C-66/80

1 — Language of the Case: Iulian.

JUDGMENT OF 13. 5. 1981 — CASE 66/80

In Case 66/80

REFERENCE to the Court under Article 177 of the EEC Treaty by the Tribunale Civile di Roma for a preliminary ruling in the action pending before that court between

S P A INTERNATIONAL CHEMICAL CORPORATION, Rome,

INTERNATIONAL CHEMICAL CORPORATION v AMMINISTRAZIONE DELLE FINANZE DELLO STATO

and

AMMINISTRAZIONE DELLE FINANZE DELLO STATO [Italian Finance Adminis- tration],

Facts and Issues

The facts of the case, the course of the I — Facts and procedure procedure and the observations sub- mitted under Article 20 of the Statute of 1. Council Regulation (EEC) No the Court of Justice of the EEC may be 563/76 of 15 March 1976 (Official summarized as follows: Journal L 67, p. 18) imposed an

JUDGMENT OF 13. 5. 1981 — CASE 66/80

purchase. With the same aim in view the entry into free circulation in the All these securities were forfeited Community of imported vegetable because the obligation to purchase was foodstuffs was made subject to the not complied with. Consequently, in delivery of a "protein certificate" order to avoid the obligation to provide proving either that the obligation to securities for vegetable foodstuffs which purchase skimmed-milk powder had it obtained outside the Community, been fulfilled or that a security had been instead of importing and putting the said provided to guarantee a later purchase. If products into free circulation the plaintiff the obligation to purchase was not in the main action availed itself of the complied with the security was forfeited. opportunity offered by Article 10 (2) of Regulation N o 677/76 (Official Journal L 81, p. 23), laying down detailed rules for the application of Regulation N o 563/76, by applying for and obtaining their admission to the temporary import- ation procedure (inward processing traffic).

The Court of Justice declared that Regulation plaintiff affirms that it was only to avoid No 563/76 was null and void because the obligation to provide a security that the obligation to purchase milk powder it had recourse to that expedient as the at a price three times higher than its vegetable foodstuffs in question entered value as fodder constituted a discrimi- the Community freely without payment natory distribution of the burden of costs of either customs duty or levy. The between the various agricultural sectors compound. feedingstuffs produced in and was not necessary to achieve the those circumstances come under sub- disposal of stocks. heading 23.07 B of the Common

(b) the existence, from the time of the 4. Following the judgments of the judgment establishing nullity, of a Court declaring Regulation No 563/76 legal basis allowing securities to be to be null and void the plaintiff thought refunded and export refunds to be that such a declaration should extend to demanded, and operations effected by it prior to the said judgments. That meant that the securities forfeited should be returned because they had been required only to guarantee an (c) the interpretation of the provisions of obligation incompatible with Community Regulation N o 192/75, especially law. It likewise followed, the plaintiff Article 8 thereof, and N o 677/76, thought, that the export refunds which it especially Article 10 (2) thereof, had been refused should be granted. relied on by both sides to demand or Consequently it sued the competent refuse the payment of the export Italian administration — which in fact refunds in question. was acting on behalf of the Community — for the payment of: 6. Having decided that the dispute (a) LIT 61 057 544 by way of refund of raised problems concerning the interpret- securities provided by it and forfeited ation of Community law the national as well as sums paid by it to its court stayed the proceedings and suppliers and which were equivalent referred the following questions to the to the amount of the securities Court of Justice for a preliminary ruling: provided by them and likewise forfeited. " 1 . Under Article 177 of the Treaty is a declaration that a Community regu- (b) LIT 173 494 317 representing the lation is null and void effective erga amount of the export refunds for the omîtes or is it binding only on the

In accordance with Article 20 of the Protocol on the Statute of the Court of 3. If the said regulation is null and Justice of the European Communities void, must the principles on which written observations were submitted by the Community legal order is based the plaintiff in the main action, SpA be held to allow or not to allow or International Chemical Corporation, to allow upon certain terms and represented for that purpose by Nicola within certain time-limits the refund Catalano, a member of the Rome Bar, by to an individual of a payment which the Italian Government, represented for was not due, and if so does the that purpose by Arnaldo Squillante, declaration of nullity give the acting as Agent, assisted by Ivo individual himself the right to claim Braguglia, Avvocato dello Stato, by the back under the national law of the Council of the European Communities, various States the amount that he represented for that purpose by Bernard has previously paid on the basis of Schloh, Adviser in the Council's Legal the rule which has been declared null Department, acting as Agent, assisted by and void and, if so, is this subject to Tito Gallas, a member of its Legal specific terms or time-limits or to Department and by the Commission of given conditions, especially having the European Communities, represented regard to the case in which the claim for that purpose by Giancarlo Olmi, is for the reimbursement of sums Deputy Director-General of its Legal paid by the plaintiff to his suppliers? Department, acting as Agent, assisted by Guido Berardis, a member of its Legal Department.

A — Observations of SpA International According to the plaintiff, the assertion Chemical Corporation that a lower court is not bound to refer questions of validity to the Court — on the ground that it is not bound to do so in cases concerning a question of in- The plaintiff in the main action first terpretation — and that it consequently recalls the facts giving rise to the dispute. may itself set aside provisions of It specifies the amounts which it had to Community regulations, is wrong. pay for the securities which it had to provide (LIT 25 204 944) and those (LIT 34 852 560) for the refund to its suppliers After analysing Articles 177 and 189 of of the cost of the "protein certificates". the Treaty the plaintiff deduces from It states that between 4 August and them that a lower court may refuse to 1 October 1976 it exported to non- refer to the Court questions of validity member countries consignments of which are obviously unfounded, but it compound feedingstuffs consisting may not declare a Community provision mainly of cereals with the addition of to be null and void without referring it other products including, up to 20 % on to the Court of Justice; higher courts, on average, soya beans or ground-nut meal the other hand, are bound in any event imported from non-member countries to refer questions of validity to the under the temporary importation Court. procedure to avoid having to provide a security. Upon exportation it submitted an application for a refund pursuant to As regards the effects of a declaration of Article 16 of Regulation No 2727/75 of nullity, according to the plaintiff in the the Council of 29 October 1975 but that main action it is necessary to distinguish application was rejected and its appeal to actions for damages from those for the the Italian Ministry of Finance remained recovery of a payment not legally due. unanswered. Although the Court in its judgment of 4 October 1979 given in Case 238/78 Ireks-Arkady [1979] ECR 2955 has held that a finding of unlawfulness is not by itself sufficient to justify an action for Questions 1 to 3 damages, it has not yet ruled on a case in which a recovery action is brought following the setting aside of a The plaintiff in the main action examines Community regulation. On the other these questions together. It first points hand there is a national precedent, out the differences and the analogies namely the judgment given by the Court between a judgment establishing nullity of Appeal, Lyon, on 13 November 1978 and a judgment providing interpretation (Dalloz 1979, Jur. 374) after the given under Article 177 of the Treaty, judgment of the Court of Justice of 20 and then goes on to compare the effects April 1978 in Joined Cases 80 and 81/77 of a judgment establishing nullity and Ramel [1978] ECR 927. The national

court upheld the application for the As to (c): entire refund of charges improperly levied and rejected the plea that the The fact that in any one Member State importers in question had passed on to the outcome is different depending on their buyers the burden of the charges whether national or Community income which they had paid. is involved is all the more paradoxical since in both cases the same provisions and procedures of the national legal According to the plaintiff the same way systems are applied. Although it is a of resolving the issue should be applied drawback and some harmonization is in regard to payments wrongly made desirable it must be accepted that in relation to the Communities' own divergencies existing between the resources. This is justified by three types different national regulations and pro- of consideration: cedures are inevitable. (a) logical argument, It follows that in Italy an action for the recovery of Community resources (b) moral considerations and wrongly acquired should be brought on the basis of Article 2033 of the Italian Civil Code just like an action relating to (c) the fact that the collection of the recovery of charges having an Community income is carried out, equivalent effect. The plea that the according to Article 6 of Council charges have been "passed on" may not Decision of 21 April 1970 (Official be raised. Journal, English Special Edition 1970 (I), p. 224), in accordance with On the basis of those considerations the national provisions imposed by law, plaintiff proposes that the questions regulation, or administrative action. referred to the Court should be answered as indicated below. As to (a): Question 1 In its judgments given on 27 March 1980 The reply to be given must be that the in Case 61/79 Denkavit [1980] ECR case-law in Da Costa (Joined Cases 28 to 1205 and Joined Cases 66, 127 and 30/62, cited above) should be extended 128/79 Salumi and Others [1980] ECR to judgments on validity. 1237 the Court affirmed that the effect of its judgments providing interpretation Question 2 given on the basis of Article 177 was purely declaratory. There is no reason to The plaintiff leaves it to the discretion of hold otherwise in regard to judgments the Court as to whether it is again declaring a provision of a Community necessary to declare expressly that Regu- regulation to be null and void. lation N o 563/76 is null and void.

to sums which have been wrongly paid the nullity of Regulation N o 563/76 by his suppliers. In so far as an action in means that the regulations adopted for the name of another should fall under its application, in this case Commission Community law the plaintiff refers to the Regulation No 677/76, as null and void judgment of 4 October 1979 (Case and that the Court may automatically 238/78 Ireks-Arkady, cited above) in declare the latter null and void. which the Court held that an action by an assignee to whom the right of recourse had been transferred was admissible. Limitation periods for (b) The second approach is entirely recovery actions are determined by independent of the question whether national law. Regulation N o 563/76 is valid or not. It is based upon an interpretation of the various regulations cited in regard to Question 4 and mainly on the interpret- ation of Article 8 (1) of Regulation No Question 4 192/75, Article 16 (2) of Regulation 2727/75 and Article 10 (2) of Regulation N o 677/76. Article 8 of Regulation N o According to the plaintiff in the main 192/75 (Official Journal L 25, p. 1), action Question 4 was framed from two which the defendant administration relies angles in order to allow for a reply using on to justify its refusal, is intended, says two different approaches. the plaintiff, to stipulate that the "refund" may be granted only in the case of products originating in the Member States or of products imported from non-member countries on which (a) The first approach starts on the any customs duties and Community dual assumption that Regulation N o levies have been paid in full. 563/76 is null and void and that the possibility of using the expedient of temporary importation was contemplated and written into Article 10 (2) of Regu- The rule in the first subparagraph of lation N o 677/76 for the sole purpose of paragraph (1) of Article 8 cited above is enabling the obligation to purchase and however relaxed in regard to compound the attendant financial consequences products, that is to say, those partly (provision of a security) to be avoided. containing raw materials (in this case Once the obligation to purchase was cereals) from the Community or in free held to be unlawful that meant that no circulation and partly raw materials from trader would need to have recourse to non-member countries, in this case oil- that expedient. He would simply put the seeds, imported under the temporary oil-seeds, which he imported from non- importation procedure. member countries, into free circulation so that when feedingstuffs made with those products were exported he would It seems that the plaintiff is relying on receive export refunds. H e would two different rules concerning relaxation. therefore be entitled to them because it would have been unlawful to have imposed upon him a method of impor- tation which deprives him of those (1) It first asserts that the animal refunds. The plaintiff in the main action feedingstuffs which it has exported further contends that the declaration of contained "more than the maximum

percentage of cereals allowed for the seems, on another relaxation of the rule grant of the refund so that it is entitled stated in the first subparagraph of Article to the payment of the whole of the 8 (1) of Regulation N o 192/75 of the refund because the percentage of Commission which restricts the refunds (Community) agricultural products to exported products originating in the incorporated justifies the grant of that Community or in free circulation therein, refund in any event, irrespective of the and which follows from the third sub- treatment for customs purposes of the paragraph of the same article. According oil-seeds incorporated". to that third subparagraph "when compound products qualifying for a refund fixed on the basis of one or more of their components are exported, that The plaintiff in the main action does not refund shall be paid only in so far as the state the legal basis for its view parti- component or components in respect of cularly in regard to the percentages which the refund is claimed come within which it gives. It seems that it is relying the terms of Article 9 (2) of the Treaty" on Article 16 (2) of Regulation N o [that is to say, originating in the 2727/75 of the Council (common Community or in free circulation]. The organization of the market in cereals) plaintiff concludes from that that it is at and Article 7 (1) of Regulation N o least entitled to the refunds on the cereal 2743/75 of the Council on the system to components in the feedingstuffs which it be applied to cereal-based compound has exported. On the basis of all those feedingstuffs whereby at the time when considerations it proposes as a reply to the refunds are determined account Question 4 that "the refund is payable should in any event be taken of the need on the export of feedingstuffs solely in to strike a balance between the use (for regard to the cereal components the manufacture of products for which notwithstanding the fact that the other refunds are granted) of Community basic components (oil-seeds) have been products and the use of products from imported from non-member countries non-member countries allowed into the under the temporary importation system inward processing traffic system. That for the sole purpose of acquiring would mean that the amount of the exemption from the requirement of refund would itself rectify any securities provided for by Regulation N o compound nature of the products for 563/76 which has been declared null and which that refund is given. Moreover, void". since the two regulations cited (Nos 2727/75 and 2743/75) are regulations of the Council, they take precedence over the conflicting provisions of regulations of the Commission, especially over Article 8 of Regulation N o 192/75 of the B —r Observations of the Italian Commission which was relied upon to Government justify the refusal to grant the refunds. The plaintiff in the main action concludes from this that it is entitled to the whole of the export refund provided for (compound) feedingstuffs. Questions 1 and 2

inter partes of a judgment declaring a that case and on other occasions (Case provision of Community law to be null 112/76 Manzoni), the Court has thought and void has been discussed at length by it necessary to re-examine thoroughly academic writers and broached by Mr the question of validity of an act already Advocate General Gand (Case 16/65 declared to be null and void. Schwarze [1965] ECR 877 at p. 899), by Mr Advocate General Warner (Cases 112/76, 22/77, 32/77 and 37/77, Manzoni and Others, [1977] ECR 1647, at p. 1661) and Mr Advocate General In conclusion, from the date of the pro- Capotorti (Case 64/76 Dumortier Frères nouncement of the judgment of the and Others [1979] ECR 3091, at Court, a regulation declared to be null p. 3119). and void should no longer be observed or applied by those subject to the law and by the national courts of the Community even if it is admitted that national courts are competent to ask the In the judgment of 1 December 1965 in Court to re-examine that question. In the Case 16/65 Schwarze although not light of the answer proposed the Italian expressly dealing with the problem, the Government thinks that Question 2 has Court stressed that although it could not no purpose. "declare such a measure void" under Article 177, it could, however, rule on its validity. The Italian Government infers therefrom that the Court considers that its judgment does not relate only to the Question 3 instant case but also concerns the act in its objective context. In other words the Court inclines rather towards the effect erga omnes than towards the effect inter partes of preliminary rulings which Question 3, which relates to the effects declare null and void an act of one of of the declaration of nullity of Regu- the institutions. That reference is lation No 563/76 on the position of the confirmed by the judgment of 13 individual, raises various questions which February 1979 given in Case 101/78 should be examined separately. Granaria [1979] ECR 623. The Court in fact decided that any regulation adopted in accordance with the Treaty must be assumed to be valid as long as no competent court has declared it null and (a) It is suggested that a declaration of void which means a contrario that once nullity pursuant to Article 177 of the the competent court has declared a regu- Treaty has an effect ex tunc as in the lation to be null and void all those case of judgments providing interpret- subject to Community law must no ations ( j u d g m e n t of 27 March 1980, longer have regard to it. That conclusion Joined Cases 66, 127 and 128/79 Salumi should normally imply that later and Others [1980] ECR 1237) save that references for preliminary rulings on the its effects do not extend to the legal validity of a regulation already declared relationships which, according to the to be null and void by the Court are national law, must be considered to be at inadmissible and the Italian Government an end (judicial decisions acquiring force argued that point of view in Case 22/77 of res judicata, acquiescence, pre- Mura [1977] ECR 1699. However, in scription, laches, and so forth).

(b) As regards the obligation on the not, it would moreover not then be a Member States to refund amounts case of recovery of payments not legally collected for the account of the due, but of the compensation for the Community, the Italian Government, damage suffered for which the whilst having due regard to the judgment Community only should be sued and not given on 27 March 1980 in Cases 66, the Member State. 127 and 128/79 cited above (Salumi and Others), thinks that it is necessary to re-examine the arguments put forward in the observations submitted in the course of Case 826/79, Mireco (judgment of 10 Question 4 July 1980 [1980] ECR 2559) and to which it refers. It maintains that the obligation to return forfeited securities causes a disparity of treatment to the The Italian Government merely states detriment of a trader who has obtained that its administration has complied with the "protein certificate", that is to say, the instructions given by the Commission the trader who has gone ahead and on 27 July 1976. bought milk powder as against a trader who, like the plaintiff in the main action, confined himself to providing a security. Those two traders are in the same situation and it is unacceptable that the C — Observations of the Council latter may have his security returned after the declaration of nullity of Regu- lation N o 563/76 whilst the one who bought milk powder, thus contributing After outlining the background to the the most to the purpose of disposing of dispute the Council says that it wishes to the surpluses, cannot receive any restrict its observations to Questions 1 compensation for the damage suffered as and 3. a result of the compulsory acquisition of milk powder. The opportunity for him to obtain damages was in effect removed by the judgment of the Court of 25 May Question 1 1978 (Joined Cases 83 and 94/76, 4, 15 and 40/77 HNL and Others [1978] ECR 1209). That situation is contrary to the principle of equal treatment which is at The Council thinks that a ruling by the the heart of the Community legal system. Court of Justice that a regulation is null and void given in the course of proceedings to obtain a preliminary ruling pursuant to Article 177 of the Treaty is binding only on the Court a quo. This follows from the specific (c) As regards the recovery of sums nature of the procedure provided for by which the plaintiff in the main action has Article 177 which unlike that under returned to its suppliers, the Italian Article 173 consists of a special form of Government thinks that the question cooperation between the Court of Justice does not arise if the problem of the and the national courts. T o give a effects of the declaration of the nullity of judgment of the Court of Justice under Regulation N o 563/76 were resolved in Article 177 an effect erga omnes would be the manner which it proposes. If it were incompatible with the second paragraph

of Article 173 of the Treaty as private should also be determined according to persons would thus obtain by means of Community law, either according to the Article 177 that which Article 173 written law or according to the principles expressly denies them. laid down by the Court of Justice. The principle of equal treatment requires that the settlement of the issue of the Another national court, in a fresh action consequences of nullity is done uni- and in regard to other parties would formly in accordance with the Com- however have the right to rely on the munity law and in a common way. The declaration of invalidity. It could also fundamental rules have already been submit a fresh reference for a pre- established in this regard (Granaria liminary ruling, not only in the form of judgment, Case 101/78, cited above). questions on interpretation but also in State authorities must accept the full the form of questions on validity. The validity of a regulation so long as the principle brought out in the judgment of Court has not ruled thereon; the 17 March 1963 (Joined Cases 28 to securities were therefore lawfully 30/62 Da Costa, cited above) therefore provided in the course of 1976 and the applies to questions on validity too. undertakings which passed on the burden of them have not suffered any damage and unless the contrary is proved they are not entitled to be Question 3 indemnified. If subsidiary questions should still remain they must be settled by the national court in accordance with The Council thinks that a judgment the national law applicable and without containing a declaration of nullity has an offending against the general principles effect ex tunc. The Court has already of Community law. expressly held that annulling judgments have an effect ex tunc in its judgment of 31 March 1971 (Case 22/70 AETR In conclusion the Council thinks that the [1971] ECR 263), and there is no reason Court should reply as follows to to draw a distinction in this respect Questions 1 and 3: between the procedure under Article 173 and that under Article 177. There are however exceptions to that principle. " 1 . The finding in a reference for a pre- Without going into the considerations liminary ruling under Article 177 of relating to the legal foundation of those the EEC Treaty that a Community exceptions — the second paragraph of regulation is null and void is binding Article 174, Article 176 (1) or the only on the court a quo. Another judgment of 8 April 1976 in Case 43/75, national court may act on the Dejrenne [1976] ECR 455 — the Council principle that the regulation is not draws attention to the special importance valid but it may at any time also of the judgments of 13 February 1979 submit the question for the decision (Granaria) and of 25 May 1978 (HNL of the Court of Justice. and Others) in regard to the resolution of the problem of the consequenses of a declaration of nullity. The obligation to 2. National authorities are bound to purchase was introduced by Community recognize the full effect of a regu- law and the regulation was declared null lation subsequently declared to be and void for being in breach of null and void so long as it has not Community principles. From that it been declared null and void by a follows that any possible consequences competent court.

1. The effect erga omnes (b) by virtue of the principle of the force of the matter interpreted lower courts lose the power to resolve a Having indicated the uncertainties in preliminary question by departing academic writings on the problem of the from the interpretation given by the effects — erga omnes or inter partes — of Court without referring the case to preliminary rulings, the Commission it. points out that the essential aim of Article 177 is to ensure the uniform interpretation of Community law which is absolutely necessary in order to secure The case-law of the Court in this field is its uniform application in all the Member based on the purpose of preliminary States by the national courts. It is references, on the participation of established, first, that the decision of the Member States and institutions in the Court is binding on the court a quo procedure and, finally, on the absence of (judgment of 27 March 1963, Joined parties in the strict sense. Cases 28 to 30/62 Da Costa, cited above, and judgment of 3 February 1977 Benedetti/Munari [1977] ECR 163) and, The fact that the judgment of the court secondly that the Court makes a binding refers to legal relations created before decision of a judicial nature when it the judgment is not relevant (judgment consequently gives an absolutely defini- of 27 March 1980, Case 61/79 Denkavit tive answer to the questions referred to [1980] ECR 1205 and Joined Cases 66, it. The problem is to determine what 127 and 128 Salumi and Others [1980] happens in the context of other actions ECR 1237). The validity ex tunc of the where the same problem arises. interpretation arises from the essentially declaratory nature of the judgments in question. An exception is made to that Although the Court has allowed other rule only when the retroactive national courts to refer again a question application of an interpretation would of interpretation which has already been mean serious economic or social resolved (judgment of 27 March 1963, consequences (judgments of 27 March Joined Cases 28 to 30/62 Da Costa, cited 1980, cited above).

As regards any fresh reference, it is necessary to distinguish between the case where the Court has held the act to be valid and the converse case. If the Court has not found a ground of nullity on the (a) A decision as to validity also carries basis of the objections made against the force in regard to parties to future act, it may be that at any time when disputes before the court. The Court called upon to rule again, the Court will moreover adopted that reasoning when be moved to find the act null and void recalling its own declarations on nullity on other grounds. The converse case is in later judgments upon actions to more difficult. If an act has been establish liability brought by other parties declared null and void any subsequent on account of the nullity found to exist decision declaring it to be valid would (judgment of 25 May 1978, Joined Cases imply a clear change in case-law. 83 and 94/76, 4, 15 and 40/77 HNL and Accordingly, there is in practice a Others and judgment of 24 March 1979, temptation to give declarations of nullity Case 90/78 Granaria, cited above). an effect erga omnes since there is a close Moreover, the obligation to regard a analogy between decisions based on regulation as valid so long as the Article 177 and decisions on nullity competent court (here the Court of pursuant to Article 173. It is logical that Justice) has not declared it null and void the effect of the two types of decisions is accompanied by the obligation not to should be the same, as is the case with apply it from the time when that nullity declarations of the unconstitutionality of has been declared.

Judgments which uphold or set aside the Question 3 validity of a Community act likewise have, the Commission says, an effect ex tunc. The arguments in support of that According to the Commission the effect proposition are the same as those re- of the case-law of the Court is that as lating to judgments providing interpret- long as Community law has not directly ation. The Commission refers in this regulated the matter in question it is for regard to the opinion of Mr Advocate the national legal systems of each General Capotorti in Joined Cases 64 Member State to draw up the legal pro- and 113/76, 167 and 239/78, 27, 28 and cedures for the protection of the rights 45/79 Dumortier Frères [1979] ECR of individuals. It refers in this regard to 3091. the judgments given on 16 December 1976 in Case 33/76 Rewe [1976] ECR 1989, on 22 March 1977 in Case 74/76 Iannelli [1977] ECR 477 and on 26 June On the other hand the Commission 1979 in Case 177/78 Pigs and Bacon thinks that the capacity of the Court of Commission [1979] ECR 2161. Those Justice to declare that certain effects of authorities nearly all concern national acts declared to be null and void are not monetary charges imposed in breach of eliminated and must be regarded as Community law. However the judgment definitive should not be regarded as given on 28 March 1980 in Joined Cases exceptional, as has been the case until 66, 127 and 128/79 Salumi and Others now as regards judgments providing (cited above) clearly extended the same interpretation (judgment of 8 April 1976, principles to Community funding. Case 43/75 Defrenne [1976] ECR 455). In the case of an action to determine the validity of an act that power of the Court of Justice might in fact be founded According to the Commission the upon the application by analogy of the case-law of the Court logically belongs second paragraph of Article 174 of the to a stage at which the existence of the

After outlining the Danish national system for recovery of a payment not legally due in cases where the person The Commission recalls the aims who made it was able to pass on the pursued by Regulation N o 563/76 and burden thereof and after pointing out the measures provided for attaching the consequences which the Court has penalties to the obligation to purchase. It drawn therefrom in its case-law, the points out that Article 5 of the regulation Commission concludes that whenever in question provides that "in the case of Community regulations make express current contracts" the burden of the provision themselves for the financial costs arising under the arrangements costs which they impose to be passed on, which it introduced shall be borne by the the structure of the legal relations successive buyers of the products created between the successive con- concerned. The passing down the line of tracting parties a fortiori excludes any the burden of the financial costs in that right to the recovery of the sum wrongly way arises therefore from the regulation paid. Since the amount of the security itself and according to the Commission was approximately equivalent to the constitutes one of the essential elements financial costs arising from the obligation of the mechanism established by Regu- to purchase, it could be said that the lation No 563/76. It relates to both the passing on of those costs to the costs arising from the actual purchase of successive buyers has had the same milk powder (the difference between the effect. price of the latter and the lower price which the producers would have paid for substitute products) and the costs arising in other cases from the loss of security by the traders who chose not to buy the milk powder. It was a matter of avoiding The Commission observes that the Court the damaging and clearly unfair has even rejected the action for damages consequences which the introduction of brought by the buyers of compound the new system would otherwise have feedingstuffs, that is to say, the livestock had on existing contractual relations. In breeders to whom were transferred the the case of contracts concluded after the financial costs falling upon the feeding- regulation had entered into force they stuff manufacturers and arising from the would automatically have been adapted compulsory purchase of milk powder or to the new circumstances. from the loss of securities.

According to the Commission the system created by Regulation N o 563/76 has existed and has produced a number of Should the Court not approve that line effects to which it is impossible not to of argument it is always open to it to have regard. In an economic context have regard to the criteria of equity and of this complexity the necessary legal certainty by applying by analogy requirement of legal certainty would be the second paragraph of Article 174. In seriously prejudiced if the principle of the case of an action to determine non-recovery of sums wrongly paid were validity the limitation in time on the not regarded as being embodied in any effects of the judgment is expressly Community regulations in cases in which referred to in the Treaty. The principle such restitution would create unjust applied by the Court in judgments 61/79 enrichment and cast uncertainty on an and 66, 127 and 128/79 (cited above), incalculable number of legal relations. according to which the limitation on the The general principles of equity and effects of a judgment providing in- good faith by which no one may require terpretation must be decided in the same repayment of a sum wrongly paid if it is judgment which rules on the in- not intended to make good damage terpretation asked for, does not apply, which has been suffered but rather leads the Commission says, in the case of to unjust enrichment are very much a proceedings to determine validity. The part of the legal systems of all the essential point is that the limitation is Member States as well as of the pronounced by the Court which might Community system itself (judgments of very well use another opportunity to fill 28 March 1979, Case 90/78 Granaria in the gaps in its decision and to define and of 25 May 1978, Joined Cases 83 the scope of the nullity as often the and 94/76, 4, 15 and 40/77 HNL and consequences of nullity can be Others, already cited). Relying on the determined only after the judgment of judgment given on 4 October 1979 in the Court has been given.

Question 4 Compound feedingstuffs (coming under subheading 23.07 B of the Common Customs Tariff) do not belong to that category. In their case, although the According to the Commission a reply to refund is calculated according to their this question requires full consideration content of cereal products, it is fixed for of the Community regulations applicable the product as a whole and not on the especially in regard to the method of cereal constituents which it contains (cf., fixing the refunds and the conditions on for example, Regulation (EEC) N o which they are granted. 1871/76, Official Journal L 206, p. 23). It follows that it is the first subparagraph of Article 8 (1) of Regulation No 192/75 already cited which is applicable and the refund may not be granted when one of Article 16 (1) of Regulation (EEC) No the components is not of Community 2727/75 on the common organization of origin or has not been put into free the market in cereals provides that an circulation in the Community. export refund may be granted to enable the products listed in Article 1 thereof to be exported in the state referred to therein or in the form of goods listed in Annex B to the regulation. Since the vegetable products used to make the feedingstuffs were imported into the Community without any difficulty as they were not subject either to customs duties or levies, that situation The first subparagraph of Article 8 (1) of did not create any problems up to the Regulation (EEC) N o 192/75 laying time of the entry into force of Regu- down detailed rules for the application lation No 563/76. of export refunds in respect of agri- cultural products (Official Journal L 25, p. 1) provides that a refund shall be granted only in respect of products which come within the terms of Article 9 After the entry into force of that regu- (2) of the Treaty, that is to say, products lation the putting into free circulation in originating in the Community or in free the Community of any imported circulation there. The third subparagraph vegetable foodstuffs was made subject to thereof provides a relaxation to that rule the delivery of a "protein certificate". By by stipulating that "when compound virtue of Article 10 (2) of Commission products qualifying for a refund fixed on Regulation No 677/76 laying down the basis of one or more of their detailed rules for the application of the components are exported, that refund system for compulsory purchase of shall be paid only in so far as the skimmed-milk powder provided for in component or components in respect of Regulation N o 563/76, the responsible which the refund is claimed come within authorities of the Member States "may the terms of Article 9 (2) of the Treaty". authorize the import of the products This last provision, however, concerns referred to in Article 3 (1) of Regulation agricultural products exported in the No 563/76 with a view to processing form of goods which do not come under them under a system of customs control Annex II to the Treaty (cf. Article 16 (1) if these products are intended to be of Regulation No 2727/75 in Annex B to exported outside the customs territory of which the products in question are the Community wholly or in part in the listed). form of compensatory products".

2. In the light of the conclusions drawn Following complaints made by many from the examination of Question 1, traders and in order broadly to offset the Question 2 loses its purpose. loss of the security resulting from the putting into free circulation of the vegetable products in question from May 3. When a Community charge is held 1976 the Commission raised the amount to be unlawful in the context of a of the actual refund in regard to the ruling declaring the Community act products coming under subheading which imposed it to be null and void 23.07 B (cereals) to the level of the the consequences thereof must first theoretical amount of refund calculated of all be determined with regard on the basis of the levy applicable to to Community law, especially as maize (Regulation (EEC) No 1913/69, regards the existence of the right of Official Journal, English Special Edition an individual to the recovery of the 1969 (II), p. 403), although as a general payment not legally due. Once rule that actual amount is fixed by the right to recovery has been applying a reduction to the theoretical established the various national laws amount to take account of the state of apply to the enforcement thereof. the world market and to avoid dis- turbances in the Community market.

In the instant case the principles of Community law admit of such In that context the fact that International actions to recover a security only on Chemical Corporation had recourse to condition that evidence is adduced the temporary importation system rather to show that the financial charges in than to the system of putting goods in question could not have been passed free circulation represents, according to on to the successive purchasers.

3 In order to reduce stocks of skimmed-milk powder by increasing the use of that product in animal feedingstuffs Council Regulation No 563/76 of

JUDGMENT OF 13. 5. 1981 — CASE 66/80

15 March 1976 (Official Journal L 67, p. 18) made the grant of certain Community aids in respect of the use of protein products and the release into free circulation in the Community of certain products used in the manu- facture of compound feedingstuffs dependent on the obligation to purchase certain quantities of skimmed-milk powder held by the intervention agencies. T o secure compliance with that obligation the grant of aids and release into free circulation were made subject either to proof of purchase of skimmed- milk powder or the prior provision of a security which was forfeited in the event of non-performance of the obligation to purchase.

INTERNATIONAL CHEMICAL CORPORATION v AMMINISTRAZIONE DELLE FINANZE DELLO STATO

6 The plaintiff in the main action, which was not a party to the actions which led to reference being made to the Court, accordingly took the view that the securities which it had provided or paid for could not be required or a fortiori declared forfeit since they served only to ensure the performance of an obligation which had been unlawfully imposed. It further believes that since it was for the sole purpose of avoiding the provision of those securities that it imported from non-member countries certain compound feedingstuffs which it manufactures under a temporary importation procedure rather than under a procedure whereby products are released into free circulation, it should be entitled to export refunds on those compound feedingstuffs as if they were in free circulation in the Community. Finally, on an alternative basis, it argues that it is entitled in any event to refunds on the cereal components, which are of Community origin, contained in the products which it exported. It is claiming from the Italian administration the refund or payment of the amounts equivalent to the securities forfeited and the refunds which have been refused.

7 In order to settle this dispute the national court referred the following questions to the Court:

" 1 . Under Article 177 of the Treaty is a declaration that a Community regu- lation is null and void effective erga omnes or is it binding only on the court a quo; more particularly, in that case may the principle contained in the judgment of 27 March 1963 in Joined Cases 28, 29 and 30/62 be extended to a declaration of nullity?

8 Those questions basically raise three issues. The first concerns the effect of the preliminary rulings given by the Court on 5 July 1977 on third parties, be they private individuals, institutions or national courts (Questions 1 and 2). The second concerns the consequences, in both the legal systems of the Community and of the Member States, of a judgment declaring a regulation void as regards what happens to charges previously imposed on commercial operators by the said regulation (Question 3). The third issue, put in the alternative and which is more specific in nature, concerns particular features of the rules on export refunds for certain agricultural products (Question 4).

Questions 1 and 2

9 Article 177 of the Treaty provides that the Court shall have jurisdiction to give preliminary rulings on the interpretation of the Treaty and on the validity and interpretation of acts of the institutions of the Community, including regulations of both the Council and the Commission. The second and third paragraphs of that provision go on to state that national courts may or must, as the case may be, bring such matters before the Court where they need a decision on that issue in order to give their judgment.

INTERNATIONAL CHEMICAL CORPORATION v AMMINISTRAZIONE DELLE FINANZE DELLO STATO

10 The scope of judgments given under this head should be viewed in the light of the aims of Article 177 and the place it occupies in the entire system of judicial protection established by the Treaties.

1 1 The main purpose of the powers accorded to the Court by Article 177 is to ensure that Community law is applied uniformly by national courts. Uniform application of Community law is imperative not only when a national court is faced with a rule of Community law the meaning and scope of which need to be defined; it is just as imperative when the Court is confronted by a dispute as to the validity of an act of the institutions.

16 It should further be observed, as the Court acknowledged in its judgments of 19 October 1977 in Joined Cases 117/76 and 16/77, Ruckdeschel and Diamalt and Joined Cases 124/76 and 20/77, Moulins de Pont-à-Mousson and Providence Agricole [1977] ECR 1753 and 1795, that as those responsible for drafting regulations declared to be void the Council or the Commission are bound to determine from the Court's judgment the effects of that judgment.

17 In the light of the foregoing considerations and in view of the fact that by its second question the national court has asked, as it was free to do, whether Regulation No 563/76 was void, the answer should be that that is in fact the case for the reasons already stated in the judgments of 5 July 1977.

18 The first and second questions should therefore be answered as follows:

(a) Although a judgment of the Court given under Article 177 of the Treaty declaring an act of an institution, in particular a Council or Commission regulation, to be void is directly addressed only to the national court which brought the matter before the Court, it is sufficient reason for any other national court to regard that act as void for the purposes of a judgment which is has to give;

that assertion does not however mean that national courts are deprived of the power given to them by Article 177 of the Treaty and it rests with those courts to decide whether there is a need to raise once again a question which has already been settled by the Court where the Court has previously declared an act of a Community institution to be void. There may be such a need especially if questions arise as to the grounds, the scope and possibly the consequences of the nullity established earlier.

21 By Article 6 of that decision the Community resources referred to in Articles 2, 3 and 4 are to be collected by the Member States in accordance with national provisions imposed by law, regulation or administrative action. Consequently disputes relating to the refund of amounts collected on behalf of the Community fall within the jurisdiction of national courts and should be settled by those courts by applying their own national law, both pro- cedural and substantive, to the extent to which Community law has not provided otherwise.

JUDGMENT OF 13. 5. 1981 — CASE 66/80

22 Regulation No 563/76, as it applied before it was declared to be void, should therefore be examined in order to ascertain whether it contained provisions affecting the recovery of sums received by the Community authorities or by national authorities acting on their behalf pursuant to that regulation.

24 The existence during the entire period in which Council Regulation No 563/76 was applied of a scheme specially designed with a view to spreading the effects of a measure of economic policy destroys the basis of an action for the recovery of securities which have been provided and declared forfeit even if a similar action could be successfully brought under national law alone. In this regard it does not matter whether the operator has actually passed on the charge or whether he decided not to do so for reasons connected with the financial policy of his undertakings. Recovery is in itself ruled out a fortiori if the operator was not himself bound to pay the charge in question which he advanced voluntarily or refunded to his suppliers thus

INTERNATIONAL CHEMICAL CORPORATION v AMMINISTRAZIONE DELLE FINANZE DELLO STATO

demonstrating that they do actually have the opportunity of passing on the charge.

25 That legal consequence is not to be dismissed by the consideration that since Regulation No 563/76 has been declared void it could not have any legal effect. It is a matter here of examining the economic effects linked to the application of the system established by the regulation so far as it effectively governed the conduct of the commercial operators concerned. The assertion that the scheme made provision for operators actually to be able to pass on the charge imposed on them to subsequent stages of the economic process leads to the conclusion that in a situation such as that which is at issue in the main proceedings an action for the recovery of the payment wrongly made has no legal foundation.

of skimmed-milk powder provided for in Regulation N o 563/76 (Official Journal L 81, p. 23). That provision states that "the competent authorities of the Member States may authorize the import of the products referred to in Article 3 (1) of Regulation (EEC) N o 563/76 (that is to say products which are allowed into free circulation only on the performance of the obligation to purchase a certain quantity of skimmed-milk powder) with a view to processing them under a system of customs control if these products are intended to be exported outside the customs territory of the Community wholly or in part in the form of compensatory products". That provision was intended to exempt manufacturers of feedingstuffs who imported certain components of feedingstuffs from non-member countries (those listed in Article 3 of Regulation N o 563/76) from the obligation to present a "protein certificate", that is to say from the obligation to purchase skimmed-milk powder, on condition that the feedingstuffs of which those components formed a part were exported to non-member countries.

29 However, the first subparagraph of Article 8 (1) of Regulation N o 192/75 of the Commission of 17 January 1975 laying down detailed rules for the application of export refunds in respect of agricultural products (Official Journal L 25, p. 1) provides that an export refund is to be granted only in respect of products which were in free circulation in the Community before they were exported.

30 The combined provisions of Article 10 (2) of Regulation N o 677/76 and of Article 8 (1) of Regulation N o 192/75 enabled manufacturers of feeding- stuffs to choose between two possibilities. Either they obtained release into free circulation of the components which they imported by paying the security or by purchasing the specified quantity of skimmed-milk powder, which enabled them to receive export refunds if they then exported the feedingstuffs in question. Or they could import the same products under a system of customs control, in this case the inward processing arrangements, which enabled them to escape the obligation to purchase skimmed-milk powder or to provide security but in that case Article 8 (1) of Regulation N o 192/75 precluded their being granted export refunds.

34 The plaintiff in the main action claims that owing to that provision it is entitled to an export refund at least in respect of those components of compound feedingstuffs which it exported, which were not imported from non-member countries, but which originated in the Community, in this case in respect of the cereal components of those feedingstuffs.

35 That interpretation of the third subparagraph of Article 8 (1) must be rejected. That provision covers only cases in which compound products are exported which, as such, do not attract export refunds but which contain certain constituents which do. That is made plain by the very wording of the provision in question which expressly refers to refunds fixed on the basis of one or more of the components of the compound product.

JUDGMENT OF 13. 5. 1981 — CASE 66/80

36 That provision does not therefore cover the case of a compound product which, as such, that is to say as a whole, attracts an export refund. In that case it is the first subparagraph of Article 8 (1) which governs the conditions for the grant of the refund; consequently all components of a product must have originated in the Community or have been released into free circulation there.

37 Compound animal feedingstuffs come under subheading 23.07 B of the Common Customs Tariff. Although the export refund is calculated on the basis of the cereal product content, as far as those cereal products are concerned it is fixed in respect of the product as a whole in such a way that it is the requirement in the first subparagraph of Article 8 (1) that the product must meet in order to attract an export refund.

On those grounds,

THE COURT

in answer to the questions submitted to it by the Tribunale Civile di Roma by order of 21 January 1980, hereby rules:

1. Although a judgment of the Court given under Article 177 of the Treaty declaring an act of an institution, in particular a Council or Commission regulation, to be void is directly addressed only to the national court which brought the matter before the Court, it is sufficient reason for any other national court to regard that act as void for the purposes of a judgment which it has to give. That assertion does not however mean that national courts are deprived of the power given to them by Article 177 of the Treaty and it rests with those courts to decide whether there is a need to raise once again a question which has already been settled by the Court where the Court has previously declared an act of a Community institution to be void. There may be such a need especially if questions arise as to the grounds, the scope and possibly the consequences of the nullity established earlier.

2. Council Regulation No 563/76 of 15 March 1976 (Official Journal L 67, p. 18) is void for the reasons already stated in the judgments of 5 July 1977 in Cases 114, 116 and Joined Cases 119 and 120/76.

3. The existence during the period in which Council Regulation No 563/76 was applied of a scheme specially designed with a view to spreading the economic effects of the obligations which it imposed destroys the basis of an action for the recovery of securities which have been provided and declared forfeit even if a similar action could be successfully brought under national law alone. In this regard it does not matter whether the operator has actually passed on the charge or whether he has decided not to do so for reasons connected with thefinancialpolicy of his undertaking. Recovery is in itself ruled

Delivered in open court in Luxembourg on 13 May 1981.

A. Van Houtte J. Mertens de Wilmars Registrar President

O P I N I O N O F MR ADVOCATE GENERAL REISCHL DELIVERED O N 21 JANUARY 1981 1

Mr President, compulsory purchase of skimmed-milk Members of the Court, powder held by intervention agencies for use in feedingstuffs (Official Journal In the proceedings for a preliminary L 67 of 15 March 1976, p. 18). ruling to be dealt with today we once again have to consider problems which have arisen in connexion with the It is generally known that the application of Council Regulation arrangements introduced by that regu- No 563/76 of 15 March 1976 on the lation were aimed at reducing the 1 — Translated from the German.