C-154/73

on the validity and interpretation of Regulation No 974/71 of the Council of 12 May 1971 on certain measures of conjunctural policy to be taken in agriculture following the temporary widening of the margins of fluctuation for the currencies of certain Member States (OJ L 106/1 of 12. 5. 1971) and of Regulation No 2122/71 of the Commission of 1 October 1971 fixing the compensatory amounts in force in agriculture as from 4 October 1971 consequent upon the same circumstances (OJ L 223/1 of 4. 10. 1971),

THE COURT

composed of: R. Lecourt, President, M. Sørensen (Rapporteur), President of Chamber, R. Monaco, J. Mertens de Wilmars, P. Pescatore, H. Kutscher and C. Ó Dálaigh, Judges,

Advocate-General: A. Trabucchi Registrar: A. Van Houtte

gives the following

JUDGMENT

of common wheat originating in the whether Article 103 of the EEC Treaty USA into the Federal Republic of was a sufficient legal basis for Germany. The Customs Office charged a Regulation No 974/71 of the Council of monetary compensatory amount of the EEC of 12 May 1971, which itself 19·20 DM per 1 000 kg in accordance provides the legal basis for Regulation with Regulation No 974/71 of the No 2122/71 of the Commission of 1 Council of 12 May 1971, in conjunction October 1971; no other legal basis is with Regulation No 2122/71 of the expressly mentioned.

'1. Is Regulation (EEC) No 974/71 of submitted by Becher before that court the Council of 12 May 1971 valid, was as follows: 'The contested notices insofar as it authorizes the charging with regard to the charging of the of compensatory amounts on imports compensatory amounts admittedly find from third countries? some support in EEC Regulation No 2. If the answer to Question 1 is in the 2122/71. That Regulation is however affirmative: irregular from the point of view of Did the compensatory amount of substantive law. It infringes Regulation 19·20 DM per 1 000 kg fixed by the No 974/71 of the Council of the EEC of EEC Commission in Annex I to 12 May 1971 which takes precedence. Regulation No 2122/71 of 1 October .

3. If the reply to Question 2 is in the on the basis of a c.i.f. price of 204·30 DM negative: per metric ton, and thus fixed it at too Must Regulation (EEC) No 2122/71 high a level to the extent of 1·05 DM. of 1 October 1971, in respect of the The over-assessment of the compensa said compensatory amount of 19·20 tory amount also constitutes an DM per 1 000 kg, be regarded as infringement of Article 110 of the EEC merely inoperative, or should the Treaty.' correct compensatory amount simply be substituted for the amount fixed 2. The order for reference of the by the Commission; and, if so, what Finanzgericht was lodged at the Registry is the rate thereof?' of the Court on 25 July 1973. In the grounds of the order for reference In accordance with Article 20 of the the Finanzgericht points out in Protocol on the Statute of the Court particular: '. . . it is not free from doubt written observations were submitted on

3. The validity of Regulation No corrected by a corresponding modifi­ cation of levies and refunds (cf. Article 5 974/71 was examined in the Judgments delivered by the Court on 24 October (3) (b) of Regulation No 648/73 of the Commission of 1 March 1973 and the 1973 in the aforementioned Cases 5/73, 9/73 and 10/73. The Court held in those seventh and eighth recitals of the said Judgments that 'examination of the Regulation, OJ L 64 of 9 March 1973, p. 1). That method was chosen for reasons questions referred has not revealed any of administrative expediency. Even if elements capable of affecting the validity of Regulation No 974/71 of the there is justification for basing the Council .. .' assessment on prices other than c.i.f. prices, there is all the more reason, in the Commission's opinion, not to require that, in a system based on c.i.f. prices, any modification of those prices should II — Observations presented before the Court necessarily be reflected in the monetary compensation. Article 2 of Regulation No 974/71 thus leaves the Commission a Becher asserts that Article 103, on which 'technical margin of discretion'. The Regulation No 974/71 is based, docs not Commission has already emphasized this empower the Council to enact a point in the context of Case 5/73 regulation since in that Article mention (Balkan), especially when replying to the is only made, in paragraph (2), of question whether that legal basis was 'deciding' and, in paragraph (3), of sufficiently specific. 'directives'. Becher leaves aside examination of all other considerations The Commission then points out that since the issues of law raised in this case in October 1971 the compensatory amounts were in fact calculated from 'have already been the subject of various orders for reference'. c.i.f. prices. But, as these prices vary every day it was necessary to adopt a In respect of the first question on the simplified method of assessment so as to validity of Regulation No 974/71, the avoid having to alter the compensatory Commission refers to its statements in amounts too often. For this purpose, the the aforementioned Cases 5/73, 9/73 and Commission calculated an average c.i.f. 10/73. price, to be modified only if an As to the second question, the appreciable change took place in respect Commission emphasizes the inaccuracy of the price fixed previously. A variation of Becher's argument, which is based on of 10 % up or down was generally the principle that the reference 'prices' considered an appreciable change. specified in Article 2 (1) in relation to The compensatory amount in question importation from third countries can was based on the average c.i.f. price of only be c.i.f. prices. Only one conclusion 204·34 DM, the price valid for the can be drawn from the above provision, period from 22 to 28 July 1971. From namely that the percentage is applied to then until 22 October 1971 there was no

need for any alteration as there was no fix the compensatory amounts, and the appreciable change in the average c.i.f. fixing of those amounts is not, as price. The average c.i.f. price for the recourse to the Management Committee reference period before 22 October was procedure already shows, a simple 194·90 DM (and not 193·10 DM as the matter of arithmetic. If one were to applicant asserts), it was thus only 4·6 % adopt an opposing point of view there less than the aforementioned average would be a risk that national price, so that the internal criterion of administrations would fix different 10 % was not fulfilled. compensatory amounts when the The Commission points out, moreover, Commission's assessments proved to be that the whole system of monetary substantially incorrect. compensatory amounts rests on the The Commission considers moreover principle of the flat-rate assessment and that by asking in its third question if the the simplification of calculations. In this incorrect compensatory amount is connexion, it refers to Article 2 (1) and 'merely inoperative' or if 'the correct Article 3 of Regulation No 974/71. compensatory amount (should) simply The Commission believes that, with be substituted for the amount fixed by regard to variations of the reference the Commission' the Finanzgericht is price, the 10 % limit should in general offering an alternative which does not be adhered to in practice, since any seem very apt. Even if a possible error lower figure would result in too frequent was found the compensatory amount alterations. fixed remains applicable, without prejudice to the consequences resulting The Commission submits that, given for persons concerned. that Regulation No 974/71 lays down no rule for the calculation of reference prices, it is free, for the purpose of B — The oral observations of Becher implementation and in accordance with and the Commission were made at the Article 6 of the said Regulation, to fix hearing on 27 November 1973. the compensatory amounts by means of In the course of the oral procedure the method of calculation described Becher asserted that it can be established

There have a uniformly unfavourable effect on must be similar criteria both for the imports. calculation of the compensatory amount The Commission considers that, after and for that of the levy. In the recitals of what has been stated above, there is no Regulation No 974/71 it is expressly point in giving a reply to the third declared that the compensatory amounts question. should be limited to the amounts strictly As a subsidiary point, the Commission necessary to compensate the incidence of emphasizes that the 'correct compensa monetary measures.

the Commission alone is competent to In reply to a question of the Court the

JUDGMENT OF 15.1. 1974 — CASE 154/73

Commission explained in the following to 207 DM per metric ton. This levy and manner the difference between the c.i.f. not the c.i.f. price was published and price of 193·10 DM alleged by Becher enabled Becher to make en approximate and that of 194·90 DM which it calculation of the c.i.f. price at 193·10 considered correct: In accordance with DM (threshold price, at the time 400·08 Article 6 of Regulation No 156/67 (OJ DM, minus levy equals c.i.f. price). From of 23 June 1967, p. 2533), the amount of 8 October 1971 the c.i.f. price was fixed the levy is modified only when variations at 53·25 u.a. per metric ton. Thus it only in the components for calculation lead to exceeded the c.i.f. price in force on 30 an increase or a reduction of more than September 1971 by 0·50 u.a. and 0·60 u.a. per metric ton in relation to the therefore did not lead to an alteration of levy previously fixed. the amount of the levy. On 30 September 1971 the Commission's departments fixed the c.i.f. price at 52·75 C — The Advocate-General delivered u.a. or 193·10 DM. This gave, with his opinion at the hearing on 12 effect from 1 October 1971, a levy equal December 1973.

Grounds of judgment

1 By an order of 10 July 1973 lodged at the Court on 25 July 1973 the Hamburg Finanzgericht, in pursuance of Article 177 of the EEC Treaty, referred questions relating to the validity and interpretation of Regulation No 974/71 of the Council of 12 May 1971, on certain measures of conjunctural policy to be taken in agriculture following the temporary widening of margins of fluctuation for the currencies of certain Member States, and of Regulation No 2122/71 of the Commission of 1 October 1971, fixing the compensatory amounts in force in agriculture as from 4 October 1971 consequent upon the same circumstances.

As to the second question

4 By the second question it is asked whether the amount of 19·20 DM per 1 000 kg fixed in Annex I to Regulation No 2122/71 for imports of common wheat from third countries was in conformity with the conditions laid down in Article 2 of Regulation No 974/71.

5 Article 2 (1) of Regulation No 974/71 provides that the compensatory amounts for the products in questions shall be equal to the amounts obtained by applying to the prices the percentage difference between the parity of the currency of the Member State concerned and the arithmetic mean of the markets rates during a period to be determined.

The point of dispute concerns the meaning and scope of the word 'prices' in that context.

6 The method adopted by the Commission at the time in question consisted in taking an average c.i.f. price calculated for a reference period of one week and modifying that average price only if an appreciable change (in general, 10 % up or down) had occurred in relation to the price fixed previously.

The plaintiff in the main action disputes the merits of such a method, asserting that not only should the c.i.f. price have been chosen as reference price, as the Commission in fact did, but that account should also have been taken of price variations, if not from day to day, at least at frequent intervals, which would require frequent publication of adjustments.

This is all the more so as these detailed rules for implementation, and in particular the fixing of the compensatory amounts, are established, as is the case under Article 6 of Regulation No 974/71, according to the so-called 'Management Committee' procedure provided for by Article 26 of Regulation No 120/67 of the Council of 13 June 1967, on the common organization of the market in cereals (OJ No 117 of 19. 6. 1967, p. 2269).

9 It must therefore be concluded that the Commission, in fixing the compensa­ tory amount in dispute, did not overstep the limits laid down for its activity in this field by the provisions of Regulation No 974/71.

Costs

10 The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable, and as these proceedings are, so far as the parties in the main action are concerned, a step

BECHER v HAUPTZOLLAMT EMDEN

in the action pending before the national court, the decision on costs is a matter for that court.

Lecourt Sørensen Monaco

Mertens de Wilmars Pescatore Kutscher Ó Dálaigh

Delivered in open court in Luxembourg on 15 January 1974.

A. Van Houtte R. Lecourt

Registrar President