C-17/70

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

Koninklijke Lassie Fabrieken NV v Hoofdproduktschap voor Akkerbouwprodukten and Another<apnote>2</apnote> (Reference for a preliminary ruling by the College van Beroep voor het Bedrijfsleven)

Case 17/70

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

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

JUDGMENT OF 28. 10. 1970 — CASE 17/70

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

LASSIE ν HOOFDPRODUKTSCHAP AKKERBOUWPRODUCTEN

7. Interpretation is requested of the second of the currency of a third country (Article 2) paragraph of Article 7 since as emerges from or of a Member State (Article 4) levies and the facts which gave rise to the main refunds shall be recalculated so as to adapt dispute, the difficulty relates to the detailed them to the new parities and that those new rules exercising the right thereby conferred. amounts shall also be applied to trans actions for which the trader had availed himself of the opportunity offixing the levies 8. In April and May 1968 Koninklijke Lassie Fabrieken NV obtained various and refunds in advance. fixings of export refunds:

100 kg; istration they are released from the obliga tion to import or export, or, if they do so, (3) for 300 000 kg of oats to be exported that they will pay or receive the amount with a refund of Fl. 26.59 per 100 kg. of the levy or refund in force on the day of (4) for 1 500 kg of hulled oats with a refund the import or export effected. of Fl. 23.93 per 100 kg;

on the fourth and 100 000 kg on the fifth. vention agency for a transaction still to Between 4 August and 2 September there be carried out after that day may, by were exported at various different dates a total of 141490 kg on the first certificate written application which must reach the competent authority within thirty days (barley groats) 25 550 kg on the second of the entry into force of this regulation, (barley groats), 15 400 kg on the third (oats obtain cancellation of the advance fixing and 166 060 kg on the fourth (hulled oats). and of the relevant document or certifi cate, or cancellation of the agreement.' 9. By a circular letter of 28 August 1968 The provision regarding the additional the Hoofdproduktschap voor Akkerbouw opportunity for cancellation laid down as a produkten, the Netherlands agency res transitional measure by Article 7 differs ponsible for the administration of the from those if Articles 1, 2 and 4 in that it refund system, notified those concerned that does not depend on any alteration in the the applications for cancellation made parity of currency (which in fact did not under the second paragraph of Article 7

of Regulation No 1134/68 could only be (a) Does the correct interpretation of the granted on the following conditions: second paragraph of Article 7 of Regulation No 1134/68 of the Council (a) that the fixing had been obtained before of the European Communities imply 4 August 1968; that the cancellation provided for in this provision refers exclusively to the (b) that the cancellation related only to entire quota still remaining on 4 August quantities which had not yet been 1968, to which the advance fixing imported or exported at the time of the relates?

10. The amount of refunds on exports of barley groats to third countries which was (c) If the reply to Question (a) is in the Fl. 25.52 for the month of August, was negative, does the correct interpretation increased to Fl. 27.71 for September; the of the second paragraph of Article 7 amount of the refunds on the export of imply that cancellation of the advance hulled oats increased from Fl. 20.35 to fixing is permissible with regard to the Fl. 22.49 for the same period; and refunds balance of the quota outstanding at the for exports of malted oats increased from date of lodging the application for FI. 22.61 per 100 kg to Fl. 24.99 per 100 kg. cancellation or for a part thereof, even if part of the quota to which the advance

12. Lassie brought the matter before the and the date of lodging the application College van Beroep voor het Bedrijfsleven for cancellation? and requested it to give a ruling on its application. 14. The request of the College van Beroep voor het Bedrijfsleven, was recorded at the 13. The College van Beroep found that the Court register on 13 April 1970. The solution to the dispute depended on the Produktschap voor Granen, Zaden en interpretation of Regulation No 1134/68 Peulvruchten, the Commission of the and by an order of 10 April 1970 referred European Communities and the Kingdom the following questions to the Court of of the Netherlands submitted written Justice: observations.

On hearing the report of the Judge- In order to protect the vested rights of such Rapporteur and the views of the Advocate- traders, they were afforded the opportunity General, the Court decided to open oral of terminating their legal relationships procedure without any prepafatory inquiry. established before Regulation No 1134/68 The Produktschap voor Granen, Zaden en entered into force. This was preferable to a Peulvruchten and the Commission of the solution which would have excluded from European Communities submitted their the new rules the advance fixings prior to oral observations at the hearing on 16 4 August 1968 which, if there were altera September 1970. tions in monetary parities during the period The Advocate-General delivered his opin in which the certificates were in force, would ion at the hearing on 13 October 1970. have seriously disturbed the functioning of the organizations of the market. The option to cancel provided for in the II — Observations submitted under second paragraph of Article 7 is thus to be Article 20 of the Statute distinguished, both with regard to its purpose and to the grounds on which it was based, from those in Articles 1, 2 and 4 The observations submitted to the Court which deal with the actual alteration of may be summarized as follows: parities. Whilst those latter provisions are of a permanent nature, Article 7 is merely a transitional provision the essential object A — Observations submitted by the Com of which is to protect traders who, in mission of the European Communities accordance with the general trend of Community legislation, were entitled to rely on the permanency of advance fixings. 1 — The rationale of Article 7 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 created before 4 August 1968 thus appreci 2 — The replies to the question ably modifying the legal conditions on which the advance fixings were obtained. The second paragraph of Article 7 must 77/e first question be read in this context.

Traders induced to cover themselves against the exhaust this quota by a series of fractional new risk of an alteration of the amounts transactions, that is to say, through expressed in national currency in the successive importations or exportations. relevant documents. The word 'transaction' in Regulation No

(c) According to the Commission, the The Commission considers that it follows interpretation which it puts forward has from its reply to the first question that the the advantage, in principle at least, of fact that after 4 August 1968 a trader reducing the amounts to which the cancel­ imported or exported with the benefit of lation may relate, thus reducing the advance fixing does not prevent the cancel­ amounts to which the cancellation may lation of such fixing with regard to the relate, thus reducing as much as possible amount still outstanding at the date of the the disturbance caused by such cancella­ application. It consequently suggests the tions. following reply: The cancellation provided for in the (d) According to the Commission, the second paragraph of Article 7 of Regula­ interpretation which it proposes cannot be tion No 1134/68 may be granted in rejected on the basis of an alleged parallel connexion with the quota still outstanding between the second paragraph of Article 7 under the said fixing at the date of and the other provisions of the regulation lodging the application for cancellation, which provide for the concellation of even if a quantity has already been advance fixings in the case of an actual alter­ imported or exported under the advance ation in monetary parities. According to fixing between 4 August 1968 and the the Produktschap, if there is an alteration date of lodging the application for of the levy or refund fixed in advance and cancellation. the trader does not instantly request cancellation of the advance fixing but The fourth question continues to import or export within the framework of such advance fixing, he (a) The Commission observes that the shows that he has not been prejudiced by cancellation of a document relating to an the alteration and a subsequent application importation or exportation already carried for cancellation would necessarily be for out constitutes a retroactive, that is to say reasons other than those which guided the exceptional, measure and consequently one legislature. According to to the Produkt- which would normally require express

provision to be made in the regulation if its objective is to ensure that persons who such regulation intended to provide for it. have obtained an advance fixing before the In addition, it derogates from a basic entry into force of the regulation are not principle of the rules with regard to the prejudiced by the unforeseeable factor that common organization of the markets and it during the interval when the fixing is would consequently be all the more sur applicable a regulation might be adopted prising that the legislature should have making such advance fixing disadvanta conceived of such an effect ex tunc without geous. making express provision for it. Articles 1, 2 and 4 deal with a 'specific transaction' and Article 7 with a 'trans (b) Furthermore, the system of licences and action still to be carried out after that date'. certificates was established in order to Departing from the normal usage of the enable the competent authorities to obtain word the regulation understands by trans a permanent record of the movement of action 'the obligations as a whole' which a trade; the cancellation ex tunc of licences trader has undertaken within the context or certificates and advance fixings for of the fixing, without this preventing the transactions already carried out must obligation from being fulfilled by several inevitably disturb that system. acts of export or import. This interpretation is based inter alia on (c) Finally, a trader carrying out import or Articles 1 (2), 2 (2) and 4 (1) dealing with an export transactions after 4 August 1968 on advance fixing 'for a transaction still to be the terms of an advance fixing may be carried out' which is only explicable if, by regarded as having renounced with regard transaction there is understood all the acts to such transactions the protection afforded of import or export to be carried out.

amounts to be imported or exported. cation for cancellation. It is incompatible with such an interpreta tion that that single transaction could be partly carried out and partly cancelled. B — The observations of the Produktschap The application for cancellation may thus relate only to the entire amount still remaining on 4 August 1968. 1. The Produktschap observes that under Articles 1, 2 and 4 on Regulation No 1134/68 2. The fact that cancellation must relate to the amount of the refund is to be adjusted the entire balance remaining on 4 August in relation to any alterations in the parities 1968 means that, if exports have been of the currencies. In order to preclude this effected between that date and the date unforeseeable factor from prejudicing tra of the application, cancellation is thereby ders who have previously obtained an precluded. The application for cancellation advance fixing those articles allow such may not relate to amounts already exported traders in such a case to cancel the advance as, by effecting an importation or an fixing. exportation for which a fixing has been Although Article 7 does not refer to an obtained and no application made for its alteration in the parities, it nevertheless has cancellation, the person concerned has a similar scope to Articles 1, 2 and 4, as shown that he has not been prejudiced and

he has made an immutable choice. A exporter will instantly apply for this similar situation obtains in the case of 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 trader might have to parity is considered to have acted in his comply with the cancellation system laid own interests and consequently not to have down by the regulation. If the trader wishes been prejudiced; the same is true of a trader to avoid such loss, he must immediately who exports on the terms of the fixing apply for cancellation without continuing after 4 August 1968. If he applies for to export. cancellation it is thus no longer to avoid Article 7 was not framed to enable traders being prejudiced but for reasons other than to make exceptional profits. those underlying Article 7. For example, an exporter may not apply 2 — Reply to the questions for cancellation because the refund applic able on the day of exportation might The first question increase sharply before the expiry of the period of thirty days.

Government portion and subsequently to lodge an application for cancellation with regard to the remainder, this would entail failure to 1 — The scope of Article 7 observe the requirement that the cancella tion should relate to the entire quota still The Netherlands Government observes that outstanding. Article 7 must be applied strictly and in a manner analogous to that implied by Articles 1, 2 and 4 if devaluation of the The second question currency occurs. On such devaluation an exporter will undoubtedly refrain from According to the Netherlands Government exporting within the framework of an the second question has been wrongly advance fixing before the alteration of drafted. The first part of the question parity in order subsequently to apply for the (whether cancellation is still possible if, cancellation of such fixing for the remaining between 4 August 1968 and the dates of quantity.

LASSIE ν HOOFDPRODUKTSCHAP AKKERBOUWPRODUKTEN

quota fixed in advance has been entirely or to the first question it is unnecessary to reply partially imported or exported) presupposes to the third and fourth questions. that a negative answer has been given to the first question. D — Observations of the Lassie undertaking The second part of the question (whether cancellation is possible only if no exporta­ SA Lassie remarked during the oral pro­ tion or importation has been effected cedure that the fact that it applied for within the framework of the said fixing cancellation of the advance fixing only on between 4 August 1968 and the date of 2 September 1968 was due to the fact that lodging the application for cancellation) is it was only informed on 30 August 1968 according to the Netherlands Government, of the possibility of applying for such merely a repetition of the first question. cancellation. The fact that it effected exports between 4 The third and fourth questions August and 2 September 1968 thus cannot in any event be interpreted as a renunciation The Netherlands Government observes that of the rights which it might derive from since it has suggested an affirmative reply Regulation No 1134/68.

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 asked 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.

6 The national court asks first whether the application for cancellation must neces­ sarily relate to the entire amount still outstanding on 4 August 1968, of the quota to which the advance fixing relates.

7 On the one hand, this question must be considered in relation to the argument expounded by Lassie before the court in the main proceedings to the effect that a trader may at any time during the thirty days allotted him apply for the cancellation of the advance fixings relating to the whole of the amount outstanding at 4 August 1968, even if a part of this balance has already been improted or exported in the meantime so that the cancellation might thus have a retroactive effect in whole or in part.

8 On the other hand, it must also be considered in relation to the argument pro­ pounded by the Produktschap to the effect that an application for cancellation may only be made with regard to the quantity outstanding at 4 August 1968 and that in the meantime no part of this amount may be imported or exported.

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.

16 An application for cancellation must thus be considered even if a trader has before the date of his application imported or exported a part of the balance remaining on 4 August 1968 to which advance fixing relates.

17 The reply thus given to the first question makes the second irrelevant.

18 The third question asks whether a trader who lodges an application for cancellation after continuing to import or export after 4 August 1968 may apply for the cancella­ tion of all or part of the balance of the quota fixed in advance which is outstanding at the date of lodging the application.

19 It is clear from the wording of Article 7, in accordance with which the application relates to the cancellation of the certificate or document certifying the advance fixing that only the complete cancellation of the certificate can be envisaged con­ sequently involving the cancellation of the entire balance.

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

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 in­ crease when they exceed the legal grounds on which Article 7 was based.

Costs

27 The expenses incurred by the Commission of the European Communities and by the Netherlands Government, which have submitted their observations to the Court, are not recoverable. 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 College van Beroep voor het Bedrijfsleven, 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 oral observations of the Produktschap voor Granen, Zaden en Peulvruchten, and the Commission of the European Communities and of Ko­ ninklijke Lassie Fabrieken NV;

LASSIE ν HOOEDPRODUKTSCHAP AKKERBOUWPRODUKTEN

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 Euro­ pean Communities, especially Article 20; Having regard to the Rules of Procedure of the Court of Justice of the European Communities.

A. Van Houtte R. Lecoure

Registrar President

OPINION OF MR ADVOCATE-GENERAL ROEMER

(See Case 16/70, p. 934).