C-79/77

REFERENCE to the Court under Article 177 of the EEC Treaty by the Finanzgericht Hamburg for a preliminary ruling in the action pending before that court between

Kühlhaus Zentrum AG, Hamburg and

Hauptzollamt Hamburg-Harburg on the interpretation of Regulation (EEC) No 1380/75 of the Commission of 29 May 1975 laying down detailed rules for the application of monetary compensatory amounts (Official Journal L 139 of 30 May 1975, p. 37),

THE COURT (First Chamber)

composed of: G. Bosco, President of Chamber, A. M. Donner and A. O'Keeffe, Judges,

Advocate General: J.-P. Warner Registrar: A. Van Houtte

The plaintiff in the main action, the 1. Is Regulation (EEC) No 1380/75 to German undertaking Kühlhaus Zentrum be interpreted in the sense that AG, which owns a private customs where, on the import into Member warehouse, put a consignment of frozen States of goods from third countries, beef from Argentina into free circu­ the levy has been fixed but its lation on 12 November 1975. It had imposition has been suspended and been imported as part of a tariff quota where monetary compensation is opened to third countries by the charged for such goods the monetary Community under agreements entered compensation should be reduced by into within the framework of the multiplication by a monetary coefficient? General Agreement on Tariffs and Trade (GATT). That quota allowed a 2. If Question 1 is answered in the affir­ certain quantity of meat to be imported mative: free from import levy, subject to Is the monetary compensation to be payment of customs duty of 20%. reduced by the amount by which, if a A monetary compensatory amount of levy had been imposed, it would have DM 1 866.80 was then charged on the been reduced by application of the goods, and the plaintiff in the main coefficient set out in Regulation action lodged an objection against the (EEC) No 2147/75? payment notice in respect thereof; it argued that the coefficient referred to in 3. If Question 1 is answered in the Article 4 (3) of Regulation No 1380/75 negative: should have been applied to the Is Regulation (EEC) No 1380/75 monetary compensatory amount, which void in so far as, where a levy is would have had the effect of reducing it fixed in units of account but its by DM 1 483.20, that is, by the amount imposition is suspended, the by which the levy is reduced when the monetary compensation on imports levy fixed is multiplied by the coefficient into the Federal Republic of referred to in the said Article 4 (3). Germany from third countries is not The defendant in the main action, reduced by application of a monetary Hauptzollamt (Principal Customs coefficient? Office) Hamburg-Harburg, dismissed that objection, and the matter was The order making the reference was brought before the Finanzgericht entered at the Court Registry on 4 July (Finance Court) Hamburg. 1977.

Having heard the report of the Judge It is argued that Regulation No Rapporteur and the views of the 1380/75 provides that the coefficient Advocate General, the Court decided to should be applied not to the import open the oral procedure without any charges imposed but to those which are preparatory inquiry, and to assign the "fixed in units of account". That should case to the First Chamber. also be the case when import charges so fixed are not in fact imposed owing to their suspension. II — Summary of the written Any different interpretation of Regu observations submitted to lation No 1380/75 would be contrary to the Court pursuant to the prohibition on discrimination and to Article 20 of the Protocol the principle of equal treatment and in on the Statute of the Court particular to Article 40 (3) of the EEC of Justice of the EEC Treaty. The first result of such an inter pretation would be wrongfully to treat dissimilar situations in the same way. The plaintiff in the main action argues For the same monetary compensatory that it emerges from the seventh recital amounts would then be imposed, in the preamble to Regulation No without any correction of the other 1380/75 that, although for the purposes of correct calculation it is necessary to import charges, on imports both from Member States and from third fix the monetary compensatory amounts countries, although in that connexion at different rates according as trade the charges on imports from third with other Member States or with third countries into the Federal Republic of countries is concerned, for the sake of Germany should necessarily be lower. simplification the same rate should be Secondly, similar situations would be fixed in both cases, as in Regulation No treated in a different way without any

German importers excessively high rate when the would have to pay an unadjusted, and imposition of the levies is suspended. hence excessively high, monetary For, in such a case, the correction of compensatory amount. the monetary compensatory amounts The Commission points out first of all which has been transferred to the levies that the questions raised are not cannot take place. Therefore the confined to the meat sector, but in a adjustment should be carried out in the very general way call in question monetary compensatory amounts "goods" and "imports from third themselves; they should be reduced by countries". However, the Commission's an amount resulting from the multi observations are confined to the plication of the levy by the monetary particular facts of the importation at coefficient. issue in the main action.

The Commission then states the way in effect of revaluation in the case of which it has interpreted the decisive Member States with revalued regulation in this area, Regulation No currencies, and of devaluation in the 974/71, Article 2 of which provides case of Member States with devalued only that the rates used (which are currencies. For the Federal Republic of established in the light of changes in the Germany, for example, the effect of the monetary situation) are applied "to the revaluation of the Deutschmark in prices", taking into account the purpose relation to the "green rate" is currently of the system which is to compensate 7.5% and the monetary coefficient is for divergences in the level of prices consequently 0.925%, being (100-7.5) caused by changes in the monetary —100. For France, the effect of the deva­ situation. In intra-Community trade, the luation of the French Franc is currently Commission has taken guaranteed 14.5% and the monetary coefficient prices (in particular intervention prices) is consequently 1.145%, being as its reference price. On the other (100 + 14.5) —100. Thus in the system hand, in trade with third countries levies of calculation currently applied, the and refunds in themselves entail partial basic monetary compensatory amount monetary compensation (expressed in and the monetary coefficient together units of account and converted into the form a single unit which is the true national currencies of the respective monetary compensatory amount. Member States by applying the parity — Thus at first sight one is tempted to or subsequently the so-called "green conclude that the monetary conversion rates" — those amounts compensatory amount applied in the completely offset the difference between case at issue in the main action is the world prices which have been used excessive because the correction ordi­ as a basis and the level of prices in the narily carried out by means of the Member State concerned). Conse­ monetary coefficient could not take quently, the monetary compensatory place owing to the exemption from the amounts applicable in regard to third levy. However, the difference between countries have been so calculated as to the monetary compensatory amount refer only to that part of the prices not actually applied and the monetary yet offset by the levies or refunds, that compensatory amount calculated in the is to say the world prices which form theoretically correct way is so slight that the basis of the levies and refunds. in the end it could be ignored. The Out of concern for administrative calculation by the plaintiff in the main simplification, the Commission decided action, who estimates the excess of the in a second stage of the system to fix monetary compensatory amount over

monetary coefficient, and is contrary to All things considered, owing to the Article 4 (3) of Regulation No 1380/75. peculiarities inherent in the calculation At most, the calculation of the of the monetary compensatory amount monetary compensatory amount could for beef and veal it is not possible to be corrected by returning to the original avoid certain divergences from a method of calculation, on the basis of theoretically ideal solution whichever of the world price of the imported goods. the two methods of calculation is used, The use of that method would enable but those divergences remain within the plaintiff in the main action to gain tolerable limits and at all events do not approximately 7 pfennigs per give rise to differences so great as to be kilogramme, a total of DM 193.46 (that capable of disturbing trade.

The Commission proposes that the the calculation (conversion) coefficients questions raised by the Finanzgericht used for the purpose of calculating the Hamburg should be answered as monetary compensatory amount applied follows: to the beef and veal product at issue are different from those used for the calcu 1. The regulations in force and in lation of the levy. Therefore the basic particular Regulation No 1380/75 do monetary compensatory amount applied not provide any legal basis for ”mult to the product at issue is lower than an iplication by a monetary coefficient" amount calculated according to the — or, more exactly, for a reduction same principles as the levy. The effect of the monetary compensatory of applying the monetary coefficient to amount by application of the the levy is to reduce the total monetary monetary coefficient to the notional compensatory amount more than if it levy. Therefore the national auth had been calculated from the outset on orities do not have the power to the basis of the world price. The carry out such an adjustment to the consequence of this, briefly stated, is to monetary compensatory amount give imports into countries with (which, moreover, would take the revalued currencies a relative advantage form of an increase in certain other and to put imports into countries with cases).

JUDGMENT OF 9. 1. 1978 — CASE 79/77

2. If, contrary to the Commission's The plaintiff in the main action, point of view, the first question is represented by K. Landry, Advocate of answered in the affirmative, the the Hamburg Bar, and the Commission answer to the second question should of the European Communities, also be in the affirmative. represented by its Legal Adviser, P. 3. The monetary compensatory amount Gilsdorf, acting as Agent, submitted charged where the product in oral observations at the hearing on 24 November 1977. question is exempted from import levy is only slightly higher than the The composition of the Chamber amount which would be charged if a having been altered, it was decided, theoretically ideal method of calcu­ after hearing the views of the parties to lation were applied. Such negligible the main action, to re-open the oral differences can be tolerated in view procedure at the hearing on 25 January of the lack of precision inevitably 1978. associated with the flat-rate nature of the system and having regard to the The parties to the main action having administrative complications that stated that they adhered to their earlier would be caused by a change in the submissions, the Advocate General method of calculation. delivered his opinion at that hearing.

Decision

1 By an order of 1 June 1977, received at the Court on 4 July 1977, the Finanzgericht Hamburg referred to the Court, pursuant to Article 177 of the EEC Treaty, several questions on the interpretation and the validity of Regulation (EEC) No 1380/75 of the Commission of 29 May 1975 laying down detailed rules for the application of monetary compensatory amounts (Official Journal L 139, p. 37).

If the foregoing question is answered in the affirmative, it is asked whether the monetary compensation is to be reduced by the amount by which, if a levy had been imposed, it would have been reduced by application of the coefficient set out in Regulation No 2147/75.

If the first question is answered in the negative, it is asked whether Regu­ lation No 1380/75 is void in so far as, where a levy is fixed in units of account but its imposition is suspended, the monetary compensation on imports into the Federal Republic of Germany from third countries is not reduced by application of a monetary coefficient.

3 The provisions of Article 4 (3) and (4) of Regulation No 1380/75 read as follows:

"3. However,

(a) ...

(b) in trade with third countries the import charges and the export refunds and levies, fixed in units of account ... shall be multiplied by a coefficient. This coefficient shall be derived from the percentage used to calculate the monetary compensatory amount and shall be fixed by the Commission at the same time as that amount.

"Whereas accession compensatory amounts, fixed components as referred to in Article 61 of the Act of Accession (Official Journal (English Special Edition) of 27 March 1972, p. 14), import charges, export refunds and all other amounts charged or granted in units of account in respect of trade with third countries are, like the prices in the Member States concerned, converted into the currencies of those Member States by applying the exchange rates provided for under the common agricultural policy; whereas, therefore, in calculating the monetary compensatory amount only the difference between the price level and the amount in question expressed in units of account need be taken into consideration; whereas, in order to simplify the system so that the same compensatory amount may be applied in respect of the trade of a given Member State with every other Member State and with third countries, accession compensatory amounts, fixed components, import charges, export refunds and all other amounts charged or granted in respect of trade with third countries should be corrected by a coefficient expressing the position of the currency of the Member State which is to apply the monetary compensatory amount."

5 Relying on the terms of that recital and in particular on the sentence "whereas, therefore, in calculating the monetary compensatory amount only the difference between the price level and the amount in question expressed in units of account need be taken into consideration", the plaintiff in the main action claims that the provisions of the said Article 4 are to be interpreted in the sense that it is sufficient for a levy to be fixed in units of account, even if the levy is not imposed, and that in such a case the monetary compensatory amount must be reduced by the amount by which the levy which has not been imposed would have been reduced by application of the coefficient.

Consequently, the first question must be answered in the negative.

7 The plaintiff in the main action further submits that, if its interpretation of the regulation at issue is not upheld, the regulation itself is "void" for infringement of the principle of the prohibition on discrimination and of the principle of equal treatment, and in particular of the principle stated in Article 40 (3) of the Treaty.

The plaintiff considers that the charging of the monetary compensatory amount at the full rate on imports carried out free from imposition of the levy has the effect of giving an advantage to imports into Member countries with depreciated currencies, in which the monetary compensatory amount is granted without deduction, and of putting at a disadvantage imports into Member countries with appreciated currrencies, in which the monetary compensatory amount is charged without adjustment.

8 Although it may be doubted whether it is appropriate to apply the system of monetary compensatory amounts in the case of a quota from a third country admitted into the Community free from imposition of the levy, the Community rules provide for that system to be applied to such imports unless the Commission grants a special derogation.

The plaintiff in the main action has not called in question the application of the system of monetary compensatory amounts to the imports in question, but only the failure to reduce the amount by application of the monetary coefficient.

JUDGMENT OF 9. 3. 1978 — CASE 79/77

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 submitted to it by the Finanzgericht Hamburg, by an order of 1 June 1977, hereby rules:

(1) Regulation No 1380/75 is not to be interpreted in the sense that where, on the import into Member States of goods from third countries, the levy has been fixed but its imposition has been suspended and where monetary compensation is charged for such goods the monetary compensation should be reduced by multi­ plication by a monetary coefficient.

KÜHLHAUS ZENTRUM v HAUPZOLLAMT HAMBURG-HARBURG

My Lords, assessed by the Defendant, in This case comes to the Court by way of accordance with Commission Regu­ a reference for a preliminary ruling by lation (EEC) No 2195/75 of 22 August the Finanzgericht of Hamburg. The 1975 "on the monetary compensatory Plaintiff in the proceedings before that amounts applicable in the beef and veal Court is the Firma Kühlhaus Zentrum sector" at DM 67.64 per 100 kg, i.e. in all DM 1 866.80. AG. The Defendant is the Haupt­ zollamt Hamburg-Harburg. Your Lordships will have it in mind that The Plaintiff is the owner of a customs import levies are, broadly speaking, warehouse at Hamburg and, as such, designed to cover the difference became accountable on behalf of a between world market prices and customer for the charges leviable on the Community prices — see in the case of removal from mat warehouse on 12 beef and veal Articles 10 and 13 of November 1975 of a consignment of Council Regulation (EEC) No 805/68 2 760 kg of frozen beef imported from of 27 June 1968 "on the common the Argentine. That consignment was organization of the market in beef and entered as part of a tariff quota veal". Such levies are fixed in units of conceded by the EEC under the GATT. account. For application in any The effect of this was that the meat in particular case they need to be question was exempt from import levy converted into the national currency of tough it remained liable to the customs the Member Sute concerned. Since the duty of 20% chargeable under the entry into force of Council Regulation Common Customs Tariff and also to (EEC) No 475/75 of 27 February 1975 the payment of an m.ca. The question "on the exchange rates to be applied in at issue between the parties is as to the agriculture" that conversion has in proper amount of that m.c.a. It was every case been effected at the "repres-