C-260/78
ECLI:EU:C:1979:199
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JUDGMENT OF THE COURT (SECOND CHAMBER) OF 12 JULY 1979 <apnote>1/apnote>
Maggi GmbH v Hauptzollamt Münster (preliminary ruling requested by the Finanzgericht Münster)
"Inward processing — monetary compensatory amounts"
Case 260/78
Agriculture — Monetary compensatory amounts — Application by the Member States — Exemption under arrangements concerning inward processing traffic — Not permissible (Regulation No 1380/75 of the Commission)
The provisions of Regulation No the matter of inward processing traffic so 1380/75 of the Commission laying down as to exempt from monetary compen detailed rules for the application of sation, in intra-Community trade, goods monetary compensatory amounts must imported from another Member State in be interpreted as meaning that a Member which they are in free circulation. State may not apply its national rules in
In Case 260/78
REFERENCE to the Court under Article 177 of the EEC Treaty by the Finanzgericht [Finance Court] Münster for a preliminary ruling in the action pending before that court between
MAGGI GMBH
and
HAUPTZOLLAMT MÜNSTER
I — Language of the Case: German.
JUDGMENT OF 12. 7. I979 — CASE 260/78
with
OBERFINANZDIREKTION [Regional Finance Board] MÜNSTER, intervening,
on the question whether an exemption from monetary compensatory amounts granted by a Member State within the context of inward processing arrangements on goods in free circulation in another Member State is compatible with Community law,
THE COURT (Second Chamber)
composed of: Lord Mackenzie Stuart, President of Chamber, M. Sørensen and A. Touffait, Judges, Advocate General: G. Reischl Registrar: A. Van Houtte
gives the following
JUGDMENT
Facts and Issues
The facts of the case, the course of the from monetary compensatory amounts, procedure and the conclusions, sub granted it permanent inward processing missions and arguments of the parties arrangements (processing of goods under may be summarized as follows: customs control) for the mixing and packaging of white sugar intended for the manufacture of soup preparations. By a decision of 20 January 1975 the I — Facts and procedure defendant in the main action withdrew the authorization which it had granted 1. The plaintiff in the main action on the grounds that the inward regularly imported sugar from France processing arrangements were no longer into Germany, processed it into soup necessary: the German regulation on preparations on commission for a French exemption from the sugar tax (Zucker customer and exported the products thus steuerbefreiungsordnung) makes pro manufactured to France and Belgium. vision for exemption from that tax in respect of sugar imported for the manu By a decision of 9 January 1974 the facture of goods intended for export; the defendant in the main action, on the purpose of inward processing traffic is application of the plaintiff for exemption not exemption from monetary com from the sugar tax ("Zuckersteuer") and pensatory amounts.
MAGGI v HAUPTZOLLAMT MÜNSTER
The plaintiff in the main action lodged constituent parts of other goods to an objection against that decision. The the country of origin or to another objection was dismissed as unfounded by Member State? the intervener in the main action. Consequently the plaintiff in the main action instituted proceedings before the 2. In the event of Question 1 being answered in the affirmative: Was the Finanzgericht Münster. exemption from the levying of the monetary compensatoryamount also compatible with Community law 2. By an order of 6 October 1978 the where national law (in this case, Finanzgericht Münster stayed pro Article 47 (2) of the German ceedings in the case and referred the Customs Law) made it dependent following questions to the Court of upon a prior assessment by the Justice for a preliminary ruling pursuant customs authority of reliability of the to Article 177 of the EEC Treaty: processor?
"I. On 8 September 1975 was it in 3. In the event of Questions 1 and 2 principle compatible with Com being answered in the affirmative: munity law, and in particular with Was the exemption from the levying the provisions of Regulation (EEC) of the monetary compensatory No 974/71 of the Council of 12 amount also compatible with May 1971 (Official Journal, English Community law where national law Special Edition 1971 (I), p. 257) and (in the present case, Article 48 (2) of the German Customs Law) made it Regulation (EEC) No 1380/75 of the Commission of 29 May 1975 dependent upon a prior balancing by the customs authorities of the (Official Journal L 139, p. 37), that a Member State of the Community as interests of the processor against the interests of the domestic manu originally constituted, in intra- Community trade and on the basis facturer in the country of impor tation?" of its national law concerning inward processing arrangements (in the present case, Article 47 et seq. of the Zollgesetz (Customs Law) of the 3. The order of the Finanzgericht Federal Republic of Germany of shows that the plaintiff in the main 1961 in conjunction with Article 2 action argued before it that it is (1) of the Abschöpfungserhebungs impossible to infer from Regulation gesetz (Law relating to the (EEC) No 1463/73 of the Commission imposition of levies) of 1962), should of 30 May 1973 laying down detailed exempt from payment of the rules for the application of monetary monetary compensatory amount compensatory amounts (Official Journal goods which had been in free circu 1973, L 146, p. 1) or from Regulation lation in another Member State and (EEC) No 1380/75 which replaced that on which monetary compensatory regulation, both of which were cited in amounts are to be levied on import the decision adopted with regard to the under Community law, subject to objection lodged by the plaintiff in the the condition that the goods were main action, that in intra-Community not to be put into free circulation in trade inward processing traffic cannot the importing State but were to be result in exemption from monetary processed under the surveillance of compensatory amounts. That inward the customs and re-exported as processing arrangements within the
JUDGMENT OF 12. 7. 1979 — CASE 260/78
original Member States of the Community could only be those which Community are lawful in principle may did not comply with the conditions laid already be inferred from Regulation down in Article 9 (2) of the Treaty. On (EEC) No 1515/74 of the Commission the other hand, goods coming from a of 18 June 1974 on the application of Member State fall within one of the inward processing arrangements in trade situations referred to in Article 9 (2) of between the Member States of the the Treaty. Community as originally constituted and the new Member States, and between the new Member States themselves, for such 5. The Finanzgericht emphasizes in the time as customs duties are levied in such order making the reference that the trade (Official Journal 1974, L 163, Community provisions applicable to this
p. 17). The plaintiff in the main action case do not expressly settle the question recalled before the Finanzgericht the whether it is lawful to authorize inward wording of the 13th recital in the processing arrangements in intra- preamble to Regulation No 1380/75: Community trade for the purposes of granting exemption from monetary compensation. "Whereas the system provided for by this regulation can cover only products in free circulation within the Community; It recalls furthermore that Articles 7 to whereas, moreover, products benefiting 15 of Regulation No 1380/75 governing from a compensatory amount should be intra-Community trade do not, unlike of a quality such that they can be Article 6, which refers to trade with third marketed under normal conditions." countries, contain any reference of a general nature to the provisions governing the levying of customs duties It considers that that recital shows of which the national provisions on clearly that the application of the regu inward processing arrangements might lation is restricted to products in free form part. Article 8 (5) together with circulation within the Community as paragraph (1) refers to the customs opposed to goods to which inward provisions only for the purpose of processing arrangements apply.
Furth determining the rate of monetary ermore, Article 11 of the said regulation compensation. According to the Finanz draws a distinction between goods which gericht the question thus arises as to it is intended shall be put into free circu whether it may be concluded a contrario lation and other goods. that the national provisions concerning customs are not generally applicable in intra-Community trade. 4. The order of the Finanzgericht also indicated that the defendant and the The Finanzgericht continues: intervener in the main action claimed that Regulation No 1515/74 does not apply to the case in question since it "In addition, it appears doubtful whether constitutes an exceptional system for the the sanctioning of inward processing transitional period in trade with the new arrangements in intra-Community trade
Member States. Likewise, the 13th recital by a Member State and accordingly the in the preamble to Regulation No exemption from the levying of monetary 1380/75 does not provide grounds for compensatory amounts is compatible concluding that inward processing traffic with the spirit and objective of the said is lawful. In fact products which were EEC regulations. The objective of not in free circulation within the monetary compensation is essentially to
MAGGI v HAUPTZOLLAMT MONSTER
compensate for the effect on the prices had appointed Peter Gilsdorf, one of its of particular goods of the divergence of Legal Advisers, and Mr. Stockburger as the actual exchange rates of the Member Agents. States from the official parity and to stabilize prices in trade in a particular The Court, having heard the report of country's currency (cf. the recitals to the Judge-Rapporteur and the views of Regulation (EEC) No 974/71). This the Advocate General, decided to open objective applies not only to trade in the oral procedure without any pre goods which go into free circulation in paratory inquiry. the importing State, but also to trade in goods which are processed in the importing State under customs control By an order of 28 March 1979 the Court and are re-exported as components of decided, pursuant to Article 95 (1) of the other goods to the country of origin or Rules of Procedure to assign the case to the Second Chamber. to another Member State ..."
"Objections to the exemption from the levying of monetary compensatory II — Written observations sub amounts by a Member State on the basis mitted to the Court by the of its national provisions on inward Commission processing arrangements also arise from the fact that thereby the uniform application of Community law could be The Commission claims that it is quite jeopardized..., merely because the clear from the wording of the relevant national provisions of the Member States provisions of Community law that of the European Communities differ inward processing traffic having as its inter se (in some cases considerably) as purpose exemption from monetary regards inward processing arrangements compensatory amounts was not auth (cf. the recitals of the preamble to the orized in trade between Member States directive of the Council of 4 March 1969 of the Community as originally on the harmonization of provisions laid constituted: basic Regulation No 974/71 down by law, regulation or admin of the Council, in conjunction with istrative action in respect of inward Regulation (EEC) No 2746/72 of the processing, Official Journal, English Council of 19 December 1972 (Official Special Edition 1969 (I), p. 75) ..." Journal, Special Edition 1972 (28 and 30 December), p. 64) amending that regu lation, provides that compensatory 6. The order making the reference was amounts are applicable to all commercial received at the Court Registry on 13 transactions whether they concern December 1978. Member States or third countries (Article 1 (1)). No provision was made for any The Commission of the European exception. Communities, represented by its Legal Adviser, P. Kalbe, acting as Agent, The Commission continues that Regu assisted by A. Stockburger, of the lation No 1380/75, which was in force Frankfurt Bar, lodged written obser during the period in question and which vations in accordance with Article 20 of contains the provisions for the the Protocol on the Statute of the Court implementation of Regulation No of Justice of the European Communities. 974/71, likewise provides for no The Commission informed the Court of exceptions to the mandatory application Justice by letter of 14 June 1979 that it of monetary compensatory amounts to
JUDGMENT OF 12. 7. 1979 — CASE 260/78
all trade in goods. Article 6 makes compensation between the original express reference, with regard to trade Member States, it would have been with third countries, to the provisions necessary to lay down a new definition concerning the charging of customs of the concept of free circulation duties and import levies which are also between Member States; such a stated to apply to monetary compen definition does not exist. satory amounts. There is no such reference to customs provisions in Title The Commission observes, thirdly, that if III concerning the application of inward processing arrangements had monetary compensatory amounts in been re-introduced in the context of intra-Community trade. It is merely trade between the original Member provided that certain provisions of States, it would have been necessary to customs legislation may apply by apply them to all products.
An economic analogy. necessity could at the most be said to exist where a compensatory amount is The Commission considers that its point applied to the basic product, but not to a of view is substantiated by considerations product re-exported after processing. of policy in legal matters. It states first of However, according to the Commission all that, after the achievement of the an authorization for inward processing European customs union it was necessary traffic, the effect of which is to exempt to ensure, in introducing the system of the trader from monetary compensation, compensatory amounts, that the brings with it in such a case distortions obstacles to the free movement of goods of competition and geographical disad on the territory of the Community as vantages which could not in any event be originally constituted inevitably entailed tolerated by the Community: in all cases by the implementation of that system where monetary compensation is applied ■were minimized. The re-introduction of to basic products coming from the inward processing arrangements within original Member States but not to the framework of the monetary compensating products manufactured compensatory amounts obliged the from them, raw materials from Member Community legislature to furnish the States with weak currencies enjoy price system of compensatory amounts with advantages in relation to products additional customs arrangements gov
coming from Member States with hard erning trade between the original currencies which sometimes cannot be Member States. That decision was made good if, by virtue of inward incompatible with the provisions of processing arrangements, it is possible Article 9 (1) of the Treaty. for them to avoid payment of monetary compensatory amounts. The Commission states, secondly, that the rules which governed inward The Commission further states that the processing traffic could not apply to system of monetary compensation monetary compensation; it was necessary provides for the possibility of inward to establish new rules for monetary processing traffic in trade with third
compensation. It emphasizes that the countries, as is indicated indirectly by basic directive of the Council of 4 March Article 1 of Regulation (EEC) No 1969 (Official Journal, English Special 1947/78 of the Commission of 11 Edition 1969 (1), p. 75) is restricted to August 1978 amending Regulation No goods which are not in free circulation 1380/75 (Official Journal 1978, L 221, p. within the Community. The Commission 14), which added to Article 6 of Regu adds that, if the Community legislature lation No 1380/75 an Article 6a had intended to make the provisions of providing for the application of the directive applicable to monetary monetary compensatory amounts to
MAGGI v HAUPTZOLLAMT MONSTER
inward processing traffic. The Com III — Oral procedure mission adds that this problem has not arisen with regard to intra-Community trade for the simple reason that inward processing traffic does not exist as a The Commission, represented by its factor in monetary compensation. Legal Adviser, Peter Gilsdorf, acting as Agent, presented oral argument at the Finally, the Commission maintains that hearing on 21 June 1979. since the second and third questions were submitted only to cover the eventuality of an affirmative answer The Advocate General delivered his being given to the first question is it opinion in the course of the same unnecessary to reply to them. hearing.
Decision
1 By an order of 6 October 1978, which was received at the Court of Justice on 13 December 1978, the Finanzgericht Münster submitted, under Article 177 of the EEC Treaty, the following questions for a preliminary ruling:
"1. On 8 September 1975 was it in principle compatible with Community law, and in particular with the provisions of Regulation (EEC) No 974/71 of the Council of 12 May 1971 (Official Journal, English Special Edition 1971 (I), p. 257) and Regulation (EEC) No 1380/75 of the Commission of 29 May 1975 (Official Journal, L 139, p. 37) that a Member State of the Community as originally constituted, in intra- Community trade and on the basis of its national law concerning inward processing arrangements (in the present case, Article 47 et seq. of the Zollgesetz (Customs Law) of the Federal Republic of Germany of 1961 in conjunction with Article 2 (1) of the Abschöpfungserhebungsgesetz (Law relating to the imposition of levies) of 1962), should exempt from payment of the monetary compensatory amount goods which had been in free circulation in another Member State and on which monetary compensatory amounts are to be levied on import under Community law, subject to the condition that the goods were not to be put into free circulation in the importing State but were to be processed under the surveillance of the customs and re-exported as constituent parts of other goods to the country of origin or to another Member State?
JUDGMENT OF 12. 7. 1979 — CASE 260/78
2. In the event of Question 1 being answered in the affirmative: Was the exemption from the levying of the monetary compensatory amount also compatible with Community law where national law (in this case, Article 47 (2) of the German Customs Law) made it dependent upon a prior assessment by the customs authority of the reliability of the processor?
3. In the event of Questions 1 and 2 being answered in the affirmative: Was the exemption from the levying of the monetary compensatory amount also compatible with Community law where national law (in the present case, Article 48 (2) of the German Customs Law) made it dependent upon a prior balancing by the customs authorities of the interests of the processor against the interests of the domestic manu facturer in the country of importation?"
2 Those questions were submitted in the course of an action between the German customs authorities and a German undertaking concerning the refusal by the former to apply inward processing arrangements to certain quantities of sugar imported from France for use in the manufacture of soups intended for export to France and Belgium. The application of inward processing arrangements had been requested in order to obtain exemption for the imported sugar from monetary compensatory amounts on import ation in view of the fact that the finished product did not benefit from the grant of monetary compensation on exportation.
3 In order to reply to the question submitted it is necessary first of all to consider the provisions 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 1975, L 139, p. 37) which, pursuant to Article 21 thereof, entered into force on 1 June 1975.
4 Title II (Article 6) of that regulation lays down detailed rules for the application of monetary compensatory amounts in trade with third countries and Title III (Articles 7 to 15) lays down detailed rules for their application in intra-Community trade. Whilst Article 6 provides that the provisions concerning the charging of customs duties shall apply to monetary compensatory amounts, there is no provision of that nature in Title III. Only certain specific customs provisions are applicable to intra-Community trade and the rules relating to inward processing arrangements are not amongst them.
MAGGI v HAUPTZOLLAMT MONSTER
5 This interpretation of the wording of the provisions is in accordance with the intention underlying them. The representative of the Commission explained in the course of the procedure before the Court that, after the achievement of the customs union had removed the justification for inward processing arrangements in intra-Community trade, the Commission wished to ensure that the arrangements were not re-established when the system of monetary compensatory amounts was introduced. Furthermore, it is clear from Article 2 of Council Directive No 69/73 of 4 March 1969 on the harmonization of provisions laid down by law, regulation or administrative action in respect of inward processing (Official Journal, English Special Edition 1969 (I), p. 75 that those arrangements do not apply to goods which are in free circulation within the Member States. It would thus have been necessary to enact specific provisions if it had been intended to re-introduce the arrangements in the context of the system of monetary compensation.
6 The Commission also pointed out that there is no real economic necessity to exempt the importer from monetary compensatory amounts in circumstances such as those in the present case since the Commission, as a matter of policy, also applies the monetary compensation arrangements to derived products where the proportion of raw materials covered by that system exceeds a reasonable level.
7 In those circumstances the reply to the first question referred to the Court should be that the provisions of Regulation No 1380/75 of the Commission of 29 May 1975 laying down detailed rules for the application of monetary compensatory amounts must be interpreted as meaning that a Member State may not apply its national rules in the matter of inward processing traffic so as to exempt from monetary compensation, in intra-Community trade, goods imported from another Member State in which they are in free circulation.
8 In view of that answer to the first question it is unnecessary to reply to the second and third questions.
Costs
9 The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable; since 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 as to costs is a matter for that court.
OPINION OF MR REISCHL — CASE 260/78
On those grounds,
THE COURT (Second Chamber),
in answer to the questions submitted to it by the Finanzgericht Münster by an order of 6 October 1978, hereby rules:
The provisions of Regulation No 1380/75 of the Commission of 29 May 1975 laying down detailed rules for the application of monetary compensatory amounts must be interpreted as meaning that a Member State may not apply its national rules in the matter of inward processing traffic so as to exempt from monetary compensation, in intra- Community trade, goods imported from another Member State in which they are in free circulation.
Mackenzie Stuart Sørensen Touffait
Delivered in open court in Luxembourg on 12 July 1979.
A. Van Houtte A. J. Mackenzie Stuart Registrar President of the Second Chamber
OPINION OF MR ADVOCATE GENERAL REISCHL DELIVERED ON 21 JUNE 1979 <apnote>1/p
In connexion with the reference for a of the European Communities has put preliminary ruling by the Finanzgericht forward written and oral observations, it Münster on which only the Commission is sufficient, I feel, to state that I find the
1 — Translated from the German.