C-85/71

JUDGMENT OF THE COURT OF 23 MARCH 1972<apnote>1</apnote>

E. Kampffmeyer v Einfuhr- und Vorratsstelle für Getreide und Futtermittel<apnote>2</apnote> (Reference for a preliminary ruling by the Hessisches Finanzgericht)

'Refunds'

Case 85/71

Summary

1. Agriculture — Common organization of the markets — Cereals — Export refund — Export to third countries — Rates of refund less than those provided by the Community rules and varying from one country to the other — Grant by Member States — Legality (Regulation No 19 of the Council, Article 20; Regulation No 90 of the Commission, Article 2)

JUDGMENT OF 23.3.1972 — CASE 85/71

and

EINFUHR- und Vorratsstelle für Getreide und FUTTERMITTEL, Frankfurt am Main,

on the interpretation of certain provisions of Regulations Nos 19/62 of the Council and 90/62 of the Council relating to refunds payable on the export of cereals to third countries,

THE COURT

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

regulations, and in particular: 'Article 2 — Regulation No 19 of the Council of 4 April 1962 (JO 1962, No 30), the The amount of the refund in respect of

KAMPFFMEYER ν EINFUHR- UND VORRATSSTELLE GETREIDE

each product on export to third coun­ in the case of the aforesaid exports for a tries shall not be greater than the amount reduction in the conversion rate to of the levy in respect of third countries 100:90.

applicable on the day of export. The defendant on the other hand main­ tained that the Member States are solely Article 4 required not to exceed the maximum rates of refund laid down by the EEC regula­ tions and that they are thus allowed, if they In derogation of Article 2 the refund consider it necessary, to adopt rates of may be granted in the form of an refund, applicable to exports to certain authorization to import a quantity of third countries, lower than those applicable the same product equal to the quantity to exports to all the other third countries. exported free from levy, provided that : The Hessisches Finanzgericht, having found that the matter related to the inter­ (a) The export takes place before the pretation of rules of Community law con­ import; cerning refunds applicable to exports to third countries referred to in Regulation (b) The import free from levy shall be No 19/62, decided by order of 21 September made during the same marketing 1971 to stay the proceedings and to refer year and within two months of the the following question to the Court under export.' Article 177 of the EEC Treaty:

By Notice No 1-4537 of 11 March 1966 'Did the provisions of Article 20 of the Einfuhr- und Vorratsstelle für Ge­ Regulation No 19/EEC in conjunction treide und Futtermittel Frankfurt (herein­ with those of Article 2 of Regulation No after called 'the defendant') granted 90/EEC enable Member States of the Kampffmeyer a refund in the form laid European Economic Community to fix, in down in Article 4 of Regulation No 90/62 connexion with the export of cereals to referred to above. It authorized in advance third countries, different rates of refund the import free from levy: in respect of exports to certain of the said third countries?'

The Advocate-General delivered his been released into free circulation in the opinion at the hearing on 15 March 1972. Federal Republic and thus only by this means takes part in the export of cereals on the world market. II — Observations submitted under With regard to the export of maize to Article 20 of the Protocol on Switzerland, Austria, Hungary, Czecho the Statute of the Court slovakia and Yugoslavia, German trade runs up against the difficulty that the import of maize into the Federal Republic The observations submitted under Article must normally be made via Rotterdam, 20 of the Protocol on the Statute of the Rotterdam/Antwerp or the German ports Court may be summarized as follows: with the result that because of transport costs maize transported to the south or A — Observations submitted by Kampff

In any event it quantities which had been exported— was to stop such transactions that the in accordance with the first paragraph of Federal Republic first adopted the second Article 4 of Regulation No 90/62—but amending regulation of 19 August 1965 for 90% of these quantities. and then the fifth amending regulation of 3 February 1966. The reasons for these amendments lies in After these observations Kampffmeyer the special situation of the market in considers the scope of the Community certain cereals, in the present case maize, in rules in question.

KAMPFFMEYER ν EINFUHR- UND VORRATSSTELLE GETREIDE

where appropriate, these refunds should import the products in question free from be made in cash or in the form of imports levy.' free of levy. But, where a Member State opted for this B — Observations submitted by the Ein­ latter form of refund, it was no longer free fuhr- und Vorratsstelle für Getreide to determine the amounts of the refund. In und Futtermittel

The problem which these purpose and objectives of the organization legislative amendments were intended to of the market and the rules relating to the resolve was to put an end to the 'triangular system of refunds which it contains. Since the Member States remained free transactions' entered into by traders and it was thus sought to avoid deflections of under the terms of Regulation No 19/62 to trade in the case of certain cereals such as decide upon the grant of refunds and to maize. fix the applicable rate up to a specific These traders imported large quantities of maximum rate, they retained their fiscal fodder from Italy paying in the process the sovereignty in the matter of levies and refunds and the institutions of the Com amount of the intra-Community levy and then exported the same to third countries munity did not control the sums due to

consequences since it would involve dis more particularly by the fact that the crimination with regard to certain third intra-Community levy did not completely countries. After pointing out that the an compensate for the disparity in prices in swer to the question depended above all this respect existing between these two on the afore-mentioned provision and not Member States. on Article 2 of Regulation No 90/62, To counteract this trend the Federal which is not decisive on this point, it Republic first (by the second amending proposes the following answer to the regulation) refused to grant a refund in question raised : respect of fodder not harvested in Ger

JUDGMENT OF 23.3.1972 — CASE 85/71

The reasons for and observes that during the transitional the establishment of such a price were period the financial burden involved in inherent in the system of levy which was the grant of the refunds was borne essen based on the necessity of compensating tially by the budgets of the Member States. for the differences between the prices on The Community legislature had therefore the world market and the threshold prices. limited itself to laying down minimum On the other hand these reasons played conditions and the general framework of no part in the case of refunds (or of ex the system calculated to ensure price ports) since the refund at the time did not stability in the markets of the Member exactly reflect the levy and the necessity to

It could not be inferred or in the form of imports free from levy from this fact that refunds in respect of can in no way affect this principle. The rate experts to third countries were necessarily provided for by Article 4 of Regulation uniform and that the application of No 90/62 was also a maximum rate below different rates with regard to certain Mem which the Member States could apply ber States was not therefore authorized. different rates. That is not the meaning and objective of It thus follows that the Federal Republic Article 7.

The tries was to know the quantities of cereals criticisms made on this subject by trade which had left the Community. circles are all the less justified since the In view of these considerations the Federal Republic has not ignored the defendant proposes that the Court should trade interests which a general application reply to the question raised to the effect of the reduced rate would have affected to that the Federal Government was entitled, a greater degree. with regard to the export of cereals to Moreover, and independently of the third countries, to fix different rates of

refund for certain countries. The provi­ Case 6/71 that during the transitional sions of Community law, in particular period, since the Member States 'were Article 20 of Regulation No 19/62 and free to forego making any grant, a Article 2 of Regulation No 90/62 author­ fortiori they were entitled to add further ized the fixing of such refunds during the conditions to the minimum conditions transitional period. for a grant provided for by the Com­ munity rules' (this principle implicitly C — Written observations submitted by the allows the inference that the Member Commission of the EC States were entitled to grant refunds at rates lower than those laid down by the The Commission states first of all that Community rules). since the facts giving rise to the proceed­ ings occurred at a time when Regulation This conclusion applies likewise in the case No 19/62 was still in force, the question to of refunds granted in the form of an be resolved is the distribution of powers authorization to import free from levy, a between the Community and the Member possibility which, moreover, no longer States with regard to the application of the exists within the framework of the final rules relating to refunds during the transi­ organization of the market. The wording tional period and before the establishment of Article 4 of Regulation No 90/62 is not, of the final organization of the market. it is true, very illuminating on this subject, but it must not be forgotten that this latter (a) The question whether the rates of refund form of refund has from the economic are maximum rates point of view effects equivalent to those of a refund in cash of the amount of the levy After referring to the main provisions of applicable with regard to third countries. Community law and German law relevant It is, moreover, a form of refund which was to the proceedings, the Commission con­ provided for for the benefit of the Federal siders in the first place the, in its opinion, Republic of Germany where it had already preliminary question whether the rates been applied in the context of the national of refund provided for by the Community organization of the market and the regulations must be regarded as maximum maintenance of which had proved useful rates or not. on budgetary grounds. It argues in this respect that the rates laid down by the regulations were 'maximum' (b) The fixing of different refund rates rates. Its opinion is based in particular on :

mechanism and having regard to the appear to be arbitrary having regard to practices existing in the Member States; the geographical position of these coun tries in relation to the Federal Republic of — to prevent these States from competing Germany and the latter's interest in with one another in the grant of refunds ; preventing dealers from obtaining unfair advantages and abusing the possibility — to establish minimum conditions for the of importing free from levy. grant of refunds. Furthermore, not only the Federal Republic of Germany but also other Member

with these conclusions. defined circumstances the maximum refund The 'global' figures in question were for rates (cf. in respect of cereals Article 5 basically statistical purposes for the of Regulation No 90/62 and Article 5(a) period in question since the only interest of the same regulation inserted by Regula the Commission had in respect of trade tion No 163/62). But these provisions are with third countries was to know the simply concerned with the special case quantity of cereals delivered by the Com where the maximum rates have proved munity as a whole and the total amount insufficient in relation to the special of refunds granted. conditions of demand in certain third The Commission concludes by proposing countries and cannot be used to justify to reply as follows to the question raised : the claim that, as regards the rest, Member States did not have the right to lay down 'According to Article 20 of Regulation No different rates of refund less than the 19/EEC Member States of the EEC were maximum rates. entitled with regard to the export of The Commission states that it does not cereals to third countries to fix in respect know the reasons which led the Federal of certain countries rates of refund lower Republic of Germany to lower the rates of than those laid down by Community law.' refund in respect of exports to certain

KAMPFFMEYER ν EINFUHR- UND VORRATSSTELLE GETREIDE

Grounds of judgment

1 By order dated 21 September 1971, received at the Court on 5 October 1971, the Hessisches Finanzgericht raised under Article 177 of the EEC Treaty the question whether the provisions of Article 20 of Regulation No 19 of the Council of 4 April 1962 (JO 1962, No 3) in conjunction with Article 2 of Regulation No 90 of the EEC Commission of 25 July 1962 (JO 1962, No 66) enable Member States to fix, with regard to the export of cereals to third countries, rates of refund differing from one country to another.

2 Article 20(2) of Regulation No 19/62 provides that 'in order to allow export to th rd countries on the basis of world market rates the difference between the prices of the exporting Member State may be covered by a refund'. Under the express terms of this provision Member States were free to forego making any grant and this freedom implies the entitlement to add further conditions for the grant of the refund provided for by the Community rules.

3 It appears, moreover, from the second and third recitals to Regulation No 90/62 on refunds applicable to exports of cereals that the conditions under which they could be granted were on the one hand to make possible the export of these pro­ ducts to third countries and on the other to avoid competition between producers in Member States from being distorted on the world market. To this end the aforesaid regulation laid down a general rule limiting the amount of refund so as to prevent Member States from outbidding one another in the matter of refunds, without, however, affecting the freedom of each Member State to use in fixing the refund rates more restrictive criteria than those provided for by the Com­ munity rules.

6 It appears from the order making the reference that the question in dispute which the national court has referred to the Court relates to refunds granted in the form provided for by Article 4 of Regulation No 90/62. Since the Federal Republic of Germany authorized the import free from levy of a quantity of maize less than the quantity exported, the plaintiff objected that under the terms of the afore­ mentioned Article 4 this authorization could be granted only in respect of the import of a quantity of the same product equal to the quantity exported. In order to enable the national court to resolve the problem which is before it it is necessary also to examine the question raised in the light of Article 4 of Regulation No 90/62.

7 Under this provision the refund may, in derogation from Article 2, be granted in the form of an authorization to import free from levy a quantity of the same product equal to the quantity exported provided that the export takes place before the import and the free-from-levy import is effected during the same marketing year and at the latest before the expiration of the second month following that during which the export was made.

8 The wording of this provision makes it clear that the derogation from Article 2 refers only to the form in which the refund may be granted and does not affect the general system of the refund as defined by Regulations Nos 19/62 and 90/62. Although the refund in the form of a free-of-levy import does not involve, unlike that referred to in Article 2, any payment in cash, both follow the same objec­ tives and lead to the same result from the economic view. There is therefore

Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the parties 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 40 and 177; Having regard to Regulation No. 19 of the Council of 4 April 1962 (JO 1962, No 30) and Regulation No 90 of the Commission of 25 July 1962 (JO 1962, No 66); Having regard to the Protocol on the Statute of the Court of Justice of the EEC, 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 Hessisches Finanzgericht by order of that court dated 21 September 1971, hereby rules:

1. The provisions of Article 20 of Regulation No 19/62 in conjunction with those of Article 2 of Regulation No 90/62 enabled Member States to fix rates of refund differing from one third country to another and lower than those provided for by the Community regulations;

2. Member States could in the context of Article 4 of Regulation No 90/62 apply rates of refund lower than those laid down by Regulation No 90/62 by

JUDGMENT OF 23.3.1972 — CASE 85/71

OPINION OF MR ADVOCATE-GENERAL ROEMER DELIVERED ON 15 MARCH 1972<apnote>1</apnote>

Mr President, provided that 'the refund on export to Members of the Court, third countries shall not exceed the amount of the levy applicable to the product on To facilitate the export 'to third countries the day of export in respect of third coun­ on the basis of world market prices' it was tries'. Article 4 of Regulation No 90 provided in the first sentence of Article provided 'In derogation of Article 2 the 20(2) of Regulation No 19/62 (JO 1962, refund may be granted in the form of levy p. 933 et seq.) on the gradual establishment free import of the same quantity of the of a common organization of the market in same products as are exported ...'. cereals that 'the difference between these These rules also applied in the Federal prices and the prices in the exporting Republic of Germany. The relevant Member State' could under certain condi­ authority with regard to the present tions be the subject of a refund. Accord­ proceedings was the Law implementing ingly Article 1 of Regulation No 90/62 of Regulation No 19 of 26 July 1962 (as the Commission (JO 1962, p. 1902) on amended by the Law of 30 June 1965) in export refunds for cereals (as amended by conjunction with the Cereals and Rice Regulation No 163/62 of the Commission Refunds Regulation of 24 November 1964 of 20 December 1962, JO 1962, p. 2944) (as amended by the Regulation of 3 provided: 'Subject to the conditions in February 1966). According to Article 5(4) Articles 2, 3, 4, 5 and 5(a) of this regulation of the Refunds Regulation, however, only Member States may grant a refund on the 90% of the maximum rates prescribed in export to third countries of the products Community regulations for refunds applied (which included maize) mentioned in to exports of maize to Switzerland, Austria, Article 1(a) and (b) of Regulation No 19 Czechoslovakia, Hungary and Yugoslavia, of the Council'. Regulation No 90 further whereas the maximum rates of refund