C-27/77
ECLI:EU:C:1977:143
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JUDGMENT OF THE COURT OF 29 SEPTEMBER 1977 1
Compagnie Cargill v Office National Interprofessionnel des Cereales (ONIC)
(preliminary ruling requested by the Tribunal Administratif de Paris)
'Monetary compensatory amounts'
Case 27/77
In Case 27/77
Reference to the Court under Article 177 of the EEC Treaty by the Tribunal Administratif de Paris for a preliminary ruling in the action pending before that court between
Compagnie Cargill , Paris,
and
Office National Interprofessionnel des Cereales (ONIC)
on the validity of Regulation (EEC) No 2042/73 of the Commission of 27
July 1973 making transitional provisions consequential upon the application
on 4 June 1973 of the new system of monetary compensatory amounts,
THE COURT
composed of: H. Kutscher, President, A. M. Donner and P. Pescatore, Presidents of Chambers, J. Mertens de Wilmars, M. Sørensen, Lord Mackenzie Stuart, A. O'Keeffe, G. Bosco and A. Touffait, Judges,
Advocate-General: J.-P. Warner Registrar: A. Van Houtte
gives the following
1 — Language of the Case: French.
JUDGMENT OF 29. 9. 1977 - CASE 27/77
JUDGMENT
Facts and issues
The facts, the procedure and the written trade and on the other for trade with
observations submitted under Article 20 third countries in order to avoid
of the Protocol on the Statute of the discrimination between Member States. Court of Justice of the EEC may be By virtue of the exact alignment of the summarized as follows: official rate for the franc as against the
unit of account and the actual rate within
the 2.25 % limit, in France monetary I — Facts and procedure compensatory amounts are applicable
neither on exports nor on imports. A system of monetary compensatory amounts on imports and exports was In accordance with Article 3 of
instituted by Regulation (EEC) No Regulation (EEC) No 1112/73 that
974/71 of the Council of 12 May 1971 regulation only became applicable on 4 (OJ English Special Edition, 1971 (I) p. June 1973 as is provided by the 257). This system was intended to correct implementing Regulation No 1463/73 of fluctuations in excess of those permitted the Commission of 30 May 1973 (OJ L
by international rules. Detailed rules for 146, p. 1). The new system obliges traders the application of the system were to be to cover exchange risks themselves
laid down by Commission regulations. whereas under the former system they a could reckon on compensatory amount. Regulation (EEC) No 1112/73 of the In order to mitigate these prejudicial
Council of 30 April 1973 (OJ L 114, effects Commission, by means of the
p. 4) amended and simplified the Regulation No 2042/73, which is at issue previous system by establishing, in the in the main proceedings, decided to
terms of the third recital in the extend the benefit of the former system
preamble, that 'it should be a principle of to traders who had obtained the issue of the new system, when calculating export certificates before 4 June 1973, compensatory amounts for the currencies subject to the reservation that the rates of
of Member States which they maintain the compensatory amounts should be
among themselves within a maximum those in force on 3 June 1973. spread of 2.25 %, to take into consideration the variation between the Regulation No 2042/73 has already been conversion rate applied under the the subject of discussions before the
common agricultural policy and the Court in actions for damages in Joined central rate; ... in the case of the other Cases 95 to 98/74, 15 and 100/75 currencies the basis should be their (Coopératives Agricoles de Céréales and relation to the aforementioned Others v Commission and Council [1975] currencies'. ECR 1615) where one of the charges
made against the Commission by the
Thus any correction in respect of the plaintiffs was that it had failed to adopt
of third sufficient transitional relationship with the currencies measures.
states, in particular the United States dollar, is excluded. However, On 5 April 1973 Cargill obtained
compensatory amounts are maintained advance fixings for exports of cereals to
on the one hand for intra-Community various countries. The exports took place
CARGILL v ONIC
during the period from 4 June to 31 3. Would the legislation applicable in July. Subsequently the plaintiff in the the present case be more favourable to main action submitted to the ONIC an the company if the Court were to application for the payment of hold that Regulation No 2042/73 was
compensatory amounts of FF illegal? 1 244 407 13. By a decision of 13 December 1973 the defendant in the The order for reference was received at
main action in application of Regulation the Court of Justice on 23 February No 2042/73 restricted the amount of the 1977. sums payable to Cargill to FF 467 583.21. Upon hearing the report of the
Cargill appealed to the Tribunal Judge-Rapporteur and the views of the Administratif de Paris (Paris Advocate General the Court decided to
Administrative Court), seeking an order open the oral procedure without holding that the ONIC should pay Cargill the a preparatory enquiry.
amount which in Cargill's opinion
remained due to it together with interest at the legal rate. II —
Summary of the written
observations submitted to Pursuant to that application, by judgment the Court under Article 20 dated 9 February 1977, the Tribunal of the Protocol on the
Administratif de Paris decided to stay Statute of the Court of
proceedings until the Court of Justice Justice of the EEC had delivered a preliminary ruling under Article 177 of the EEC Treaty on the The plaintiff in the main action first following questions: points out that although the conditions
1. Is Community Regulation No and formal effects of the Court's decision 2042/73 dated 27 July 1973 vitiated are not the same where it is called upon
by illegality for having practised to adjudicate by way of preliminary discrimination between exporters in ruling upon the validity of a measure
contravention of the rules against adopted by an institution of the
discrimination laid down by Articles 7 Community as where the Court gives a and 40 of the Treaty of Rome, such decision on the basis of Article 173, in illegality allegedly having had the both instances from the point of view of
effect of placing traders who had fixed substance it is the conformity of the
refunds in advance before 4 June measure under examination with the rule
1973 in a different situation of law, its validity (or its legality), which depending on whether the exports is in question. Consequently apart from were made before 4 June 1973 or after the differences of form between the two
that date, the former attracting the procedures it is possible to speak of
whole of the compensatory payments proceedings concerning validity (or and the others being affected by the legality). In each case the annulment of a obligation on the part of the traders to measure contrary to the law or the
cover themselves against exchange nullification of its effects is at issue. On risks and suffering the effects of the the other hand proceedings concerning devaluation of the dollar? liability seek pecuniary compensation for 2. Is the same Community Regulation damage which can be assessed
No 2042/73 by illegality in affected economically.
that it confers a retroactive effect on
Regulation No 1112/73 adopted by The independence of the two types of
the Council of the European action is clearly recognized by Communities on 30 April 1973 and Community law. It is to be found in thus interferes with vested rights? respect of Article 40 of the ECSC Treaty
JUDGMENT OF 29. 9. 1977 - CASE 27/77
in Joined Cases 9 and 12/60 (Vloeberghs ensured until the end of the sixties by v High Authority, Rec. 1961, p. 393), complex mechanisms laid down for the and in respect of Article 215 of the EEC common organization of the markets in
Treaty in Case 4/69 (Lütticke v the principal agricultural products by Commission [1971] ECR 325), Case 5/71 Community regulations. The (Aktien-Zuckerfabrik Schöppenstedt v abandonment by the USA of the Bretton Council [1971] ECR 975) and Joined Woods parity led to the adoption of
Cases 9 and 11/71 (Compagnie immediate correcting factors which were
d'Approvisionnement v Commission capable of ensuring the actual uniformity [1972] ECR 391). The action for damages of agricultural prices in the Community.
was established as an independent action The subsequent vicissitudes of the dollar which has a particular function within necessitated the modification of the
the system of legal remedies and the system set up by Regulation No 974/71 exercise of which is subject to conditions and any reference to the American established having regard to its specific currency was definitively abandoned. object; it is differentiated from the action Under*
for annulment in that it does not entail the system laid down by the annulment of a particular measure Regulation No 974/71 the rate of export
but the compensation of damage caused refunds was fixed taking account of the
by an institution in the exercise of its exchange shortfall guarantee which the
powers. compensatory amounts in fact
constituted; after the abolition of the The arguments relied on before the compensatory amounts the rate of
Court in the aforementioned Joined refunds should have increased Cases 95 to 98/74, 15 and 100/75 and in automatically in relation to the effective the main action are not identical and devaluation of the other currencies (cf. their logical basis is fundamentally Article 16 of Regulation No 120/67). In different. In the main action the essential these circumstances traders who before argument relied on is that of the change of system had concluded
discrimination; the objection relating to forward contracts intended to be the illegality of Regulation No 2042/73 performed under the new system were
prejudicing vested rights is not penalized in three ways: first they could
independent in its scope. The fact that in no longer benefit from the compensatory its judgment of 10 December 1975 the amounts; secondly they were subject to a Court denied the existence of unlawful devaluation of the dollar which was more damage on which the plaintiffs could marked than that which took place
rely has no effect on the main action in before 4 June 1973; finally they were
this case. Finally, with regard to only able to obtain the refund for which admissibility, it is sufficient to state that provision had been made, calculated on
from the mere fact that Regulation No the basis of fixed exchange rates, without 2042/73 had been applied to Cargill that any set-off in the way of compensatory company had an interest in challenging amounts.
the legality of the regulation but that does not necessarily imply that the In its judgment of 10 December 1975 regulation caused it damage such as to the Court found that the new provisions
satisfy all the conditions for damage for did not infringe vested rights and, solely which compensation may be claimed on as regards the cases examined, did not the ground that liability exists. prejudice legitimate expectation. On the
other hand it has not yet had the
As to the discussion of the substance of opportunity to examine the possible
the case, Cargill recalls one of the violation of the fundamental principle of
objectives of the common agricultural non-discrimination in respect of an
policy, namely the uniformity of prices analagous question; (cf. Case 74/74,
CARGILL v ONIC
Comptoir National Technique Agricole measures and yet adopted inadequate (CNTA) v Commission [1975] ECR 533) and discriminatory provisions is an
it recognized that there had been a aggravating circumstance. A mere
violation of the principle of legitimate reading of the preamble to Regulation expectation. No 2042/73 made it possible to expect the announcement of a transitional
The adoption of appropriate transitional provision ensuring an exchange shortfall guarantee for all export certificates measures was included among the
implementing measures which, under subject to advance fixing issued before 30 April and used even after 4 June but Article 6 of Regulation No 974/71 and before the expiry of the validity of the Article 26 of Regulation No 120/67, the
Council delegated to the Commission, advance fixing or any extension thereof. On the contrary with obvious illogicality although with the assistance of the and without any explanation the fourth Management Committee. recital of the preamble and Article 1 of
the regulation restrict the transitional Even if it is lawful as a whole Regulation application of the compensatory amount No 2042/73 should be regarded as being to the date of 3 June 1973. This is invalid from the following point of view sufficient to show the flagrant in particular: it provides a favourable discrimination entailed. solution to the problem in the interests of those exporters who had performed As regards the infringement of vested their contracts before 4 June 1973 but it rights and the principle of legitimate leaves a considerable discrimination to expectation, in contrast to Cases 95 to the detriment of those who were only 98/74, 15 and 100/75 it is merely able to obtain the performance of their objected that the Commission, which contracts later. In fact it restricts the laid down the transitional measures exchange shortfall guarantees to contracts which it considered it fair to adopt, performed up to 3 June 1973 in spite of introduced inappropriate measures which the subsequent very marked devaluation served not only to cause discrimination of thedollar which occurred precisely in but which also infringed vested rights the months of June and July. On the and the principle of legitimate other hand the Commission regulation expectation, the necessity of safeguarding was not adopted to coincide with the which the Commission itself had date of entry into force of the new recognized. scheme but almost two months later (27 July 1973) when the subsequent In respect of the consequences of the considerable devaluation of the dollar Court's decision the plaintiff in the main had already occurred. The presumption action points out that Regulation No of knowledge and the actual opportunity 2042/73 is not to be declared invalid to seek other remedies could only have either as to its principle or in its entirety existed for exporters after 4 June 1973 as but 'in far it as'
solely so entails it was not easy to react in the correct discrimination. The matter at issue, the manner before knowing details relating correction of which will be sufficient to to the application of the system. remove all illegality is the ill-advised fixing of the final date as 3 June 1973. The plaintiff in the main action objects The force of res judicata arising from not that the Commission failed to adopt the judgment of the Court of Justice
any transitional measures but that it should therefore cause the competent
adopted transitional measures which authorities not to refuse to the apply were insufficient and clearly contested regulation but to take all
discriminatory. The very fact that it necessary measures to enable it to be recognized the need to adopt such applied without discriminatory effects.
JUDGMENT Of 29. 9. 1977 - CASE 27/77
The Commission first sets out some of June 1973 (the date of the entry into
the characteristics of the system of force of the new system) in the method monetary compensatory amounts and of of calculating the compensatory amounts. the amendments made in 1973 which The maintenance as a transitional
are of particular importance for the main measure of the amount applicable on 3 action. June 1973 preserved to the benefit of
exporters and at their request the amount
In reality the abandonment of the US calculated according to the variations in dollar as the reference currency for the the rate of exchange of the dollar up to 3 calculation of those amounts and its June. From that date exporters of
replacement in Regulation No 1112/73 agricultural products were in an
by 'Community snake'
the merely unprivileged situation which was
represented adaptation to the new comparable, for example, to that of
international monetary conditions. exporters and importers of industrial products.
In the Community rules prior to
Regulation No 2042/73 there is nowhere A more generous solution was
any reference to an exchange shortfall unacceptable for two reasons. First the
guarantee against a downward fluctuation experience of the Commission with
of the dollar (the basic Regulation No other transitional measures revealed the
974/71 sought to prevent 'a disruption of existence of fraudulent practices and
the intervention system'
and 'abnormal fictitious contracts: for example the fact movements of prices jeopardizing a that an exporter had obtained an advance
normal trend of business in agriculture'). fixing on 30 March 1973 by no means
The objective of providing compensation implies that he had already concluded a which is inherent in this system and contract by that date. Further, the which was conceived in the abstract and implementation of such a transitional
on a flat-rate basis without taking scheme would entail very complex
account of the individual conditions of administrative machinery, allowing two
commercial transactions received the systems of monetary compensation to
approval of the Court (cf. Case 5/73, exist side by side for several months. Balkan Import-Export v Hauptzollamt Berlin-Packhof[1975] ECR 1091). In addition to the provisions of
Regulation No 2042/73 there were
Monetary compensatory amounts were available to exporters the possibilities set
never conceived as being fixed in out in Regulation No 837/72 of the
advance even under the system of fixed Commission of 24 April 1972 laying parities. On the other hand refunds are down special provisions in respect of
fixed in advance and to change an levies and refunds fixed in advance for amount fixed in advance would cereals (OJ, English Special Edition 1972 constitute an infringement of the vested (II), p. 345). The latter regulation provides rights of the trader. for two possibilities in the event of the
rules for the calculation of monetary 'transitional'
The Regulation No 2042/73 compensatory amounts being altered:
admits that importers or exporters might either the application of the monetary sustain loss owing to 'variations in the compensatory amount applicable on the
value of the dollar at the time of the date of the advance fixing of the levy or from (in less other'
transition one system to the refund any event than the
but this does not mean that the loss amount resulting from the application of would be imputable to the Community. Regulation No 2042/73) or, at the The relatively limited derogation chosen request of the interested party, the
as a measure of fairness is explained by cancellation of the advance fixing and
the lack of certainty existing up to 4 consequently the determination of the
CARGILL v ONIC
monetary compensatory amount and the be based on a promise made by a should
refund (or the levy) by reference to the Community authority. However from the day of exportation (or importation). As very nature of the scheme of
the refund was calculated after 4 June compensatory amounts it is clear that it taking account of the actual (lower) rate is a scheme laid down in the public
of the dollar it was possible for exporters interest taking account of certain
in certain cases to obtain a higher circumstances and which can by no
refund; the plaintiff in the main action means be analysed as containing a
could therefore have released itself from guarantee as to the duration of its the compulsion to accept a refund fixed validity.
in advance which did not reflect the Moreover the change in the method of variations in the rate of the dollar calculating monetary compensatory whereas from 4 June onwards refunds amounts was foreseeable from before 30 did reflect such variations. April 1973, the date of the adoption of
As regards the argument based on Article Regulation No 1112/73 in which there
7 of the Treaty Regulation No 2042/73 is was no question of exceptional measures
applicable 'at the request of the — which Cargill had therefore no right party concerned'
and contains no restriction as to expect — for prior contracts. An to the of the parties involved. exporter who had thus been given notice nationality of the new system should have taken the With regard to the alleged infringement appropriate commercial steps. The of Article 40 (3) of the Treaty the frequent variations in the rates of Commission doubts whether that exchange between the currencies of the provision is applicable to a case in which, Member States inter se and between by means of an amendment made to an those currencies and the dollar and the existing system, the legislature treats in a specific provisions of Regulation No different way traders who are subject to 974/71 which obliged the Commission the former rules and those who come to lay down compensatory amounts only within the framework of the new in so far as the monetary situation 'would scheme. Secondly that provision is not of lead to disturbances in trade in an absolute nature since it should also be products'
agricultural provided other examined in the light of the other grounds for uncertainty which should objectives laid down by Article 39 of the have caused traders not to make their Treaty and moreover the Court has calculations in reliance on any automatic recognized that the Community system of compensatory amounts. legislature possesses a wide discretionary power in this respect (cf. Case 5/73 The court making the order for reference referred to above and the is aware of the fact that the illegality of abovementioned Joined Cases 9 and Regulation No 2042/73 would render
11/71). applicable not the former system of the
calculation of compensatory amounts but As to the question of vested rights the the new system without any transitional answer has been given in Joined Cases rules ex hypothesi less favourable to 95 to 98/74, 15 and 100/75 referred to Cargill which sought the application of above where the Court recognized that the regulation while contesting its 'the right to benefit from a compensatory validity. In the submissions made to the amount or the obligation to pay it only court making the order for reference it is arises by the export's taking place and argued that if Regulation No 2042/73 is only as from the time when it takes declared invalid the court must be place'. released from the obligation to apply it However in reality the objection relates and must accede to Cargill's request.
to the breach of the principle of rather Such an argument would be still less legitimate expectation. Such expectation convincing if it were relied on in support
JUDGMENT OF 29. 9. 1977 - CASE 27/77
of amounts represented by Nicola Catalano, monetary compensatory calculated under the former system but Advocate of the Rome Bar, and by date Georges Vedel, Dean Professor the
granted to exports made after and of
laid down by the legislature for the Law at the University of Paris II, and the application of the new system. Commission of the European Communities, represented by its Agent, The Court put certain questions to the J. H. J. Bourgeois, presented oral
parties to which they replied in writing. argument.
At the hearing on 28 June 1977 the The Advocate-General delivered his plaintiff in the main proceedings opinion at the hearing on 13 July 1977.
Decision
1 By order of 9 February 1977 which was received at the Court Registry on 23 February the Tribunal Administratif de Paris referred to the Court, pursuant to Article 177 of the EEC Treaty, several questions relating to the validity of Regulation (EEC) No 2042/73 of the Commission of 27 July 1973 making transitional provisions consequential upon the application on 4 June 1973 of the new system of monetary compensatory amounts (OJ L 207, p. 34).
2 These questions were raised in the course of proceedings relating to the calculation monetary compensatory amounts for exports of cereals carried of
out by the Cargill company, the plaintiff in the main action, between 4 June
and 31 July 1973 and in respect of which the latter company had obtained on 5 April 1973 certificates in which the refunds had been fixed in advance.
3 Cargill made an application to the Office National Interprofessionnel des Céréales for the payment of compensatory amounts of FF 1 244 407.13 but the latter office, in application of Regulation (EEC) No 2042/73, reduced to
FF 467 583.21 the sum payable to the plaintiff in the main action.
4 The first question asks: 'Is Community Regulation No 2042/73 dated 27 July 1973 vitiated by illegality for having practised discrimination between exporters in contravention of the rules against discrimination laid down by Articles 7 and 40 of the Treaty of Rome, such illegality allegedly having had the effect of placing traders who had fixed refunds in advance before 4 June 1973 in a different situation depending on whether the exports were made before 4 June 1973 or after that date, the former attracting the whole of the
CARGILL v ONIC
compensatory payments and the others being affected by the obligation on the part of the traders to cover themselves against exchange risks and
suffering the effects of the devaluation of the dollar?'.
5 The second question asks: 'Is the same Community Regulation No 2042/73 affected by illegality in thatretroactive effect on Regulation No it confers a
1112/73 adopted by the Council of the European Communities on 30 April
1973 and thus interferes with vested rights?'.
6 The last question asks: 'Would the legislation applicable in the present case
be more favourable to the company if the Court were to hold that Regulation No 2042/73 was illegal?'.
7 It is appropriate to consider the various questions together.
8 Since the establishment of the system of compensatory amounts those amounts have been calculated by reference to the difference between the
parity of the national currency of the Member State in question declared to the International Monetary Fund on the one hand and the spot market rate of
that currency as against the United States dollar on the other.
9 By reason of the continued pressure on the United States dollar at the beginning of 1973, in spite of the devaluation of that currency in February, the Council decided to set up a system whereby the currencies of six of the Member States would float in respect of other currencies while maintaining 1
inter se certain flexibility margins (the 'snake ) and asked the Commission to submit to it proposals for a reform of the system of monetary compensatory amounts to take account of the new situation.
10 The proposals of the Commission resulted in the adoption by the Council on 30 April 1973 of Regulation No 1112/73 whereby Article 2 (1) of Regulation No 974/71 was amended so that compensatory amounts were no longer calculated by reference to the United States dollar but by reference to the
central rates of currencies in the 'snake'.
11 In the words of Article 3 of Regulation No 1112/73 that regulation was to
apply 'from the date on which the detailed rules required for its application
enter into force'. ...
JUDGMENT OF 29. 9. 1977 - CASE 27/77
12 The detailed rules for its application were laid down by the Commission in Regulation No 1463/73 of 30 May 1973.
13 By virtue of Article 19 of that regulation the rules took effect only on 4 June 1973.
14 During the period when the compensatory amounts were calculated by reference to the dollar, export refunds were calculated by reference to the
world prices expressed in dollars converted at par which might have had the
consequence of reducing the refunds but that risk was counterbalanced by the fact that the compensatory amounts themselves were calculated by reference to the official rate of the dollar.
is In the view of the plaintiff in the main action Regulation No 2042/73 15 invalid by virtue of the difference of treatment it accords to exporters who
performed their contracts before 4 June 1973 in comparison with those who
could only obtain the performance of their contracts after that date.
16 The combined effect of Regulations No 1112/73 and No 1463/73 was to
abolish the payment of monetary compensatory amounts on exports coming from France after 4 June 1973.
17 Regulation No 2042/73 does not affect exports prior to 4 June which clearly continue to be governed by the rules applicable until that date but it constitutes a transitional measure benefiting traders who carry out exports
from 4 June and who obtained advance fixing prior to that date by granting to them, on request, the monetary compensatory amounts applicable on 3 June.
18 Consequently such a transitional measure cannot be regarded as giving favourable treatment to exporters who performed their contracts before 4 June 1973 and as being discriminatory as is alleged by the plaintiff in the main action.
i9 Moreover the latter chose to rely on those rules and not on the provisions of
Regulation No 837/72 which makes available two possibilities where the rules
for the calculation of monetary compensatory amounts are altered: either the application of the amount applicable on the date of the advance fixing of the refund or, at the request of the interested party, the cancellation of the
CARGILL v ONIC
advance fixing with the consequence that the monetary compensatory amount and the refund are determined by reference to the day of export.
20 Consequently consideration of the questions raised by the Tribunal Administratif de Paris has disclosed no factor of such a kind as to affect the
validity of Regulation No 2042/73.
Costs
21 The costs incurred by the Commission of the European Communities which submitted observations to the Court are not recoverable.
22 As these proceedings are, in so far as the parties to the main action are
concerned, in the nature of a step in the action pending before the national
court, the decision on costs is a matter for that court.
On those grounds,
THE COURT,
in answer to the questions referred to it by the Tribunal Administratif de Paris by order of 9 February 1977, hereby rules:
Consideration of the questions raised by the Tribunal Administratif de Paris has disclosed no factor of such a kind as
to affect the validity of Regulation No 2042/73.
Kutscher Donner Pescatore Mertens de Wilmars Sørensen
Mackenzie Stuart O'Keeffe Bosco Touffait
Delivered in open court in Luxembourg on 29 September 1977.
A. Van Houtte H. Kutscher
Registrar President