C-55/72

on the validity of the decisions of the EEC Commission dated 7 January 1966 (OJ Agricultural Supplement No 1 of 12 January 1966, p. 16/66 Table B), 28 January 1966 (OJ Agricultural Supplement No 4 of 2 February 1966, p. 118/ 66 Table B), 18 February 1966 (OJ Agricultural Supplement No 7 of 23 February 1966, p. 214/66 Table B), 28 February 1966 (OJ Agricultural Supplement No 8 of 2 March 1966, p. 250/66 Table B), and 4 March 1966 (OJ Agricultural Supplement No 9 of 9 March 1966, p. 285/66 Table B),

THE COURT

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

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

gives the following

JUDGMENT

forward contracts for the import of These data were regularly prepared by maize from Italy which the applicant the Italian authorities, who calculated wished to carry out between January the free-at-frontier price and then and June 1966. The defendant fixed the supplied the Commission with such data levy rates in the import licences both for (Article 7). After checking the data, the the imports carried out within the time Commission determined the free-at-fron allowed and for those carried out after tier prices each Friday (Articles 8 and 9).

It considers that the The amount of the levy corresponded to Commission incorrectly based the the difference between the price of maize free-at-frontier price on the market price from Italy delivered free-at-frontier in of maize imported from the United Germany and the German threshold States and not on the higher price of price, after deduction of a flat-rate maize produced in Italy. Further, the amount. It devolved on the Commission market price taken by the Commission to determine the free-at-frontier price in as the basis of calculation was not the accordance with the detailed rules laid price ruling in the most representative down by Article 3 of Regulation No 19 markets for exports of maize from Italy of the Council of 4 April 1962 on the to Germany.

charges into account (Article 2). By Registry on 3 August 1972, decided to representative markets was meant the refer for a preliminary ruling the follow Italian markets from which maize could ing question: be exported to Germany at the most favourable price (Article 3). The most 'Are the decisions of the EEC favourable price was that which, taking Commission published in the EEC into account the price ruling on the most Official Journal (Agricultural Supple representative markets together with ment) No 1 of 12 January 1966, page freight charges and marketing costs not 16/66 B; No 4 of 2 February 1966, page already included in such prices, worked 118/66 B; No 7 of 23 February 1966, out at the lowest figure in relation to the page 214/66 B; No 8 of 2 March 1966, standard of quality (Article 4 (1)). Freight page 250/66 B and No 9 of 9 March charges were defined in Article 5 of 1966, page 285/66 B, determining the Regulation No 89. free-at-frontier price for the import of

maize from Italy to the Federal Republic leading to an increase in the levies of Germany, valid?' collected on the import of maize from By order dated 18 October 1972, the Italy to Germany. Court decided to join Cases 41/72 and The applicant maintains that several 55/72 for the purposes of the oral distinctions exist between the Italian proceedings. maize market and the Netherlands The applicant in the main action and the barley market referred to in the Commission submitted their written judgment of the Court in Case 16/65. observations in accordance with the The ratio decidendi of that judgment provisions of Article 20 of the Protocol cannot be applied directly to the present on the Statute of the Court of Justice of case. In the first place, the Court based the EEC. its decision on the supposition that After hearing the report of the Judge home-grown cereals and imported Rapporteur and the opinion of the cereals of the same quality, and therefore Advocate-General, the Court decided to interchangeable, must command the proceed without a preparatory inquiry. same price. In the present case, it is The oral observations of the applicant in established that the price of imported the main action and the Commission maize was lower than that of the were made at the hearing on 16 home-grown product.

1972. Yellow Corn 2 and to compare it with the standard of quality in respect of II — Ob s e r v a t i o n s p r e s e n t e d which the Italian target price for maize under Article 20 of the is fixed. It must then correct the price of Protocol on the Statute imported maize by applying the of the Court of Justice coefficients in force in Italy for deter of the EEC mining the target prices and intervention prices. The observations presented under Article When there is a difference between the 20 of the Statute of the Court of Justice standard of quality in respect of which of the EEC may be summarized as the Italian target price is fixed and the follows: standard of quality in respect of which

GETREIDE-IMPORT v EINFUHR-UND VORRATSSTELLE GETREIDE

In these between the standard of quality for the circumstances, the c.i.f. price of cereals threshold price and the standard of coming from third countries is the basis quality for the Italian target price, on which the levy is calculated. differences which, according to the From the above considerations, it must applicant, did not exist. If the be concluded that by Article 1 of Commission had proceeded as indicated Regulation No 86 the principle of the above, the free-at-frontier price interchangeability of cereals of the same determined by it would correspond to category and quality was excluded in the prices ruling for home-grown maize, intra-Community trade. even if the Commission had taken the The application of the ratio decidendi of price of imported maize as the basis for Case 16/65 would be liable to create calculation. market disturbances in the intra-Com In this connection the plaintiff invites munity trade in cereals.

The presumed, at least for 1965/66, that plaintiff concludes from this that, in the there was a division in the Italian maize event of a division in the market, the market. The principle according to free-at-frontier price must be calculated which cereals of the same category, of on the basis of the price of the equal quality, command the same price home-grown product. ceases therefore to apply. In these circumstances, the application of 2. Further, the plaintiff raises an the ratio decidendi of the judgment in objection to the choice of Padua as the Case 16/65 would have results quite most representative market for the contrary to the objectives of Regulation export of maize from Italy to Germany.

It is evident,

therefore, that the Commission should between 4-71 DM and 4-84 DM per have chosen Milan as the most metric ton of maize. The Commission representative market. was therefore abusing its discretionary powers by failing to apply the provisions 3. Finally, the plaintiff submits that the of Article 2 (2) of Regulation No 129. Commission should have seen to it that, in converting the free-at-frontier price 4. The Commission states that at first determined in Italian lire, the defendant it based its calculation of the to the main action applied the effective free-at-frontier price on the lowest prices exchange rate of lire into DM instead of for Italian maize ruling at the time at the exchange rate declared to the Padua, in accordance with the provisions International Monetary Fund (IMF). of Regulation No 89.

The problem rates jeopardises the functioning of the of calculating the free-at-frontier price common organizations of the market or appeared therefore in these terms: the implementation of the common calculation either on the basis of the agricultural policy, the Council and the absolute minimum price, that is of Commission may authorize the imported maize, or on the basis of the application of the effective exchange rate lowest price of the home-grown product. (Article 2 of Regulation No 129). Initially the Commission chose the Market disturbance was all the more second solution, as it considered that the probable as the Federal Republic of levies derived from the free-at-frontier Germany fixed the limit referred to in price were only applicable to cereals Article 1 of Regulation No 67 of the harvested in the exporting Member Commission of 11 July 1962 laying State. down criteria for amending the amounts Towards the end of 1965, however, of the levies imposed on cereals, flour, more and more indications came to light groats and meal (OJ p. 1860/62) at 0-75 that maize coming from third countries u.a. and falsely declared as merchandise According to the applicant's calculations, harvested in Italy was being exported to the difference resulting from the two Germany. variations in the basic factors for Since the introduction of the common determining the levy amounted to organization of the market in the cereals

Grounds of judgment

1 By order dated 28 June 1972, received at the Registry on 3 August 1972, the Hessisches Finanzgericht referred to the Court for a preliminary ruling the question of the validity of the EEC Commission's decisions published in the EEC Official Journal, Agricultural Supplement No 1 of 12 January 1966 (page 16/66 B), No 4 of 2 February 1966 (page 118/66 B), No 7 of 23 Feb­ ruary 1966 (page 214/66 B), No 8 of 2 March 1966 (page 250/66 B) and No 9 of 9 March 1966 (page 283/66 B (sic)) determining the free-at-frontier price for importing into the Federal Republic of Germany maize coming from Italy.

2 It is apparent both from the file and from the proceedings before the Court that three grounds of complaint have been raised against those decisions, concerning:

(a) the choice of the price of maize imported from the United States as the basis of calculation for determining the free-at-frontier price of maize from Italy imported into Germany,

JUDGMENT OF 10. 1. 1973 — CASE 55/72

(b) the choice of Padua as the most representative market within the meaning of Article 3 of Commission Regulation No 89 of the Commission and

Support for this conclusion can be found in the 9th recital in the Preamble to Regulation No 19, which states that 'the system to be established must allow for the maintenance in favour of Member States of the preference which follows from the application of the Treaty'.

5 From 10 December 1965 the Commission no longer calculated the free-at-frontier price of maize imported from Italy into Germany on the basis of the most favourable price of the product harvested in Italy, but on the basis of the most favourable price of imported maize, which, at that time, was about 3 000 lire lower than the price of Italian maize.

The Commission has maintained that it was forced to make such a departure from the general rule by the fact that large quantities of maize coming

GETREIDE-IMPORT v EINFUHR-UND VORRATSSTELLE GETREIDE

from third countries, falsely declared as merchandise harvested in Italy, were being exported to Germany and that, by determining the free-at-frontier price on the basis of the most favourable price of imported maize, a stop could be put to this practice.

6 Departure from the rule by which the free-at-frontier price must be calculated from the price of the home-grown product is only possible on the condition that home-grown and imported products are completely interchangeable and offered for sale at a uniform market price. .

9 Because of the quantities of both Italian and imported maize dealt with on the Padua market, the Commission was entitled to consider that that market is important in international trade in this cereal compared to the other principal markets of Northern Italy.

JUDGMENT OF 10. 1. 1973 — CASE 55/72

Moreover, it is not disputed that the most favourable prices for the export of maize from Italy to Germany are those quoted on the Padua exchange.

10 The ground of complaint concerning the choice of Padua as the most represen­ tative market within the meaning of Article 3 of Regulation No 89 is therefore rejected.

The third ground of complaint

11 Under Article 2 (1) of Regulation No 129 of the Council of 23 October 1962 (OJ 1962, p. 2553), the Commission must apply the exchange rates declared to the International Monetary Fund when calculating the various prices within the framework of the common agricultural policy.

14 The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable, and as these

GETREIDEHANDEL v EINFUHR-UND VORRATSSTELLE GETREIDE

proceedings are, insofar as the parties to the main action are concerned, a step in the action pending before a 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 applicant 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 Article 177; Having regard to Regulation No 19 of the Council of 4 April 1962 on the gradual establishment of a common organization of the market in the cereals sector, especially Articles 2 and 9; 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 within the framework of the common agricultural policy, especially Article 2; Having regard to Regulation No 67 of the Commission of 11 July 1962 laying down criteria for amending the amounts of the levies imposed on cereals, flour, groats and meal, especially Article 1; Having regard to Regulation No 86 of the Commission of 25 July 1962 embodying provisions to prevent diversion of trade in cereals, especially Article 1; Having regard to Regulation No 89 of the Commission of 25 July 1962 laying down criteria for determining free-at-frontier prices for cereals, flour, groats and meal, especially Articles 2 and 3; 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 Euro­ pean Communities;

Mertens de Wilmars Kutscher

Delivered in open court in Luxembourg on 10 January 1973.

A. Van Houtte R. Lecourt

Registrar President

OPINION OF MR ADVOCATE-GENERAL ROEMER

(see Case 41/72, page 7)