C-74/74

JUDGMENT OF 14. 5. 1975 — CASE 74/74

3. The actual right to receive a Community is therefore liable if, in compensatory amount on exports in the absence of an overriding matter of

the event of disturbances to trade in public interest, the Commission agricultural products by monetary abolished with immediate effect and

measures is only created by the without warning the application of

performance of the export transaction compensatory amounts in a specific

and only from the moment when this sector without adopting transitional

him to the exchange risk. The for which the refunds had been fixed.

In Case 74/74

COMPTOIR NATIONAL TECHNIQUE AGRICOLE (CNTA) S.A., Paris, represented by Jean-François Péricaud, Advocate of the Paris Bar, with an address for service in Luxembourg at the Chambers of J. Wolter, 2 rue Goethe,

applicant,

v

COMMISSION OF THE EUROPEAN COMMUNITIES , represented by its Legal Adviser, J. H. J. Bourgeois, acting as Agent, with an address for service in Luxembourg

composed of: R. Lecourt, President, J. Mertens de Wilmars and A. J. Macken­ zieStuart, Presidents of Chambers, A. M. Donner, R. Monaco, P. Pescatore, H. Kutscher, M. Sørensen (Rapporteur) and A. O'Keeffe, Judges,

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

gives the following

JUDGMENT

Facts

The facts and the arguments of the Community. The subsidy is, as a general parties set out during the written rule, equal to the difference between the procedure may be summarized as target price and the world market price.

fluctuation for the currencies 22 September 1966 (OJ, Special Edition of certain

for Member States (OJ, Special Edition 1971 1965-1966, p. 221) provides a target

price and an intervention price for colza (I), p. 257) provides for a system of

and rape seeds. compensatory amounts. Article 1 (1) thereof, in the version in force at the On exports to third countries a refund time of the facts in dispute, authorizes a may be granted, the amount of which Member State 'If, for the purposes of may not exceed the difference between commercial transactions, [it] allows the prices within the Community and those exchange rate of [its] currency to on the world market. As the situation in fluctuate by a margin wider than [is] this sector is characterized by high by international rules'

permitted to demand and low overall production, the 'charge on imports from Member States regulation does not establish specific and third countries, [and] grant on tariff protection for colza seed and does exports to Member States and third not therefore provide for a levy on countries compensatory amounts'

for imports. certain products. The final sentence of

that the compensatory amounts are to be quantities fixed in advance before 1

fixed by to the prices of the February 1972 but exported after that applying goods in question a certain percentage date (8 000 metric tones) and to the

representing the difference between the quantities relating to subsidy certificates

of the of the Member fixed in advance before 1 February 1972 parity currency State concerned and the arithmetic mean and subjected to control after that date of the spot market rates of this currency (16 490·525 metric tones).

against the US dollar. The Commission refused to comply with

Detailed rules for the application of the that demand. regulation are to be adopted by the 4. This application was lodged on 1 Commission abtaining the after opinion October 1974. The written procedure of the Management Committees. followed the normal course. The Commission extended the appli­

By Regulation No 189/72 of 26 January all other compensation, legal interest, 1972 (OJ L 24 of 28 January 1972, p. interest under the contracts and

25), the Commission rescinded with costs.

effect from 1 February 1972 the The Commission contended that the compensatory amounts applicable in the Court should: sector of oils and fats, as it considered

that 'the present situation of the market dismiss inadmissi­ — the application as is such that the application of these ble or, in any event, as unfounded; compensatory amounts no longer proves to be essential for avoiding disturbances — order the applicant to pay the costs.

to trade in the abovementioned

products'.

grounds on which the application is compensation.

based. The submissions relied on are not only The Commission recalls that the put forward but are numerous. applicant claims compensation for With regard to the damage, the applicant damage, basing its claim soleley on the points out first of all that Article 38 of

following factors: subjection to control the Rules of Procedure does not mention by it of certain quantities of colza seed, damage and goes on to contend that it is the issue of a certain number of export in fact presupposed by the subject-mat­

licences and the monetary compensatory ter of the dispute and underlies the amount applicable to colza seed. It submissions relied on. The applicant has maintains that this is obviously defined the nature and amount of the insufficient not only in order to grasp damage. It complains, on the one hand, the precise subject-matter of the dispute of not having had the compensatory but also in order to understand the amounts on its exports granted and, on

applicant's submissions. the other hand, of the fact that the

abolition of the compensatory amounts After listing the basic factors which are subjected it to abnormal competition thus missing, the Commission adds that

distinct from the loss of advantages in case.

money resulting from the abolition of After reviewing the case-law of the

the compensatory amounts, is an Court, the applicant contends that the

essential element of the action. Commission's allegation as to the

necessity to show the existence of loss The Commission particularly emphasizes distinct from the damage caused by the that with regard to the damage in legislative measure must be rejected. respect of 16 800 metric tonnes of colza

seed subjected to control the application In its rejoinder, the Commission maintains its conclusions on the does not indicate how the abolition of

JUDGMENT OF 14. J. 1975 — CASE 74/74

and 189/72 no particular event occurred wide discretionary power to decide on

in the oils and fats sector which could the application of the system and that

justify such abolition. On the contrary, that system is limited purely to monetary the rate of the US dollar showed a compensation on and at the time of

deterioration in relation to that of the trade in products. It is not intended to

French franc during that period. The adapt price guarantees within the

consider that in addition to the amount Furthermore, the Commission refutes the of aid they would be protected against applicant's allegations as to the illegality abnormal competition from seeds from of the regulation.

third countries by a fixed and published The argument based on Article 7 of

compensatory amount and that in Regulation No 974/71 is in irrelevant, to the the fact addition amount of refunds particular by reason of the that

they would receive the compensatory to the case-law of the Court according amounts on exports to third countries. (Judgment 24 October of 1973, The the Merkur-Auβenhandels-GmbH v Com­ applicant considers that

Commission's liability is all the more mission of the European Communities evident in that in similar cases it decided [1973] ECR 1055) that rule is addressed to indemnify traders. It refers to to Member States alone. Regulation No 2041/73 of 27 July 1973 to the Contrary applicant s statement, making transitional provisions conse­ Commission the never maintained that quential upon the application on 4 June the marketing of colza was completed by 1973 of the new system of differential 26 1972. It January refers to the amounts for colza and rape seed (OJ L abovementioned second recital of the 207, p. 33). preamble to Regulation No 189/72. It In its statement of defence, the was possible to abolish the compensa­

Commission describes the legislative tory amounts in view of the fact that they framework within which the application were no longer indispensable having is made. It emphasizes that the system of regard to the advanced stage of disposal compensatory amounts confers on it a of the harvest. In fact at the time of the

applicant was not entitled to the basis of an action for damages under the maintenance of the compensatory second paragraph of Article 215 of the

amounts at the rate fixed. The system of Treaty.

compensatory amounts does not provide In its reply, the applicant first examines for advance fixing of the amounts. 'the infringement of a superior rule of

Secondly, the applicant is not entitled to law'. It contends that in general any the permanent application of the infringement of a law or of a general

compensatory amounts. It follows from principle of law may, to the according the provisions of Regulation No 974/71 case-law of the Court, constitute an

separate the alteration the exchange. of

compensatory amounts and their The applicant points out, in addition,

withdrawal, the Commission refers to its that the compensatory amounts are

observation on the fundamental instruments of monetary trends and not

distinction between an alteration and a of economic policy intended to influence withdrawal of amounts. the markets. When the Commission compensatory The only valid comparison to be made is states the reasons on which Regulation

JUDGMENT OF 14. J. 1975 — CASE 74/74

principle of non-retroactivity of laws doing it also intended to bear down and the principle of the protection of the on prices, which were actually legitimate expectations of persons lowered, judging from the statement concerned ('Vertrauensschutz'). of prices for colza oil f.o.b. Dieppe;

The immediate application of the —

by erroneously assessing the

provisions of Regulation No 189/72 foreseeable market trends; from the adversely affects the applicant's vested end of the 1971-1972 marketing year, rights. In the relationship between it and the Council had needed to provide

the Community, the advance fixing of for special measures for colza seed; aid and refunds and the issue of import —

by ignoring the interests ot traders licences is tantamount to the complete and achievement between the parties of a

is not a question of a mere expectation system of monetary compensatory but of a firm undertaking. amounts (OJ L 207, p. 34) as well as the

Judgment of the Court of 28 October In any event, there is in this case 1970 in Case 16/70, Coöperatieve violation of the legitimate expectations Hoofdpro­ of traders. The applicant points out in Vereniging Necomout GA v

this connexion that the prejudicial duktschap voor Akkerbouwprodukten and Produktschap voor Granen, Zaden decision of the Commission was adopted en Peulvruchten (Rec. 1970, p. 921). simply because the application of the

compensatory amounts no longer With regard to the loss, according to the appeared indispensable in order to avoid applicant it is actual and certain. The disturbances. Their maintenance there­ actual damage suffered at the time of

fore would have been in no exportation is indisputable. As to the way prejudicial to the Community interest, exact amount of such loss, the applicant whereas their abolition seriously affected has calculated it by taking as the traders. compensatory amounts due those

applicable to the date of the advance The applicant states that the fixing of the refund. The applicant has Commission's conduct was wrongful no objection to a calculation of the because it adopted its decision: compensatory amounts on the basis of

also indisputable, even if its assessment Member States.

may give rise to argument. The lowering With regard to the alleged violation of of prices resulting from the abolition of the principle of legal certainty, the the compensatory amounts is in the Commission that emphasizes the order of 10%. The applicant has question of 'vested rights'

cannot even therefore suffered a certain loss of profit. arise for the quatities of colza for which Methods of assessment other than that the aid was fixed in advance. Even chosen by the applicant may certainly be supposing that the compensatory put forward. This question does not amounts had been the maintained, come within the field of a lawyer but of applicant would in no way have had any an expert who must calculate the fall in right to for compensatory amounts the the applicant's receipts. The result is the quantities receiving aid.

In its the Commission same with regard to the quantities in rejoinder, emphasizes not that the applicant respect of which the refund was fixed in only has not alleged in due time that advance. The Commission refers to the

Regulation No 189/72 has infringed a Judgment of the Court of 4 July 1973 in

higher rule of law intended to protect its Case 1/73, Westzucker GmbH v Einfuhr-

wrongful — the factors of the situation The application of the system is only as they appeared at the time it adopted justified in so far as the monetary Regulation No 189/72. It observes in measures of the Member States are likely particular that it appeared that the to lead to a 'disruption of the application of compensatory amounts intervention 'abnormal system'

and to had in fact little effect on the market in movements of prices jeopardizing the It figures from colza. refers to certain normal trend of business in agriculture'. which it appears that the abolition of the As soon as these conditions are no compensatory amounts was not followed longer met, the compensatory amounts by a lowering of prices. It was therefore are no longer justified, even if they offer necessary to abolish them, as soon as the some of the traders in the Community marketing of the harvest permitted it. additional protection. When the

Commission assesses the situation in After establishing that the certificates for order to decide whether it is necessary to the advance fixing of refunds and aid

maintain compensatory amounts or to issued covered 84 % of the harvest of

revert to the normal system, it must colza seed, the Commission was

JUDGMENT OF 14. 5. 1975 — CASE 74/74

been informed of what it consists. It is cannot be transposed without further

necessary to know whether or not the ado to the field of advantages arising applicant had concluded contracts, from the regulations concerning the

whether those contracts were made in fixing of monetary amounts for dollars or in French francs and whether agriculture. These two sets of regulations it had included the receipt of the differ in both their cause and their

compensatory amounts in its calculation objective.

of the prices at which it undertook to Furthermore, the Commission bases its make delivery. In any event, the decisions broadly on the following Commission disputes that the abolition general considerations: of the compensatory amounts caused a In principle, in respect of provisions of lowering of the prices of colza seed in France; it further questions the fact that public interest, the amendment of rules

the loss of profit for a trader, consisting applies to the future effects of situations in arising under the aegis of the former the lowering of the value of the

age. condition on which the of a very efficacy After the closure of the written measure abolishing financial advantages

procedure, the Court asked the or achieving an economic objective

Commission to give an explanation on sought by such abolition depends.

the general considerations which in its Furthermore, when it envisages the

practice are decisive in assessing whether possibility of transitional measures in

the withdrawal or reduction of financial favour of current transactions, the

two systems, the transitional and the his profit margin varied between 1 % new. and 2 % and the compensatory amount

than 2 Lastly the Commission adds that it must represented more %.

also take into account that the adoption In the applicant emphasized addition, of measures transac­ enabling current that although the price of colza seed tions to be taken into consideration may, constant after the remained relatively where necessary, involve the necessity of of the amounts abolition compensatory balancing the interests of two different the price of oils, that is to say finished categories of transaction. The financial products, fell appreciably.

advantages to be decreased or abolished

for The Commission replies to this last a category of current transactions observation that the applicant does not may be the counterpart of financial burdens for show the link between the abolition of another category of current the compensatory amounts and the fall transactions. of prices and it wonders whether such a During the oral procedure on 18 March link exists. It refers in this connexion to 1975 the parties introduced new factors the fact that between November and as hereinafter summarized: December 1971 there was also an

In reply to a question put by a member appreciable fall in the price of oils. In its of the Court, the applicant explained, in opinion, the price of colza oil merely respect of 8 000 metric tonnes for which reflects the prices of other products had been fixed in refunds on export which were not affected by compensa­

JUDGMENT OF 14. 5. 1975 — CASE 74/74

the withdrawal, by Regulation No 189/72 of the Commission of 26 January 1972, of the monetary compensatory amounts applicable to colza and rape

seeds and to the oils obtained from those seeds.

Admissibility

2 The Commission, the defendant, objects that the application is inadmissible in that the originating application does not contain the necessary information,

according to Article 19 of the Statute of the Court and Article 38 (1) of the

its judicial review, and the applicant has moreover provided all relevant

information during the proceedings.

5 In its reply, the applicant has in particular defined its original conclusions

by asking the Court to rule in an interlocutory judgment that the Community is obliged to make reparation for the loss allegedly suffered and not to rule

on the exact extend of the loss and the amount of the compensation until

after receiving an expert's report.

quantities intended for export to a third country, for which refunds had been fixed in advance in accordance with the same regulation.

8 The system of compensatory amounts instituted by Regulation No 974/71 of the Council of 12 May 1971 involves, under the version in force at the

time of the facts in dispute, an option for a Member State which allows

the exchange rate its currency to fluctuate by a margin wider than the of

one permitted by international rules to charge on imports and to grant on exports compensatory amounts for specified agricultural products in so far as the application of that exchange rate would lead to disturbances to trade in the products in question.

9 It is for the Commission, after receiving the opinion of the Management

JUDGMENT OF 14. 5. 1975 — CASE 74/74

13 New compensatory amounts, taking into account the exchange rates recorded between 13 and 19 January, were fixed by Regulation No 144/72 of the

Commission of 21 January 1972, which entered into force on 24 January 1972.

14 Finally, by Regulation No 189/72 of 26 January, which was published in the Official Journal on 28 January and entered into force on 1 February 1972,

the Commission abolished the compensatory amounts applicable to colza

and rape seeds and to the oils from those seeds in view of the fact that the market situation was such that the application of those amounts

the Treaty, unless a sufficiently flagrant violation of a superior rule of law for the protection of the individual has occurred.

17 In this connexion the applicant contends in the first place that by abolishing the compensatory amounts by Regulation No 189/72 the Commission has

infringed basic Regulation No 974/71 of the Council.

18 That regulation, it contends, while conferring on the Commission the power to ascertain that the conditions for the application of the compensatory met, does not allow it to take a decision withdrawing compen­ amounts are

satory amounts once instituted and it requires in any event that the

Commission's decision be taken on the basis of an assessment of solely monetary factors to the exclusion of economic factors which in this case the Commission has taken into consideration.

21 The Commission has a large area of discretion for judging whether the

monetary measures concerned might lead to disturbances to trade in the

product in question.

22 In order to judge the risk of such disturbances, it is permissible for the

Commission to take into account market conditions as well as monetary factors.

23 It has not been established that the Commission exceeded the limits of its power thus defined when it considered towards the end of January 1972 that the situation on the market in colza and rape seeds was such that

27 Regulation No 189/72 cannot therefore be considered to be illegal in the

light of the provisions of Regulation No 974/71.

28 The applicant contends secondly that the withdrawal of the compensatory amounts from 1 February 1972 violated the principle of legal certainty, on the one hand, in that it had retroactive effect and, on the other hand, in that it ignored the legitimate expectation of persons concerned that the

compensatory amounts would be maintained for current transactions.

29 With regard first to the problem of retroactivity, it must be recalled that

the compensatory amounts are levied on imports and granted on exports of

33 The applicant claims in addition that the withdrawal of the compensatory amounts with immediate effect destroyed the expectation which he had of

their maintenance when he sought the advance fixing of aid and refunds

on exports, thus definitively undertaking with the competent authorities to carry out commercial transactions from which he could not withdraw save

under pain of forfeiting the deposit lodged.

34 It is appropriate in this connexion to examine separately the situation with

regard to advance fixing of aid on the one hand and refunds on exports

satory amounts in the oils and fats sector as from 1 February 1972 did not

appreciably affect the price of colza seed on the French market.

37 It must be concluded that no loss was caused to the applicant by Regula­ tion No 189/72 with regard to the quantities of seed which were not intended for export.

38 With regard, secondly, to the quantities intended for export and for which

the applicant obtained the advance fixing of the refunds, it must be noted that the objective of the system of compensatory amounts, as it appears

from is difficulties in­ the Community rules, to ward off which monetary stability might create for the proper functioning of the common organizations of the markets, rather than to protect the individual interests of traders.

41 Nevertheless the application of the compensatory amounts in practice avoids the exchange risk, so that a trader, even a prudent one, might be induced to omit to cover himself against such risk.

JUDGMENT OF 14. 5. 1975 — CASE 74/74

42 In these circumstances, a trader may legitimately expect that for transactions irrevocably undertaken by him because he has obtained, subject to a deposit, export licences fixing the amount of the refund in advance, no unforeseeable alteration will occur which could have the effect of causing him inevitable loss, by re-exposing him to the exchange risk.

43 The Community is therefore liable if, in the absence of an overriding matter of interest, the Commission abolished with immediate effect and public

without warning the application of compensatory amounts in a specific

sector without adopting transitional measures which would at least permit

therefore legitimately expect under all circumstances to make the profits which

would have accrued to it from the contract under the system of compen­

satory amounts.

46 The protection which it may claim by reason of its legitimate expectation is merely that of not suffering loss by reason of the withdrawal of those amounts.

47 As the amount of the compensation due to the applicant cannot be deter­

mined at the present stage of the proceedings, it must be held by inter­

On those grounds,

THE COURT

By interlocutory judgment,

1. Rules that the Commission of the European Communities must

compensate the Comptoir National Technique Agricole for the loss

suffered, by reason of Regulation No 189/72 of 26 January 1972, in the execution of export transactions for which the refunds had been fixed by the certificates of 6 January 1972;

Pescatore Kutscher Sørensen O'Keeffe

Delivered in open court in Luxembourg on 14 May 1975.

A. Van Houtte R. Lecourt

Registrar President