C-17/72

JUDGMENT OF THE COURT 8 NOVEMBER 1972 1

Gesellschaft für Getreidehandel AG v Einfuhr- und Vorratsstelle für Getreide und Futtermittel (Reference for a preliminary ruling by the Hessisches Finanzgericht)

'Free-at-frontier Price'

Case 17/7/2

Summary

1. Agriculture — Common organization of the market — Cereals — Free-at-frontier price — Calculation

JUDGMENT OF 8.11.1972 — CASE 17/72

GESELLSCHAFT fur GETREIDEHANDEL AG, Düsseldorf,

plaintiff in the main action,

and

EINFUHR- und Vorratsstelle fur Getreide und Futtermittel, Frankfurt,

defendant in the main action,

JUDGMENT

Issues of fact and of law

I — Facts and procedure Member State delivered in the importing Member State free-at-frontier and the The facts and the course of the procedure threshold price of the importing Member may be summarized as follows: State reduced by a fixed amount. Under Article 3 of the said regulation the free-at- 1. Regulation No 19 of the Council of frontier price shall be determined on the 20 April 1962 (JO No 30 of 20.4.1962, p. basis of the prices ruling on the most 933) on the progressive establishment of a representative markets of the exporting common organization of the market in Member State for exports to the relevant cereals provided for the imposition of an importing Member State. intra-Community levy on imported cereals In accordance with this same provision equal to the difference between the price such price shall be determined by the Com­ of the product coming from the exporting mission in accordance with criteria laid

GETREIDEHANDEL v EINFUHR- UND VORRATSSTELLE GETREIDE

4. The order referring the matter was 2. The dispute before the national court received at the Court Registry on 2 May relates to the question whether the Com­ 1972. The plaintiff in the main action and mission properly determined the free-at- the Commission of the European Com­ frontier price in force on 28 January munities submitted written observations; 1966 for imports of French maize into the the defendant in the main action declared Federal Republic of Germany. that it waived its right to submit written After the plaintiff in the main action, the observations. Gesellschaft für Getreidehandel, received on Upon hearing the report of the Judge- 28 January 1966 from the defendant in Rapporteur and the views of the Advocate- the main action, the Einfuhr- und Vorrats­ General the Court decided to dispense with stelle fur Getreide und Futtermittel, a a preparatory inquiry. licence to import 614 250 kg of French maize, it imported during February 579 600 kg of maize with a levy fixed in 5. On 14 July 1972 there arrived at the Court advance of DM 11.59 per tonne calculated Registry a copy of an application addressed on the basis of a free-at-frontier price of on 5 July 1972 by the plaintiff in the main FF 508.86. action to the Hessisches Finanzgericht The plaintiff in the main action disputed requesting that court to supplement the this calculation and, on its complaint being order of reference so that the Court might unsuccessful, applied to the Hessisches also consider the following point:

JUDGMENT OF 8.11.1972 — CASE 17/72

(d) Finally, the generalizing nature of the II — Observations submitted under system requires the cost factors which Article 20 of the Statute make up the free-at-frontier price— especially the profit margin of the exporter —to be calculated at a flat rate. The observations submitted under Article 20 of the Statute of the Court may be summarized as follows: 2. The application of the method of calculation to the case in dispute A — Observations of the Commission of the European Communities (a) The price of maize on the most re­ presentative export market 1. The method of calculating the free-at- frontier price The Commission chose the prices ruling m Bayonne, that is FF 463.80. This price The Commission explains first of all the included all the costs incurred by the method of calculation followed by it in producer up to Bayonne, including broker­ accordance with Regulation No 19 of the age, insurance, transport and financing.

GETREIDEHANDEL v EINFUHR- UND VORRATSSTELLE GETREIDE

(b) Transport costs per tonne, which is perfectly correct even if it is further necessary—and this is On the basis of the most favourable denied—to deduct from it FF 3.75 for transport costs the Commission calculated miscellaneous costs not included in the the following costs up to the German Commission's calculations (brokerage, frontier (Emmerich) financing).

FF per tonne The Commission thus arrives at a free-at-

— Unloading from train to ship frontier price of: at Bayonne 6.60 463.80+35.06 + 10=FF508.86pertonne.

Articles 2 and 3 of the said regulation 35.06 doubtless permit the application in excep­ tional circumstances of the actual ex­ This amount corresponds to the actual change rates ruling on the most representa­ costs of transport calculated on 12 January tive markets. The Commission did not do so 1966. On 19 January the cost of maritime because, according to it, the conditions freight, according to the Commission, laid down as to limits in this sphere were fell by FF 1.03 per tonne, so that by adopt­ not fulfilled but principally because the ing the price of FF 35.06, the Commission fluctuations in the exchange rates in rela­ had favoured the importer, as the French tion to their official parity did not impair authorities had communicated an un­ either the functioning of the common altered transport tariff. The Commission organization of the market or the im­ further maintains that as it made its plementation of the common agricultural estimations on the basis of the costs of policy. Furthermore, the observations sub­ transport actually incurred the costs of mitted to the national court on this point insuring the transportation, supervision by the plaintiff are based on a complete of the unloading and the 'free out' costs misconception of Regulation No 67 of the further incurred by the plaintiff, are in­ Commission (JO No 66 of 28.7.1962, p. cluded in its calculation. 1860).

The Commission concludes by requesting (c) The profit margin of the trader the Court to reply in the affirmative to the question submitted by the national court. In calculating the free-at-frontier price account must be taken of the amount B — Observations of the plaintiff in the representing the profit margin of the trader main action and a sum to cover his marketing costs. The Commission fixed this amount at FF 10 In the first place the plaintiff in the main

action requests the Court to order the 1965 [1965] ECR 877), the method and the Commission to produce the data forming documents which form the basis for its the basis of its calculation of the price in determination of the free-at-frontier price. dispute. It requests the Member States to com­ municate to it by telex, on the basis of the The method for calculating the free-at- data at their disposal, their suggestions frontier price in the present case with regard to the free-at-frontier price to be determined. The plaintiff in the main action sets out In France the relevant authority is the three factors which, according to it, must Office National Interprofessionnel des be taken into consideration in determining Céréales (ONIC) (the 'National Cereals the free-at-frontier price. Trade Board') which communicated for (a) First, the most favourable prices the week from 24 to 30 January 1966 a ruling on the most representative market free-at-frontier price (Emmerich) of FF of the exporting Member State for the 523.50 per tonne which took into account the abovementioned costs and exceeds importation to the importing Member State of the relevant cereals (Regulation by FF 14.64 per tonne the price arrived at No 89, Article 2). The parties agree that by the Commission. Since ONIC is the institution having the this market is Bayonne and that the initial price is FF 463.80 per tonne. best knowledge of the actual conditions on the French market, the figures put forward by it must be accepted unless the (b) The transport costs up to the marketing centre of the area have the largest deficit Commission justifies the reasons which induced it to depart from these figures. in the importing Member State, calculated up to the frontier crossing point, in the The plaintiff in the main action con­ present case Emmerich (Regulation No sequently requests the Court to take into 89, Articles 4 and 5). consideration the figure proposed by ONIC in place of the Commission's (c) The marketing costs up to the frontier figure and also in place of the figure of crossing point, including a sufficient FF 515.61 per tonne which it advocated profit margin. before the national court at a time when it With regard to the transport costs, the had not yet learned of the calculations of Commission has, according to the plaintiff ONIC.

Finanzgericht that the decision in question referring the matter 6.75 is invalid and that the free-at-frontier — Trans-shipment Rotterdam 4.32 price must be fixed at FF 523.50 per tonne. — Free out Bayonne 2.00 In the course of the oral procedure the — Profit margin 8.93 plaintiff in the main action indicated that it was unable to determine with absolute 22.00 certainty what costs were included under the head 'Trans-shipment Bayonne FF The Commission, for its part, produced, 11.00 per tonne', which accounts for the first, the telex messages from ONIC on difference of FF 4.40 from the figure the calculation of the free-at-frontier price obtained by the Commission. It sub­ for the relevant goods and, secondly, mitted that this point should be raised with various documents from its departments ONIC. specializing in this field, from which it is clear that the free-at-frontier price arrived With regard to the head 'profit margin and at corresponds to the price actually ruling marketing costs FF 22.00 per tonne' on the market at that period. arrived at by ONIC, this head may be With regard to the additional question broken down as follows: which was submitted by the court making the reference, the Commission doubts whether it is admissible in the circum­ stances in which it was communicated to the Court.

Grounds of Judgment

1 By an order of 9 March 1972, which was received at the Registry on 2 May 1972, the Hessisches Finanzgericht requested the Court to give a preliminary ruling on the validity of the decision of the Commission of the EEC of 21 January 1966 fixing at FF 508.86 per metric ton the free-at-frontier price on 28 January 1966 for French maize imported into the Federal Republic of Germany (Supplément Agricole No 3 of 26.1.1966, p. 85).

(a) The method of calculating the free-at-frontier price

4 Regulation No 89 of the Commission, adopted in implementation of Regulation No 19 of the Council (JO No 30 of 20.4.1962, p. 933) on the progressive establish­ ment of a common organization of the market in cereals, fixes the criteria for determining the free-at-frontier prices for cereals, flour, cereal groats and cereal meal. It is clear from Articles 2 and 4 of that regulation that the free-at-frontier price shall be determined on the basis of the most favourable prices for the im­ porting Member State from the prices ruling on the most representative markets for exports to that State and taking account of the transport costs. The most favourable price is that which, taking account of the prices ruling on the most representative markets, adjusted in accordance with Article 6, and taking account of the costs of transport and of marketing not already included in those prices, results in the lowest figure.

5 By establishing a system of general levies, the Community legislature has fore­ gone individual investigation of the price of each transaction, preferring to draw a comparison between the most favourable current price for maize in the exporting Member State and the threshold price reflecting the level of the domestic price in the importing Member State, with both prices relating uniformly to a specific standard of quality.

6 Consequently the free-at-frontier price must not be calculated on the basis of the costs actually incurred by an exporter in a specific transaction but must becal­ culated at a flat rate from the costs which all exporters must inevitably incur up to the frontier.

10 Thus, when the Commission rejected the figure communicated to it and proceeded to amend it, it did not exceed its powers.

(c) The price of FF 515.61

11 Before the national court the applicant put forward a free-at-frontier price of FF 515.61. The divergence between this figure and the figure of FF 508.86 accepted by the Commission, that is to say, FF 6.75 per tonne, consists of various items which may be grouped under two headings: the first—transport insurance: FF 0.50, supervision of unloading: FF 0.50 and costs free-out Rotterdam: FF 2— relates to transport costs whilst the second concerns marketing costs—interest: FF 2.50, agency commission: FF 1 and bank charges : FF 0.25.

12 With regard to the transport costs, it must first of all be stated that the insurance costs up to FF 0.50 were expressly taken into account by the Commission in its calculation. Furthermore it is clear from Internal Document No 8596/VI/64-F that for the relevant period the unloading costs at Rotterdam, estimated at FF 4.32, include all the costs of trans-shipment from ship to barge. Furthermore, as the plaintiff in the main action itself has admitted, the free-out costs are merely contingent on transport by coaster and on a disputed interpretation of the fob clause and consequently do not correspond to the acceptation of the most favour­ able price as prescribed by Articles 2 and 4 of Regulation No 89 of the Commission. With regard to the marketing costs the Commission has stated that these were included under the item of FF 10 included by it under the group heading 'profit

16 Under that provision the intervention for which it provides is subordinated to the condition that the variations in the exchange rate in relation to the rate which corresponds to the parity communicated to the International Monetary Fund might, in exceptional circumstances, be capable ofjeopardizing the implementation of the common agricultural policy.

17 The existence of exceptional circumstances in which the fluctuations in the ex­ change rate impair the effectiveness of the machinery of the common organization of the market or the implementation of the agricultural policy has not been es­ tablished in this case. The applicant claims that, pursuant to Regulation No 67 of the Commission (JO of 28.7.1962, p. 1860) fixing the criteria for modifying levies imposed on cereals, flour, cereal groats and cereal meal, the existence of fluctuations in excess of 0.75 u.a. must be considered as evidence of a disturbance

of the market. With the aim of simplifying administration, Regulation No 67 of the Commission fixes the limits of fluctuation of the exchange rates within which, in any case, no review of the rate of the levy will be carried out. It may not be inferred from this that any fluctuation beyond those limits by itself constitutes evidence of a serious disturbance capable of impairing the effectiveness of the machinery of the common organization of the market or the implementation of the common agricultural policy.

GETREIDEHANDEL v EINFUHR- UND VORRATSSTELLE GETREIDE

Costs

18 The costs incurred by the Commission of the European Communities, which sub­ mitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the Hessisches Finanzgericht, the decision on costs is a matter for that court.

Trabucchi Mertens de Wilmars Kutscher

Delivered in open court in Luxembourg on 8 November 1972.

A. Van Houtte R. Lecourt

Registrar President