C-46/75

In Case 46/75

IBC IMPORTAZIONE BESTIAME CARNI S.R.L., a limited liability company incorporated under Italian law, whose registered office is in Trieste, in the person of its director and legal representative pro tempore, Gaetano Dolfini, assisted and represented by Augusto Pino and Pier Luigi Bonifazi, Advocates, with an address for service in Luxembourg at the Chambers of Ernest Arendt, Advocate, 34 b rue Philippe-II, applicant, v

COMMISSION OF THE EUROPEAN COMMUNITIES, represented by its Legal Adviser, Cesare Maestripieri, acting as Agent, with an address for service in Luxembourg at the office of its Legal Adviser, Pierre Lamoureux,

defendant,

1 — Language of the Case: Italian.

JUDGMENT OF 27. I. 1976 -CASE 46/75

Facts

The facts and the arguments which the Common Customs Tariff, representing a parties have put forward during the total value of Lit. 14 619 000 and a written procedure may be summarized as weight of 10 368 kg. The sum paid by follows: the applicant to the customs by way of equalization was Lit. 276 870.

I — Facts and procedure On 10 August 1973 the applicant imported from Hungary 22 head of live (a) Subject-matter of the action cattle covered by tariff heading 01.02-A II b of the Common Customs Tariff, On 3 March 1973 the applicant imported representing a total value of Lit. from Hungary 27 head of live cattle 7 888 410 and a weight of 11 470 kg. For covered by tariff heading 01.02-A II b of this transaction the applicant was the Common Customs Tariff, required to pay to the customs the sum representing a total value of Lit. of Lit. 42 660. 11 292 260 and a weight of 17 085 kg. At the customs office at Trieste the The applicant company considers that it applicant was required to pay Lit. was charged more in respect of these three transactions than the sum for 198 620 by way of equalization between which it believes itself to have been the import charge and the compensatory liable. The difference between the sum amounts. required by the customs and that which On 27 April 1973 the applicant imported the applicant considers should have been from Yugoslavia a consignment of payable by way of equalization is a result hindquarters of beef and veal covered by of a reduction in the rate of the tariff heading 02.01-A II a 1 bb 33 of the compensatory amounts made in

pursuance of Article 5 of Regulation No in value of the currency concerned may 1463/73 of the Commission. not be higher than the charge on products imported from third countries The applicant company considered this (Article 4a (2)). provision to be unlawful and lodged an application against the Commission of The detailed rules for implementing this the European Communities under regulation, which might involve other Articles 178 and 215 of the EEC Treaty exceptions to the regulations concerning for compensation for the loss suffered as the common agricultural policy, were a result of the application of Article 5 of drawn up in accordance with the Regulation No 1463/73 of the procedure laid down in Article 26 of

Subject to the provisions of Article 3, the Regulation (EEC) NO 974/71 of the detailed rules for the application of the Council of 12 May 1971 on certain regulation involve in particular the fixing measures of conjunctural policy to be of compensatory amounts (Article 6). taken in agriculture following the temporary widening of the margins of Article 6 of Regulation (EEC) No 648/73 fluctuation for the currencies of certain of the Commission of 1 March 1973 Member States (OJ, English Special laying down detailed rules for the Edition 1971 (I), p. 257) introduced a application of 'monetary' compensatory system of compensatory amounts in trade amounts (OJ L 64 of 9. 3. 1973, p. 1) with Member States and third countries provides that for the purposes of to be applied to products for which applying Article 4a (2) of Regulation intervention measures are provided (EEC) No 974/71 the Commission shall within the framework of the common fix the amounts by which the 'monetary' organization of the agricultural markets. compensatory amounts are to be

depreciated below the margin of fluctuation shall charge on exports and The compensatory amounts were fixed grant on imports compensatory amounts by Regulation (EEC) No 649/73 of the in trade with Member States and third Commission of 1 March 1973 (OJ L 64 countries. of 9. 3. 1973, p. 7). In trade with third countries the The adjustment amounts were fixed by compensatory amounts granted on Regulation (EEC) No 905/73) of the imports shall be deducted from the Commission of 23 March 1973 (OJ L 92 import charge (Article 4a (1) (a)). of 7. 4. 1973, p. 1). In trade between the Member States and Finally, Regulation (EEC) No 1463/73 of third countries, the compensatory the Commission of 30 May 1973 laying amounts applicable due to the [increase] down detailed rules for the application of

'monetary' compensatory amounts (OJ L and that it constitutes a misuse of 146 of 4. 6. 1973, p. 1) provides at powers on the part of the Article 5: Commission. '1. The Member States shall take the Therefore, order the institutions of the measures necessary to assure that the provisions of Article 4a (2) of Communities to make good the damage Regulation (EEC) No 974/71 are suffered by the applicant, that is, the observed. amount of Lit. 354 669 paid in excess, 2. In the case of application of Article and to pay the legal rate of interest as 4a (2) of Regulation (EEC) No 974/71 well as the costs of the present to beef and veal, Member States shall proceedings.' always reduce the 'monetary' The Commission contends that the compensatory amounts by amounts Court should: to be established on the basis of the (a) Dismiss the application; import price calculated in accordance (b) Order the applicant to pay the costs. with Article 10 (1) of Regulation (EEC) No 805/68, and for frozen beef and veal on the basis of the world market price established in III — Submissions and argu­ accordance with Article 13 (1) (b) of ments of the parties that regulation which shall be communicated to them for this A — Application purpose.' Facts (c) Procedure The applicant maintains that the sums to The application was received at the Court be paid by way of equalization should Registry on 13 May 1975. The written have been calculated as follows: procedure followed the normal course. As regards the first transaction: Upon hearing the report of the Judge-Rapporteur and the views of the Import charge (8 % ad Advocate-General, the Court decided to valorem customs duty) Lit. 903 380 open the oral procedure without holding Compensatory amounts any preparatory inquiry. to be deducted (Lit. 46.70 per kilo) Lit. 797 869 However, the parties replied to certain questions raised by the Court. (Regulation No 649/73 of the Commission of 1 March 1973, OJ L 64 of II — Conclusions of the parties 9. 3. 1973, p. 7) Sum to be paid: Lit. 105 511 The applicant claims that the Court should: As regards the second transaction: Import charge (10 % ad 'State that Article 5 of Regulation (EEC) valorem) Lit. 1 461 900 No 1463/73 of the Commission is invalid on the ground of illegality: Compensatory amounts (a) In that the reduction of the to be deducted (Lit. compensatory amounts by the 135-41 per kilo) Lit. 1 403 930 amount to be deducted' is contrary to (Regulation No 974/73 the purpose of the system of of the Commission of 6 compensatory amounts; April 1973, OJ L 97 of (b) In that the abovementioned rule 12. 4. 1973, p. 1) infringes the provisions of Article 4a, Sum to be paid: Lit. 57 970

In pursuance of Article 5 of Regulation By Article 5 of Regulation (EEC) No No 1463/73 the rate of the compensatory 1463/73 the Commission reduced the amounts was reduced from 46.70 to Lit. monetary compensatory amounts to a 41.25 per kilo as regards the first level lower than the amounts fixed by transaction (Regulation No 905/73 of 23 the Council in order to compensate for March 1973) and from Lit. 136.78 to this difference. In the applicant's view 51.30 per kilo as regards the third this reduction therefore deprived the transaction (Commission Decision of 30 compensatory amounts of their purpose July 1973); this resulted in the applicant and led to increases in the prices of company's paying more than it imported goods, which resulted in considered itself bound to pay. discrimination against traders operating in countries with weak currencies and in Law favour of traders established in countries with strong currencies, thereby distorting 1. Infringement of the second and free competition within the common fourth indents of Article 155 of the market, in violation, inter alia, of the EEC Treaty, together with Article 1 general principles of Community law on of Regulation No 974/71 competition.

(ninth recital). In doing so the 4. Infringement of the fourth indent Commission infringed the rule laid down of Article 155 of the EEC Treaty, by the Council in Article 4a (1) of together with Article 145 Regulation No 974/71, that is, the deduction of the compensatory amounts Under the terms of Article 145 of the from the import charge, which is not the Treaty the power to take decisions same as a reduction of the compensatory necessary in order to attain the objectives amounts. defined by the Treaty is vested in the Council, while the Commission exercises The former operation effects an a power to take decisions within the equalization between the credit limits fixed by the third and fourth represented by the compensatory indents of Article 155 and by Article 162. amounts and the debit represented by In drawing up Article 5 of Regulation the import charge, whereas the latter No 1463/73 the Commission exercised a reduces the sum intended to compensate power which fell exclusively within the the difference between the conversion area reserved to the Council.

. .', the Commission decided that. compensatory amounts which exceed the As the compensatory amounts remain charge on imports fixed at a flat rate unchanged for a given period, the sum were to be reduced by this excess owed to the importer may be precisely amount. However, the import charge fixed in respect of each transaction, referred to by Article 4a represents a whereas the import charge is variable: as different concept from that of the import regards the product in question the charge which is fixed theoretically by the charge consists at present in the ad Commission as the weighted average of valorem customs duties alone and the the ad valorem customs duties imposed value varies according to the category on the various categories and qualities of and quality of the product imported. goods. Therefore, the legal basis for the amount to be deducted, which is fixed by For this reason, the cancellation of the the Commission, is not to be found in sum by which the compensatory Article 4a, as that amount does not amounts exceed the ad valorem customs reflect the excess amount of the credit duties and the reduction of the represented by the compensatory compensatory amounts at regular amounts as compared with the debit intervals by a sum fixed theoretically and represented by the import charges.

IBC v COMMISSION

The customs authorities must carry out a As regards the substance of the complicated calculation in order to application the Commission recalls that determine a hypothetical import Article 5 (1) of Regulation No 1463/73 charge, the amount of which implies that the Commission is to fix the represents the maximum monetary compensatory amounts which are compensatory amount. theoretically applicable by means of the Management Committee procedure. For Complications also arise in the case of their part, the Member States are exports to third countries, as in such required to compare, in practical terms, cases the customs authorities do not the amount which is theoretically normally carry out any check on the applicable and the import charge value of the product. imposed on the same product, for the purposes of the possible application of The considerations set out under (a) the alignment rule laid down by Article require the extension of the flat-rate 4a (2) of Regulation No 974/71. system to imports from third countries and as a result of those under (b) the The basis of the specific application of alignment referred to in Article 4a of this rule to beef and veal (Article 5 (2) of Regulation No 974/71 must be carried Regulation No 1463/73) is to be found in out at a flat rate. the existence of an ad valorem duty on

JUDGMENT OF 27. 1. 1976 — CASE 46/75

the Commission. The limits of this transaction in dispute, the import charge was fixed at Lit. 4 125. As the delegation are set by the aims of the compensatoriy amount for this product is system of compensatory amounts itself. Lit. 4 670 an adjustment amount of Lit. The regulation also lays down a series of criteria on which the Commission must 545 must be deducted from it in order to base its action. adhere to the maximum figure imposed by Article 4a (2) of Regulation No

Of course, could have been re-exported, for the Commission must also, if only example, to Germany, paying, also by indirectly, take account of the interests of way of a compensatory amount, Lit. individual traders, but its major concern 4 125. From an economic point of view must be to avoid 'abnormal movements such a difference might of itself justify of prices jeopardizing a normal trend of deflections of trade and it is clear that in business in agriculture' and 'disturbances such a situation there would no longer be in trade in agricultural products'.

referred to. With regard to a measure of a legislative nature involving choices as to (b) Incompatibility with the objectives of economic policy the Community cannot the compensatory amounts be liable unless a sufficiently flagrant violation of a superior rule of law for the As regards this point the Commission protection of the individual has occurred. emphasizes the importance of Article 4a

The applicant's interpretation, which The applicant company must further results in a separation between the explain wherein lies the wrongful act or intra-Community and extra-Community omission on the part of the Commission, markets, amounts to a contraction of the as it is in this instance impossible to ambit of Article 4a. Furthermore, it is deny that the Commission acted in order contrary to the aim of the rule, which to protect 'an overriding matter of public cannot be interpreted as intending to interest'. encourage deflections of trade. As regards the damage suffered, the The Commission refers to the case-law of Commission emphasizes that as the the Court, which confirms the assessment in question is based upon an discretionary nature of compensatory average value for beef and veal the amounts (Judgment of 15 January 1974 compensatory amounts are reduced when in Case 154/73, Becher v Hauptzollamt the prices of the goods imported exceed Emden, [1974] ECR 19), lays down in those adopted by the Commission, and a detail the aims of the system of profit results when the prices of compensatory amounts (Judgment of 12 imported goods are lower. November 1974 in Case 34/74, Société Roquette Frères v French State, [1974] C — Reply ECR 1217) and acknowledges the difficulties which result from a variation As regards the admissibility of the of the compensatory amounts which may application the applicant refers to the lead to deflections of trade, stating that opinion of the Advocate-General in Case 'compensatory amounts are conducive to 74/74, which emphasizes the the maintenance of a normal flow of independent nature of an action for trade under the exceptional damages. circumstances created temporarily by the monetary situation' (Judgment of 24 As the measure which it claims to be October 1973 in Case 5/73, unlawful may be imputed to the Balkan-Import-Export GmbH v Commission the applicant company Hauptzollamt Berlin-Packhof, [1973] considers itself obliged to bring the ECR 1113). action for damages against the Community institution responsible for More recently, the Court has recognized the measure which has injured it. that the Commission has a wide discretionary power in making the On the other hand, an action for the assessment provided for by the last recovery of undue payment implies that sentence of Article 1 (2) of Regulation the claim is addressed to the creditor, No 974/71 (Judgment of 14 May 1974 in from whom a refund is required of the Case 74/74 CNTA v Commission of the charge imposed. In this instance, as it

charged the applicant company the sum Moreover, as a result of the method of Lit. 333 231, the Italian State is the applied by the Commission Italian creditor by virtue of the direct effect of traders find themselves in a different the Commission regulation. position from traders in Member States with strong currencies. This leads to As regards the substance, the applicant deflections of trade according to the maintains that the provision of the quality of the goods and price Commission regulation in question discrimination on the basis of the which reduces the compensatory country of origin. amounts by an amount fixed at a flat rate is unlawful for the reasons put forward in As regards the overriding public interest the application. The defects which vitiate the applicant does not question the fact the regulation expose the wrongful act or that the Commission acted in order to omission on the part of the Commission achieve an aim of primary public which consists in the negligent importance. The existence of the performance of duties, which negligence wrongful act or omission is, however, not is of a particularly serious nature in that affected by the fact that there is no it takes the form of a general legislative intention to harm individuals and, measure which is in conflict with the therefore, no question of deliberate Council regulation.' injury. Although the Commission regulation is a measure having general application, it The fact that the applicant company adversely affected the applicant company, would not have suffered any loss had it which was obliged to pay a sum which purchased products of a lower value than was not provided for by the Council that calculated by the Commission regulation. (According to the reply, the cannot rule out the question of loss applicant was obliged to pay a sum suffered by the applicant. Even if other which exceeded by Lit. 333 231 that transactions involving an equivalent 'net payable under Regulation No 974/71 of subsidy' existed to compensate for the the Council). This constitutes the causal damage claimed, the loss would remain, link, in that without such negligent since the measure adopted by the action on the part of the Commission Commission does not automatically the applicant would have been required guarantee the trader a profit equivalent to the loss suffered. to pay the sum set out in the application.

interpreted in abstracto, that is, if the The combined provisions of paragraphs provision obliges the Commission to (1) and (2) of that article clearly show that reduce the compensatory amounts from the cancellation of the surplus portion of their inception. the compensatory amounts is to be carried out case by case and that an On any interpretation the solution to the abstract concept of the import charge is problem is offered by the first alternative. not permissible. Whilst the compensatory amounts must In intra-Community trade it is be fixed theoretically on the basis of an unnecessary to seek to compensate the average assessment of monetary difference between the price on the fluctuations, the import charge cannot be world market and the Community price. determined theoretically. The variable Similarly, it is unnecessary to avoid a nature of the value of a currency is not situation in which imports may be comparable to and does not have the effected at a price below that ruling on same effects as the verifiable variability of the world market. The prohibition the import charge imposed on beef and veal. contained in Article 4a (2) is thus inapplicable to intra-Community trade. The content and the purpose of this Moreover, if reasons of agricultural provision necessitate the drawing of a economic policy led the Community distinction between the two markets. authority to fix the average value of the product, the Council and not the When it mentions trade between Commission was competent to do this Member States, Article 4a is referring to (cf. Article 13 of Regulation (EEC) No the adjustment to be made between the 803/68 of the Council of 27 June 1968, compensatory amounts and the charge OJ, English Special Edition, 1968 p. on imports from third countries, that is, 170). to goods in free circulation. In the same way as for goods in free circulation, the In such cases the Council decided that problem of adjustment may arise in the value must also be adhered to by the respect of products imported from third customs authorities in order to ensure countries and processed in the Member equal treatment of importers as regards States. the collection of Common Customs Tariff duties (8th recital), thus avoiding As regards the question of the identical deflections of trade as a result of the nature of the compensatory amounts simultaneous application of two different applied in trade with third countries and methods of calculation. in intra-Community trade, the applicant maintains that this does not involve the

in the duties to be paid. The applicant company recalls that according to its argument the The claimed lack of facilities of the compensatory amounts are not reduced customs authorities does not correspond but are deducted from the import charge, to reality in view, for example, of the and that any surplus is cancelled. duties of those authorities under Italian The wrongful act or ommission on the law, which in fact include checks on the part of the Community institutions is value of the products for the purposes of demonstrated by the arguments which the application of VAT, which exists in the applicant puts forward. That act or all the Member States. ommission involves the exercise of a

that the compensatory amounts must not exceed the import charge. The limits to the Commission's powers which are set by the objective of the As regards the example of the system of compensatory amounts re-exportation of goods (cf. Commission's preclude the application of Article 4a defence), the applicant maintains that where those amounts do not exceed the when the goods were forwarded to import charge and where it is therefore Germany the Italian importer should unnecessary to prevent imports being have paid by way of compensatory made at prices which are lower than the amount the very sum paid to him by way world market price.

IBC v COMMISSION

On this point the Commission recalls The third transaction at issue shows the that compensatory amounts are applied in intra-Community trade 'to products difficulties raised by the proposed solution. In this case, as the originating in Member States and to products coming from third countries compensatory amounts were higher than which are in free circulation in Member the import charge, the importer made no States' (Article 9 (2) of the EEC Treaty). payment and had merely to forego the surplus. According to the applicant's However, the applicant limits its argument, on re-exportation of the same arguments to products in free circulation. goods it would have been necessary to In fact, the implementation of the pay the compensatory amounts fixed for solution suggested by the applicant, those products. which is already difficult in the case of goods in free circulation, becomes In this example too the applicant is impossible in the case of products disregarding the provisions of Article 4a originating in the Member States. (2) of Regulation No 974/71 and is Moreover, such a distinction is applying different compensatory unacceptable within the context of amounts to the same goods. Such a result Article 9 (2) of the Treaty. is clearly incompatible with Regulation No 974/71. If this is the solution The applicant does not explain how the proposed by the applicant the arguments import charge is to be calculated in order which appear in the defence concerning to determine the compensatory amounts the example of re-exportation to the applicable to goods submitted at the Federal Republic must be amended. internal frontiers of the Community. The observations put forward in the reply In effect, the applicant is limiting the concerning the feared deflection of trade application of Article 4a (2) of Regulation are not convincing. When it claims that No 974/71 to trade with third countries the Commission should have provided and disregarding it in relation to for the application of the compensatory intra-Community trade. The result of amounts without any reduction both at such an argument would be the the time of importation into Italy and of application of different compensatory re-exportation into Germany, the amounts, and, in the case of the third

transaction, to render all trade in beef Even supposing Article 5 of Regulation and veal impossible between Italy and No 1463/73 to be invalid, the Germany. non-contractual liability of the Commission is not automatically The Commission maintains that Article established. In introducing the system of 5 of Regulation No 1463/73, which was compensatory amounts the Council incorporated into Community legislation exercised powers conferred by the Treaty for the reasons set out above, is valid. It

the time. The Commission considered that the public interest must be regarded As regards the wrongful act or omission, as being of primary importance and that the Commission observes that the deflections of trade, which are harmful applicant's arguments introduce into for the common organization of the Community law the concept of a market in the sector in question, must presumption of error, whereas in fact the above all be avoided. As regards this Community can incur extra-contractual supremacy of the public interest, the liability solely on the basis of a causal Commission refers to the opinion of the link. Advocate-General and to the judgment of the Court of 14 May 1975 in Case 74/74 The difficulties alleged by the applicant CNTA v Commission of the European were not caused by negligent or Communities, [1975] ECR 533). imprudent action on the part of the In this instance the overriding interest of Commission. In adopting the provision the safeguarding of the proper in question the Commission was aware

IBC v COMMISSION

Law

1 In an application lodged on 13 May 1975 the applicant undertaking claims compensation for the damage which it allegedly suffered as a result of the application by the Italian customs authorities of Regulation No 1463/73 of the Commission of 30 May 1973 laying down detailed rules for the application of 'monetary' compensatory amounts (OJ 1973, L 146, p. 1); the applicant asserts that Article 5, which was applied in this instance, is void on the ground of illegality in that it unduly reduced the compensatory amounts on imports.

2 It is claimed that as a result of the application of this provision the applicant was wrongly required to pay certain sums by way of equalization between the import charge and the monetary compensatory amounts; it is the repayment of these sums which is sought in this action.

3 The action in fact concerns decisions of the Italian authorities adopted in implementation of Community rules which the applicant regards as unlawful. It thus concerns the legality of the imposition of the sums in dispute by the national authorities responsible for the implementation and enforcement of the provisions concerning monetary compensatory amounts and seeks the reimbursement, by the Community rather than by the national authorities, of the sums which are said to have been improperly charged.

4 The provisions of these rules lay down criteria for the calculation of sums payable by way of equalization between the import charge and the compensatory amounts and therefore leave no doubt that the actual assessment and imposition of the sums due are matters for the national authorities.

On those grounds,

THE COURT

hereby:

1. Dismisses the application as inadmissible.

2. Orders the applicant to pay the costs.

Lecourt Kutscher Donner