C-38/71

JUDGMENT OF 26.1.1972 — JOINED CASES 38 AND 39/71

to be applied for the purposes of the the par value communicated to and common agricultural policy, that is, at recognized by the International Mone­ the rate of exchange corresponding to tary Fund.

In Joined Cases 38 and 39/71,

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

(1) Westzucker GmbH, Dortmund (Case 38/71),

(2) Fritz Dietz, representing Gebrüder Dietz, Frankfurt am Main (Case 39/71),

composed of: R. Lecourt, President, H. Kutscher (Rapporteur), President of Chamber, A. M. Donner, A. Trabucchi and R. Monaco, Judges,

Advocate-General : A. Dutheillet de Lamothe

Registrar: A. Van Houtte

gives the following

WESTZUCKER v HOOFDPRODUKTSCHAP AKKERBOUWPRODUKTEN

JUDGMENT

I — Provisions applying during the 1009/67 and the interpretation of which is periods in question sought by the national court. Article 1(1) thereof 'lays down detailed rules for the The provisions applying during the period sale by tender of sugar bought in by inter in question were primarily as follows: vention agencies'. Still in pursuance of Regulation No 1. Measures taken on sugar 1009/67, on 17 October 1969 the Council adopted Regulation (EEC) No 2049/69 Basic Regulation No 1009/67/EEC of the laying down general rules on the denaturing Council of 18 December 1967 on the com of sugar for animal feed (OJ L 263, p. 1, mon organization of the market in sugar English Special Edition 1969 (IT), p. 441). (OJ No 308, p. 1, English Special Edition In pursuance of Regulation No 1009/67 1967, p. 304) sets out in the second iecital and taking into consideration Regulation in the preamble the initial concept that No 2049/69, the Commission on 20 October 'denaturing premiums for sugar rendered 1969 adopted Regulation (EEC) No 2061/69 unfit for human consumption' may help laying down detailed rules on the denatur 'to ensure that the necessary guarantees in ing of sugar for animal feed, the inter respect of employment and standards of pretation of which is also sought by the living are maintained for Community national court. growers of sugar beet and sugar cane'.

Under the (see below under 2) and Regulation No terms of paragraphs (7) and (8) respectively 1009/67. of the same article, the Council 'shall On 4 May 1970, the Commission adopted determine: general rules for the applica Regulation (EEC) No 822/70 concerning a tion of the above paragraphs', while standing call for tender for the sale of 'Detailed rules for the application of this white sugar intended for animal feed and article' and in particular 'conditions for held by the German intervention agency granting denaturing premiums and the (JO L 98, p. 7).

JUDGMENT OF 26.1.1972 — JOINED CASES 38 AND 39/71

2. General measures award of tender' for total quantities of 3 000 metric tons (Westzucker) and 27 425 'In order to enable the common organiza metric tons (Dietz) at a selling price pre tion of agricultural markets to attain its viously fixed by Regulation No 822/70 objectives' Regulation No 25 of the Council (21.73 u.a. per 100 kg) and providing for a of 4 April 1962 on the financing of the denaturing premium offered by the under common agricultural policy (OJ of 20.4. takings for the various individual 1962, p. 991, English Special Edition 1959- quantities. 1962, p. 126), set up 'a European Agri cultural Guidance and Guarantee Fund', (2) At the request of the two under hereinafter referred to as the 'Fund' takings involved the Hoofdproduktschap (Article 1).The purpose of this Fund is, voor Akkerbouwprodukten (hereinafter inter alia, to finance intervention aimed at referred to as 'the Hoofdproduktschap') stabilizing markets (Article 2(2)(b)). Under issued to Westzucker on 12 and 23 June the terms of Article 3(1)(b) 'intervention 1970 and to Dietz on 4 June 1970 denatur on the domestic market' shall in particular ing premium certificates in respect of 3 000 be eligible for aid from the Fund. metric tons (Westzucker) and 25 000 metric On 23 October 1962 the Council adopted tons (Dietz).

On 14 August 1970 the of this regulation defines the phrase two undertakings appealed against this 'intervention on the domestic market', as decision to the College van Beroep voor it is used in particular in Regulation No 25. het Bedrijfsleven and sought in particular: On the same date the Council adopted the Financial Regulation concerning the Euro — the annulment of the decision ; pean Agricultural Guidance and Guarantee Fund (JO of 27.2.1964, p. 599). — a ruling that they must be issued with denaturing premium certificates on

(1) In May and June 1971 the Dietz and (3) By judgments of 6 July 1971 the Westzucker undertakings respectively sub­ College van Beroep voor het Bedrijfsleven mitted several tenders within the context of decided, in each of these cases, to refer the the standing call for tender provided for in following questions to the Court:

WESTZUCKER ν HOOFDPRODUKTSCHAP AKKERBOUWPRODUKTEN

If the preceding question must receive of the Council and Article 2(c) of an affirmative answer, must the pre Regulation (EEC) No 2334/69 of the mium be paid in this currency after Council, imply that where sugar is conversion of the amount referred to denatured in a Member State other than in the statement of award of the tender that in which the tender was submitted in the other Member State at the rate of and the award made, the denaturing exchange applicable for the purposes premium shown in the denaturing of the common agricultural policy or premium certificate issued by the after conversion of this amount at the former Member State must be ex

In accordance award made? with Article 20 of the Protocol on the Statute of the Court of Justice of the EEC 3. Or does the issue of a denaturing the parties to the main action, the Govern premium certificate by the Member ment of the Kingdom of the Netherlands State in which denaturing has taken and the Commission of the European place after the tender has been sub Communities submitted written observa mitted and the award made in another tions. Member State confer an exclusive Upon hearing the report of the Judge- right the payment of the premium by Rapporteur and the views of the Advocate- the first Member State? General the Court decided not to hold any preparatory inquiry.

JUDGMENT OF 26.1.1972 — JOINED CASES 38 AND 39/71

Its purpose is to withdraw from the Justice of the EEC market those quantities of the product which exceed its power of absorption on The observations submitted under Article condition that they be assured of an 20 of the Protocol on the Statute of the outlet on the internal market of the Court of Justice may be summarized as Community for purposes other than follows : human consumption, that is, as animal feed. The term 'market' must be under 1. The first question stood here to mean the Community market which was unified as regards Westzucker and Dietz and the Hoofd sugar by Regulation No 1009/67.

This provision out. In the circumstances it has to be merely fixes the rate of exchange to be accepted that it is for the Member States applied when conversion is necessary to settle this question as they think fit. within the framework of the implemen It is reasonable to assume that in doing so tation of the common agricultural each State uses its national currency. policy. On the other hand, it does not Moreover, an obligation on a Member settle the question of the cases in which State to express such amounts in an a conversion must be made. official document in a foreign currency constitutes a serious disregard for the 2. The second and third questions

WESTZUCKER ν HOOFDPRODUKTSCHAP AKKERBOUWPRODUKTEN

The fourth, fifth and sixth questions Only in the special situation provided for in the second subparagraph of Article 6(1) Westzucker and Dietz maintain that it of Regulation No 2049/69—which does follows from Article 9(1 )(a) and (3)(a) of not exist in this instance—can the party Regulation No 1987/69 that the award of concerned have the choice between pay the tender gives rise to a right to the issue ment by the State awarding the tender and of the certificate showing the premium set payment by the State in which denaturing out in the tender. Moreover, the denaturing takes place. process is governed by a Community The Netherlands Government is of the same system which is intended to regulate a

use. On the other hand, the final sentence the Member States. In this instance the of paragraph (2) of that article shows not market in question is the German market only that denaturing must take place within as it is from this that a quantity of sugar the State which has issued the premium was to be taken. certificate, but also that it is only in that The costs of regulating the market, in casu State that the premium may be paid. the denaturing premiums, are borne by The Commission maintains that at the time the Fund (cf. for example, Article 2(c) of in question it was normally for the State Regulation No 2334/69).

only sanctioned a power on the part of why repayment of the premium paid by such State (cf. ninth recital in the preamble the Netherlands agency may not be to that regulation; Article 16 of Regula requested from the Fund in Netherlands tion No 2061/69) which Germany did not currency, as no relevant Community exercise in respect of the quantities of provision provides for conversion into sugar involved in this case. "In the absence another currency. The Netherlands regula of any express rules it has to be accepted tions (Suikerbeschikking 1968-11), referred that the premium is paid by the State by to in this respect by the Hoofdprodukt which it has been granted and which has schap, are irrelevant in this instance, as issued the certificate. In fact, the deposit the rights and obligations of the parties provided for in Article 6(3) of Regulation derive directly from the Community rules. No 2049/69 must be lodged with that It is illogical to provide, in favour of the

JUDGMENT OF 26.1.1972 — JOINED CASES 38 AND 39/71

In the most favourable area for denaturing to addition, this note reminded the German take place. tenderers that, also as regards the Deutsch It has become clear during recent months mark, the fixed parities established between that the conversion of one currency into the monetary units of the Member States another by means of the unit of account by means of the unit of account would if produces results which differ considerably necessary be applied. When all the tenders from those obtained when conversion is were submitted a ceiling was fixed for the carried out on the basis of the normal premium in units of account.

Af 1 1 fi d b an answer must be in the terms of the After having been fixed by the Commission first alternative. the maximum premium must be recal It is impossible to interpret the Suiker culated in the national currency according beschikking 1968-11 to mean anything to the same conversion scale. In this way other than that the maximum amount of all the tenderers obtain, either in their the denaturing premium fixed by the Com national currency or in that of another munity in units of account and the amounts Member State, a comprehensive picture which are calculated on the basis thereof of their financial situation and of the risks are converted into and paid in Nether they undertake when they carry out the lands currency, where the certificate is denaturing process in a Member State other issued by the Netherlands authorities. In than that in which the tender is awarded. the absence of any single monetary system As, therefore, in practice the tender is for all the Member States such a method awarded in units of account it follows from of conversion is in accordance with the Article 2 of Regulation No 129 that the system of Community law concerning premium may only be paid in the currency transactions carried out within the frame of the State in which denaturing takes work of the common agricultural policy, place, if necessary, after conversion accord-

were correct, it would follow that the This concept agrees with Articles 1 and 2 authorities in the State in which denaturing of Regulation No 129 and is even more took place would have to purchase foreign relevant inasmuch as that regulation, currency at the variable daily rate. As a which dates from 1962, originally concerned result, the statement given to the Fund by national agricultural levies expressed in this State of the amount paid might exceed the national currency and levied on behalf the maximum premium on which the of each Member State. As is shown by award of the tender was based. In this recent Community measures or communi­ instance the calculations contained in the cations this regulation still applies to statements laid before the national court conversions carried out by virtue of the by the Hoofdproduktschap show that the Community provisions. premium granted to Westzucker and Dietz In this instance, the German authorities would have amounted to 13.07 u.a. If the applied the official rate of exchange and ceiling had been fixed at this figure, several not the daily rate when they reconverted tenders which had not been taken into into German currency the denaturing consideration might have been accepted. premium established in units of account In favour of its argument the Hoofd­ applying to the quantities of sugar produktschap again refers to Article 2(c) denatured to Dietz's order in Germany. of Regulation No 2334/69. It is not clear why the Netherlands Although Article 9(1)(a) of Regulation authorities should be obliged to act No 1987/69 provides that the premium differently. must be expressed in the currency of the State awarding the tender, this is merely Finally, therefore, the necessary reply is because, in all probability, the majority that the premium must be paid in the of the tenderers would be nationals of that currency of the State which pays it and that any necessary conversion must be State and would carry out the denaturing there. However, it cannot be concluded made in accordance with the provisions of from this that the premium must also be Regulation No 129. expressed and paid in this currency by The Commission maintains that, in the the State in which the denaturing takes absence of express Community provisions place, where that State is different from in this matter and in the light of certain the former. If the Community legislature indications provided by the so-called had intended to make such rather unusual 'horizontal' regulations, it can fairly be rules it would have had to make this clear, admitted that the Community legislature as was done in certain later regulations has, first, left the solution of this problem which are irrelevant vviuv.il cut. irrelevant in in this instance. una instance. to the Member States and, secondly, The Netherlands Government maintains adopted as its basic concept that the that the State by which the premium must States would overcome the difficulty by be paid is bound to deal with all traders, payment of the premium in the currency whether nationals or aliens, on the same of the State in which denaturing is carried footing, that is, to pay them all in the out.

Grounds of judgment

1 By judgments of 6 July 1971 received at the Court Registry on 7 July 1971, the College van Beroep voor het Bedrijfsleven has submitted to the Court several questions concerning, in particular, the interpretation of Article 5(2)(e) and (f), the first indent of Article 9(1)(a), Article 9(3)(a) and Article 10 of Regulation (EEC) No 1987/69 of the Commission and of Article 11 (1) (a) of Regulation (EEC) No 2061/69 of the Commission.

2 The file shows these questions to concern an action which arose from the fact that the Westzucker and Dietz undertakings which were declared by the German authorities to be the successful tenderers for certain quantities of sugar intended for denaturing, had this operation carried out in the Netherlands where the authorities issued them with denaturing premium certificates.

3 The undertakings in question consider that the Netherlands authorities were re­ quired to express the amount of the premium solely in German currency and, therefore, to fix it at a sum in Deutschmarks equal to that shown in the tenders which Westzucker and Dietz submitted to the German authorities and on the basis of which the latter awarded the tender.

Questions 2 and 3

4 Under the terms of the first subparagraph of Article 6 (1) of Regulation No 2049/69 : 'The denaturing premium shall be granted by the Member State on whose territory denaturing takes place'.

Questions 1, 4, 5 and 6

9 Under the terms of Article 9(2) of basic Regulation No 1009/67 national inter­ vention agencies — which are obliged to purchase the Community sugar which is offered to them and which are empowered to resell it in accordance with Articles 9(1) and 10(1) of the same regulation — 'may grant denaturing premiums for sugar rendered unfit for human consumption'.

10. Under the combined provisions of Article 10(1) of that regulation (as amended by Article 2 of Regulation No 1393/69) and Article 3 of Regulation No 447/68 (as amended by Regulation No 1395/69) this resale may take place 'by tender'.

11 Under the terms of Article 5(2) (e) and (f) of Regulation No 1987/69 any person wishing to accept the invitation to tender must indicate in the tender, in particular, 'the amount of the denaturing premium proposed, ... in the currency of the Mem­ ber State in which the intervention agency issues the invitation' and 'in the case of denaturing, the Member State in which the sugar will be denatured'.

12 Article 10 of the regulation in question provides that the intervention agency con­ cerned 'shall ... send a statement of award to the successful tenderers' which shall

indicate in particular 'the amount of the denaturing premium' accepted for the quantity awarded.

16 Finally, under the terms of Article 11(1) (a) of the same regulation 'the issue of the denaturing premium certificate gives rise, as regards the quantity in question, to a right to payment, after denaturing has taken place, of the denaturing premium indicated in the certificate ...'.

π Taken as a whole these provisions show that the amount of the premium shown in this certificate must correspond to the amount appearing in the tender made by the successful tenderer and referred to in the statement of award.

is However, they do not in any way show that where the State in which denaturing has taken place is different from that jn which the tender is invited, the former State is bound to express and to pay the premium in the currency of the latter State.

19 In fact, although Article 5 of Regulation No 1987/69 expressly provides that the amount of the proposed premium must be expressed in the tender in the currency of the State in which the invitation is issued, the provisions concerning the issue of the certificate and the payment of the premium are silent as regards the currency to be used for this purpose by the State in which denaturing has taken place.

20 There is thus no obligation for the State concerned to pay the premium in question in a foreign currency.

21 Moreover, this interpretation is by implication confirmed by Article 11 (2) of the Financial Regulation concerning the European Agricultural Guidance and

26 Under the terms of Article 2(1) of Regulation No 129 of 23 October 1962 'Where measures taken in pursuance of the instruments or provisions referred to in Article 1 ', that is to say, in particular, 'instruments concerning the common agricultural policy' (Article 1 of Regulation No 129, as amended by Article 1 of Regulation No 653/68 of the Council of 30 May 1968 (OJ L 123, p. 4, English Special Edition 1968(1), p. 121) 'require sums given in one currency to be expressed in another currency, the exchange rate to be applied shall be that which corresponds to the par value communicated to and recognized by the International Monetary Fund'.

27 Regulation No 1009/67 on 'the common organization of the market in sugar' and the provisions adopted on the basis of that regulation on the denaturing of sugar concern the common agricultural policy.

28 As a result, the provisions of Article 2(1) of Regulation No 129 apply to trans­ actions to be carried out under Regulation No 1009/67 and the measures taken in implementation thereof.

29 Moreover, a note to paragraph 2(e) of Chapter III of the Notice of standing call for tender No 3/1970, which refers to Regulation No 1987/69 and within the frame­ work of which the awards in dispute were made, expressly indicated the parities in units of account of the currencies of the Member States, and thus showed clearly

JUDGMENT OF 26.1.1972 — JOINED CASES 38 AND 39/71

that any necessary conversion would take place at the rate of exchange referred to in Regulation No 129.

Upon reading the pleadings ; Upon hearing the report of the Judge-Rapporteur; Upon hearing the observations of the parties to the main action and the Commis­ sion of the European Communities; 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 No 129 of the Council of 23 October 1962 on the value of the unit of account and the exchange rates to be applied for the purposes of the common agricultural policy, especially Article 2; Having regard to Article 1 of Regulation (EEC) No 653/68 of the Council of 30 May 1968 on conditions for alterations to the value of the unit of account used for the common agricultural policy; Having regard to the Financial Regulation concerning the European Agricultural Guidance and Guarantee Fund, adopted by the Council on 5 February 1964, especially Article 11 ; Having regard to Regulation No 1009/67/EEC of the Council of 18 December 1967 on the common organization of the market in sugar, especially Articles 9 and 10; Having regard to Regulation (EEC) No 447/68 of the Council of 9 April 1968

WESTZUCKER ν HOOFDPRODUKTSCHAP AKKERBOUWPRODUKTEN

laying down general rules for intervention buying of sugar, especially Article 3; Having regard to Regulation (EEC) No 1987/69 of the Commission of 8 October 1969 laying down detailed rules concerning the sale by tender of sugar by inter­ vention agencies, especially Articles 3, 5, 9 and 10; Having regard to Regulation (EEC) No 2049/69 of the Council of 17 October 1969 laying down general rules on the denaturing of sugar for animal feed, especially Article 6; Having regard to Regulation (EEC) No 2061/69 of the Commission of 20 October 1969 laying down detailed rules on the denaturing of sugar for animal feed, in particular, Articles 10, 11 and 16; Having regard to the Protocol on the Statute of the Court of Justice of the Euro­ pean Economic Community, in particular Article 20; Having regard to the Rules of Procedure of the Court of Justice of the European Communities,

(a) the denaturing premium indicated in the certificate issued by the Member State in which denaturing has taken place must not be expressed in the currency of the Member State in which the tender is invited;

(b) the Member State in which denaturing has taken place is not obliged to pay the premium in the currency of the Member State in which the tender is invited, but may pay it in its own currency.

JUDGMENT OF 26.1.1972 — JOINED CASES 38 AND 39/71

3. In the case referred to under 1. above, where the Member State in which denaturing has taken place pays in its own currency a premium which is expressed in the statement of award issued by the State in which the tender is invited in the currency of that State, the conversion must be effected at the rate of exchange provided for in Article 2(1) of Regulation No 129.

Lecourt Kutscher

Donner Trabucchi Monaco

1 — Translated from the French.