C-58/70

In Case 58/70

Reference to the Court under Article 177 of the EEC Treaty by the College van Beroep voor het Bedrijfsleven, The Hague, for a preliminary ruling in the action pending before that court between

1. COMPAGNIE CONTINENTALE (FRANCE) SA, having its registered office in Paris,

2. COMPAGNIE CONTINENTALE D'IMPORTATION (HOLLANDE) NV, having its registered office in Rotterdam,

and

1. HOOFDPRODUKTSCHAP VOOR AKKERBOUWPRODUKTEN, having its office in The Hague,

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

gives the following

JUDGMENT

Issues of fact and of law

I — Summary of the facts and miums in force on the day of procedure lodging the request for the licence for the month of The facts underlying the dispute and importation shown in the the procedure may be summarized as licence, or for the final month follows: of the period of validity of the By letter of 13 May 1969, Compagnie licence, if the latter is higher; Continentale d'Importation (Hollande) and requested the Produktschap voor — reduced by the levy applicable Granen, Zaden en Peulvruchten (herein­ on the final day of the period after referred to as 'the Produktschap'), of validity of the import the Netherlands agency entrusted with licence.' the application of Regulation No By a debit note of 7 July 1969 the 473/67/EEC of the Commission, to Hoofdproduktschap voor Akkerbouw­ review the position which it had adopted produkten (hereinafter referred to as in a circular of 28 June 1967 on the 'the Hoofdproduktschap') charged Com­ interpretation of Article 8(3)(b) of the pagnie Continentale (France) with the said regulation. That provision is worded amounts declared forfeit for non- as follows: utilization of the five advance fixings 'The amounts to be taken into con­ of the levy relating to importation into sideration in calculating the deposit the EEC of maize from third countries. or part of the deposit which is forfeit After lodging a complaint against that shall be: debit note, Compagnie Continentale (a)... d'Importation effected payment of the (b) in the case of import licences for amounts appearing in the said note, at which the levy is fixed in advance: the same time reserving the right sub­ 0.50 unit of account per metric sequently to request a revision of the ton, increased by an amount method of calculation applied by the equal to: Hoofdproduktschap, if the Commission — tne levy fixed in advance, in­ should support the point of view put creased by a premium pro­ forward by that company in its letter vided for in the scale of pre- of 13 May 1969.

By application of 22 October 1969, import licence is mentioned in Article Compagnie Continentale (France) and 8(3)(b) only in connexion with the Compagnie Continentale d'importation premium. (Hollande) brought an action before the The plaintiffs, as also the Belgian and College van Beroep voor het Bedrijfs­ German authorities entrusted with the leven against the decision of the pro­ implementation of the regulation, con­ duktschap, on which the abovementioned sider that 'the levy fixed in advance' is debit note was based. 'the levy fixed for the month indicated in By order of 9 October 1970, which was the import licence as the month during received at the Court Registry on 12 which importation is intended to be October 1970, the College van Beroep effected'. voor het Bedrijfsleven decided to stay The application of the method of cal­ the proceedings until the Court of culation resulting from the interpreta­ Justice of the European Communities tion defended by the Netherlands gave a reply to the following question: agencies had the effect of charging 'Must the expression "levy fixed in Compagnie Continentale (France) Fl. advance" appearing in Article 8(3)(b) 308 090.78 more than the amount which of Regulation No 473/67/EEC of the it ought to have paid, by reason of Commission of the European Com­ imports not effected, if Article 8(3)(b) munities, as it was worded before the had been interpreted in the manner entry into force of Regulation (EEC) advocated by the plaintiffs in the main No 638/70 of the said Commission, action. be understood as referring to the levy While the proceedings were pending fixed in advance applicable for the before the College van Beroep, Article month of importation envisaged in 8(3)(b), the provisions of which were the import licence or as referring to applied differently by the Member the levy fixed in advance applicable States, was amended by Regulation for the final month of the period of (EEC) No 638/70, in order to ensure validity of that licence?' uniform application throughout the In that order, the court referring the Community. Under the terms of Article matter to the Court of Justice observes 1 of that regulation, Article 8(3)(b) is that the dispute arises from the fact that replaced by the following: the Hoofdproduktschap gives the expres­ '(b) in the case of import licences for sion 'levy fixed in advance' appearing in which the levy is fixed in advance: Article 8(3)(b) of Regulation No 0.50 units of account per metric 473/67/EEC an interpretation different ton, increased by an amount corres­ from that advocated by the plaintiffs in ponding to the difference between: the main action. The Netherlands administrative agencies are of the opinion — the levy fixed in advance, for that the levy fixed in advance is 'the application in the final month of levy which by reason of the fixing validity of the import licence, would have had to be paid if importation increased by the amount of the had been effected on the last day of the premium provided for by the period of validity of the advance premium rates in force on the fixing'. day on which the application for The plaintiffs pointed out before the a licence was lodged for the College van Beroep that in the regula­ month indicated in the licence

— the levy applicable for the final II — Written observations day of the period of validity of submitted to the Court the import licence should this The observations submitted in accord latter amount be less than the ance with Article 20 of the Protocol on former.' the Statute of the Court may be sum This provision is applicable for import marized as follows: licences issued on and after 11 April Compagnie Continentale (France) and 1970. Compagnie Continentale d'Importation The plaintiffs in the main action con (Hollande), the plaintiffs in the main sider .that this regulation does not pro action, observe first of all that in the vide an exhaustive answer to the pro recitals of the preamble to Regulation blem of the interpretation of Article (EEC) No 638/70, amending Regulation 8(3)(b) of Regulation No 473/67 as No 473/67/EEC, the Commission, originally worded. without indicating what interpretation For this reason the Netherlands court of the wording of the former Article decided to refer the matter to the Court 8(3)(b) it considers appropriate, merely of Justice. states that that provision was applied In accordance with Article 20 of the in different ways. They emphasize in

They preparatory inquiry. supply examples to demonstrate this. The defendants in the main action and They claim that it is begging the ques the Commission of the European Com tion to say that, according to the munities submitted their oral observa former wording, the interpretation of tions at the hearing on 3 February which is requested in this case, the 1971. penalty must be equal to the difference In the procedure before the Court the between the levy applicable to the day plaintiffs in the main action were on which importation is to be effected represented by R. van Delden, Advocate and that fixed for the final month of of the Rotterdam Bar, the defendants the period of validity of the import in the main action by J. R. Hommes, licence. Deputy Secretary-General of the Hoofd The Hoofdproduktschap and the Pro produktschap, the Government of the duktschap, the defendants in the main Kingdom of the Netherlands by W. action, consider that the question put Riphagen, Legal Adviser to the Ministry to the Court calls for the following for Foreign Affairs, and the Com

COMPAGNIE CONTINENTALE v HOOFDPRODUKTSCHAP AKKERBOUWPRODUKTEN

to the College van Beroep. and secondly in fact because the effect of In the pleading lodged by it on 1 Decem advance fixing is to establish simulta ber 1969 in the Netherlands court, the neously the various levies which will be Hoofdproduktschap comes to the con in force during each month of the period clusion, after an examination of the of validity of the import licence. regulations establishing the detailed rules The Hoofdproduktschap goes on to com of application with regard to import and pare the effects resulting in the Nether export licences for cereals and processed lands from the application of the system products, that it follows clearly from of deposits with those to which that those provisions, as well as from the system could give rise if it was applied studies preceding them, that the levy fixed both in law and in fact is that in accordance with the plaintiffs' argu ment, and supplies examples in order to which is applicable for each month of demonstrate that, according to the the period of validity of the licences and system applied in the Netherlands, the not solely the levy applicable during the system of deposits realizes its objective, expected month of importation. which is to oblige the holders of licences The Hoofdproduktschap observes further with advance fixing to utilize them even that the system of deposits is principally when it would have been better for them aimed at avoiding the situations whereby to import at the 'rate on the day', as they importers and exporters obtain fictitious cannot realize a profit by avoiding the fixings with a view to speculation. If an obligation to import which devolves on importer were able to avoid his obliga them from a licence with advance fixing. tion to import without any pecuniary On the other hand, according to the sanction he would have the choice, at the interpretation advocated by the plaintiffs, time when he effected the importation, there would be cases in which an import between importation on the basis of er could profit from a levy lower than the the advance fiixng and importation levy resulting from his licence with after payment of the levy applicable advance fixing, by ignoring the obligation on the day on which importation is undertaken by him to import within the effected. framework of the licence. The Hoofdproduktschap acknowledges In their pleading of 16 July 1970, the that the wording of Article 15(2) of defendants in the main action observe

They during the expected month of importa claim that it may therefore be excluded tion'. Despite this, the Hoofdprodukt that this limitation in time of the scope schap considers that the legal situation of Regulation No 638/70 is an indica-

tion of a 'change of attitude' by the refers to the levy fixed for the final Community legislature. month of the period of validity of the The Netherlands Government states that import licence. it fully subscribes to the submissions of The additional amount of the deposit is the defendants in the main action. In obtained by a comparison between, on addition it refers to the last part of the the one hand, the 'levy fixed in advance' written observations which it submitted plus a premium, and on the other hand, in Case 38/70, in which it attempted to the 'levy applicable on the final day of show that the system of deposits fulfils the period of validity of the import the aim assigned to it only if it gives the licence'. The latter consists of the thresh greatest effectiveness to the penalty old price, less the cif price in force on attaching to the failure to carry out the the same day. The threshold price is also obligation to import or export. It alleges used to calculate the levy fixed in ad that such is not the case in the system vance for the final month of the period applied by the German authorities, to of validity of the import licence.

. . or for the final month of the he imports at the rate fixed for the day of period of validity of the licence, if the importation, not only will he lose the latter is higher'. Since account is taken profit realized but he will also have to of the premium in force during the final pay a penalty equal to the amount fixed. month, it might be concluded that In the German system, on the other account must also be taken of the levy hand, the profit realized by an importer fixed in advance in respect of that final who has preferred to import at the 'rate month. on the day' will not be lost to him as The purpose of the deposit is to en long as the increase in price does not courage importers to effect importations exceed the equivalent of three monthly of the quantities indicated on the licence graduations, that is to say, as long as during its period of validity.

The Commission of the European Com advance, against payment of the lower munities maintains, after setting out the levy fixed for the day of importation. two hypotheses at issue and the argu The advantage to the importer in aban ments from the texts which may be de doning the old licence is directly pro duced in favour of one or other, that the portionate to the diminution of the levy criteria of interpretation, and in par during the period of validity of the ticular the objective of the system of licence. Article 8(3) of Regulation No deposits, clearly militate in favour of the 183/67 calculated it at a flat rate.

COMPAGNIE CONTINENTALE v HOOFDPRODUKTSCHAP AKKERBOUWPRODUKTEN

obviate as far as possible the temptation What is more, to take into account the to abandon a licence. levy fixed in advance for the intended There are good reasons for assessing the month of importation would be in contra­ advantages to the importer of abandoning diction with the objective of the system the old licence by comparing the levy of deposits. In fact, this levy is, as a fixed in advance and the levy in force on general rule, lower than that which has the final day of the period of validity of been fixed for the final month of the the licence. It is therefore in conformity period of validity of the licence, since the with the purpose of the deposit to cal­ threshold price is staggered on a month­ culate the additional amount by compar­ ly basis and rises during the cereal ing the levy fixed in advance for the final marketing year. day of the period of validity of the Article 8(3)(b) of Regulation No 183/67 licence, which is equal to the levy fixed is reproduced word for word in Regula­ for the final month, and the levy in force tion No 473/67 and has been interpreted at the same time. and applied in a number of different On the other hand, there is no plausible ways by the Member States in pursuance reason for assessing this advantage by of that regulation. In order to put an end means of comparison between the levy to these difficulties of interpretation, fixed in advance for the intended month Regulation No 638/70 amended the of importation and the levy in force on wording of Article 8(3)(b) in so far as the final day of the period of validity of the expression 'levy fixed in advance' the licence: these two levies never fall due must henceforward be understood as at the same time and the importer would referring to the levy fixed for the final therefore have no interest in abandoning month of the period of validity of the one in favour of the other. import licence.

3 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.

4 The Hoofdproduktschap voor Akkerbouwprodukten and the Produktschap voor Granen, Zaden en Peulvruchten of The Hague, which are the inter­ vention agencies for the Kingdom of the Netherlands and are the defendants in the main action, contend, in reliance on Article 7 of Regulation No 54 and Article 9 of Regulation No 140/67 which replaced it, as well on considera­ tions drawn from the objective of the system of deposits, that the expression 'levy fixed in advance' is to be understood as referring to the rate of levy fixed for the final month of the period of validity of the licence.

5 The Government of the Kingdom of the Netherlands comes to the same conclusion.

6 The plaintiffs in the main action, on the other hand, take the view that this expression refers to the rate fixed for the expected month of importation.

7 For a long time the Commission upheld the interpretation put forward by the plaintiffs in the main action, but before the Court it has adopted the interpretation put forward by the Netherlands agencies, relying in particular on Article 9 of Regulation No 140/67/EEC of the Council of 21 June 1967 on rules for the advance fixing of levies on cereals (Official Journal, English Special Edition 1967, p. 91) and on arguments adduced from the objective of the system of deposits.

9 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'.

10 In order to interpret that expression, reference must be made to the pro­ visions which form the legal basis of Regulation No 473/67 as a whole, namely Regulations Nos 120/67 and 140/67 of the Council.

11 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'.

12 Since Regulation No 473/67 uses the expression 'levy fixed in advance' with­ out 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 473/67 is intended to implement.

13 Contrary to what was maintained before the Court by the defendants in the main action, this interpretation is not contradicted by Article 9 of Regulation No 140/67, under which 'If importation is not effected during the month indicated at the time of application... (a) the levy applicable on the day on which the application for the licence was submitted shall be adjusted in accordance with the threshold price in force on the date of importation...'.

14 In fact, that provision—which is intended to meet the case in which importa­ tion is effected during the period of validity of the licence but during a month other than that indicated in the application for a licence—is not ap­ plicable to a case in which importation is not effected, or is only partially effected, during the period of validity of the licence, so that the deposit is wholly or partially forfeited.

18 The costs incurred by the Commission and the Government of the Kingdom of the Netherlands, 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 defendants in the main 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 Community, especially Articles 43 and 177; Having regard to Regulation No 473/67/EEC of the Commission of 21 August 1967 and Regulations Nos 120/67/EEC and 140/67/EEC of the Council of 13 and 21 June 1967; 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,

COMPAGNIE CONTINENTALE v HOOFDPRODUKTSCHAP AKKERBOUWPRODUKTEN

THE COURT

in answer to the question referred to it by the College van Beroep voor het Bedrijfsleven, The Hague, by order of that court of 9 October 1970, hereby rules:

OPINION OF MR ADVOCATE-GENERAL

DUTHEILLET DE LAMOTHE

(See Case 38/70, p. 156)