C-127/78

on the validity of Commission Regulation (EEC) No 3092/76 of 17 December 1976 on the application of monetary compensatory amounts to certain beef and veal products (Official Journal 1976 L 348 p. 18)

THE COURT (First Chamber)

composed of: J. Mertens de Wilmars, President of Chamber, A. M. Donner and A. O'Keeffe, Judges

Advocate General: H. Mayras Registrar: A. Van Houtte

gives the following

JUDGMENT

20 December 1976. Its purpose was in application of monetary compensatory amounts to certain beef and veal particular to bring the intra-Community trade in "seasoned meat" within the products (Official Journal L 348 p. 18) system of monetary compensatory either invalid or inapplicable: amounts. (a) for absence of the conditions Accordingly, Article 1 of that regulation required by Article 1 (1) of Regu- provides: lation (EEC) No 974/71 of the Council; "For fresh, chilled or frozen products, other than minced products, which fall (b) for failure to make any provision for within subheading 16.02 B III (b) 1 of the old contracts; Common Customs Tariff and which are (c) for restriction of intra-Community excluded from classification in Chapter 2 trade?" thereof solely by reason of simple seasoning (e.g. with salt and pepper), or The order of the Hessisches Finanz- the addition of other substances (e.g. gericht was received at the Court on vegetables, flours or oil), monetary 7 June 1978. compensatory amounts shall apply in The Court, having heard the report of trade between Member States at the level the Judge-Rapporteur and the views of applicable to products of the same the Advocate General, decided to open description without such treatment which the oral procedure without a preparatory fall within subheading 02.01 A II of the inquiry and to assign the case to the First Common Customs Tariff." Chamber.

Spitta & Co., the plaintiff in the main action, imported on 29 December 1976 and 7 January 1977 from France into the Federal Republic of Germany "fore- quarters of bovine animals and boned or boneless cuts of beef and veal, seasoned with pepper, falling within tariff sub- heading 16.02 B III (b) 1" of the Common Customs Tariff. Those goods were bought on 30 November 1976.

as compared with trade with third According to Spitta & Co., Regulation countries to which the system of No 3092/76 is unlawful and accordingly compensatory amounts was applied only null and void on three grounds. by Regulation No 425/77 of 14 February Regulation No 3092/76 is based on 1977 amending the wording of tariff Regulation No 974/71, in particular subheading 16.02 B III (b) 1 concerning Article 6. It is a condition for the meat and veal. This constitutes an application of Regulation No 974/71 infringement of Article 9 (1) of the that in a Member State there should Treaty prohibiting customs duties on occur a modification in the rate of imports and exports and charges having exchange in excess of the margin of fluc- equivalent effect between Member States. tuation authorized by the international The present case entails a general rules in force on 12 May 1971. The discrimination against intra-Community power conferred under Article 6 applies trade as compared with trade with third only to the detailed rules for the countries. This is in fact the very application of the regulation. Regulation characteristic of a tax having an effect No 3092/76 is thus based exclusively on equivalent to a customs duty within the the enabling provision in Article 6 of Community. Regulation No 974/71 when in a Member State there occurs a fluctuation B — Observations submitted by the in the rate of exchange wider than the Commission permitted margin. In the Federal Republic of Germany there was no According to the Commission all the alteration in the partity of the currency, conditions listed by Regulation No either in December 1976 or during the 974/71 for the fixing of monetary previous period, after October 1976. compensatory amounts in intra- Community trade were fulfilled, with Secondly, Regulation No 3092/76 makes regard to the products referred to in the no provision for contracts in the course present case, when Regulation No of implementation and thus breaches the 3092/76 was adopted. principles of the protection of good faith and of legitimate expectation. It is true that in certain cases concerning long- term contracts the Court of Justice has ruled that the importer himself must seek the appropriate remedy (cf. Case 68/77 IFG [1978] ECR 354) but this ruling cannot be extended to contracts to be

Spitta & Co. is mistaken in particular in individuals is appropriate in a procedure considering that Article 1 (1) of Regu- for a preliminary ruling under Article lation No 974/71 means that it is a 177 of the Treaty concerning the validity condition for the inclusion of a product of a regulation. A regulation can only be within the scope of the system of valid or invalid. The invalidity of a regu- monetary compensatory amounts that a lation can scarcely be restricted to "modification of the rate of exchange" certain persons whose legitimate should occur. The application of the expectations have been frustrated. Such system is conditional only upon the rate persons are always entitled to institute of exchange of a given currency being in proceedings for damages under Article excess of the margin of fluctuation; the 215 of the Treaty. currency fluctuations themselves, that is Regardless of the reply to the doubt to say the variations in the rate of expressed above, the conditions which, exchange, affect the size of the amounts, according to the case-law of the Court, as is clear from Article 2 of Regulation must be fulfilled before it can be No 974/71. acknowledged that there has been a Since "seasoned" meat is merely the breach of that principle have not been fresh meat referred to in Chapter 2 of fulfilled in this case. The principle that the Common Customs Tariff where only legislation generally has immediate effect a little spice or some other substance has in the absence of express and exceptional been added, currency fluctuations had provision to the contrary applies also to the future effects of situations which the same effect on prices for such meat. There was thus a risk of disturbances in came into being under the earlier legislation. Derogations from that the trade in such products also by reason principle are permissible only in quite of monetary measures. The Commission, exceptional circumstances, the existence in including "seasoned" meat within the of which is appraised in accordance with scope of the system of monetary the most stringent criteria. compensation, acted in pursuance of the very wide discretionary powers which it Spitta & Co. did not conclude an "irrevo- enjoys in that sphere. cable" transaction within the meaning of the case-law of the Court of Justice. Monetary measures affecting fresh meat "Irrevocable" transactions in the sense have led in the Community to abnormal that the trader can in fact no longer patterns of trade in "seasoned" meat not withdraw from them, are considered to covered by the system of compensatory be those which the trader has definitively amounts, and these patterns constitute a committed himself to carry out and this danger for the level of prices in the applies also as against the competent Member States concerned. Thus in the authorities. last months of 1976 importations from Ireland into the Federal Republic of meat products coming under subheading 16.02, which includes "seasoned" meat, increased considerably. When com- pensatory amounts were applied to such products also in January 1977, after the adoption of Regulation No 3092/76, the importations returned to their normal level.

refer to the developments occurring in As far as intra-Community trade is the rules applicable to imports of concerned traders are free to conclude seasoned meat from non-member contracts of unlimited duration for countries (the discussions in Case 68/77 unlimited quantities. The implementation (previously cited) and Case 90/77, or otherwise of such contracts is not Stimming [1978] ECR 995, turned on subject to penalties under Community these rules). The undertakings were fully law since there is no system of licences aware of the special nature of the or deposits. product which they had termed Finally, it was very easy to export meat "seasoned meat" and similar "pre- covered by heading 02.01 from Germany parations". They were not unaware that to any other Member State and thereby the product in question was one which was "made to measure" for no other to benefit from increased monetary compensatory amounts and subsequently, purpose than to enable them to avoid the after "preparing" the meat by adding a provisions then applicable to fresh meat. few grains of pepper, to re-export it to The foregoing applies in full to Spitta & the Federal Republic under heading Co., as is clearly shown by the terms in 16.02 without being charged any which they described the goods imported monetary compensatory amount. from France into Germany. In the order The fact that "seasoned" meat and making the reference these goods are similar products were subject to the described as "forequarters of bovine animals and boned or boneless cuts of system of monetary compensatory amounts only in respect of trade between beef and veal, seasoned with pepper, Member States is justified on objective falling within tariff subheading grounds. From the legal point of view 16.02 B III (b) 1". Such wording is different situations must be accorded nowhere to be found in heading 16.02 of different treatment. When Regulation the Common Customs Tariff. There are No 3092/76 was adopted "seasoned" no terms applicable to beef and veal meat no longer occupied anything but a except "Other prepared or preserved very minor place in trade with non- meat or meat offal: Other: Containing bovine meat or offal". On the other

1 By an order of 3 May 1978, which was received at the Court on 7 June 1978, the Hessisches Finanzgericht referred to the Court of Justice under Article 177 of the EEC Treaty a preliminary question on the validity of Regu- lation (EEC) No 3092/76 of the Commission of 17 December 1976 on the application of monetary compensatory amounts to certain beef and veal products (Official Journal L 348, p. 18).

2 This question was raised in the course of an action concerning the charging of monetary compensatory amounts in respect of importations of fore- quarters of bovine animals and boned or boneless cuts of beef and veal, seasoned with pepper, falling within tariff subheading 16.02 B III (b) 1 of the Common Customs Tariff which were effected by Spitta & Co., the plaintiff in the main action, from France into the Federal Republic of Germany on 29 December 1976 and 7 January 1977.

The competent customs office, the defendant in the main action, in pursuance of Regulation No 3092/76 charged a sum of DM 13 655.01 in respect of monetary compensatory amounts.

Spitta & Co contested the relevant notices of assessment before the Hessisches Finanzgericht on the ground that Regulation No 3092/76 was invalid.

3 The question submitted by the Hessisches Finanzgericht inquires whether Regulation No 3092/76 is either invalid or inapplicable:

JUDGMENT OF 31. 1. 1979 — CASE 127/78

Article 1 of that regulation states :

"For fresh, chilled or frozen products, other than minced products, which fall within subheading 16.02 B III (b) 1 of the Common Customs Tariff and which are excluded from classification in Chapter 2 thereof solely by reason of simple seasoning (e.g. with salt and pepper), or the addition of other sub- stances (e.g. vegetables, flours or oil), monetary compensatory amounts shall apply in trade between Member States at the level applicable to products of the same description without such treatment which fall within subheading 02.01 A II of the Common Customs Tariff."

5 The application of monetary compensatory amounts is subject to the condition prescribed in Article 1 (1) of Regulation No 974/71, as amended by Regulation No 509/73 of the Council of 22 February 1973 (Official Journal L 50, p. 1) that a Member State allows the exchange rate of its currency to fluctuate by a wider margin than that permitted by international rules in force on 12 May 1971.

SPITTA HAUPTZOLLAMT FRANKFURT AM MAIN-OST

Contrary to the claims of the plaintiff in the main action, that provision does not prescribe as a condition for the application of monetary compensatory amounts that there should have been a recent alteration in the exchange rate of the currency of the Member State in question.

It is sufficient that at the time when the monetary compensatory amounts are applied the exchange rate exceeds the fluctuation margins permitted by the international rules in force on 12 May 1971.

The second part of the question

8 The plaintiff in the main action claims that Regulation No 3092/76 makes no provision for exemption in respect of contracts already concluded and thereby breaches the principles of the protection of good faith and of legitimate expectation and that in fact it concluded the contract for the purchase of the goods in question on 30 November 1976, that is, before the publication of Regulation No 3092/76.

9 However, the import system at issue in this case did not require any previous authorization or any firm commitment on the part of the person concerned with respect to the authorities responsible for the management of the organi- zation of the markets in question and the Commission gave importers no indication which could have justified the expectation that, regardless of the development of conditions on the market, the previous rules would be main- tained without alteration.

Furthermore, the measure adopted by the Commission could not have surprised prudent traders who could not be unaware that the products in question, coming under subheading 16.02 B III (b) 1, constituted a sensitive area and were no different in practice from the fresh meat coming under Chapter 2 of the Common Customs Tariff.

In those circumstances the establishment of a transitional period would probably have prompted traders to import significant quantities of "seasoned" meat before the compensatory amounts were in fact applied, thereby rendering ineffective the measure adopted by the Commission.

The third part of the question

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 (First Chamber),

in answer to the questions referred to it by the Hessisches Finanzgericht by order of 3 May 1978, hereby rules:

Consideration of the question submitted has disclosed no factor of such a kind as to affect the validity of Commission Regulation No 3092/76.

Mertens de Wilmars Donner O'Keeffe