C-38/79

HAUI'1/OI.I.AM ľ [Principal Customs Office] HAMBURG-JONAS

on the interpretation of Article 11 (2) of Regulation N o 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),

THE COURT

composed of: H. Kutscher, President, A. O'Keeffe and A. Touffait (Presidents of Chambers), J. Mertens de Wilmars, P. Pescatore, Lord Mackenzie Stuart, G. Bosco, T. Koopmans and O. Due, Judges,

Advocate General: F. Capotorti Registrar: A. Van Houtte

gives the following

Article 2a of Regulation N o 974/71, as I — F a c t s and w r i t t e n p r o c e d u r e amended by Regulation N o 1112/73 of the Council of 30 April 1973 (Official Journal, L 114, p. 4), provides that: 1. The request from the Finanzgericht Hamburg for a preliminary ruling is "Where a product exported from one concerned with whether the exception in Member State has been imported into a regard to the destruction of goods in Member State which has to grant a transit by reason of force majeure, compensatory amount upon importation, provided for in Article 6 (1) of Regu­ the exporting Member State may, by lation No 192/75 on export refunds, agreement with the importing Member which was applied by analogy to State, pay the compensatory amount accession compensatory amounts in the which should be granted by the said judgment of the Court of 11 July 1978 in importing Member State. In this case no Case 6/78 Union Française des Céréales v compensatory amount shall be granted Hauptzollamt Hamburg-Jonas [1978] by the importing Member State for ECR 1675, may also be applied to products originating in the Member State monetary compensatory amounts which concerned." become payable on importation into a Member State but which are granted by the exporting State. The United Kingdom and the Federal Republic of Germany have taken advantage of the option given by that 2. The monetary compensatory amount Article. payable in the case of exportation from a Member State the currency of which has Article 11 (2) of Regulation N o 1380/75 appreciated above the margin of fluc­ of the Commission of 29 May 1975 tuation to a Member State the currency laying down detailed rules for the of which has depreciated below that • application of monetary compensatory margin is composed of two elements: amounts (Official Journal 1975, L 139, one, granted by the exporting State, is p. 37) provides that: payable when the goods are exported and the other, granted by the importing State, is payable when the goods are "Payment by the exporting Member imported (Article 1 (1) of Regulation N o State of the monetary compensatory 974/71 of the Council of 12 May 1971 amount which should be granted by the on certain measures of conjunctural importing Member State shall be

"The compensatory amount shall be paid only upon proof that the product in 5. In its judgment of 11 July 1978 in respect of which customs export Case 6/78 Union Française des Céréales, formalities have been completed has left the Court, in applying by analogy Article the geographical territory of the Member 6 (1) of Regulation No 192/75, ruled State in which the formalities were that: completed." "Article 5 (2) of Regulation No 269/73 According to the second paragraph of of the Commission of 31 January 1973 is that Article, where the compensatory to be interpreted as meaning that where amount has to be adjusted for the goods exported from an old Member amount of customs duties, or where it is State to a new Member State have higher than the export refund applicable perished in transit as a result of force on the day of exportation, payment of majeure, the exporter is entitled to the the monetary compensatory amount is same compensatory amounts as would made subject to ". . . proof that, further, have been due to him if the goods had import formalities have been completed reached their destination and if import and duties and taxes of equivalent effect formalities had been completed there." payable in the Member State of destination have been collected." 6. At the beginning of November 1977, 4. In the field of export refunds, Article Butter- und Eier-Zentrale Nordmark 6 (1) of Regulation No 192/75 of the e.G., the plaintiff in the main action in Commission of 17 January 1975 laying the present case, sold 18 160 kg of butter down detailed rules for the application to a British undertaking. The sale price, of export refunds in respect of agri- which was calculated on the basis of the cultural products (Official Journal, L 25, domestic purchase prices less the p. 1) provides that: accession compensation for the United Kingdom, the monetary compensation ". . . payment of the refund shall be for Germany and the monetary conditional not only on the product compensation for the United Kingdom,

was agreed cif Manchester. On 10 The defendant in the main action argued November 1977 the goods were loaded before the Finanzgericht that in on board the "Hero" at the Danish port Community law there is no general of Esbjerg. On 13 November 1977 the principle of force majeure having the ship sank to the north-west of effects which the plaintiff claims. The Heligoland. The insurance company plaintiff had not shown that, unless it reimbursed the cif price of the goods. were granted the monetary compensa- The plaintiff received from the German tory amount, it would be at a disad- customs authorities DM 14 617.63 by vantage compared with exporters in way of the United Kingdom accession France. Where in Germany a monetary compensation and DM 10 734.38 by way compensatory amount is paid on export of the monetary compensation for the of a product and in France a monetary Federal Republic of Germany, that being compensatory amount is levied on export in respect of the exportation of the of a similar product, both products, after goods. The Hauptzollamt Hamburg- being exported, are on the same currency Jonas, the defendant in the main action level. It was submitted that there is no in this case, refused, however, to pay the scope for applying Article 6 (1) of Regu- monetary compensation of DM lation No 192/75 by analogy. There is 17 307.56 for importation into the no comparability in that respect. United Kingdom. Monetary compensatory amounts on imports are paid by the exporting State only for administrative and technical reasons and are conditional on the act of 7. In respect of that refusal the plaintiff importation. In so far as Article 11 (2) of in the main action instituted proceedings Regulation No 1380/75 requires proof before the Finanzgericht Hamburg. of completion of customs import formalities it does not, unlike the provisions of Regulation No 192/75, do so to prevent abuses. Before the Finanzgericht the plaintiff argued, in particular, that, in accordance with the principle laid down by the Court in its aforementioned judgment in Case 6/78, Article 6 (1) of Regulation No 192/75 falls to be applied by analogy 8. By order of 20 February 1979 the in the present case. It was submitted, Finanzgericht stayed proceedings before moreover, that there is in Community it and made reference to the Court of law a general legal principle of force Justice under Article 177 of the EEC majeure which, in the case in question, Treaty for a preliminary ruling on the relieved the plaintiff in the main action following question: of the need to provide proof of impor- tation.

the exporting instead of the importing that country. The position of an exporter State in accordance with Article 2a of who sells from a Member State with Regulation (EEC) No 974/71 of the higher prices to a Member State with Council of 12 May 1971, has a claim for lower prices is no different. To this must payment by the exporting Member State be added, according to the Finanz­ of the same monetary compensation as gericht, the fact that the very purpose of would have been due to him if the goods the introduction, by means of Regulation had reached their destination and if No 974/71, of monetary compensatory customs import formalities had been amounts in trade between Member States completed there?" was to facilitate, without deflection of trade, trade in agricultural products even where the price levels are different. For 9. It appears from the order making the that reason, according to the Finanz­ reference that the Finanzgericht is of the gericht, a rule which runs counter to that opinion that the wording of the relevant objective would not be compatible with provisions supports the argument of the that system. defendant in the main action. 10. The order making the reference On the other hand, it considers that, was received at the Registry of the Court despite their consisting legally and on 8 March 197.9. technically of two operations, the subsidies on exportation and on impor­ In accordance with Article 20 of the tation constitute a single measure Protocol on the Statute of the Court of designed to stimulate agricultural trade Justice of the EEC, written observations within the Community without any were submitted by the Commission of deflection of trade. It appears therefore the European Communities, represented to the Finanzgericht that, where goods by J. Sack, a member of its Legal perish in transit as a result of force Department, acting as Agent, and by the majeure, it is illogical to grant monetary plaintiff in the main action, represented compensation on export and not on by Dr Modest and Partners, Rechts­ import. The Finanzgericht considers that, anwälte, Hamburg. on the principle of equality, Regulation N o 1380/75 contains a lacuna which After hearing the report of the Judge- must be made good by applying Article 6 Rapporteur and the views of the (1) of Regulation N o 192/75 by analogy. Advocate General, the Court decided to The granting of export refunds, open the oral procedure without any monetary compensation on trade with preparatory inquiry. non-member countries and accession compensatory amounts even where goods have perished as a result of force majeure is based upon the concept of II — Written observations sub­ equality in competition. If he had not the mitted to the C o u r t prospect of being granted those export subsidies, the exporter would have to insure against the risk of not being A — Observations of the plaintiff in the granted any subsidies in the event of the main action goods perishing as a result of force majeure and he would be at a disad­ In the view of the plaintiff in the main vantage compared with a seller in a non- action the question put by the Finanz­ member country, who only has to insure gericht ought to be answered affir­ the goods at the price level applicable in matively.

In the plaintiff's submission, Article 6 (1) of Regulation No 192/75 must be Finally, the plaintiff emphasizes that applied by analogy to monetary com­ under Articles 32 and 36 of the Act of pensatory amounts. It submits that an Accession customs duties and charges undertaking in a country the currency of having an effect equivalent thereto may which has appreciated beyond the no longer be levied after 1 July 1977. margin of fluctuation may not be obliged Accordingly, the second condition of to bear the above-mentioned loss or to Article 11 (2) of Regulation No insure against the risk of such a loss, 1380/75, whereby proof is required that since in both cases it would be in a less customs duties and charges having favourable competitive situation com­ equivalent effect have been charged, pared with sellers in countries the disappears. currency of which has depreciated below the margin of fluctuation. Such a situation would not be compatible, moreover, with the prohibition on B — Observations of the Commission discrimination.

An application of Article 6 (1) of Regu­ The Commission stresses that a literal lation No 192/75 by analogy follows application of the provision in question

JUDGMENT OF 5. 3. 1980 — CASE 38/79

The Commission reminds the Court in The Commission considers that, in these this regard, first, that the objectives of circumstances, it is proper to recognize the two systems are different: the system an entitlement to an accession of monetary compensation seeks to compensatory amount in a situation such prevent currency fluctuations from as that underlying Case 6/78, where the disturbing the market or deflecting product had been exported from a traditional trade, whereas the aim of the Member State having a higher price system of accession compensatory level. In order to prevent possible abuses amounts is that of permitting free in such cases, it is sufficient to require movement of agricultural products in the proof that the product was in fact enlarged Community before the entry destined for the specified new Member into force of uniform agricultural prices State. and therefore of facilitating such a deflection within that larger Community. In the granting of accession compensa- tory amounts fundamental importance is The Commission goes on to state that thus attached to the principle of the legal position with regard to Community preference, while that monetary compensatory amounts is principle does not play an essential part totally different. Two independent in the system of monetary compensatory amounts, for which different qualifying amounts. conditions apply, are involved. The matter is not merely one of preventing, by means of the obligation to provide proof of importation, the perpetration of The Commission points out further that fraudulent practices in certain cases; accession compensatory amounts are quite simply, in the absence of impor- applied only by the original Member tation, there is no entitlement to the States of the Community. Consequently, compensatory amount.

Where goods which have been sold are The Commission examines finally transported without crossing any of the whether, and if so, to what extent, frontiers within the Common Market, Article 6 (1) of Regulation No 192/75 the trader concerned must insure the may be invoked in regard to the grant of goods at Community agricultural prices monetary compensatory amounts in cases if he does not wish to suffer any loss of force majeure. In this context, the should those goods perish. According to Commission emphasizes that no parallel the Commission, it is difficult to see why may be drawn between export refunds goods which are the subject of a and monetary compensatory amounts. transaction between Hamburg and The granting of export refunds and the Munich and which also have to compete granting of accession compensatory with goods coming from non-member amounts have a common objective, countries must bear higher insurance namely, that of opening the markets of costs than those which have to be borne non-member countries and of Member by goods sold for dispatch from States which are not yet fully integrated Hamburg to London. The Common into the Community to certain goods Market rests upon the principle that it is which could not be sold on those essential to eliminate the disadvantages markets because their basic price is too arising in trade between Member States high. However, the purpose of monetary simply through goods crossing a frontier. compensatory amounts is not to However, conversely, to give certain encourage exports, but merely to goods an unjustified advantage for the neutralize the negative effects on the simple reason that they cross a frontier Common Agricultural Policy of currency would be equally incompatible with the fluctuations. The Community institutions

The Commission stressed in particular that application by analogy of Article 6 (1) of Regulation No 192/75 was Ill — Oral procedure excluded by reason of the absence of any lacuna in the legislation on monetary compensatory amounts. The ommission from Article 11 of Regulation No 1380/75 of any provision concerning 1. The Commission stated in reply to a cases of force majeure is due to the written question from the Court that, Commission's intention not to attribute apart from the butter sold by the plaintiff to monetary compensatory amounts the in the main action, agricultural products function of an insurance against an from Denmark were aboard the exporter's actual losses. shipwrecked vessel. According to infor- mation given to the Commission by the Danish customs authorities no monetary compensatory amounts were paid in respect of those other goods, despite the 4. The Advocate General delivered his fact that the United Kingdom and opinion at the sitting on 16 January Denmark had made use of the option 1980.

BUTľlíK- UND mi-K-ZI-NTRAl.l-: NORDMARK v HAUPTZOI.LAMT HAMBURG-JONAS

Decision

1 By order of 20 February 1979, which was received at the Court on 8 March, the Finanzgericht Hamburg submitted for a preliminary ruling under Article 177 of the EEC Treaty a question concerning the interpretation of Article 11 (2) of Regulation N o 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).

4 In Case 6/78 the Court applied that clause on force majeure by way of analogy in interpreting Regulation N o 269/73 of the Commission of

JUDGMENT O ľ 5. 3. 1980 — CASE 38/79

31 January 1973 laying down detailed rules for the application of the system of "accession" compensatory amounts (Official Journal, L 30, p. 73), Article 5 (2) of which provides that, in certain cases, payment of the compensatory amount is subject to proof that import formalities have been completed in the Member State of destination. In its judgment the Court proceeded, in particular, on the principle of Community preference, the observance of which principle, in trade between the Community as originally constituted and the new Member States before the full and complete integration of the latter into the common organization of agricultural markets, the temporary system of accession compensatory amounts was intended to ensure.

5 In the present case the Finanzgericht considers that Regulation N o 1380/75 displays the same lacuna and has therefore invited the Court to rule upon the following question:

"Is Article 11 (2) of Regulation (EEC) N o 1380/75 of the Commission of 29 May 1975 to be interpreted, by analogy with Article 6 (1) of Regulation (EEC) N o 192/75 of the Commission of 17 January 1975, as meaning that, if goods exported from a Member State perish in transit as a result of force majeure, the exporter thereof, in the event of the monetary compensation being granted by the exporting instead of the importing State in accordance with Article 2a of Regulation (EEC) N o 974/71 of the Council of 12 May 1971, has a claim for payment by the exporting Member State of the same monetary compensation as would have been due to him if the goods had reached their destination and if customs import formalities had been completed there?"

7 In fact, the system of refunds on exports to non-member countries was introduced in order to ensure that, subject to special considerations relating to the different products, Community exporters would enjoy a level of prices similar to that within the Community market and accordingly, for certain products, significantly higher than the level of prices on the world market. As the Court stressed in the judgment which it gave in Case 6/78 in relation to accession monetary compensatory amounts, it would be incompatible with the principle of Community preference for the exporter in the Community to be refused the refund after the goods had perished in transit as a result of force majeure. Whether he bore that loss himself or whether he had insured against that risk, the exporter would be in an unfavourable competitive position in relation to a seller in a non-member country, which is precisely what the system of refunds is intended to prevent.

» On the other hand, the function of the system of monetary compensatory amounts is wholly different. That system was introducted in order to remedy, in a general manner, a monetary situation which threatens the existence of the Community system of prices for agricultural products. It was not conceived in order to give individual traders security against all the risks which flow from fluctuations in exchange rates or to indemnify them for any loss suffered as a result of these fluctuations.

9 Having regard to these differences between the system of refunds on exports to non-member countries and the system of monetary compensatory amounts, there is no reason to apply by analogy a rule expressly laid down for refunds in order to indemnify the plaintiff in the main action for a loss which normally constitutes one of the commercial risks which traders must themselves assume, by taking out, where appropriate, a suitable insurance.

in answer to the question submitted to it by the Finanzgericht Hamburg by order of 20 February 1979, hereby rules:

Article 11 (2) of Regulation No 1380/75 of the Commission of 29 May 1975 laying down detailed rules for the application of monetary compensatory amounts is to be interpreted as meaning that where goods exported from a Member State have perished in transit as a result of force majeure, the exporter is not entitled to the same monetary compensatory amounts as would have been due to him if the goods had reached their destination and if customs import formalities had been completed there.

Kutscher O'Keeffe Touffait Mertens de Wilmars Pescatore

Mackenzie Stuart Bosco Koopmans Due

Delivered in open court in Luxembourg on 5 March 1980.

A. Van Houtte H. Kutscher Registrar President