C-95/75

JUDGMENT OF THE COURT 9 MARCH 1976 1

Effem GmbH

v Hauptzollamt Lüneburg (preliminary ruling requested by the Finanzgericht Hamburg)

Case 95/75

Summary

Agriculture — Common organization of the market — Cereals — Compound feedingstuffs for cattle — Quantity of cereals included — Taking into account — Standard export levy — Fixing — Unacceptability (Regulation EEC No 120/67, Article 1)

on the validity of Regulations (EEC) Nos 311/74 of 6 February 1974 (OJ L 34, 1974, p. 19), 317/74 of 7 February 1974 (OJ L 35, 1974, p. 8), 381/74 of 14 February 1974 (OJ L 43, 1974, p. 9), 410/74 of 18 February 1974 (OJ L 46, 1974, p. 5) and 427/74 of 20 February 1974 (OJ L 49, 1974, p. 15) of the Commission fixing the export levies on cereals,

1 — Language of the Case: German.

JUDGMENT OF 9. 3. 1976 — CASE 95/75

THE COURT

composed of: R. Lecourt, President, H. Kutscher and A. O'Keeffe, Presidents of Chambers, A. M. Donner, J. Mertens de Wilmars, M. Sørensen and Lord Mackenzie Stuart, Judges,

Advocate-General: G. Reischl

necessary measures may be taken. Regulations (EEC) Nos 317/74 of 7 February 1974, 381/74 of 14 February These measures were laid down in the 1974, 410/74 of 18 February 1974 and form of general rules by Regulation 427/74 of 20 February 1974. These (EEC) No 1968/73 of the Council, of 19 regulations likewise do not show whether July 1973 (OJ L 201, 1973, .p. 10) as the starch content of the sweetened amended by Regulation (EEC) No forage is determined on the basis of the 2632/73 of the Council, of 28 September cereals which they contain, within the 1973 (OJ L 272, 1973, p. 18). meaning of Annex A to Article 1 of Regulation No 120/67/EEC, or whether During the 1973/74 marketing year, in that content is defined in relation to view of the increase in the price of other ingredients containing starch but cereals on the world market, which which do not come within the common threatened to create a situation of organization of the market in cereals.

EFFEM v HAUPTZOLLAMT LÜNEBURG

and Switzerland 405 537 kg of preparations used for feeding domestic The court making the reference wonders animals, coming under heading 23.07 B I whether in the present case it may be a 1 of the Common Customs Tariff, and accepted that the Commission has 188 048 kg of preparations coming under the power, which the Council is heading 23.07 B I b 1. On the basis of acknowledged as having by the these exports, the customs office at judgments of the Court of 24 October Verden by an assessment of 29 April 1973 (Balkan, 5/73 [1973] ECR 1091 and 1974 charged the sum of DM 57 028-60 Schlüter, 9/73, [1973] ECR 1135), of by way of levy. making an overall evaluation of the advantages and disadvantages of the On 27 May 1974, the plaintiff in the system to be established in a situation main action brought a direct action developing constantly and more or less against that assessment, alleging that the unpredictably. Here the Commission had flat-rate tariff fixed by the regulations known since July 1973 that world price applicable in the present case was levels were liable to lead to exports from unlawful and that only products under the Community, and had the time to heading 23.07 B I a 1 contained cereal improve the levy machinery. constituents, whereas those under heading 23.07 B I b 1 certainly contain In accordance with Article 20 of the

starch, wheat red dog, wheat germ, maize Protocol on the Statute of the Court of swelling starch and maize gluten, but no Justice of the EEC, written observations cereals within the meaning of Chapter 10 were lodged on 24 October 1975 by or of headings 11.01 and 11.02. If the the Commission of the European amount of the disputed levy had been Communities, and on 13 November calculated on the basis of Regulation No 1975 by the plaintiff in the main action. 433/74, it would have amounted to a sum of DM 4 864-12, which the plaintiff states The Court, on hearing the report of the it is ready to pay. Judge-Rapporteur and the views of the Advocate-General, decided to open the By an order of 5 August 1975, received at oral procedure without any preparatory the Court Registry on the following 3 inquiry.

not constitute sweetened forage in the could not confuse the products in sense of mixtures of different types of dispute with those which might be cereals or cereal products, but are manufactured in order to evade the rules composed rather of different types of and the levy. It knew that, for forage meat and tripe. The disturbances under tariff heading 23.07, gradations occurring in the cereals sector could were necessary, within the framework of therefore only have affected them to a the organization of the market in cereals, small extent. on the basis either of the starch content or of the cereals content. That follows The fact of not having taken account from the differentiations existing in the of this situation amounts to an Common Customs Tariff, but above all infringement of the system of the from those contained in the Annex to common organizations of the markets Regulation (EEC) No 311/74 and in and consequently of Articles 39 and 40 the later regulations. In fact the of the EEC Treaty, of Article 19 of differentiations on the basis of the starch Regulation No 120/67/EEC and of content are set out therein, but they were Regulations (EEC) Nos 1968/73 and not given concrete expression in the rates 2632/73. of levy. It is incomprehensible that in spite of the haste with which the In applying the lawful and differentiated regulations had to be adopted, such a tariff of Regulation (EEC) No 433/73, the differentiation could not have been plaintiff in the main action should have effected as was the case shortly paid a levy of only DM 4 864-21 instead afterwards. of DM 57 028-60. A number of ingredients giving rise to the levy in The judgments of the Court of Justice in accordance with Regulation (EEC) No Cases 5/73 and 9/73 quoted above 311/74 and later regulations, exported cannot be relied upon, for they concern a separately, were not made subject to the completely different situation. levy: rice-meal, flour, broken rice, maize swelling starch and maize gluten. The Commission is of opinion that there Certainly other ingredients, exported is no legal prohibition on fixing one and separately, were made subject to the levy, the same rate of levy for several products but because of the small proportion when the situation of the market

secondary products, does not necessarily wheat germ, rice-meal and barley groats allow it to be concluded that there is were exempted from it. any such duty to differentiate. The requirement thus laid down is satisfied As the crisis became more acute, the when the Commission adopts rules amounts of the levies were raised, in the differentiated in accordance with the same way as it became increasingly tariff headings, without making other necessary to take preventive steps in distinctions within a single tariff heading. respect of the difficulties which might occur also in the sector of compound Such a requirement would be contrary to feedingstuffs for cattle containing cereals. the spirit of Regulation No 1968/73, the Further, experience has shown that every provisions of which are characterized not strengthening of safeguard measures in by obligations and rigid criteria but by external trade led to attempts to avoid the wide-power of discretion and of these with the assistance of substitute decision which they grant to the products of the same value coming under Commission within a framework.defined tariff headings exempted from duties or by directives which are very general in subject to lower duties. scope, especially in relation to the policy of the organization of the market. The Having regard to the increase in Commission could for example fix the quantities of compound feedingstuffs for amount as low as possible, and base itself cattle which were the subject of export on average values when the different licences: September 1973: 7 505 metric products and ingredients cannot be tons, October 1973: 14 686 metric tons, identified and differentiated with November 1973: 16 322 metric tons, precision because of their large number. December 1973: 18 459 metric tons, and In order that the tariff of levies should January 1974: 19 790 metric tons, the remain practicable, it is impossible to Commission believed that this showed make infinite differentiations. And why an increase in these exports which are uniform rates of levy permissible for displayed striking analogies with the several products gathered under a tariff trends in world market prices and with subheading, but not in respect of a whole the variations in export levies. tariff heading? Thus the levies fixed in the disputed regulations are all subject to Having regard to the number of products judicial supervision from the point of coming under tariff heading 23.07 liable view of a misuse of powers. to contain any percentage of any cereal product in any combination, it was

All the basic cereals and then composition of which were known. But all the products derived from them by then it would not be able to keep control general processing, to the exclusion of of the transactions in that way and could compound feedingstuffs for cattle, were only react to events as they occurred. subject to the levies. It is incorrect that Further, to the extent that it was cereal products used by the plaintiff in impossible to say with sufficient certainty the main action, such as wheat red dog, that there were difficulties only for cattle

type. The Advocate-General delivered his In these circumstances the Commission opinion at the hearing on 17 February chose an amount based on 75 % of the 1976.

Law

1 By an order dated 5 August 1975, received at the Court on the following 3 September, the Finanzgericht Hamburg referred, pursuant to Article 177 of the EEC Treaty, a question for a preliminary ruling on the validity of Regulations (EEC) Nos 311/74 of 6 February 1974 (OJ L 34, 1974, p. 19), 317/74 of 7 February 1974 (OJ L 35, 1974, p. 8), 381/74 of 14 February 1974 (OJ L 43, 1974, p. 9), 410/74 of 18 February 1974 (OJ L 46, 1974, p. 5) and 427/74 of 20 February 1974 (OJ L 49, 1974, p. 15) of the Commission fixing the export levies on cereals. That question was raised within the framework of an action against an assessment amounting to DM 57 028-60 addressed to the plaintiff in the main action by the customs administration by way of levies on

EFFEM v HAUPTZOLLAMT LÜNEBURG

the export to third countries of preparations used in the feeding of domestic animals, under headings 23.07 B I a 1 and 23.07 B I b 1 of the Common Customs Tariff.

2 The question is raised whether Regulations (EEC) Nos 311/74 of 6 February 1974, 317/74 of 7 February 1974, 381/74 of 14 February 1974, 410/74 of 18 February 1974 and 427/74 of 20 February 1974 of the Commisson are valid in so far as they fix, in their annexes, a uniform rate of levy of 26-25 u.a. per metric ton for the products listed under tariff heading 23.07 without taking account in each case of the starch content or whether the rate of levy applied to the products under this tariff heading should have been differentiated as was done in the provisions contained in the annex to Regulation (EEC) No 433/74 of 21 February 1974 (OJ L 50, 1974, p. 10) which was made applicable to the same products as from 25 February 1974.

JUDGMENT OF 9. 3. 1976 — CASE 95/75

5 Consequently the fixing of a standard levy which is applicable irrespective of the quantity, whether negligible or considerable, of cereals included in the products concerned cannot comply with these provisions. An instance of this would be a levy of 26·25 u.a. per metric ton applicable to products containing only a small quantity of cereals, whilst, moreover, the standard amount of levy was several times in excess of the value of these products.

6 The graduation of the levy appears all the more possible since Regulation (EEC) No 433/74 fixes, inter alia for the same products, amounts differentiated in respect of five groups of preparations according to their content by weight in cereal products (that is to say: from 5 % to 15 %, from 15 % to 30 %, from 30 % to 50 %, from 50 % to 65 %, and exceeding 65 %) and fixes no amount for such preparations having a content by weight in cereal products equal to or less than 5 %. At the time when Regulation (EEC) No 433/74 was adopted the cereals market continued to be disturbed. In fixing a single standard amount for all the products coming under the abovementioned tariff heading, the contested regulations did not take account of the quantities of cereals necessary for their manufacture.

7 The deficit situation on the cereals market which the Commission had to

meet at the time when the first disputed regulation was published had been known to it since August 1973 and had given rise as from that time to the application of export levies in respect of certain types of cereals.

On those grounds,

THE COURT,

in answer to the question referred to it by the Finanzgericht Hamburg hereby rules:

Regulations (EEC) Nos 311/74 of 6 February 1974, 317/74 of 7 February 1974, 381/74 of 14 February 1974, 410/74 of 18 February 1974, and 427/74 of 20 February 1974 of the Commission are invalid to the extent to which they fix for the products listed under tariff heading 23.07 a standard levy applicable irrespective of the quantity, whether negligible or substantial, of cereals contained in these products.

Lecourt Kutscher O'Keeffe

Donner Mertens de Wilmars Sørensen Mackenzie Stuart