C-136/77

on the validity of Regulation (EEC) No 722/75 of the Commission of 19 March 1975 amending Regulation (EEC) No 539/75 fixing the monetary compensatory amounts and certain rates for their application (Official Journal 1975, L 71 of 20 March 1975, p. 24),

THE COURT,

composed of: H. Kutscher, President, M. Sørensen and G. Bosco (Presidents of Chambers), A. M. Dormer, J. Mertens de Wilmars, P. Pescatore, Lord Mackenzie Stuart, A. O'Keeffe and A. Touffait, Judges,

Advocate General: G. Reischl Registrar: A. Van Houtte

gives the following

JUDGMENT

(b) the Member State whose States and third countries; currency decreases beyond the Whereas the compensatory amounts permitted fluctuation margins should be limited to the amounts strictly shall charge on exports and necessary to compensate the incidence grant on imports, of the monetary measures on the prices compensatory amounts for the of basic products covered by products referred to in paragraph 2, intervention arrangements and whereas in trade with the Member States it is appropriate to apply them only in and third countries." cases where this incidence would lead to difficulties." Article 1 (3), in the version in force at the date of the facts in question (Regu­ 2. Regulation (EEC) No 539/75 of lation No 2746/72 of the Council of the Commission of 28 February 1975 19 December 1972, Official Journal, fixing the monetary compensatory English Special Edition 1972 (28-30 amounts and certain rates for their December), p. 64) provides that: application (Official Journal 1975 L 75 "3. Paragraph 1 shall not apply where of 3 March 1975) fixed the monetary application of the monetary compensatory amounts to be charged or measures referred to in that granted in trade between the nine Member States and in trade between the paragraph would lead to distur­ bances in trade in agricultural Community and third countries for the products". following wines: "1. ex 22.05 C I and C II: Table wine The third, fourth, fifth and sixth recitals with an actual alcoholic strength of of the preamble to Regulation No not less than 8-5° and a total 974/71 are worded as follows: alcoholic strength not exceeding

15° as well as imported red and abovementioned products except in white wines Germany. 2. ex 22.05 C I: Table wine of the The second to last recital of the R III type within the meaning of preamble to Regulation No 2021/75, Regulation (EEC) No 945/70 and having recalled the wording of Article 1 red wines presented for importation (3) of Regulation (EEC) No 974/71, under the name Portugieser continues as follows: 3. ex 22.05 C I: Table wine of the A II "Whereas in the present situation this and A III types within the meaning rule makes it possible not to fix of Regulation (EEC) No 945/70 compensatory amounts for France and and white wines presented for for Italy, and to fix amounts in the wine importation under the name sector only for Germany". Riesling or Sylvaner." Regulation (EEC) No 2448/75 of the These amounts were discontinued as Commission of 25 September 1975 suspending the monetary compensatory from 24 March 1975 by Regulation amounts for certains wines (Official (EEC) No 722/75 of the Commission Journal 1975 L 250 of 26 September of 19 March 1975 amending Regulation 1975) suspended the monetary (EEC) No 539/75 (Official Journal compensatory amounts in Germany for 1975 L 71 of 20 March 1975), except in the first group of wines mentioned Germany. above with effect from 29 September The reasons for the discontinuance of 1975. The reasons for that suspension those amounts are stated as follows in were stated as follows: the second and fifth recitals of the "Whereas compensatory amounts are at preamble to Regulation (EEC) No 722/75: present applied to wine only in Germany; whereas a detailed study has "Whereas, as regards wine products, shown that it is possible to discontinue compensatory amounts are fixed only in the application of the monetary respect of table wines; whereas compensatory amounts in that country production and marketing conditions also in respect of certain wines, without for these wines differ from Member causing disturbance of trade; whereas, State to Member State; whereas it however, it is necessary fo proceed with therefore seems possible to discontinue caution; whereas provision should with immediate effect the compensatory therefore be made for the suspension of amounts in most of the Member States those amounts". without thereby disturbing trade; Commission Regulation (EEC) No Whereas, with respect to wine, the 3071/76 of 15 December 1976 altering measures provided for in this regulation the monetary compensatory amounts are in accordance with the Opinion of applicable in the wine sector (Official the Management Committee for Wine". Journal 1976 L 346 of 16 December Fresh monetary compensatory amounts 1976), which entered into force on 16 were fixed as from 4 August 1975 by December 1976, likewise did not Regulation (EEC) No 2021/75 of the provide for monetary compensatory Commission of 31 July 1975 fixing the amounts in Germany for the first group monetary compensatory amounts and of wines mentioned above, but fixed certain rates for their application amounts in Italy and in France for all (Official Journal 1975 L 205 of 4 three abovementioned groups. August 1975). With regard to wine, that regulation also provided for no 3. During the period from 1 to 30 compensatory amounts for the September 1975, the plaintiff in the

main action imported into Germany red to the difference between wine in particular but also some white production and marketing wines coming within tariff heading conditions for table wines within 2.05 CI b from Yugoslavia and the Community, or should the Hungary. Commission have given a more detailed statement of the reasons It lodged an application against the defendant in the main action before the for retaining the monetary Finanzgericht Rheinland-Pfalz for compensatory amounts in force for repayment of the monetary Germany?" compensatory amounts which it had had 5. The order reference was entered in to pay on that occasion. the Court Register on 8 November 1977. 4. By order of 4 October 1977, that court stayed the proceedings and The plaintiff in the main action and the requested the Court of Justice under Commission of the European Article 177 of the EEC Treaty to give a Communities submitted written obser­ preliminary ruling on the following vations in accordance with Article 20 of questions: the Protocol on the Statute of the Court of Justice of the EEC. "(1) Is Regulation (EEC) No 722/75 of the Commission valid in so far as After hearing the report of the Judge- No 1 of the Annex thereto excepts Rapporteur and the views of the the import into Germany of wines Advocate General, the Court decided to falling within tariff subheading open the oral procedure without any 22.05 CI of the Common Customs preparatory inquiry. Tariff from the discontinuance of the monetary compensatory amounts? II — Written observations sub­ mitted to the Court In particular: Did the conditions laid down in A — 1. The plaintiff in the main Article 1 (3) of Regulation (EEC) action observes that, as regards the No 974/71 of the Council still market in wine, German production of apply in September 1975 to such red wine in 1975 amounted to 1 144 000 imports of wine, or was the hectolitres, 49 000 hectolitres of which retention in force of the monetary was unfermented red table wine (red compensatory amounts for table wine did not appear as such in the Germany based on considerations statistics). That market of 49 000 which contravened the prohibition hectolitres in no way justifies making on discrimination and the imports of red wine 40 times larger in requirement that prices be quantity, in other words 1 943 000 uniform, within the meaning of hectolitres, subject to monetary Article 40 (3) of the EEC Treaty, compensatory amounts. The 99 145 000 and transformed the monetary hectolitres of wine produced in Italy compensatory amounts into and in France may be set against those charges having an effect equivalent figures. In those two countries the to customs duties? production of red table wine amounts to 71 931 000 hectolitres. (2) Is the duty to give a statement of reasons for a regulation laid down The plaintiff in the main action strongly in Article 190 of the EEC Treaty suspects that the Community wished to discharged by the mere reference exempt France and Italy from the in Regulation (EEC) No 722/75 monetary compensatory amounts which

lead to distortions in competition, while have disturbing effects on the domestic the levying of those amounts was market in wine. On the contrary, the retained for imports into Germany so as burdens imposed by the application of to satisfy that country politically and to monetary compensatory amounts caused obtain revenue for the Community. the proportion of German wine on the domestic market to increase from 67 % 2. In its opinion, the levying of in 1973 to 72 % in 1974 and 75 % in monetary compensatory amounts on the 1975. In contrast, the proportion of wine from Yugoslavia is illegal because foreign wine sold on that market fell it infringes Article 1 (3) of Regulation accordingly from 33 % in 1973 to 28 % No 974/71. in 1974 and finally to 25 % in 1975. Under that provision, the compensatory In its judgment of 22 January 1976 in amounts should only be applied if Case 55/75, Balkan-Import Export application of the monetary measures GmbH v Hauptzollamt Berlin-Packhof referred to in Article 1 (1) would lead [1976] ECR 19, the Court granted the to disturbances in trade in agricultural Commission a wide discretion as

products". Compensatory amounts considerations do not apply in this case: should only be applied in cases where because special rules are involved the this incidence would lead to difficulties: Commission no longer has a discretion, end of the sixth recital to the preamble merely in view of the third paragraph of to Regulation No 974/71. For that Article 40 of the Treaty; in addition reason the monetary compensatory very concrete and demonstrable facts amounts are therefore necessarily of an must exist showing that it was exceptional nature: judgment of the impossible according to the objectives Court of 14 May 1975 in Case 74/74, pursued by Regulation No 974/71 and CNTA S.A_ v Commission of the the objectives of a common market in European Communities, paragraph 20 of wine also to justify the discontinuance the decision ([1975] ECR 547). of the monetary compensatory amounts It follows that the Commission should on imports of wine into Germany. have abolished them as soon as their Even if the Court should in law grant application proved to be no longer the Commission a discretion there are necessary in order to prevent distur however considerable doubts as to bances in trade: judgment of the Court whether the Commission was also able of 17 March 1976 in Joined Cases 67 to to and did in fact use that discretion 85/75 Lesieur Cotelle et Associés SA. within the context of Regulation No and Others v Commission of the 722/75 from the political point of view. European Communities, paragraph 27 of The Commission was subjected to the decision ([1976] ECR 409).

RACKE v HAUFTZOLLAMT MAINZ

the monetary compensatory amounts on Since the plaintiff in the main action is wine. It seems unreasonable to grant it a an undertaking trading in wine in the discretion if it is an established fact Common Market it is also a consumer from the beginning that it can only use within the meaning of the above- that discretion to a very limited extent. mentioned provision. It clearly suffers Finally, the discretion granted to the discrimination as against similar under­ Commission by the Court of Justice can takings in other Member States of the however only relate to the evaluation of European Communities through the the facts but not to the determination imposition of a monetary compensatory and establishment of those facts. amount.

collapse of the intervention price system compensatory amount levied at the and preserve the normal flow of trade in frontier only on imports of Italian and agricultural products both within the French wines but not on imports of wine from third countries. Community and with third countries (see the judgment of the Court of Justice of 24 October 1973 in Case 4. Under the third subparagraph of 10/73, Rewe-Zentral AG v Hauptzollamt Article 40 (3) of the EEC Treaty any Kehl [1973] ECR 1190, paragraph 14 of common price policy must be based on the decision). The defendant in the common criteria and uniform methods main action has claimed in the of calculation. The principles of uniform proceedings before the court making the prices and of uniform rules for foreign reference that the discontinuance of the trade with third countries apply inter monetary compensatory amounts on alia within the context of Regulation wine has had the effect in Germany of No 816/70 of the Council of 28 April encouraging imports. The measure is 1970 laying down additional provisions therefore justified by means of an for the common organization of the objective not pursued by Regulation No market in wine (Official Journal, 974/71. This situation already gives rise English Special Edition 1970 (I), to a breach of the second subparagraph p. 234). The plaintiff in the main action of Article 40 (3) of the EEC Treaty in considers that the Commission has conjunction with Regulation No infringed these principles by adopting 974/71. Regulation No 722/75 because that

regulation retained monetary compensa 722/75 is also invalid for infringement tory amounts on imports of wine into of Article 190 of the EEC Treaty, at least the Federal Republic of Germany whilst in so far as the annex thereto states: it declared with regard to the far more "other than Germany". The result important markets in wine in Italy and thereof is that the wines imported into France that there were no disturbances the Federal Republic of Germany were on the market caused by the monetary also exempted from the monetary situation. That infringement makes the compensatory amounts. monetary compensatory amounts In the field of the system of monetary charged on imports of wine into the compensatory amounts it is unnecessary Federal Republic of Germany unlawful. to state with regard to each product or group of products individually the

If the disturbing factors which distort Commission declared that there was no competition. risk of disturbance in the case of the other Member States, it should at least 6. The plaintiff in the main action have stated what facts led it to take the finally claims that Regulation No view that a different evaluation was

applicable in the case of the Federal market by increased exports to the other Republic of Germany. monetary areas of the Community. This procedure gave rise to difficulties. B — The Commission does not reply to In the market in wine there is no the questions as to the validity and intervention by means of purchases by scope of Regulation No 722/75 the State but payment of an aid when submitted by the Finanzgericht Rhein storage contracts are concluded if the land-Pfalz for a preliminary ruling.

As long as compensatory amounts should continue comparatively high monetary compensa to be applied in the remaining Member tory amounts were levied on exports States without making any change in from Italy there was no particular the situation concerning the retention of incentive to sell Italian surplus table the German amounts. The question wine elsewhere cheaply. This situation essential for the purposes of the decision in the main action is whether, when changed when the Italian compensatory amounts decreased considerably as a Regulation No 2021/75 was adopted, result of the adjustment to the exchange the conditions applicable to the levying rate of the green lira. In particular there of such amounts under Regulation No were huge exports to France in 1975 974/71 were complied with in respect of after the monetary compensatory the compensatory amounts on table

The is confined to a possible declaration that discontinuance of the monetary there has been a manifest error, misure compensatory amounts in the case of of power or a clear abuse of power (see the Federal Republic of Germany the abovementioned judgment of the resulted in an additional fall in the price Court of Justice in Case 55/75 and the of Italian wine. As a result of the judgment of 20 October 1977 in Case experiences suffered in the meantime in 29/77, SA. Roquette Frères v French the wine trade between France and Italy State — Customs Authorities [1977] similar problems should have been ECR 1835). expected in Germany.

JUDGMENT OF 25. 5. 1978 — CASE 136/77

case-law of the Court of Justice for the tory amounts must continue to be application of the monetary applied by the other Member States compensatory amounts. Regulation No without affecting the levying of the 2021/75 is therefore valid. amounts in Germany is therefore unfounded.

RACKE v HAUPTZOLLAMT MAINZ

Decision

1 By order of 4 October 1977, which was received at the Court of Justice on 8 November 1977, the Finanzgericht Rheinland-Pfalz referred to the Court under Article 177 of the EEC Treaty two questions on the validity of Regu­ lation (EEC) No 722/75 of the Commission of 19 March 1975 amending Regulation (EEC) No 539/75 fixing the monetary compensatory amounts and certain rates for their application (Official Journal 1975, L 71, p. 24) in so far as it excepts from the discontinuance of the monetary compensatory amounts imports into the Federal Republic of Germany of wine coming under tariff subheading 22.05 CI of the Common Customs Tariff. These questions were raised within the context of a dispute between a German undertaking and the German customs authorities over the levying of monetary compensatory amounts on the importation of certain quantities of table wine from Yugoslavia and Hungary in September 1975.

2 Regulation (EEC) No 722/75 amending Regulation No 539/75 discontinued the monetary compensatory amounts on wine coming within tariff subheadings 22.05 CI and II in all the Member States other than the Federal Republic of Germany as from 24 March 1975.

At the date of the imports in question Regulation (EEC) No 539/75, as amended by Regulation (EEC) No 722/75, had been replaced by Regu­ lation (EEC) No 2021/75 of the Commission of 31 July 1975 fixing the monetary compensatory amounts and certain rates for their application (Official Journal 1975, L 205, p. 1), which came into force on 4 August 1975; Part 6 of Annex I to that regulation, relating to wine, fixed compensatory amounts for Germany alone and thus maintained the situation already established by Regulation No 722/75. It is therefore necessary to examine the questions which have been referred to the Court having regard not only to Regulation (EEC) No 722/75 but also above all to Regulation (EEC) No 2021/75.

5 During both the written and the oral procedure, the Commission explained the circumstances which, in its view, justified the retention in the market in wine, of monetary compensatory amounts charged on imports in the case of the Federal Republic of Germany while monetary compensatory amounts in that sector did not apply to other Member States. In particular it showed that that decision was based on an analysis of the general developments in the market in wine in the Community during a period in which the situation recorded in certain Member States might well have caused disturbances in imports into Germany. It does not seem therefore that the Commission exceeded the bounds of its discretion by adopting the provisions of Regu­ lations (EEC) Nos 722/75 and 2021/75 in question.

6 Moreover, the question has been raised as to whether the principle of non­ discrimination laid down in the second subparagraph of Article 40 (3) of the Treaty has been infringed by the retention in the market in wine of the monetary compensatory amounts in the case of the Federal Republic of Germany alone. It is necessary however to reply to that question in the negative. In fact, the Federal Republic of Germany was the only Member State the currency of which has been revalued and which produces wine nationally, so that the difference between the solution adopted in the case of the Federal Republic of Germany, on the one hand, and in the case of the Member States the currency of which has been devalued and the Member States the currency of which has been revalued but which are not wine producers, on the other, could therefore be considered as objectively justified.

It follows only from the annex to the regulation that the discontinuance of the compensatory amounts does not apply to the Federal Republic of Germany. The twelfth recital of the preamble to Regulation (EEC) No 2021/75 in the English version, having recalled the terms of Article 1 (3) of Regulation (EEC) No 974/71, provides that:

"Whereas in the present situation this rule makes it possible not to fix compensatory amounts for France and for Italy, and to fix amounts in the wine sector only for Germany".

9 Although those recitals do not mention the factors justifying the making of an exception in the case of Germany, that absence, in the particular circum­ stances of the case, does not result in the invalidity of the provisions in question. In fact, in the case of Germany it was merely the retention in substance of the rules which had already been in force for several years,

JUDGMENT OF 25. 5. 1978 — CASE 136/77

whilst the amendment introduced by Regulation (EEC) No 722/75 and retained in Regulation (EEC) No 2021/75 only concerned certain other Member States. Although in similar circumstances the discontinuance of the monetary compensatory amounts in the case of certain Member States is the result of the fact that the conditions for their introduction are no longer fulfilled, their retention with regard to another Member State is the normal result of the continuing existence of the necessary conditions as far as that other State is concerned. In the absence of an express indication it may be accepted that the retention of the previous rules is based on the same grounds.

Consideration of the questions raised has disclosed no factor of such kind as to affect the validity of Regulations (EEC) Nos 722/75 and 2021/75 of the Commission in so far as the importation into Germany

RACKE v HAUPTZOLLAMT MAINZ

of wine falling within tariff subheading 22.05 C I is excepted from the discontinuance of the monetary compensatory amounts.

Kutscher Sørensen Bosco Donner Mertens de Wilmars

Pescatore Mackenzie Stuart O'Keeffe Touffait

Delivered in open court in Luxembourg on 25 May 1978.