions on which the advance fixings were obtained. The second paragraph of Article 7 must The first question be read in this context.

Furthermore, if Regula 'To carry out a transaction' does not relate tion No 1134/68 had been applied immedi to the complete exhaustion of the quota ately, it might have had adverse effects on mentioned in the certificate. Traders traders who had been induced to cover exhaust this quota by a series of fractional themselves against the new risk of an transactions, that is to say, through alteration of the amounts expressed in successive importations or exportations. national currenly in the relevant documents. The word 'transaction' in Regulation In order to protect the vested rights of such No 1134/68 is a generic term encompassing traders, they were afforded the opportunity the various acts laid down in the annex to of terminating their legal relationships the regulation and means, inter alia established before Regulation No 1134/68 'importation' or 'exportation'.

parities. Whilst those latter provisions are is only meaningful, in the context of the of a permanent nature, Article 7 is merely a conditions under which the transactions

(d) According to the Commission, the The cancellation provided for in the interpretation which it proposes cannot be second paragraph of Article 7 of Regula­ rejected on the basis of an alleged parallel tion No 1134/68 may be granted in between the second paragraph of Article 7 connexion with the quota still out­ and the other provisions of the regulation standing under the said fixing at the date which provide for the cancellation of of lodging the application for cancella­ advance fixings in the case of an actual tion, even if a quantity has already been alteration in monetary parities. According imported or exported under the advance to the Produktschap, if there is an alteration fixing between 4 August 1968 and the date of the levy or refund fixed in advance and of lodging the application for can­ the trader, does not instantly request cellation. cancellation of the advance fixing but continues to import or export within the The fourth question framework of such advance fixing, he shows that he has not been prejudiced by the alteration and a subsequent application (a) The Commission observes that the for cancellation would necessarily be for cancellation of a document relating to reasons other than those which guided the an importation or exportation already legislature. According to the Produktschap, carried out constitutes a retroactive, the same holds good in the case of Article 7. that is to say exceptional measure and On the other hand, the Commission consequently one which would nor­ considers that the second paragraph of mally require express provision to be Article 7 has a different objective since the made in the regulation if such regulation considerations to which it is a response intended to provide for it. relate essentially to respect for established In addition, it derogates from a basic legal relationships. principle of the rules with regard to the The Commission suggests the following common organization of the markets reply to the first question: and it would consequently be all the The option to cancel an advance fixing more surprising that the legislature provided for in the second paragraph of should have conceived of such an effect Article 7 of Regulation No 1134/68 does ex tunc without making express pro­ not relate to the entire amount still vision for it. outstanding at 4 August 1968 of the quota to which the advance fixing relates. (b) Furthermore, the system of licences and certificates was established in order to enable the competent authorities to The second question obtain a permanent record of the movement of trade; the cancellation The Commission declares that it is un­ ex tunc of licences or certificates and necessary to consider the second question advance fixings for transactions already since the reply to be given to the first carried out must inevitably disturb that question is in the negative. system.

The Necomout undertaking, the plaintiff 1. The Produktschap observes that under in the main action, observes that its Articles 1,2 and 4 of Regulation No 1134/68 application for cancellation was rejected the amount of the refund is to be adjusted because, according to the interpretation in relation to any alterations in the parities given to Article 7 of Regulation No 1134/68 of the currencies. In order to preclude this by the Netherlands Minister for Agriculture unforeseeable factor from prejudicing tra­ and Fisheries, an application for the ders, in such a case, to cancel the advance cancellation of an advance fixing is ad­ fixing. missible only if it relates solely to amounts Although Article 7 does not refer to an not yet imported or exported at the time alteration in the parities, it nevertheless has of the application and moreover if no a similar scope to Article 1, 2 and 4, as import or export has been carried out under its objective is to ensure that persons who the said fixing between 3 August and the have obtained an advance fixing before the date of lodging the application for can­ entry into force of the regulation are not cellation, which conditions were not prejudiced by the unforeseeable factor that fulfilled in the applicant's particular case. during the interval when the fixing is Such conditions do not appear in Regula­ applicable a regulation might be adopted tion No 1134/68 and it is not for the compe­ making such advance fixing disadvan­ tent bodies in the Member States to add tageous. to the wording of this regulation. Such Articles 1, 2 and 4 deal with a specific additional conditions are even less appro­ transaction' and Article 7 with a 'trans­ priate since they are not laid down in action still to be carried out after that date'. Belgium, France or the Federal Republic, Departing from the normal usage of the so that they distort competition within the word, the regulation understands by Common Market. transaction 'the obligations as a whole' Those conditions, result moreover, from an which a trader has undertaken within the incorrect interpretation of Article 7, based context of the fixing, without this preventing on the notion that the amounts for which the obligation from being fulfilled by an advance fixing is obtained constitute several acts of export or import. an entity. This is an incorrect view of the This interpretation is based inter alia on advance fixing system as it is applied in the Articles 1 (2), 2 (2) and 4 (1) dealing with import and export trade. an advance fixing 'for a transaction still to

be carried out' which is only explicable if, siders that the application for cancellation by transaction, there is understood all the made during the period of thirty days and acts of import or export to be carried out, relating to the entire quota remaining and finally on the fact that according to outstanding at 4 August 1968 cannot in Article 7 itself cancellation of the fixing any circumstances cover importations and also involves cancellation of the relevant exportations effected before the date of the document, thus implying that it is legal application for cancellation. relationship itself which is cancelled. On the basis of the above considerations Furthermore, the concept employed in the Produktschap suggests that an affirma Article 4 (2) of a 'part transaction' precludes tive reply be given to the first question, a understanding, by transaction, any part negative reply to the first part of the whatsoever of the amounts to be imported second question and an affirmative reply or exported. to the second part thereof, and, as an It is incompatible with such an interpre alternative, a negative reply to the third tation that that single transaction could and fourth questions. be partly carried out and partly cancelled. The application for cancellation may thus D — The observations of the Netherlands relate only to the entire amount still Government remaining on 4 August 1968.

In order to limit the he has made an immutable choice. A loss the exporter will instantly apply for similar situation obtains in the case of this cancellation. alteration of the parity of the currency Cases of the type envisaged by Article 7 (Articles 1, 2 and 4) and in the case of must be viewed as though devaluation had Article 7. When there is a devaluation, an occurred when the provision entered into exporter who exports on the terms of the force: the loss to be avoided in the present advance fixing prior to the alteration of case is the risk that a trader might have parity is considered to have acted in his to comply with the cancellation system laid own interests and consequently not to have down by the regulation.

The Netherlands Government claims that by the words 'a transaction still to be 3. Alternatively, the Produktschap con- carried out after that date' the regulation

Grounds of judgment

1 By a decision of 10 April 1970, which was received at the Court Registry on 13 April 1970, the College van Beroep voor het Bedrijfsleven, The Hague, has put various questions under Article 177 of the Treaty establishing the EEC, concerning the interpretation of Article 7 of Regulation (EEC) No 1134/68 of the Council 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.

2 Regulation No 1134/68, which entered into force on 4 August 1968, provides that in the case of an alteration in the value of the unit of account or in the parity of the currency of a Member State or of a third country the amounts fixed under the provisions relating to the agricultural policy, and in particular the amounts of levies and refunds, may be adjusted to the new parities, even as regards levies and refunds for which traders had exercised the right conferred upon them by the various regulations establishing the organization of the agricultural markets to have the amounts fixed in advance.

JUDGMENT OF 28. 10. 1970 — CASE 16/70

3 In order not to prejudice persons having previously obtained an advance fixing, the regulation enables them to obtain the cancellation of such fixing in the event of circumstances' requiring adjustment of the amounts fixed in advance.

9 The system of advance fixing, as it has been implemented in the various agricultural regulations, establishes a connexion between such advance fixing and the obligation to import or to export the entire quota of goods to which the advance fixing relates.

10 Article 7, of Regulation No 1134/68 exempts from this obligation 'a transaction still to be carried out' after 4 August 1968 thereby providing for the division of the quota mentioned in the licence or certificate into one part for which the advance fixing is valid and another part for which it may be cancelled.

NECOMOUT ν HOOFDPRODUKTSCHAP AKKERBOUWPRODUCTEN

11 Nevertheless, the wording of Article 7 does not necessarily imply that such division must be made between the part of the quota exhausted prior to 4 August 1968 and the balance remaining at that date.

12 Furthermore, the provision of a period of thirty days granted to the trader cannot imply that the person concerned is prohibited from continuing to import or to export between 4 August 1968 and the date on which he chooses to lodge his application.

13 This must apply with even greater force in view of the fact that the traders con­ cerned may be bound by contractual delivery dates and that the regulation should not be interpreted in such a way as to increase the difficulties of implementing such obligations.

20 Furthermore, this interpretation corresponds to the restricted scope of the excep­ tion made by the said Article 7 to the principle of the immutability of advance fixings.

JUDGMENT OF 28. 10. 1970 — CASE 16/70

21 Moreover, since such cancellations disturb the proper functioning of the systems of organization of the markets, there can be no justification for favouring their increase when they exceed the legal grounds on which Article 7 was based.

22 Consequently, the cancellation of the advance fixing must refer to the entire quota outstanding at the date of lodging the application.

23 The fourth question asks whether if the reply to the first question is in the negative, it is also possible to cancel the advance fixing with regard to one or more importa­ tions or exportations which were effected between 4 August 1968 and the date of the application for cancellation.

24 Retroactive cancellation would preclude the forward planning on which the authorities responsible for the administration of the agricultural markets may properly rely in assessing their charges or revenues and in determining market trade.

NECOMOUT ν HOOFDPRODUKTSCHAP AKKERBOUWPRODUCTEN

Upon hearing the oral observations of the Produktschap voor Granen, Zaden en Peulvruchten and the Commission of the European Communities; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the European Economic Community, especially Article 177; Having regard to Regulations No 19, No 139/67/EEC, (EEC) No 653/68 and (EEC) No 1134/68; Having regard to the Protocol on the Statute of the Court of Justice of the European Communities, especially Article 20; 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 by the College van Beroep voor het Bedrijfsleven, by order of that court of 10 April 1970, hereby rules:

The second paragraph of Article 7 of Regulation No 1134/68 of the Council of the European Communities of 30 July 1968 must be interpreted as meaning that cancellation of an advance fixing of levies or refunds may relate to the balance of the quota still outstanding at the date when the application is made, but only to such balance in its entirety, and may not relate to amounts previously imported or exported.

Lecourt Donner Trabucchi