C-39/70

2. Agriculture — Common organization of the markets — Levy — Suspension — Special system — Complete nature of Community rules — Implementation by the national authorities — Requirements (Regulation No 805/68 of the Council, Article 14 (3) [OJ L 148, p. 24; OJ (English Special Edition) 1968 (I), p. 187]; Regulation No 888/68 of the Council, Article 1 [OJ L 156, p. 7; OJ (English Special Edition) 1968 (I), p. 239]

1. The uniform application of Com­ porters to whom the special system munity provisions allows no recourse applies to additional requirements to national rules except to the extent arising under national law, in par­ necessary to carry out the regulations. ticular where such requirements are 2. Where Community rules introducing incompatible with the criteria on a special system for imports lay down which the Community rules are all the conditions for the applicability based; the position is the same where of the system as well as the arrange­ the applicability of such a special ments for security and supervision system is made dependent upon a designed to prevent fraud, national subjective assessment on the part of authorities may not subject the im- the national authority.

In Case 39/70

Reference to the Court under Article 177 of the EEC Treaty by the Fifth Senate of the Finanzgericht Hamburg, for a preliminary ruling in the action pending before that court between

NORDDEUTSCHES VIEH- UND FLEISCHKONTOR GMBH

and

Advocate-General: A. Dutheillet de Lamothe Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

I — Facts and procedure served meat of the kinds mentioned at the end of the first subparagraph The facts and procedure may be sum­ of Article 14 (2) of Regulation (EEC) marized as follows: No 805/68; Article 14 (3) (a) of EEC Regulation (b) a deposit being lodged by the im­ No 805/68 of the Council on the porter, in an amount equal to the levy, common organization of the market in guaranteeing such manufacture; beef and veal provides that the Council shall adopt 'general rules for applying (c) a written undertaking being given by total suspension of the levy in respect of the importer, at the time of importa­ meat intended for the manufacture of the tion, to pay the additional sum preserved foods described in the first specified in paragraph (5) if the proof subparagraph of paragraph (2)’. This specified in paragraph (3) is not fur­ was done by Regulation No 888/68 lay­ nished in respect of the whole ing down general rules on special import quantity of frozen meat imported. terms for certain frozen meats intended Under paragraphs (3) and (4) of this for processing. Article 1 (1) of this article the deposit is only returned if, Regulation makes the total suspension of within six months, proof is furnished the import levy conditional upon: that a quantity of the preserved meat, (a) a written declaration being made by which is at least equivalent to the co­ the importer at the time of importa­ efficients fixed by the Commission in tion that the frozen meat is intended Regulation No 1082/68, has been manu­ for use in the importing Member factured from imported frozen meat. State for the manufacture of pre- By a decision of 18 September 1968 the

Hauptzollamt Hamburg dismissed an advantages might follow a refusal to application from the Norddeutsches grant the authorization. Vieh- und Fleischkontor GmbH of On 24 April 1969 the plaintiff brought Hamburg for approval for arrangements an action contesting this refusal before for the use of goods subject to levy, the Finanzgericht Hamburg, and put namely frozen beef and veal. The forward evidence of certain factors Hauptzollamt explained its decision to which, in its opinion, justified the pro dismiss this request on the ground that duction of an invoice for a smaller the plaintiff did not satisfy the conditions amount. In addition, the plaintiff ob laid down in paragraph 55 (2) of the served that when making a decision on German Customs Law, which requires its objection against the assessments that an undertaking applying for such issued on 17 December 1968 and 13 approval must be trustworthy ('ver January 1969, the Hauptzollamt Duis trauenswürdig'). burg had failed on certain vital points to By a decision of 18 March 1969 the take account of criticisms made at that Oberfinanzdirektion dismissed the plain time by the Hamburg office for investi tiffs objection on the grounds that good gation of fraudulent customs trans reasons existed for suspecting that it actions. had infringed the tax provisions concern The plaintiff also pointed out that the

invoice. This fact was claimed to be withdrawn. sufficient to destroy the trust which must The plaintiff in the main action observes exist between the administration and the that none of the allegations against it has taxpayer even though it was to be re been finally proved and also that it has vealed in the course of legal proceedings been carrying on its activities for twelve brought at Duisburg that some reduction years, that it has an annual turnover of of the higher figure appearing in the approximately DM 100 million and that purchaser's invoice was in fact justified the tax demand by the German ad by defects in the goods. It was claimed ministration amounts only to DM to be of little significance that the 54 401.07. amount stated on the invoice fixed 'for The practical effect of the refusal to duty and customs only' represented the grant the undertaking's request for estimated value of the goods, since it is customs arrangements is to prevent it for the customs authorities to determine from carrying on this line of business. the value for customs purposes. In its order making the reference the For these reasons, even though it had to Finanzgericht Hamburg states that the be accepted that the plaintiff had in question whether the plaintiff's appeal good faith believed the value declared against the dismissal of its request of 31 for customs purposes to be approximate September 1968 for approval for ar ly correct, the plaintiff was considered rangements for the use of goods subject not to be 'vertrauenswürdig'. This was to levy is justified or not is subject to the considered sufficient to justify the plain

JUDGMENT OF 11. 2. 1971 — CASE 39/70

legislation. If not in form certainly in accept that the plaintiff was trustworthy practice, the defendant's decision means within the meaning of paragraph 55 (2) that the plaintiff is prevented from im of the German Customs Law, with the porting frozen beef and veal for the result that if it has to be accepted that manufacture of preserved meats without the EEC regulations do not set a limit to payment of the levy. According to the the formal requirements necessary for Finanzgericht Hamburg the detailed obtaining the exemption from the levy nature of the Commmunity regulations provided for in (EEC) Regulation No on this subject favours the view that as 805/68, the application at present before regards the formal requirements, Article the Court must fail. Although the facts

fied in law as long as it has not been for the use of goods in bond under the shown before the courts dealing with conditions laid down in paragraph 55 of the plaintiff's applications that this party the Zollgesetz (Customs Law). If it had has acted correctly. An exception to to be accepted that the benefit of total this principle is only justified where it is suspension of the levy, referred to in manifest that the applications are likely Article 14 (3) (a) of Regulation No 805/

FLEISCHKONTOR v HAUPTZOLLAMT HAMBURG

1971. and 2 of Regulation No 1082/68, lay down all the formal requirements which must be satisfied in order that the total suspension of the import II — Observations submitted to the Court levy referred to in Article 14 (3) (a) of Regulation No 805/68 may be The observations submitted under granted, or may the national customs Article 20 of the Protocol on the Statute authority rely on provisions of its national law in order to make the of the Court of Justice may be sum

tion No 1082/68 the Commission also laid down the conditions which must be tence of paragraph 55 (2) of the German Customs Law of 1961?' fulfilled to prove that the frozen meat has been entirely processed into pre The plaintiff in the main action, the served meat. These two regulations are Government of the Federal Republic of a sufficient guarantee of the interests German and the Commission of the of all parties concerned, taking into European Communities submitted writ account the interests of both importers ten observations in accordance with and national authorities.

The The powers of intervention claimed Government of the Federal Republic of by the German authorities in this Germany was represented by R. Mora- matter would lead to distortions of

competition, particularly as they claim the particular advantage that it does to refuse to grant the exemption pro not hinder commercial transactions, but vided for by the regulations in question is only possible provided the admini on the basis of mere suspicion. In this stration can rely on the accounts. It is way the arbitrary and unfettered for these reasons that, according to the assessment of the authorities in the German law on customs procedure, locality concerned would be substituted 'Vertrauenswürdigkeit' constitutes the for the Community system. indispensable basis of the supervision The Government of the Federal procedure.

ance with Article 1 (2) of Regulation cedural requirements, but this in no No 888/68. way restricts the scope of Community An effective system of supervision is law. The provision contained in especially important in the sector in Article 14 (3) of Regulation No question as the risk of evasion of the 805/68 of the Council concerning levy is particularly great. Since the special terms for certain frozen meats revenue from the levies will have to be shows clearly that it is merely intended transferred to the Community the to fix the conditions for such pre Federal Republic is acting in the ferential treatment, without encroach interests of the Community in the true ing on the national rules governing sense by using such a system. the procedure.

805/68. In this situation, recourse to to take the necessary precautions to the procedural requirements of national prevent imported frozen meat exempt law is inevitable. ed from the levy from being used for For practical reasons German customs purposes other than those for which supervision of the observance of the the undertaking concerned obtained conditions of the preferential levy the benefit of the special terms. Thus, system is based in principle upon it is provided that the importer must supervision of the accounts. This has furnish proof of the proper use of the

products and that, if this condition is there is no question that the sub not satisfied, he shall lose the deposit stantive requirements for the granting provided for in Article 1 of Regulation of this benefit are satisfied. Case-law No 888/68. The general rule laid and academic legal writing agree on down concerning proof by Article 1 regarding the grant of the benefit as a (4) of this Regulation was set out in purely discretionary decision on the detail by Regulation No 1082/68 of part of the administration. the Commission. Every importer who These German regulations are clearly satisfies the conditions laid down in based upon the idea that the benefit Article 1 of Regulation No 888/68 is of the special customs arrangements entitled to seek the suspension of the constitutes an exceptional favour which

deposits. imported meat at low prices. The Such wide discretionary power as that supplies must be acquired on the same held by the German administrative terms throughout the whole Com authorities in this case has no parallel munity and this means that Com in the systems in force in the other munity regulations must be applied Member States. uniformly in all the Member States. However, these considerations do not The Commission refers to the general render it impossible for the national principle confirmed by the Court in authorities to adopt internal measures the cases concerning turkey rumps and in order to implement Community tapioca flour which prohibits Member

regulations. When there is conflict, visions are uniformly valid throughout therefore, the German customs regula the whole Community. tions must give way to the Community Even when the Community provisions provisions, without any need to resort are as detailed as those in question in to a general Community rule govern this instance, it is not absolutely ing conflict of laws. impossible for Member States to adopt Having made these preliminary implementing measures, even of a observations the Commission em legislative nature. It is clear that the phasizes that, under paragraph 55 of Member States are entitled to adopt the Zollgesetz, an importer has no rules of procedure of a formal nature right to the benefit of arrangements for which define, for example, the form of use of goods in bond, even where the request, the competent authority

and other details which the Com the national authority may refuse to munity provisions cannot regulate. apply the Community system in ques The Commission considers that the tion here on the basis of considera question whether, by applying para tions which may be quite foreign to graph 55 of the Zollgesetz, the German Community law. This power of the authority was merely applying the administration also involves the danger Community provisions or whether it of discriminatory treatment in allow added other requirements which were ing the suspension of the levy, even if not contained in those provisions, can in every Member State the authorities not be answered in general terms. The had such a discretionary power, which reply to this question can only be in fact they have not. given in relation to each of the require The Commission considers that the ments laid down in paragraph 55. national authority cannot be regarded To the extent to which the provision as entitled to refuse the benefit of the requires the importer making the re suspension of the levy on the mere quest to keep proper books of account ground that, in its discretionary judg or to draw up regular statements of ment, the applicant is not 'trustworthy', account, it resorts to specific legal and that this is so not only when concepts which only leave the admini this concept is a matter for discretion stration a minimum of discretionary but even if it is to be regarded as 'an

Moreover, longer for the national authority to in order to prevent abuses and fraudu decide whether to require deposits or lent practices the Community has not. The same applies to the periods drawn up detailed rules which within which the product must be emphasize the lodging of deposits and used; these periods are fixed defini proof of proper utilization. It is within tively by Community law. the context of the actual inspection The scope of the Community rules is of the proof furnished by the importers more seriously affected if the suspen that the Member States may still take sion of the levy is left to the discre such action as they think fit.

FLEISCHKONTOR v HAUPTZOLLAMT HAMBURG

lent action may be held in check or cept of 'Vertrauenswürdigkeit' it is not prevented in the most effective way. inconceivable that claimants from It is not a valid answer to this require­ other Member States who are not ment to say that it leads to an in­ known to the national customs crease in work. A final consideration authorities may be more readily con­ which militates against the accept­ sidered untrustworthy than domestic ability of the criterion of 'Vertrauens­ undertakings, or that, at the least, the würdigkeit' is that its application may 'Vertrauenswürdigkeit' of foreign im­ result in discriminatory treatment to porters may only be acknowledged in the detriment of the nationals of other the light of requirements which are Member States. In fact, as a result of more stringent than those applying to the extremely wide nature of the con- nationals.

Grounds of judgment

1 By an order of 25 June 1970 received at the Court on 27 July 1970 the Finanzgericht Hamburg has referred for a preliminary ruling under Article 177 of the EEC Treaty a question on the interpretation of Regulation (EEC) No 805/68 of the Council of 27 June 1968 and Regulation (EEC) No 888/68 of the Council of 28 June 1968 as well as of Regulation (EEC) No 1082/68 of the Commission of 26 July 1968, concerning the introduction and application of special import terms for certain frozen meats for processing.

2 The Court is asked to rule whether these regulations 'lay down all the formal requirements which must be satisfied in order that the total suspension of the import levy referred to in Article 14 (3) (a) of Regulation No 805/68 may be granted', or whether the national customs authority may 'rely on provisions of its national law in order to make the grant of the benefit of the preferential levy system conditional upon additional requirements'.

(c) a written undertaking being given by the importer, at the time of importa­ tion, to pay the additional sum specified in paragraph (5) if the proof specified in paragraph (3) is not furnished in respect of the whole quantity of frozen meat imported.

In addition, under paragraphs (3) and (4) of that article the deposit is not to be returned unless the importer furnishes the proof required within six months.

Furthermore, in Regulation No 1082/68 the Commission fixed the co­ efficients determining the quantity of preserved meat which must arise from the processing of imported frozen meats.

The question put is therefore intended to ascertain whether, in the face of these detailed provisions, the national authorities may subject the application of these rules to additional conditions laid down in their customs legislation.

4 Where national authorities are responsible for implementing a Community regulation it must be recognized that in principle this implementation takes place with due respect for the forms and procedures of national law.

However, the uniform application of Community provisions allows no re­ course to national rules except to the extent necessary to carry out the regulations.

6 For this reason it would be incompatible with Community rules for any customs authority to subject an importer's claim for suspension of the levy to internal legal requirements based upon subjective assessments.

Costs

7 The costs incurred by the Commission of the European Communities and the Government of the Federal Republic of Germany, which have submitted ob­ servations to the Court, are not recoverable 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 Finanzgericht Hamburg, the decision as to 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 plaintiff in the main action, the Commission of the European Communities and the Government of the Federal Republic of Germany; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the European Economic Community, especially Article 177; Having regard to Regulation (EEC) No 805/68 of the Council of 27 June 1968 and Regulation (EEC) No 888/68 of the Council of 28 June 1968, as well as Regulation (EEC) No 1082/68 of the Commission of 26 July 1968; Having regard to the Protocol on the Statute of the Court of Justice of the European Economic Community; Having regard to the Rules of Procedure of the Court of Justice of the European Communities,

THE COURT

Monaco Mertens de Wilmars Pescatore Kutscher

Delivered in open court in Luxembourg on 11 February 1971.

A. Van Houtte R. Lecourt

Registrar President

OPINION OF MR ADVOCATE-GENERAL

DUTHEILLET DE LAMOTHE