C-142/73

on the interpretation of Article 20 (2) of Regulation No 19 of the Council of the EEC of 4 April 1962 (OJ 1962, p. 933 et seq.),

THE COURT

composed of: R. Lecourt, President, A. M. Donner (Rapporteur) and M. Sø­ rensen, Presidents of Chambers, R. Monaco, J. Mertens de Wilmars, P. Pesca­ tore, H. Kutscher, C. Ó Dálaigh and A. J. Mackenzie Stuart, Judges,

Advocate-General: J. P. Warner Registrar: A. Van Houtte

gives the following

JUDGMENT

refunds on the fact that the applicant intention of obtaining a higher refund, had taken advantage of the investigation has exported goods of lower value than certificate obtained by fraud to export the goods stated in the application for not wheat meal, but a mixed feedingstuff the refund, entitled, after discovery of containing bran, for which no refund the fraud, to the refund appropriate to had been promised. the nature of the exported goods?' The plaintiff in the main action The order making the reference was contested the view taken by the EVSt, registered at the Court on 6 July 1972. claiming that it did indeed export wheat Firma Mathes & Schurr, represented by meal as stated. Moreover, it was of the F. Modest of the Hamburg Bar, and the opinion that the cancellation of a refund Commission of the European Communi could be justified only to the extent that ties, represented by its legal adviser M. the refund for the export of wheat meal Gilsdorf, submitted written observations was higher than that available for the pursuant to Article 20 of the Protocol on export of mixed feedingstuffs containing the Statute of the Court of Justice. bran, under tariff heading 23.02.

system. In its opinion, such an the main action) firstly criticizes the interpretation would in particular be terms in which the preliminary question inconsistent with the spirit of the refund is expressed, believing it to have been system. formulated so as to give rise to the impression that the plaintiff in the main Finding that a question of interpretation action is one of those dishonest of Community law was involved, the exporters who obtain the grant of Hessisches Finanzgericht decided to stay excessive refunds by fraud. the proceedings and referred the following question to the Court of The plaintiff then goes on to recount its Justice, by order of 18 May 1973: actions during the period October 1963 'Must Article 20 (2) of Regulation No to March 1965, in order to show that it 19 of the Council of the European conformed strictly to the rules then in

JUDGMENT OF 12. 12. 1973 — CASE 142/73

It is clear from the (b) The plaintiff satisfied the legal case law of the Court in Cases 6/71, provisions in relation to evidence Rheinmühlen, Rec. 1971, p. 821, and as to type, characteristics and 85/71, Kampffmeyer, Rec. 1972, p. 213, composition of the exported that Regulation No 19/62 makes a product. During the period in fundamental distinction between the question the decrees of 30 July 1963 system for levies and that for refunds.

They were merely product in question by fraud, are required to abide by the maximum limits said by the plaintiff to be entirely fixed by Community provisions, as laid baseless. They are moreover down in Regulations Nos 141/64 and premature, in that they anticipate 164/64, and were accordingly free to the result of an investigation which make use of their ability to reclaim has not yet been undertaken. refunds as they thought fit. (c) At all events the censure of the The plaintiff emphasizes that the refund Finanzgericht is illdirected. In the system is solely aimed at the plaintiff's opinion the European organization and direction of the

Even in action merely took advantage of the cases of dishonesty, there is no reason to gap created by this omission on the part of the Community legislature. depart from these principles. According ly, the Court could reply to the question This could not give rise to any as follows: objection at law. 'The question whether and to what As for the question itself, Firma Mathes extent the repayment of a refund & Schurr states, firstly, that the wrongfully claimed under Regulation difference theory is applied in all cases No 19/62 should be required is a matter where the administrative authorities do for the internal law of the Member

States and is left to the discretion of as regards the objective of putting their national courts. The Member States surpluses onto the world market. and national courts must however The Commission recognizes the danger ensure that the maximum limits fixed in of abuse of the refund system, but notes respect of refunds by Regulations Nos that it is for the national legislature to 55 and 141/64 and by the other adopt the necessary preventive measures. provisions adopted for the implementa­ Community law on refunds during the tion of the latter by the Community transitional period provides no answer institutions are not exceeded, and that to this problem. the repayable portion of the refund Accordingly, the Commission proposes wrongfully claimed is estimated so as to reestablish a balance within the the following reply: organization of the market.' 'The provisions of Community law, especially Article 20 of Regulation No 19 2. The Commission outlines the refund of the Council, do not prohibit the grant system for exports of agricultural of refunds for exports of a specific good products to third countries, as laid down to third countries during the period by Regulation No 19/62 and elaborated October 1963 to March 1965, even by Regulations Nos 92/62, 131/62 and, where, for the purposes of obtaining a subsequently, by Regulations Nos higher refund, the exporter recorded in 162/64 and 164/64. the documents relating to the refund a These Regulations only laid down product other than that which was in maximum figures for the relevant fact exported. In such a case the refunds and left the Member States free Member States were free to make the to arrange the details; thus there was grant of a refund dependent on further nothing to prevent the application of a conditions; in particular they could system allowing the grant of the make it a condition for the grant of a requisite refund to any product in fact refund that the product recorded in the exported. documents relating to the refund should coincide with the product in fact The objective of the refund system as exported.' elaborated at the time in Community Firma Mathes & Schurr and the law does not prohibit the grant of a Commission submitted their oral refund at the rate applicable to goods of a lower quality. As long as refunds were observations at the hearing on 7 November 1973. available for goods 'of lower quality', the objective of the equalization of prices The Advocate-General presented his would also have been attained in a case opinion at the hearing on 28 November such as this. The same argument is valid 1973.

On the other hand, it was open to them to adopt criteria more restrictive than those provided for by the Community rules.

3 Accordingly, in the context of the optional export refunds, the Member States were required to take account only of those products which at the least fulfilled the conditions set out in the Explanatory Notes to the Brussels Nomenclature.

Accordingly, in the event of the goods exported not corresponding to the statements contained in the export documents, on the basis of which the refund was granted, the Member State was obliged at the very least to reduce the refund so that it did not exceed the limit laid down for the product exported.

Subject to this obligation, it was for the authorities of the Member States to decide according to their national law the further consequences of such an occurrence.

4 It must therefore be concluded that, in cases where the goods in fact exported did not correspond to the information given in the export documents,

(a) Article 20 (2) of Regulation No 19/62 required the national authorities to reduce the refund granted so that it should not exceed the maximum limits laid down for the goods in fact exported and,

THE COURT

in answer to the question referred to it by the Hessisches Finanzgericht, in accordance with the order of that court dated 7 May 1973, hereby rules:

In cases where the goods in fact exported did not correspond to the information given in the export documents:

(a) Article 20 (2) of Regulation No 19/62 required the national authorities to reduce the refund granted so that it should not exceed the maximum limits laid down for the goods in fact exported and,

OPINION OF MR WARNER — CASE 142/73

(b) subject to this obligation, it was for those authorities to decide, according to their national law, upon the necessary further consequences.

DELIVERED ON 28 NOVEMBER 1973

My Lords, countries some 3 000 000 kg of a product which it described as This case comes to the Court by way of wheat-meal within tariff heading 11.02. a reference for a preliminary ruling by On the faith of that description the the Hessisches Finanzgericht. defendant, which, as Your Lordships It raises a question of interpretation of know, is the German intervention agency Regulation No 19 of the Council, of 4 for cereals and feeding-stuffs, granted to April 1962, and of certain subsequent the plaintiff the refunds appropriate to Regulations that were adopted to such exportations. The defendant now implement it. Your Lordships will alleges that the description was remember that Regulation No 19 misleading and that what the plaintiff in provided for the gradual establishment fact exported was a mixed feedingstuff in the then Member States of a common containing bran, for which the rate of organization of the markets for cereals refund was lower. On the strength of and that it had effect for a transitional these allegations the defendant claims period which lasted from 1962 to 1967. repayment by the plaintiff of the refunds One of the features of the system that it in question. The plaintiff vigorously instituted was that Member States were denies the allegations and contends that, thereby permitted to provide for the even if they were substantiated, it would payment, through their intervention be liable to repay only the difference agencies, of refunds on exports. between the refunds appropriate to Between October 1963 and March 1965 wheat-meal and those appropriate to the plaintiff in the proceedings before feedingstuffs containing bran. the Hessisches Finanzgericht exported The Hessisches Finanzgericht, without from the Federal Republic to third making any finding on the crucial issues