C-38/70

JUDGMENT OF THE COURT 10 MARCH 19711

Deutsche Tradax GmbH v Einfuhr- und Vorratsstelle für Getreide und Futtermittel2

(Reference for a preliminary ruling by the Verwaltungsgericht Frankfurt am Main)

'Rate of levy'

Case 38/70

Summary

1. The requirement by the agricultural 2. The levy fixed in advance, which is regulations of the Community of to be taken into consideration in cal­ import and export licences involving culating the deposit or part of the for the licensees an undertaking to deposit which is forfeit, is the rate effect the proposed transactions under of levy fixed for the month of the guarantee of a deposit constitutes importation as stated in the applica­ a method which is both necessary tion for the import licence. and appropriate, for the purposes of Article 40 (3) and 43 of the EEC 3. An implementing regulation adopted Treaty, to enable the competent by the Council pursuant to a power authorities to determine in the most contained in the basic regulation effective manner their interventions on from which it derives cannot derogate the market in cereals. The system of from the provisions of that regula­ licences violates no fundamental right. tion.

In Case 38/70

Reference to the Court under Article 177 of the EEC Treaty by the 1 — Language of the Case : German. 2 — CMLR.

JUDGMENT OF 10. 3. 1971 — CASE 38/70

Verwaltungsgericht (Administrative Court) Frankfurt am Main for a pre­ liminary ruling in the action pending before that court between

DEUTSCHE TRADAX GMBH, having its registered office in Hamburg,

gives the following

JUDGMENT

Issues of fact and of law

I — Facts and procedure The Einfuhr- und Vorratsstelle fixed the levy for May and June 1967 at DM On 16 May 1967 Deutsche Tradax 174.60 per metric ton, and for July and GmbH, a company carrying on business August 1967 at DM 97.60 per metric in Hamburg, obtained from the Einfuhr- ton, to which was to be added the pre­ und Vorratsstelle für Getreide und Fut­ mium laid down by Article 15 (2) of termittel of Frankfurt am Main an im­ Regulation No 120/67 of the Council port licence for 5 000 metric tons of of 13 June 1967 on the common or­ barley subject to a levy fixed in advance. ganization of the market in cereals The licence was valid until 31 August (Official Journal, English Special Edition 1967. June 1967 was specified as the 1967, p. 33), which was fixed at DM month of importation. 2.20 for July and at DM 5 for August

TRADAX v EINFUHR- UND VORRATSSTELLE GETREIDE

On 30 November 1967 the Einfuhr- und Vorratsstelle rejected the appeal The issue of import licences has a regu latory function, its objective being to lodged by Deutsche Tradax on 11 enable the position over the whole mar October. The latter commenced pro ket to be studied and controlled; it is ceedings before the Verwaltungsgericht Frankfurt am Main on 30 December therefore of public interest. However, in 1967. view of Article 2 (1) of the Basic Law, compulsory use of the licences can By order of 25 February 1970, regis not be confined within the limits of the tered at the Court on 23 July 1970, the 'constitutional order' unless it is the

Article 12 of Regulation No 120/67, appear unconstitutional. 2. If the answer to Question 1 is affirma Moreover, it is at the very least doubt tive: does the expression 'levy fixed ful whether the relevant rate of levy can in advance' in Article 8 (3) of Regu be that fixed for the intended month lation No 183/67 of the Commission of importation as stated in the applica of 27 June 1967 mean the levy fixed tion of the holder of the licence. for the final month of the period of In accordance with Article 20 of the validity of the licence or, as the de- Protocol on the Statute of the Court

of Justice of the EEC written observa the fundamental rights recognized by tions were submitted on 16 October that law. 1970 by the Government of the King Or particular prominence amongst the dom of the Netherlands, on 17 October fundamental rights recognized under by the plaintiff in the main action, on Community law is the right to the free 20 October by the defendant in the exercise of economic activity and the main action and on 21 October by the principle of proportionality of means. Commission of the European Com

Krauel and Gerhard Commichau, Ad Regarding the second question the plain vocates of the Hamburg Bar, the de tiff in the main action is of the opinion fendant in the main action by Albrecht that the expression 'levy fixed in ad Stockburger, Advocate of the Frankfurt vance', within the meaning of Article 8 am Main Bar, the Government of the (3)(b) of Regulation No 183/67, must Kingdom of the Netherlands by W. be taken to mean the levy fixed in ad Riphagen, Legal Adviser to the Ministry vance for the final month of the period for Foreign Affairs, and the Commis

rights. The validity of the regulation the final month of the period of validity at issue must be considered above all of the licence only if it is higher than in relation to Community law and to the premium fixed for the month of

mission of 21 August 1967 on import This interpretation is confirmed by the certificates for cereals, cereal-based pro­ wording and general system of the pro­ cessed products, rice, broken rice and visions of the basic regulations concern­ rice-based processed products (Official ing advanced fixing of the levy. Journal 1967, No 204, p. 16) and by It appears in particular from Article 15 Regulation No 638/70 of the Commis­ (2) of Regulation No 120/67 that in the sion of 7 April 1970, amending Regu­ event of the advance fixing of the levy lation No 473/67 (Official Journal 1970, only one levy is fixed, which is calcula­ No L 78, p. 7). ted in relation to the month of importa­ Moreover it is illogical, in the case of tion indicated by the holder of the the partial utilization of a licence, to licence. This provision is not disre­ apply one levy to the quantities impor­ garded by Article 9 (a) of Regulation ted and another levy for the calculation No 140/67, which is based on Article of the deposit in respect of the quantity 15 (4) of Regulation No 120/67 and is not imported. concerned with exceptional circum­ The Einfuhr- und Vorratsstelle für stances, different from those envisaged Getreide und Futtermittel, the defendant by Article 8 of Regulation No 183/67. in the main action, maintains in reply Article 5 (2) of Regulation No 183/67 to the second question that the only embodies the same concept. precise interpretation of the concept of The proposed interpretation corresponds 'levy fixed in advance' is that suggested to the meaning and objective of the by it which it has applied for many system of deposits: it is the рurposе of years, according to which the relevant the deposit to encourage the importer to levy is that fixed for the month of im­ fulfil within the prescribed period the portation stated in the application of the obligation to import arising from the holder of the licence. licence. Provision was made for an addi­ It is clear from Article 8 (3) of Regula­ tional deposit in order to diminish the tion No 183/67 that the three concepts risk of speculation on the levy and to of levy fixed in advance, premium fixed obviate the temptation not to use a in advance and refund fixed in advance licence, which are particularly great in as contained therein fulfil the same func­ the case of a levy fixed in advance. In tion as factors in the calculation for fixing the additional deposit the criterion determining the amount of the addi­ adopted was the difference between the tional deposit. Although the regulation levy fixed in advance for the intended expressly provides that, in the case of month of importation and the levy ap­ the premium on an import licence and plicable on the final day of the period

of validity of the licence; that differ vance knowledge of the various levies ence could be considered as representing applicable to an importation effected the importer's interest in not utilizing a during one of the months of the .period licence. of validity of the licence. This is why, The objection that this interpretation is pursuant to Article 7 of Regulation No based upon comparison between two 54, all levies applicable during the vari levies which are not comparable because ous months of the period of validity of they are calculated on the basis of two a licence are fixed in advance both in different threshold prices may be coun law and in fact.

The interpreta No 140/67. tion proposed by the defendant in the The fact that all levies valid for each main action is not therefore less logical of the months of the period of validity than the contrary interpretation. of the import licence are fixed in ad With regard to the second question the vance is confirmed by Article 5 (2)(b) Government of the Kingdom of the of Regulation No 183/67. This provi Netherlands is of the opinion that the sion had no meaning in the system orig 'levy fixed in advance' mentioned in inally envisaged for the fixing of levies. Article 8 (3)(b) of Regulation No 183/67 The obligation to import arising from is to be taken to mean, in principle, the the issue of a licence is indispensable to levy applicable during the final month obtaining a comprehensive view of the of the period of validity of the licence. market situation. The system defended The argument adduced by the defendant by the defendant in the main action is in the main action from Article 15 (2) not capable of ensuring, in all cases, an of Regulation No 120/67 is miscon adequate sanction in respect of the non-

tion. At the time of the entry into force fundamental rights recognized by Com of the common organization of the munity law, the Commission of the market in cereals, Regulation No 54 European Communities states, in its oral instituted a system which, as an excep observations, that it believes that the tion to the provisions of Article 17 (2) case-law of the Court, in particular the of Regulation No 19, provided for the judgment given on 17 December 1970 possibility of applying different levies. in Case 11/70 (request for a preliminary In this system, which has since remained ruling by the Verwaltungsgericht Frank in force, emphasis is laid upon the fact furt am Main in the case between In that the individual concerned has ad- ternationale Handekgeseilschaft mbH

and Einfuhr- und Vorratsstelle für from succumbing to the temptation of Getreide und Futtermittel) provides the requesting, for the same quantity, a new answer to the first question referred in levy fixed in advance at a lower level this case. or of importing the said quantity with Regarding the second question the Com a new licence not involving a levy fixed mission, after a restatement of the two in advance, against payment of the lower hypotheses at issue and the arguments levy fixed for the day of importation. from the texts which may be deduced The advantage to the importer in in favour of one or the other, maintains abandoning the old licence is directly that the criteria of interpretation, and in proportionate to the diminution of the particular the objective of the system of levy during the period of validity of the deposits, clearly militate in favour of the licence. Article 8 (3) of Regulation No

It is therefore port licence'. The latter consists of the in conformity with the purpose of the threshold price, less the cif price in deposit to calculate the additional force on the same day. The threshold amount by comparing the levy fixed in price is also used to calculate the levy advance for the final day of the period fixed in advance for the final month of of validity of the licence, which is equal the period of validity of the import to the levy fixed for the final month, licence. This is not the case for the levy and the levy in force at the same time. fixed in advance for the month of im On the other hand, there is no plausible portation indicated on the licence. It is reason for assessing this advantage by normal practice to compare levies cal means of a comparison between the levy culated on the basis of the same point fixed in advance for the intended month of reference. of importation and the levy in force on The levy fixed in advance is increased, the final day of the period of validity for the purposes of the comparison, by of the licence: these two levies never a premium 'fixed by the scale of pre fall due at the same time and the im miums in force . . . or for the final porter would therefore have no interest month of the period of validity of the in abandoning one in favour of the licence, if the latter is higher'.

JUDGMENT OF 10. 3. 1971 — CASE 38/70

Article 8 (3)(b) of Regulation No 183/­ import licence. 67 is reproduced word for word in Regu­ It should аlsо be noted that Regulation lation No 473/67 and has been interpre­ No 2434/70 of the Council of 30 ted and applied in a number of different November 1970, amending Regulations ways by the Member States in pur­ Nos 120/67 and 359/67 on the com­ suance of that regulation. In order to mon organization of the markets in put an end to these difficulties of in­ cereals and in rice (Official Journal 1970, terpretation, Regulation No 638/70 No L 262, p. 1), stated that 'in general, amended the wording of Article 8 (3)(b) the month shown on the import licence in so far as the expression 'levy fixed does not correspond to the month in in advance' must henceforward—since which importation takes place' and, in Regulation No 638/70 cannot be given consequence, deleted from Article 15 of retroactive effect—be understood as re­ Regulation No 120/67 the reference to ferring to the levy fixed for the final the threshold price in force during the month of the period of validity of the expected month of importation.

Grounds of judgment

1 By order of 25 February 1970, received at the Court on 23 July 1970, the Verwaltungsgericht Frankfurt am Main has requested the Court, pursuant to Article 177 of the EEC Treaty, to give a preliminary ruling on the following questions:

(1) Is Regulation No 120/67 of the Council of 13 June 1967 valid in so far as in the final paragraph of Article 12 (1) it makes the issue of an import licence conditional on the lodging of a deposit and provides that that deposit shall be forfeited in whole or in part if importation is not effected during the period of validity of the licence?

Second question

5 The second question concerns the interpretation of the expression 'levy fixed in advance' employed in the first paragraph of Article 8 (3) (b) of Regulation No 183/67/EEC of the Commission of 27 June 1967 on import and export licences for cereals and cereal-based processed products (Official Journal 1967, p. 2631), which is one of the factors to be taken into account in calcula­ ting the deposit or part of the deposit which is forfeited if importation is not effected or is only partially effected during the period of validity of the import licence.

6 It appears from the information supplied in the course of these proceedings that the competent authorities of the various Member States have interpreted this provision in different ways. Some of them believe that the phrase 'levy fixed in advance' within the meaning of the provision at issue must be under­ stood as the rate of levy fixed for the expected month of importation specified in the import licence, while others take the view that this expression means the rate fixed for the final month of the period of validity of the licence.

— reduced by the levy applicable on the final day of the period of validity of the import licence.'

Although this provision has taken care to indicate with precision various factors involved in the calculation of the amount of the deposit or part deposit to be forfeited, it has not defined what is to be understood by 'levy fixed in advance'. In order to interpret that expression, reference must be made to the provisions which form the legal basis of Regulation No 183/67 as a whole, namely Regulations Nos 120/67 and 140/67 of the Council.

9 Article 15 (2) of Regulation No 120/67 provides that in a case of advance fixing the levy to be charged on importation is 'the levy applicable on the day on which application for a licence is made, adjusted for the threshold price which will be in force during the expected month of importation'. Since Regulation No 183/67 uses the expression 'levy fixed in advance' without defining it more precisely, it must be understood in the same sense as that in which it is used in the basic Regulation No 120/67, which Regulation No 183/67 is intended to implement.

12 The expression 'levy fixed in advance' in the first indent of Article 8 (3) (b) of Regulation No 183/67 should therefore be interpreted as referring to the rate of levy fixed for the month of importation specified in the application by the holder of the import licence.

Costs

13 The costs incurred by the Government of the Kingdom of the Netherlands and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable and as these proceedings are, in so far as the parties to the main action are concerned, a step in the action pending before the national court, costs are 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 parties to the mam action and the Commission of the European Communities; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the European Economic Com­ munity; Having regard to Regulation No 120/67/EEC of the Council of 13 June 1967, Regulation No 140/67/EEC of the Council of 21 June 1967 and Regulation No 183/67/EEC of the Commission of 27 June 1967; Having regard to the Protocol on the Statute of the Court of Justice of the European Economic Community, especially Article 20; Having regard to the Rules of Procedure of the Court of Justice of the Euro­ pean Communities,

OPINION OF MR DUTHEILLET DE LAMOTHE — CASE 38/70

Delivered in open court in Luxembourg on 10 March 1971.

A. Van Houtte R. Lecourt Registrar President

OPINION OF MR ADVOCATE-GENERAL

DUTHEILLET DE LAMOTHE

DELIVERED ON 10 FEBRUARY 19711

Mr President, where, as a result of a failure to effect Members of the Court, the importation for which a licence was issued, the deposit is forfeited by the In Case 38/70 the Verwaltungsgericht importer. Frankfurt am Main has referred to you In Case 58/70 this second question re­ two questions, one relating to the valid­ ity of the system of deposits introduced lating to the calculation of the amount by Regulation No 120/67 of the Council of the deposit has been referred to the for imports of cereal products coming Court practically in the same terms by a from third countries, the other subsidiary Netherlands court, the College van and concerning the detailed rules for Beroep voor het Bedrijfsleven, but as the calculation of that deposit in cases a single question.