C-35/71

JUDGMENT OF 15. 12. 1971 — CASE 35/71

2. The levies are mainly intended to of Regulation No 120/67 of the protect and stabilize the Community Council of the European Communi­ market, in particular by preventing ties must be interpreted as meaning fluctuations in world market prices that the day of importation or of the from having repercussions within the effecting of the importation is the day Community. on which the goods are removed from This aim is best achieved if the levy the warehouse, which implies that is fixed on the basis of the date from they are irrevocably put into free which the imported goods exercise circulation. It is for the legislation of an influence on the internal market the individual Member States to of the Community, that is to say, the stipulate in detail what factual cir­ date on which they finally reach this cumstances or what customs formali­ market and enter into competition ties fulfil these conditions. with domestic products. The rate of 4. Where goods in respect of which a levy applicable must therefore be that levy fixed in advance are not re­ in force on the date on which the moved from store until after the ex­ goods are irrevocably put into free piry of the period of validity of the circulation. import licence, the rate of levy ap­ 3. As regards goods which are stored plicable on the date of removal from in deferred levy warehouses (Ab­ store must be applied. schöpfungsaufschublager) Article 15

In Case 35/71

Reference to the Court under Article 177 of the EEC Treaty by the Finanz­ gericht Hamburg for a preliminary ruling in the action pending before that court between

composed of: R. Lecourt, President, J. Mertens de Wilmars (Rapporteur) and H. Kutscher, Presidents of Chambers, A. M. Donner, A. Trabucchi, R. Monaco and P. Pescatore, Judges,

SCHLESWIG-HOLSTEINISCHE HAUPTGENOSSENSCHAFT v HAUPTZOLLAMT ITZEHOE

Advocate-General: K. Roemer Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

JUDGMENT OF 15. 12. 1971 — CASE 35/71

The plaintiff in the main action, the customs inspection or are altered in central cooperative of the Land of a manner which is not permitted Schleswig-Holstein, obtained customs (Paragraph 57 (1) of the Customs clearance during August 1968 for re Law). lease into circulation on the market (4) If goods are removed from a deterred 20 000 kg of barley covered by an levy warehouse then the rate of levy import licence valid until 31 August applicable on the day of the removal 1968 and 347 000 kg of oats covered from store shall be applied to these by a licence valid until 30 September of

August to 28 November as regards the oats. However, the view or certain commenta tors is that subparagraph 4 does not pro In view or these findings the Customs vide any exception to the concept of Office of Husum claimed from the plain importation set out in subparagraph 3 tiff an additional payment of DM 6 341 but that the day of the removal from by way of levies. In support of the store is only regarded as the day of amended notice it stated that the goods importation for the application of the stored in the warehouse under the defer rate of levy, whereas for the relevant red levy scheme could not be considered moment for provisions which do not as removed for release into circulation relate to the rate of levy, that is to say, until the moment when they were phy those that concern the quantity, type sically removed from the warehouses and value of the goods subject to the and that the entries in the books relative levy, that day is to be taken as the day to the movements of the goods were not on which an application for clearance of sufficient to satisfy the provisions of the goods through customs for release German law relating to the imposition into free circulation on the internal of the levy. market is made.

SCHLESWIG-HOLSTEINISCHE HAUPTGENOSSENSCHAFT v HAUPTZOLLAMT ITZEHOE

of Regulation No 120/67 and, by order Rapporteur and the views of the Advo­ of 30 June 1971, stayed the proceedings cate-General, the Court decided not to and referred the following questions hold any preparatory inquiry. to the Court of Justice for a preliminary The plain tiff in the main action, the ruling: Commission of the European Communi­ 1-1. Must Article 15 (1) of Regulation ties and the Federal Republic of Ger­ No 120/67/EEC of 13 June 1967 many presented oral argument at the (OJ, English Special Edition 1967, hearing on 9 November 1971. p. 33) be interpreted as meaning The plaintiff in the main action was that when goods are stored in represented by Mr Modest of the deferred levy warehouses the date Hamburg Bar. of the removal of the goods from The Commission was represented by its store is to be regarded as the day Legal Adviser, Mr Gilsdorf. of importation so that the rate of The Federal Republic or Germany was levy applicable on the date of the represented by its Agent, Mr Morawitz. removal must be applied? The Advocate-General delivered his 2. If Question I -1. is answered in opinion at the hearing on 30 November the negative: how is the term 1971. 'importation' in Article 15 (1) of Regulation No 120/67 to be II — Observations submitted interpreted? Does this mean the in accordance with Arti­ bringing of goods into the customs cle 20 of the Protocol on territory or is it based on the the Statute of the Court application for clearance of the of Justice goods for release into free circula­ tion? The observations submitted in accord­ ance with Article 20 of the Protocol on II - 1. Must Article 15 (2) of Regulation No 120/67 be understood to the Statute of the Court of Justice may mean that if goods are stored in be summarized as follows:

the imposition of levies (Abschöpfungs Prior production of an import licence erhebungsgesetz) in the version in force was required in neither case for the at the time in question is compatible admission of goods into store. with Article 15 (1) of Regulation No — In fact, goods placed in deferred levy 120/67/EEC. The national court warehouses were not, because of the should have submitted this question for supervision to which they remain a Dreliminarv ruling. subject, regarded as being in free The German government describes the circulation and could even be re relevant provisions of German law in exported in so far as they had not 1968 as follows: left the warehouse for release into — The day of importation was, in prin free circulation without any customs ciple, the day on which the first provision. From an economic point request for the release of the goods of view, deferred duty warehouses into free circulation was made or may be regarded as the same as open took effect (Paragraph 4, Abschöp customs warehouses where, too, im fungserhebungsgesetz). Nevertheless ported goods could not compete with this provision was to be interpreted products subject to common organiza taking account of the details of the tion of the market. rules in relation to warehousing in In this context paragraph 4 (4) of the force in Germany. Law relating to the imposition of levies — Before the change in the rules rela provides that the rate of levy to be ting to warehousing brought about by applied for products leaving deferred the Law of 22 July 1969 (BGB1.

assimilated and it must therefore be — In these deferred duty warehouses, concluded that the German national such as the one owned by the appli scheme is in conformity with Com cant, the goods were only admitted munity law. after having been subject to a declara The first question should therefore be tion of release into free circulation. answered in the affirmative. — Nevertheless in spite of the fact that The plaintiff in the main action observes these goods were intended to be sold also that the term 'day of importation' on the internal market, the payment had not been defined by the Commun of customs dues was suspended for ity regulations before the Council as long as they remained in these Directive of 4 March 1969 and Regula deferred duty warehouses which were, tion No 1373/70. moreover, with regard to agricultural While tooth these Community provisions products subject to levy, named were not applicable at the time of the 'deferred levy warehouses' (Para dealings in question they may neverthe graph 46 of the Zollgesetz of 14 less be relied on in so far as they reveal July 1961). the interpretation which the Council — In spite of the difference between the and Commission placed on this concept. customs warehouses and the deferred However, these Community provisions duty warehouses the two were deemed (in particular Regulation No 1373/70, to be the same for the purposes of Article 15, the Directive of 4 March matters relating to import licences. 1969, Articles 1 (2), 8 and 10) clearly

show that there is no importation within Article 15 (1) of Regulation No 120/67 the meaning of Article 15 (1) (and the and from the function of this article effecting of an import within the mean­ within the context of provisions for the ing of Article 15 (2)) of Regulation No common organization of the market 120/67 until the goods are removed relating to levies and to importation. from the customs warehouse and are Relying on these criteria, the Com­ thus released into free circulation. mission concludes that importation Moreover the Directive of the Council occurs when the goods are finally and of 4 March 1969 wholly conforms to the irrevocably put into free circulation in aims and spirit of the common organiza­ such a way that the importation can no tion of the markets. Levies should be longer be revoked. Where goods are stored in customs warehouses this means imposed on foreign goods released into free circulation in the territory of a that the day of removal from the ware­ Member State of the Community. It is house must be considered as the day only subject to this condition and at of importation since the goods are only that time that the levies can have an finally put into free circulation in the effect on the internal market of the common market when they are removed from store. Member States and of the Community. Nevertheless imported goods only arrive In support of its view the Commission on the free market when the importer relies on the following arguments: releases them into free circulation or — In view of the fact that the aim of when they are removed from customs the levy is to compensate for fluctua­ supervision for other reasons (such as tions in the world prices, the moment theft or fraudulent importation). at which the goods have a decisive The criterion of the release of the goods influence on trends on the market into free circulation is only fulfilled by in the Community must be taken the action of the warehouse keeper into account, that is to say, the which has the effect of altering the legal moment when the goods were in fact situation and by which he expresses his introduced on the internal market. intention of putting an end to the It would be hardly realistic to take customs supervision. an earlier moment. There sometimes

lead finally to the same conclusion. moment importation was to be regarded Importation within the meaning of as effected. It follows that at the time the licensing rules is only finally in question (1967 to 1968) the national accomplished after the clearance of provisions remained in force. the goods through customs for re­ The German legislation concerned with lease into free circulation (See inter external trade (AWV) regarded the im­ alia Regulation No 1373/70, Articles portation as effected once the entry 4 and 15). The same concept should formalities had been completed. In the be applied with regard to the imposi­ case of deferred duty warehouses this tion of the levy. was only completed when the import Applying this principle to the situation licence had to be submitted, that is to existing in Germany in 1968 with regard say, from the time when the goods to goods stored in deferred duty ware­ ceased to be under customs supervision houses, the Commission states that in in other words, when they were re­ such warehouses goods could not be moved from store. Paragraph 4 (4) of considered as having been put into free the Abschopfungserhebungsgesetz pro­ circulation in the Community when vides consequently, that when the rate being given 'customs clearance for the of levy was fixed in an import licence, purpose of admission to the deferred the products were to be treated, as re­ duty warehousing scheme'. That is why gards the application of this rate of the German legislature itself decided to levy, as though they had been imported apply the rate of levy on the day of during the month in which they left removal from store (Paragraph 4 (4) of the warehouse (or in certain cases, on the Abschopfungserhebungsgesetz), thus the day on which they left the ware­ conforming to Community Law. house). The commission therefore suggests the The rules of German law thus estab­ following answer to Question I (1 and lished are compatible with Article 15 (2) 2): of Regulation No 120/67. 'Article 15 (1) of Regulation No The plaintiff in the main action observes 120/67 must be interpreted as mean­ that the question of the national court ing that the day of removal from store relates to the case where the import must be regarded as the day of licence is only sought and issued after importation where the goods are storage in the deferred levy warehouse. stored in a deferred levy warehouse In its view in the import transaction is within the meaning of the provisions only effected on the day of removal in force in the Federal Republic of from store. The fixing of a levy in ad­ Germany before the entry into force vance in an import licence can there- of the Directive of 4 March 1969 Fore occur when the goods are already relating to customs warehousing pro­ in store.

The plaintiff observes that the reply to of the store (except in cases of move Question II (2) is superfluous. The ment within one silo divided up into Commission observes that in view of different compartments with the per its prior submissions the answer must mission of the administration). be that the import transaction must only The solution thus adopted by German be effected on the day of removal from law for deferred duty warehouses was store. followed by Community law, particu This interpretation is corroborated by larly by the Directive of 4 March 1969

The Commission suggests the follow the warehouse must be applied. ing answer to Question II, 1 and 2: 'Article 15 (2) of Regulation No The plaintiff in the main action observes 120/67 must be interpreted as mean that the question referred seeks in fact ing that if goods are stored in de to know what is meant by 'removal ferred levy warehouses of the kind from store' that is, whether the removal mentioned above, the import trans is completed once the owner of the store

tion in national law. The Official inter pretation given by the German adminis The plaintiff observes that private and tration clearly shows that 'removal from free warehouses of the type involved in store' (within the meaning of Article the present case are characterized by 28 Z.G_ and of Article 4 (3) of the the fact that the person storing goods Abschopfungserhebungsgesetz) must be has a large measure of control over the understood to mean the physical leaving goods stored since they are not under

seal. All transactions are made, to a great sponsible for its supervision has been extent, on the basis of the confidence completed or where the removal has reposed in the proprietors of warehouses been notified to the Customs Office re and the customs authorities do not in sponsible for the supervision and where tervene in most operations. the putting into free circulation of the The removal from store' requires that goods has been made public by its re the declaration of leaving the warehouse moval from the registers stocks neces should be made and that this should be sary for supervision.

warehouse keeper. to the Customs Office responsible The goods are therefore actually put for the supervision and for the re into free circulation whether or not they moval from the stocks registers: are in fact removed from the warehouse the rate in force on the day when on the day of the declaration and the these two acts are completed even deletion from the books. if the actual removal of the goods To require on the other hand an actual from warehouse occurs later.' removal from store would be to insist Finally it is the practice of the German unduly on formalities which would re customs authorities to take account of quire, for each amount sold, either re the day of the declaration of removal in moval to another silo in the same depot, calculating the levy where the actual re until the buyer in fact comes to remove moval occurs not too long after the the goods, possibly in small consign declaration which indicates that the de ments, or an actual removal, requiring cisive factor is the declaration.

Goods Moreover such a solution is contrary to removed from store after the expiry of that accepted for exports by Regulation the period are therefore subject, in ac No 1041/67, namely that it is the de cordance with Article 15 (1) of Regu clared intention of the exporter which lation No 120/67, to the rates of levy determines the moment of exportation. applicable on the day of removal from The plaintiff in the main action there store (in spite of the fact that they are fore suggests the following answer: removed from the warehouse without a 'Goods are removed from a customs valid licence since the provisions of warehouse or from a deferred levy ware Article 15 (1) remain applicable in house within the meaning of Article 15 dependently of the question of validity of Regulation No 120/67 when the of the licence). goods are actually removed before the The Commission adds that the problem declaration of the Customs Office re- apparently also arises of how 'removal

2 The Court is asked first to decide whether Article 15 (1) of that Regulation must be interpreted as meaning that when goods have been stored in deferred duty warehouses, the date of the removal of the goods from the warehouse must be regarded as the day of importation and, consequently, as determining the rate of levy. The grounds of the order making reference show that this question concerns imports from third countries into the Federal Republic of Germany of barley stored in a deferred duty warehouse. Although, according to the German law in force at the time, goods were only admitted into de­ ferred duty warehouses after their clearance through customs for release into free circulation, payment of the levy was suspended for the period of storage, the goods remain subject to the supervision of the Customs Office and capable of being re-exported. It must be examined what rate of levy is to be applied to the goods upon their removal from store.

3 According to Article 15 (1) of Regulation No 120/67 the levy to be imposed is the levy applicable on the day of importation. The concept 'day of impor­ tation', which is conclusive for the purposes of the application of the levy scheme must have the same meaning in all the Member States, since other­ wise there is a danger that different rates of levy would be applied to goods which are in the same situation economically at the same date and the intro­ duction of which into the territory of the Member States has comparable effects on the market in agricultural products. This meaning is to be inferred from the purpose of the levy system. The levies are mainly intended to protect

6 Article 15 (2) of Regulation No 120/67, which deals with the fixing of the levy in advance, provides, by way of exception to the rule contained in para­ graph 1, that the levy which is applicable on the day of submission of an application for the import licence in that the importer seeks the benefit of the advance fixing of the levy may, at his request, be applied provided that what is involved is an 'import to be effected' during the period of validity of the said import licence. For the purposes of ascertaining in what cases the import has taken place during the period of validity of the import licence, the Court is asked to interpret the phrase 'import to be effected' by deciding at what time this occurs. Thus the Finanzgericht seeks to know, by means of the inter­ pretation requested, what date is to be regarded as the day of importation in the cases mentioned in Article 15 (2).

SCHLESWIG-HOLSTEINISCHE HAUPTGENOSSENSCHAFT v HAUPTZOLLAMT ITZEHOE

7 The reasons which were decisive for the interpretation of the concept 'day of importation' in Article 15 (1) also apply to the interpretation of the same con­ cept in Article 15 (2). It must therefore be answered that the import is effected when the goods are removed from store.

The third question (II (3))

8 The national court further asks what rate of levy is applicable if the removal of the goods from deferred levy warehouses does not take place until after the expiry of the period of validity of the import licence but the rate of levy was fixed in advance. It is apparent from the documents in the case that although the removal of the goods stored was notified and the transfer out was re­ corded in the stock records during the period of validity of the import licence, most of the goods were not removed from the warehouse until after expiry of the validity of the import licence.

JUDGMENT OF 15. 12. 1971 — CASE 35/71

the action pending before the national court, 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 observations of the plaintiff in the main action, the Government of the Federal Republic of Germany 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, especially Article 177; Having regard to Regulation No 120/67 of the Council of 13 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 European Communities,

THE COURT

in answer to the questions referred to it by the Finanzgericht Hamburg by order of 28 May 1970, hereby rules: