C-9/72

JUDGMENT OF THE COURT 4 OCTOBER 1972 1

Georg Brunner KG v Hauptzollamt Hof2 (Reference for a preliminary ruling by the Finanzgericht München)

'Coming from Poland'

Case 9/72

Summary

Agriculture — Common organization of the market — Poultrymeat — Importation from Poland — Concept (Regulation No 565/68, Article 1)

on the interpretation of Article 1 of Regulation No 565/68 of the Commission of 24 April 1968 (OJ, English Special Edition 1968 I, p. 110) on the non-fixing of an additional amount for slaughtered fowls, ducks and geese imported from Poland,

1 — Language of the Case: German. 2 — CMLR.

JUDGMENT OF 4.10.1972 — CASE 9/72

THE COURT

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

Advocate-General: K. Roemer

caused by offers made at abnormally low prices, Articles 7 and 8 of Regulation No 2. In the course of the winter of 1968/69 123/67 of the Council of 13 June 1967 the undertaking Georg Brunner of Munich, (OJ, English Special Edition, 1967, p. 63) the plaintiff in the main action, declared to on the common organization of the market the customs office of Schirnding-Bahnhof, in poultrymeat provide for the fixing of at the frontier between the Federal sluice-gate prices and lay down that the Republic and Austria, 17 truckloads of levy applicable to a product shall be in­ slaughtered ducks with a total weight of creased by an additional amount when the 181 775 kg, giving Poland as the country of free-at-frontier offer price of that product production, origin and purchase and falls below the sluice-gate price. stating that the ducks were despatched by Article 8(2) however specifies that: 'The the State foreign trade agency Animex in levy shall not be increased by this ad­ Warsaw. In support of its declarations it ditional amount as regards third countries produced attestations and inspection certi­ which are prepared and in a position to ficates from the Polish veterinary services guarantee that the price for imports into together with invoices drawn up in its the Community of products originating in name on Animex forms. and coming from their territory will not be The German customs authority, which had lower than the sluice-gate price for the accepted the declarations made by Brunner, product in question and that any deflec­ took the view after a check that the relevant tion of trade will be avoided'. goods had been sold and supplied by Ani­ The Government of the Polish People's mex to an Austrian undertaking which had Republic asked for that exemption and in its turn resold them to Brunner. Con­ gave the guarantees required for its applica­ sequently it decided that the goods could tion. Consequently Regulation No 565/68 no longer be considered as products of the Commission of 24 April 1968 (OJ, originating in and coming from Poland

and, by an amended assessment of 17 April 1968 on the non-fixing of an December 1969, claimed the additional additional amount for slaughtered amount provided for in Article 8 of fowls, ducks and geese imported from Regulation No 123/67. Poland (OJ, English Special Edition, 1968 (I), p. 110) to be interpreted as 3. The main action concerns the annul meaning that the relevant products ment of the assessment claiming payment satisfy this criterion only if they have of that amount. In the course of the not remained in a transit country procedure before the Finanzgericht having and if they have not formed the jurisdiction the defendant explained the subject-matter there of legal measures reasons why the goods entered Germany on grounds other than of their trans by way of Austria. portation, or, Ducks originating in Poland which were sold by Animex to an Austrian under (b) Do they also satisfy this criterion, taking, Höllmuller, were rejected by the latter because of late delivery. A Swiss (aa) if they were sold and delivered to a trader established in a third undertaking acted as agent for Animex in order to offer the ducks to the defendant country and subsequently resold which accepted the offer in the belief that and consigned to a purchaser established in a Member State it came from Animex. After delivery it credited Animex's bank account in Swit without undergoing processing, or, if the answer is in the

In paragraph of Article 20 of the Protocol on fact the Polish Government may only the Statute of the Court of Justice to guarantee prices, as the consideration for submit statements of case or written exemption from the additional amount, observations. for products which Poland has itself sold Alter hearing the report of the Judge- and despatched to the Federal Republic of Rapporteur and the views of the Advocate- Germany. General, the Court decided that there was no need for a preparatory inquiry.

JUDGMENT OF 4.10.1972 — CASE 9/72

II — Summary of the observations they were in transit through the country of the purchaser who rejected them. The observations submitted under Article 20 of the Protocol on the Statute of the Court of Justice may be summarized as B — Observations of the Government of the follows: Italian Republic

for reasons relating exclusively to their with regard to products sent directly to transportation. a destination in the Community without Without that restrictive interpretation the any middleman by the State foreign trade Polish People's Republic could not honour agency, Animex. If there were any such the guarantee which it has given. middleman Animex would be unable to With regard, more generally, to the use of fulfil its obligations and the exemption the concept of 'coming from' and its provided for by Regulation No 565/68 application to the cases referred to in could not come into operation. Question (b) referred by the national court, Consequently, the exemption cannot be the Netherlands Government observes granted with regard to products which, first that under the rules in force in the although originating in Poland and initially Netherlands the country from which a despatched from Poland, arrive in the product comes is regarded as the most Community through another third country distant country, in terms of the transport (in the present case, Austria). route, in which goods were consigned to The fact that the goods, which come from

in which they were rejected. On that condi can be considered as 'products coming tion they may still be considered as coming from' but that those conditions are not from the country of the first seller even if fulfilled in the two cases (aa) and (bb)

governing the exception provided for in in the last two questions referred by the Article 8 of Regulation No 123/67 and national court, according to which the Article 1 of Regulation No 565/68 is not Austrian trader was the initial purchaser to be jeopardized. but dispatched the goods to the Com­ munity as a result of circumstances which 2. The Commission then observes that the arose subsequently, it is probable that it exemption from the additional amount is no longer Poland but Austria which is was granted by Regulation No 565/68 on the country from which the goods come. the basis, on the one hand, of the guarantee It is also doubtful whether Poland is the that the prices ruling for exports coming country from which the products come if within the exemption are not lower than they remained in Austria longer than was the threshold prices prevailing on the date required for their transportation since this when customs clearance is obtained and, fact casts doubt on their original destina­ on the other, that the exports are made tion. directly by the State foreign trade agency 'Animex'. 4. The Commission finally observes that In using the words product coming from it is impossible to rely upon the fact that Poland', Regulation No 565/68 conse­ it is irrelevant with regard to the honouring quently lays down the condition that only by Animex of the price guarantee that the direct deliveries from Poland are exempt. goods have come directly from Poland or, Nevertheless this concept does not imply on the other hand, that a detour was made that only the last territory where the pro­ through Austria, for, even although they ducts were can be considered as the country came from Austria for the account and on from which they come. Indeed Poland has the instructions of Animex, that agency no common frontiers with the Com­ can ensure that its guarantee with regard munity. This concept refers to the country to the price of the goods is upheld. from which the products in question are This view is unacceptable as the customs sent into the Community even if they have authorities of the Community cannot be passed through other countries in transit. required to examine the details of each In order to distinguish between the country case. The Community can only be com­ of dispatch and the transit country it is pletely certain that its sluice-gate prices are necessary to consider from which country maintained when the exemption from the products were consigned to the Com­ additional amounts is restricted to pro­ munity and only accept as the country of ducts which undoubtedly come directly dispatch, and consequently as the country from Poland.

1. (a) For the purposes of the implemen­ 2. With regard to the present case, the tation of regulations on the non­ plaintiff in the main action states that fixing of additional amounts such as Animex initially sold the goods to an Regulation (EEC) No 565/68, the Austrian purchaser (Höllmüller) and after country which must be considered the latter had rejected them resold the as that from which the goods come goods to Brunner without the goods is the country from which the goods undergoing any processing. The present were dispatched and consigned case thus concerns goods in transit the directly to the Community. destination of which was changed at the volition of the seller after the purchaser in (b) If goods cross the territory of third the original country of destination refused countries after leaving the country to accept the goods and they have not been of despatch and before reaching the given customs clearance or processed in Community, they are directly con­ the latter country. signed, when no delays, transactions or legal measures have taken place 3. In the abovementioned case the goods other than those inherent in trans­ must be considered as coming from portation and which do not interrupt Poland. In fact, although Regulation No the latter or change the destination 123/67 and Regulation No 565/68 used of the product. the words 'coming from' they did so in 2. The other questions referred to the order to provide a certain price guarantee Court by the Finanzgericht München and the restrictions on the entry of im­ under point (b) of the order for reference ported goods without the payment of are intended to obtain particulars of the additional amounts may only be permitted consequences of the argument set out above to the extent to which they further that if, as far as can be judged, the relevant guarantee. When the goods are re-routed products were originally intended for the by the first seller, who remains bound by Austrian market and were delivered there the price guarantee vis-à-vis the Com­ from Poland. In those circumstances it is munity, they must be regarded as continu­ probable that on their importation into ing to come from the initial country. the Community the ducks will not be On the other hand, to require that the considered as coming from Poland what­ goods be sent directly by the initial seller ever the fare and manner in which the to a Community country is illogical from various contracts for purchase were to be the economic point of view and moreover performed may have been. The national is unnecessary with regard to the price court must decide the question of the guarantee.

2 In the first question the Court is asked whether this expression, in relation to products exempted from the additional levy on the conditions laid down in Article 1 of Regulation No 565/68, must be interpreted as meaning that the products in question are only exempt from the additional levy if they have not remained in a transit country and have not formed the subject-matter there of legal measures on grounds other than of their transportation.

3 In the second question the Court is asked whether such products also fulfil this condition:

(a) When they are sold and delivered to a trader established in a third country and subsequently resold and consigned to a purchaser established in a Member State without having undergone processing, or, if the answer is in the negative,

(b) When they are initially sold and delivered to a trader established in a third country but afterwards consigned by that trader, who rejected them on the ground of late delivery, to a purchaser established in a Member State without having undergone processing.

4 Regulation No 123/67 of the Council (OJ, English Special Edition 1967, p. 63) on the common organization of the market in poultrymeat provides that a levy shall be charged on imports of slaughtered poultry from third countries. Under Article 8 of the same regulation, where the free-at-frontier offer price falls below the sluice-gate price, the levy applicable shall be increased by an additional amount

JUDGMENT OF 4.10.1972 — CASE 9/72

7 The expression 'coming from' in conjunction with the expression 'originating in' shows that the guarantee that the price will not be lower than the sluice-gate price can only be honoured if delivery to a purchaser in the Community is made by a seller who is bound to comply with the undertakings entered into with regard to prices vis-à-vis the authorities of the third country which benefits from the exemp­ tion. Furthermore, in the course of transportation the goods must not have been given customs clearance, put into free circulation or processed in any way.

8 On the other hand, legal measures which, whilst not directly connected with the transportation of the products, reserve to the seller, who is bound to abide by the guaranteed price, the right to dispose of and directly to control the goods do not jeopardize the conditions of the said exemption. Indeed, as long as the seller retains the right to dispose of the goods he is in a position to carry out his under­ taking to deliver them only at the price which was guaranteed by the third State. In such a case it may be ascertained immediately by inspection of the transport certificates and customs documents that the seller and the goods have remained unchanged, that the latter have not undergone any processing and have been invoiced at the guaranteed price.

BRUNNER v HAUPTZOLLAMT HOF

9 On the other hand this is not the case when, for whatever reason, goods are sold and delivered to a trader established in a third country and subsequently resold and consigned, even without having undergone processing, by that purchaser to a purchaser established in a Member State.

in answer to the questions referred to it by the Finanzgericht München pursuant to the order issued by that court on 2 March 1972, hereby rules:

Article 1 of Regulation No 565/68 must be interpreted as meaning that goods must be considered as 'coming from' Poland when they remain until the moment when they are delivered in the Community at the disposal and under the direct control of the seller who is bound vis-à-vis the Polish People's Republic to comply with the undertakings entered into with regard to prices and when in the course of transportation they have not been given customs clearance, put into free circulation or processed in any way.

JUDGMENT OF 4.10.1972 — CASE 9/72

Lecourt Mertens de Wilmars Kutscher

Donner Monaco

Delivered in open court in Luxembourg on 4 October 1972.