C-26/77

JUDGMENT OF THE COURT (SECOND CHAMBER) 8 NOVEMBER 1977 <apnote>1</apnote>

Balkan-Import-Export GmbH v Hauptzollamt Berlin-Packhof (preliminary ruling requested by the Finanzgericht Berlin)

'Levies — Milk products — Bulgarian cheese of sheep's milk'

Case 26/77

Agriculture — Common organization of the markets — Milk products — Cheese of sheep's milk — Importation from third countries — Levy — Fixing — Detailed rules — Special system of Article 8 of Regulation No 823/68 — Preferential treatment — Importer — Absence of vested interest — Needs of the common organization of the markets and the common commercial policy — Freedom of action on the part of the Community

The preferential treatment from which at prejudice to any undertakings into which a given time certain milk products, in it may have entered with regard to third particular cheese of sheep's milk countries, reserve its freedom to imported from third countries, have determine the conditions of importation benefited in application of a special for agricultural products originating in system fixing the levies gives an importer third countries, having regard to the no vested right to the maintenance of the common organization of the agricultural advantages which he has thereby gained. markets and the needs of its commercial The Community must always, without policy.

JUDGMENT OF 8. 11. 1977 - CASE 26/77

on the interpretation and the of provisions in regulations of the validity Council and Commission on the computation and fixing of the levy on a

milk product,

THE COURT (Second Chamber)

composed of: M. Sørensen, President of Chamber, P. Pescatore and

A. Touffait, Judges,

as follows: On 18 August 1976 the company brought an action without preliminary proceedings for a partial annulment of

I — Facts and written procedure that notice.

On 28 July 1976, in fulfilment of a It takes the view that the levy demanded long-term exclusive dealing agreement of it is excessive since it is based on too

concluded with the Bulgarian State low a free-at-frontier price. A correct

trading undertaking Rodopa-Impex, application of Community law, in Balkan-Import-Export GmbH, whose particular of Regulation No 804/68 of

registered office is in Berlin, imported the Council of 27 June 1968 on the

Hauptzollamt Berlin-Packhof demanded products (OJ, English Special Edition from Balkan-Import-Export GmbH 1968 (I) p. 199), as amended by besides monetary compensatory amounts Regulation No 467/75 of the Council of

BALKAN-IMPORT-EXPORT v HAUPTZOLLAMT BERLIN-PACKHOF

27 February 1975 (OJ No L 52, p. 10), Commission of 24 July 1968 laying and of Regulation No 1073/68 of the down detailed rules for determining Commission of 24 July 1968 laying free-at-frontier prices and for fixing down detailed rules for determining levies in respect of milk and milk

free-at-frontier prices and for fixing products (OJ, English Special Edition levies in respect of milk and milk 1968 (II), p. 359) in that, although products (OJ, English Special Edition aware of the movement of offer prices

1968 (II), p. 359), would in the present for products under tariff subheadings

case have led to a levy of only DM 04.04 E I (b) (3) and (4) of the

law, in spite of non-alignment of the respectively?

free-at-frontier offer prices for 4. It there is held to be a special

Kashkaval and cheese of sheep's milk (preference) rule: for the 1976/77 milk year, a claim (a) Are free-at-frontier prices for the

that the levy in respect of goods said products to be fixed only by imported by it on 30 July 1976 agreement with the third countries

should be calculated at a rate of DM concerned or has the plaintiff

126·41 per 100 kg and not as under Article 14 of Regulation demanded by the defendant at a rate (EEC) No 804/68 and the

subheadings 04.04 E I (b) (3) and (4) of Commission obliged in fixing the Common Customs Tariff a prices for the 1976/77 milk year to

preference rule within the meaning of raise the free-at-frontier prices for Article 14 (6) of the aforesaid products under tariff subheadings

regulation or a rule fixing the levy 04.04 E I (b) (3) and (4) of the

within the meaning of Article 14 of Common Customs Tariff to at

the aforesaid regulation? least 150/135 u.a.?

3. In the event of its being a normal levy rule: The order of the Finanzgericht Berlin Have the Commission and the was registered at the Court on 23 Council of the European February 1977. Communities infringed Article 14 of

After hearing the report of the (b) As a special rule in relation to levies Judge-Rapporteur and the views of the Article 8 of Regulation No 823/68 does Advocate-General the Court decided to not, however, represent a preference rule

open the oral procedure without any in favour of a particular country of origin. preparatory inquiry. Article 14 (6) of Regulation No 804/68 'special'

does not state what is in the

The plaintiff in the main action was fixing of the levies; Article 8 of

nevertheless requested to supply certain Regulation No 823/68 is applied as

figures to the Court before the opening against all third countries to products of

the Rules of Procedure to the Second That principle, which is laid down in Chamber. Article 14 (3) of Regulation No 804/68, is the very basis of Article 8 of Regulation No 823/68. The special nature could

II — Written observations sub­ perhaps be seen in the fact that the

mitted to the Court free-at-frontier offer prices were fixed for a longer period; there can be no

Balkan-Import-Export GmbH, the objections to this, providing that the

plaintiff in the main action, makes in free-at-frontier offer prices which are

essence the following observations: fixed are aligned as far as possible with

(a) The levy on cheese of sheep's milk regard according to objective criteria to

is determined by Article 8 of Regulation all information supplied to it, even by No 823/68 as amended by Regulation the importer concerned, relating to the

No 467/75. Regulation No 823/68 is actual offer prices which apply.

BALKAN-IMPORT-EXPORT v HAUPTZOLLAMT BERLIN-PACKHOF

The levies within the meaning of Article offer price according to objective criteria 8 of Regulation No 823/68 are also fixed even if Regulation No 1073/68 did not

according to objective criteria, namely apply to the fixing of such prices in the according to the difference between the context of Article 8 of Regulation No threshold price and the free-at-frontier 823/68. offer price. A Community citizen who

require any application on the part of marketing year the Commission did third countries any or agreement with neither, although it knew that offer

them. The Commission fixes the levies prices had increased since 1975 and that

independently within the framework of threshold prices had increased 173·80 u.a.

the special provisions referred to in on 1 February 1975 to 194 u.a. per 100 Article 14 (6) of Regulation No 804/68, kg on 16 September 1976. Since, according to objective price criteria. The moreover, the fixed minimum price had view which the Advocate-General took in remained the same, this had led to a

his opinion in Case 55/75, continual increase in the levies, which

Balkan-Import-Export ([1976] ECR 34), had increased from 170·80 u.a. in to the effect that it is for the exporting January 1974 to 202·05 u.a. in November country to ensure the necessary 1976. That increase had a very negative agreement between the minimum prices effect on the plaintiff's turnover figures fixed and the actual offer prices, is not for cheese of sheep's milk.

JUDGMENT OF 8. II. 1977 - CASE 26/77

increase in actual offer prices but also the distinction between the two levy systems not inconsiderable increase in threshold which the basic Regulation No 804/68 prices. Contrary to the existing practice on milk and milk products offers as

of preserving a balance between alternatives.

increased offer prices and increased 'general'

threshold prices, the Commission The system for calculating the

proposed in its decisions with regard to levy is laid down in the second

minimum of 150 u.a. in order to take Community free-at-frontier offer price of the assimilated product itself is as a rule account of the actual increase in prices irrelevant for calculating the levy on that and the increase in the threshold prices. product.

The Council observes that in framing the The second subparagraph of Article 14 questions and the grounds therefor the (3) of Regulation No 804/68 allows the Finanzgericht Berlin largely followed the

observations and submissions as to the levy on individual products to be fixed

by 'special provisions'. In practice only law contained in the claim and 'assimilated products'

are involved. It is committed various errors. accordingly the Council which is responsible for

The case in the main action is concerned adopting such provisions on a proposal

No 823/68 (OJ L 249, p. 13) that there threshold price of the pilot product less was a special provision for cheese of the free-at-frontier price of the

sheep's milk. The objective of that assimilated product.

special provision was to permit a

reduction in the levy on cheese of The levy is intended, however, to raise

sheep's milk in relation to the levy rate the price of a product applying outside calculated to the general the Community to the desired level according system in respect of the pilot product, within the Community. As the difference

'account being taken of the typical between these two levels it must be That in characteristics'

1976 as amended by Regulation No legislature, for reasons of administrative

467/75. Article 2 of that regulation simplicity and because of 'sufficiently provides that where products falling comparable characteristics for trade

within subheading 04.04 E I (b) (4), purposes', related 'assimilated products'

originating in and coming from third to those levels for the levy, it simply countries, are imported into the intended to stress that the levy applicable Community at a price of not less than to those products must be equal to that

115 u.a. per 100 kg the levy per 100 kg applied to the pilot product; on the other

of product shall be equal to the threshold hand, it basically left the possibility open

to individual cases is reserved to the of the assimilated product.

national court; the question cannot

therefore be answered by the Court in The significant point is that the special

the form in which it is put. levy rules for cheese of sheep's milk have been completely divorced from the

(b) The Finanzgericht Berlin asks the concept of the 'free-at-frontier price'

question whether, as the plaintiff in the within the meaning of Article 14 (3) of

is therefore as

JUDGMENT OF 8. 11. 1977 - CASE 26/77

irrelevant to the calculation of the levy in amount applicable under the special

question here as the free-at-frontier offer provision of Regulation No 467/75 did price actually paid by the plaintiff in the not diminish during the period

main action or the usual market price the summer of 1976 but preceding ruling outside the frontiers of the remained constant at about 60 u.a.

Community.

product, providing that in doing so it and the second indent of Article 14 (6) of does not depart from the guidelines laid Regulation No 804/68. down in the basic regulation or from Articles 39, 42, 43 and 110 of the EEC Third question Treaty. The Council has no reason for

thinking that it exceeded its powers

when the special Since this question is asked only in the originally adopting event of Article 8 of Regulation No provisions, when subsequently amending 823/68 being a rule under the general them or even by abstaining from making levy system it does not arise. the amendments alleged to have been necessary.

Moreover, the question seeks a

The special rules for cheese of sheep's declaration that the institutions of the

milk and the frequency and extent of Community have failed to fulfil their

reduction of certain rates of levy otherwise applicable under general (a) Any amendment of the levy on

cheese of sheep's milk laid down in provisions. Where the Council Article 8 of Regulation No 823/68 is the deliberately refrains subsequently from responsibility of the competent adjusting special provisions of that kind institutions of the Community. Neither to price variations, the reasons is that the the countries outside the has, from producing Community the commercial

point of view, less interest in Community nor private persons have any making right to request such amendment. concessions to the third producing country.

(b) In so far as the levy on cheese of

Moreover, the difference between the sheep's milk was fixed by Article 8 of

levy fixed for cheese of sheep's milk by Regulation No 823/68, Regulation No the general system and the reduced 1073/68 dose not apply.

main action of a misuse of powers does The rules for calculating the levy do not not support a claim that the levies should place on the Commission or on the be reduced: Council an obligation to calculate the

amounts of levy on cheese of sheep's Article 8 is an instrument of common milk on the basis of the purchase or offer trade policy towards third countries by prices actually paid by the plaintiff in the which the Community can take account main action. of the wishes of particular exporting countries. It is not a provision enabling The cheese of sheep's milk imported by the Community to meet obligations the plaintiff in the main action falls which it may have towards individual within Group 11, as an assimilated importers the fulfilment of which such product. The levy normally payable importers may require by judicial means. under Article 14 of Regulation No In exercising its discretion in deciding 804/68 is calculated according only to whether and to what extent the the market factors and free-at-frontier importation of Bulgarian cheese of prices of the pilot product of that group sheep's milk should be favoured by a ('Gouda'-type cheese) and not according preferential levy the Council has to to the difference between the threshold balance the trade policy interests of the price for that group and the import Community against the objectives prices for cheese of sheep's milk paid by pursued by the common agricultural the plaintiff in the main action. policy and does not have to subordinate

its policy to the commercial interests of a

to protect the Community market. sheep's milk has not been matched by a Continual adjustment of that amount to corresponding expansion of outlets.

fluctuations in the import prices paid by Because of the increasing difficulties in the plaintiff in the main action is not the exportation of cheese of sheep's milk

provided for, is not required and has so originating in the Community the

far not been undertaken. Commission has not attempted to give

JUDGMENT OF 8. 11. 1977 - CASE 26/77

additional encouragement to the with the 'free-at-frontier prices', which

that would not have the result that the application of Article 8 of Regulation No

levy would then have to be 823/68 cannot, even on a purely logical necessarily calculated on the basis of the import view, infringe the rules determining the

prices paid. If, for legal reasons, free-at-frontier prices laid down in actually the special rule contained in Article 8 Regulation No 1073/68. did not apply then the amount of levy fixed according to Article 14 (3) of Fourth question

Regulation No 804/68 would apply.

This question is devoid of object.

Second question

Communities, represented by its Legal Third question Adviser, Peter Gilsdorf, in place of Peter

Kalbe, presented oral observations at the

The levy provided for in Article 14 (3) of hearing on 14 July 1977 and answered

put by the Court. Regulation No 804/68 applies only 'if it questions

is not fixed by special provision'. Article 8 of Regulation No 823/68 is such an The Advocate-General delivered his exclusive special provision. The system opinion at the hearing on 6 October

provided for thereby has nothing to do 1977.

of the Commission laying down detailed rules for of 24 July 1968

determining free-at-frontier prices and for fixing levies in respect of milk and milk products (OJ, English Special Edition 1968 (II), P. 359) in relation to the

fixing of the levy on a consignment of cheese of sheep's milk falling within

subheadings 04.04 E I (b) (3) and (4) of the Common Customs Tariff imported

on 28 July 1976 from Bulgaria.

2 The parties to the proceedings have stated that contrary to the particulars

respect it claims that the fact that the responsible Community authorities did not align the free-at-frontier offer price, on which the calculation of the levy

is based, on the movement of the actual prices had the result that an

unjustified burden was placed on the plaintiff and the volume of its imports

adversely affected. It therefore demands that the levy be adjusted in

accordance with the actual import price.

4 According to the second subparagraph of Article 14 (3) of Regulation

Finanzgericht.

The second question, to the distinction between the relating general system and the special system

5 In substance, the second question asks whether the system applied under

Article 14 of Regulation No 804/68 to products falling within subheadings

JUDGMENT OF 8. 11. 1977 - CASE 26/77

04.04 E I (b) (3) and (4) of the Common Customs Tariff is a special provision

shall be determined for each group. Those groups and pilot

products were determined by Regulation No 823/68, Annex I to which lists

12 groups, five of which (Groups 7 to 11) comprise the various kinds of

cheeses with the pilot products listed alongside. Consideration of the tariff

headings to which Regulation No 823/68 in its original version refers shows

that the kinds of cheese with which the main action is concerned originally fell within Group 11 and as such were subject to the general system. The

No 823/68 in the version applying at the time of the importation in question

provides for a special system for fixing the levy in relation to certain third countries in so far as the products fall within certain tariff headings, including subheadings 04.04 E I (b) (3) 'kashkaval' and (4) 'cheese of sheep's milk'.

Having regard to a misunderstanding on the part of the plaintiff in the main action to which the Council and Commission have rightly drawn attention it should be stressed in this connexion that that system (in contrast to the

general system based on a comparison between the import price and the

threshold price) does not relate to the import price but only to a 'minimum price'

as a condition of application and to the threshold price as the basis for From'

system applicable at the time of the facts with which the main action is

concerned to products falling within subheadings 04.04 E I (b) (3) and (4) of the Common Customs Tariff in the context of Article 14 of Regulation No 804/68 of the Council of 27 June 1968 constitutes a 'special provision'

within the meaning of the second subparagraph of Article 14 (3) and the

second indent of Article 14 (6), as subsequently defined by Article 8 of

Regulation No 823/68 as amended by Article 2 of Regulation No 467/75 of

27 February 1975.

special provision pursuant to Article 8 of Regulation No 823/68) asks at letter (a) whether the free-at-frontier prices for the said products are to be fixed only by agreement with the third countries concerned or whether, under Article 14 of Regulation No 804/68 and the subsequent regulations thereto, the plaintiff, has a right to ask the Commission to align the prices in question.

11 Article 8 of Regulation No 823/68 provides that where, on importation into

the Community, the price of the products in question is not less than 130

u.a. or, where appropriate, 115 u.a. per 100 kg, as is accepted to be the case

here, the levy per 100 kg shall be equal 'to the threshold price less 130 u.a.'.

According to the wording of this provision, therefore, the levy is equal to the

interested third countries or an importer could put forward with regard to a

price factor extraneous to the detailed rules for calculation adopted by Regulation No 823/68.

12 This part of Question 4 must accordingly be answered to the effect that under

the special system of Article 8 of Regulation No 823/68, in the version

applicable at the time of the facts with which the main action is concerned, the levy must be calculated on the basis of the threshold price fixed pursuant

to Regulation No 804/68 without regard to the free-at-frontier price of the

free-at-frontier prices are irrelevant for the determination of the levies in the

context of the special system under Article 8 of Regulation No 823/68, which, as stated, rests not on the difference between the threshold price and

the free-at-frontier price of the pilot product but on the threshold price less a

standard amount of 130 u.a. per 100 kg.

15 Since the provisions of Regulation No 1073/68 do not apply in fixing the

levy imposed on the importation of the product in question, this part of the question is devoid of object.

criteria on the basis of the threshold price and without any regard being paid to the actual offer price on importation into the Community. With regard to

the arguments put forward by the plaintiff in the main action in this respect

it must be observed that not only is what it says completely irrelevant, but that the application of the special system provided for in Article 14 of the

basic Regulation No 804/68 and implemented by Article 8 of Regulation No 823/68 as subsequently amended ensures preferential treatment for the goods

in question in comparison falling within the general system, even with goods

after the increase in import prices stressed by the plaintiff. If the preferential

18 This part of Question 4 must accordingly be answered to the effect that, there

was no obligation on the competent institutions of the Community at the

time of the facts with which the main action is concerned to amend the

import system applicable under Article 8 of Regulation No 823/68 to

products falling within tariff subheadings 04.04 E I (b) (3) and (4).

Application to reopen the oral procedure

applicable to certain kinds of cheese but left the minimum

prices of kashkaval and cheese of sheep's milk unchanged. In this respect it

must be observed not only that that measure was adopted after the levies in question were fixed but also that it is irrelevant to the questions referred to

the Court by the Finanzgericht Berlin with regard to taking account of the

free-at-frontier price as determined by Regulation No 804/68. This further

submission, which rests on a misunderstanding of the principles relating to the temporal application of legal rules and on a confusion between the

21 Further the plaintiff in the main action alleges that it is in possession of a

copy of a letter from the Bulgarian Government to the Commission

informing the latter of the movement in prices of cheese of sheep's milk and kashkaval in order to obtain an amendment of the import system. Such

information might lead to a future amendment of the system in question by the competent Community authorities, but it has in any event no influence

The on the outcome of the action pending before the Finanzgericht Berlin. document produced is therefore irrelevant to the present proceedings.

22 For these reasons there is no cause to accede to the application to reopen the

On those grounds,

THE COURT (Second Chamber)

in answer to the questions referred to it by the Finanzgericht Berlin by order of 10 February 1977, hereby rules:

1. The system applicable at the time of the facts with which the

main action is concerned to fallingproducts within

subheadings 04.04 E I (b) (3) and (4) of the Common Customs Tariff in the context of Article 14 of Regulation No 804/68 of

amended by Article 2 of Regulation No 467/75 of the Council

of 27 February 1975.

2. Under the special system of Article 8 of Regulation No 823/68 in the version applicable at the time of the facts with which

the main action is concerned, the levy must be calculated on the basis of the threshold price fixed pursuant to Regulation

No 804/68 without regard to the free-at-frontier price of the

products subject to that special system, provided only the that

Delivered in open court in Luxembourg on 8 November 1977.

A. Van Houtte M. Sørensen

Registrar President of the Second Chamber

OPINION OF MR ADVOCATE-GENERAL REISCHL <apnote>1</apnote> DELIVERED ON 6 OCTOBER 1977

Mr President, the importation of milk products from Members of the Court third countries, in this case the importation of cheese of sheep's milk

The reference for a preliminary ruling on from Bulgaria. which I have to give an opinion today is