C-250/80

PETER HANS GERTH,

JOHANNES HEINRICH GOTHMANN,

ALFRED C. TÖPFER, Hamburg,

on the interpretation of Article 5 (2) of Regulation (EEC) No 269/73 of the Commission of 31 January 1973 laying down detailed conditions for application of the system of "accession" compensatory amounts (Official Journal 1973, L 30, p. 73) as amended by Regulation (EEC) No 1466/73 of the Commission of 30 May 1973 (Official Journal 1973, L 146, p. 13),

THE COURT,

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

I — Facts and written procedure pensatory amounts which were to be applied to trade between the Community as originally constituted and the new When the Community was enlarged for Member States, and between the latter the first time in 1973 considerable and non-member countries, were equal differences existed between the prices to the difference between the prices fixed prevailing in the original Member States for the new Member States concerned and those applied in the new Member and the common prices. States. H o w e v e r , those differences were eliminated only gradually over a In the case of trade between two new transitional period of five years provided Member States, the compensatory for in the Act of Accession. In the amounts were equal to the difference meantime so-called "accession" com- between the amounts applicable to trade pensatory amounts were introduced in between each of the new Member States order to avoid any distortion of the and the Community as originally conditions on which a product orig- constituted. inating in one Member State might be marketed within another Member State. The gradual alignment of the prices fixed In order to ensure Community pre- for each new Member State with the ference, the compensatory amounts were common prices entailed a parallel constantly reviewed so that, save in the reduction of those amounts until they case of a derogation accorded by the were discontinued completely at the end Council, they could not be higher than of the transitional period. the import levies applied in trade with non-member countries. Rules concerning the application of the abovementioned compensatory amounts Article 6 of Regulation No 229/73 made were laid down in the Act of Accession provision, were the need to arise, for the (Articles 55 to 58). By virtue of Articles introduction of a system of advance 73, 51 and 55 of that Act, those rules fixing of the compensatory amount. The were also to be applied to cereals. They provisions necessary for that purpose were subsequently laid down, for the were laid down in Regulation (EEC) No cereals sector, by Regulation (EEC) No 3280/73 of the Commission of 4 229/73 of the Council of 31 January December 1973 (Official Journal 1973, 1973 (Official Journal 1973, L 27, p. 25), L 337, p. 11). The latter regulation which remained in force until 1 provided inter alia that in the case of November 1975 when it was replaced by advance fixing of the compensatory Regulation (EEC) No 2757/75 of the amount a security of three units of Council of 29 October 1975 (Official account per tonne should be furnished, Journal 1975, L 281, p. 104). which would be released upon production of proof that the customs formalities had been completed and, in Under the system introduced by the the case of exportation, upon the abovementioned provisions, the com- provision of further proof that the

product had left the geographical (EEC) No 2315/69 relating to territory of the Member State where Community transit. The second sub- those formalities had been completed. paragraph of Article 5 (2) of Regulation N o 269/73, as amended by Regulation No 1466/73, provided that, among the The "accession" compensatory amounts special endorsements to be made on that were levied or granted in trade between copy, Section 104 was to be completed the new Member States or between them by the parties concerned by deleting and the original Member States by the what did not apply and adding a specific one of the two Member States concerned endorsement which that article set out in whose price-level used in determining the the languages of the various Member compensatory amounts was the higher.

lation". It is from that difference in the L 30, p. 73). forms of wording that this case, the facts of which are as follows, arises. By virtue of Article 5 of that regulation, as amended by Regulation (EEC) N o 1466/73 of the Commission of 30 May On 29 July 1975 the Danish authorities 1973 (Official Journal 1973, L 146, p. issued Firma Alfred C. Töpfer, 13), payment of the compensatory Hamburg, (hereinafter referred to as amount by the exporting State was "Töpfer"), an international wheat- subject to production of proof that the dealer, with an advance-fixing certificate product in respect of which the customs for the "accession" compensatory amount to be granted in respect of the

The compensa- tory amounts to be paid by the importer amounted to two units of account per That proof was to be furnished by tonne, a security of three units of production of the control copy (T/5) account per tonne having been furnished. referred to in Article 1 of Regulation The certificate was valid until

25 October 1975 with respect to all the empowered to initiate proceedings for original Member States. offences of an economic nature] initiated proceedings before the Københavns On 4 September 1975 Töpfer concluded Byret against Töpfer and against three a contract for the sale of 1 800 tonnes of employees of that firm who had dealt Danish wheat to Bremer Rolandmühle, with the abovementioned exports. The Bremen. On 15 September it sold 1 800 Statsadvokat accused the defendants of tonnes of Danish wheat to an English infringing certain provisions of Danish undertaking, Dalgety Franklin Ltd, from Law N o 595 of 22 December 1972 which it re-purchased the wheat on the concerning the implementation of following day. Community regulations establishing common organizations of the markets in On 17, 23 and 25 September 1975, three agricultural products, and sought an vessels chartered by Töpfer left Denmark order that they should repay the carrying a total a 1 800 tonnes of wheat, "accession" compensatory amounts the final destination being Bremen. On received in Denmark and that they arrival in the United Kingdom the vessel should refund the security, on the discharged the wheat into the silos of an ground that they had planned, even English company, jointly owned by the before the goods in question were abovementioned English purchaser and exported from Denmark, to import them by Töpfer. Once the import formalities into the Federal Republic of Germany were completed the 1 800 tonnes of and that, in order to secure payment of wheat were re-loaded into the same the Danish "accession" compensatory vessel and re-exported to Bremen, where amounts for the exports to the United the various consignments arrived on 26 Kingdom without forfeiting the security, September, and on 1 and 13 October they had intentionally made an incorrect 1975. and misleading declaration to the Danish customs authorities by indicating on form T / 5 , the form provided for that Having stated in the T / 5 declaration, purpose that the goods in question were which the English authorities sub- intended for entry for home use in the sequently endorsed, that the destination United Kingdom. of the goods was "England" and that the goods were "bestemt til afsaetning til On 12 August 1980, in a preliminary forbrug" (intended for entry for home hearing, the defendants acknowledged use), Töpfer received in Denmark an that they had intended from the outset to "accession" compensatory amount of export the goods to the Federal Republic DKR 287 501.21 (20.62 units of account of Germany but contended that their per tonne) and obtained release of the security which it had furnished in that conduct did not infringe the rules of country. Community law. They stated that their declaration recorded the fact that the goods had been cleared through customs Upon importation into the Federal in the United Kingdom, as had in fact Republic of Germany Töpfer paid an taken place, and that nothing in the "accession" compensatory amount of abovementioned provisions prevented re- D M 11 611 (two units of account per exportation of those goods to another tonne) on the basis of the certificate State after they had been cleared obtained in Belgium on 27 August. through customs.

"Is a Member State (A) in a case where II — W r i t t e n o b s e r v a t i o n s s u b it has issued an advance-fixing certificate mitted pursuant to Article concerning an 'accession' compensatory 20 of t h e P r o t o c o l o n t h e amount on the export of wheat to a S t a t u t e of t h e C o u r t of second Member State (B) entitled J u s t i c e of t h e E E C

Member State (C)? In this connection it fact had happened but, on the contrary, is assumed that the provisions concerning had always given the competent auth- the 'accession' compensatory amounts orities all the information for which the are observed in relation to the expor latter had asked. They are furthermore tation from Β to C." of the opinion that the development of events in this case does not in any way infringe the provisions of Community The order making the reference was law. received at the Court Registry on 13

Commission of the European Communi Court on 2 June 1976 (Case 125/75 ties, represented by R. Wainwright and Milch-, Fett- und Eier-Kontor GmbH), H. P. Hartvig, members of its Legal [1976] ECR 771), in which it is stated: Department. "Only objective criteria can be taken into account in answering the question On hearing the report of the Judge- whether goods have reached the market Rapporteur and the views of the at their destination so that it is not Advocate General, the Court decided to necessary to ascertain whether the open the oral procedure without any exporter who made the application knew preparatory inquiry. at the date in question that the goods would ultimately be transported to

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In their opinion, the same principle objectives which usually underlie the should apply in this case, too. common agricultural organizations.

The only decisive fact should be that the For reasons of legal certainty this aspect exporter takes the actual steps upon carries even more weight where the which grant of the compensatory amount unjustified payment of an "accession" is conditional. In this case, those compensatory amount involves criminal conditions were fulfilled since the goods liability on the part of the exporter who in question were actually put into free received the amount. circulation in the United Kingdom.

It observes that, when that proof and the For the purpose of that interpretation, other proof required by the above- the defendants consider it relevant to mentioned regulations are furnished, the emphasize that import-export under- person concerned is regarded as having takings operating within the framework fulfilled the formal conditions necessary of European market organizations must to obtain payment of the compensatory take into account, on a totally uniform amounts and release of the security. basis, the "accession" compensatory amount, loss of the security and possible charges and refunds and that it is In the Commission's view, the fact that therefore important that reliance may be the endorsement which should be made placed on the wording of provisions. in Section 104 of the control document They state moreover that in their opinion differs in the various language versions the application of clear and consistent of Regulation N o 269/73, as amended guidelines regarding the criteria for by Regulation No 1466/73, is of no obtaining the monetary compensatory importance. Such a disparity constitutes amount is far more important and a strictly linguistic problem arising from necessary than the concern to avoid, the fact that no common terminology in very special circumstances resulting existed at that time at Community level from unexpected changes in market in the field of customs. It was therefore conditions, payment of a monetary necessary to rely to a considerable extent compensatory amount which is in no on the national terms used in each way or only partially conducive to the Member State, which did not however

give rise to difficulties in practice. It State to another Member State where the should be emphasized in this regard that level of prices is lower can only fulfil the sole function of the endorsement in that objective if the goods in question question is to prove to the authority are placed on the market in the responsible for paying the compensatory importing country. In fact it is only at amounts that the condition laid down in that stage that the imported product the first subparagraph of Article 5 (2) of competes with other products on the Regulation No 269/73 has been fulfilled. basis of the lower price-level in the That endorsement does not therefore importing country. On the other hand, constitute a condition which is sup- the offsetting of price-differences is not plementary to the condition that "import achieved if the goods merely pass formalities have been completed and through the country of destination or if duties and taxes of equivalent effect they are immediately re-exported after payable in the Member State of completion of the import formalities. A destination have been collected", as set precondition therefore for entitlement to forth in the abovementioned provision. a compensatory amount is that the imported product should be processed or used in the country of destination, or both, except where subsequent re-expor- The Commission nevertheless considers tation of the goods in their original that the fact of fulfilment of the formal condition is objectively justifiable by conditions necessary for payment of the reason of changed market conditions. compensatory amount and for release of the security is not a factor of relevance in determining whether exportation from one Member State to another Member On the basis of those considerations, State gives rise to entitlement to a which it derives from a series of compensatory amount. It is in fact a judgments delivered by the Court in matter of rules of evidence which, in the cases relating to export refunds and view of the Community legislature, which it applies by analogy to the should in the normal course of events compensatory amounts, the Commission provide a sufficient basis for considering submits that in a case such as the one in whether the person concerned has point no entitlement to a compensatory acquired entitlement to a compensatory amount has been required and, amount, but those rules do not create consequently, no entitlement to release such entitlement. of the security.

economic objective, is certainly by far "must in no case be extended to cover the most serious. However, the abusive practices of an exporter". Community cannot prevent such transactions or make them more difficult without running the risk of pointlessly After stating that, for reasons of legal hindering the conduct of real commercial certainty, the operation of a rule transactions. Likewise, a retroactive enabling payment of a compensatory amendment of the provisions, in a case amount to be refused where there is an where abuses are noted, might constitute abuse or fraudulent exploitation of a breach of the principle of legitimate Community law should of course be expectation as regards those under- limited to those cases where it had been takings which had not engaged in specu- possible to prove that a commercial lative transactions. transaction was purely speculative, the Commission proposes that the following answers should be given to the questions raised by the Københavns Byret: Faced with this difficulty of avoiding fraudulent exploitation of Community provisions, the Commission considers " 1 . The provisions relating to the that it must be possible to refuse 'accession' compensatory amounts, payment of a compensatory amount including Regulation No 269/73, where it is proved that although the must be interpreted as meaning that formal conditions for entitlement to that entitlement to the 'accession' amount have been fulfilled a specific compensatory amount and to release transaction is devoid of any economic of the security in the case of advance objective and is intended only to achieve fixing is subject to the condition that a profit by reason of the differences exportation from one Member State between the rates for the compensatory to another Member State fulfils the amounts fixed by the Community. purpose for which the system was established, namely the offsetting of differences between price-levels in those Member States. Accordingly, the imported goods should actually In support of its view the Commission be placed on the market in the has annexed to its observations an importing country. outline of the provisions which, in the majority of Member States, impose penalties for abuse and fraudulent 2. Exportation from one Member State exploitation of the law. to another Member State, which is proved to be devoid of any economic objective by reason of the fact that its sole purpose is to exploit differences existing between the It is of the opinion that similar rules compensatory amounts fixed by the must be applicable as far as Community Community, constitutes a fraudulent law is concerned and in that regard practice or an abuse of the refers to a judgment delivered by the Community system and does not Court on 11 October 1977 (Case give rise to entitlement to a 125/76, Cremer [1977] ECR 1593) from compensatory amount or to release which it appears in particular that the of a security furnished in the case of application of Community provisions advance fixing."

3 Regulation N o 269/73 of the Commission, of which the national court requests interpretation, provides in Article 5 (1) that the "accession" compensatory amount "shall be paid only upon proof that the product in respect of which customs export formalities have been completed has left the geographical territory of the Member State in which the formalities were completed". It adds in paragraph (2) that "where the compensatory amount is applicable for a product for which no refund is fixed, it shall be paid only

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upon proof that, further, import formalities have been completed and duties and taxes of equivalent effect payable in the Member State of destination have been collected".

4 The last subparagraph of that paragraph, as amended by Regulation No 1466/73 of the Commission, provides additionally that the proof "shall be furnished by production of the control copy referred to in Article 1 of Regu- lation (EEC) No 2315/69", namely the intra-Community transit document known as T/5. Finally, in (b) of the same subparagraph it is provided that, among the special endorsements to be made on the control copy, Section 104 must be completed by deleting as necessary and inserting one of the following:

"intended for entry for home use" "Bestemt til afsætning til forbrug" "Für den freien Verkehr bestimmt" "Destine à être mis à la consommation" "destinato ad essere immesso in consumo" "Bestemd om in het vrije verkeer te worden gebracht".

5 It is apparent from the file on the case and from the order making the reference to the Court for a preliminary ruling, that a wheat-dealer, one of the accused iri the main action, obtained pursuant to Article 6 of Regulation No 229/73 of the Council of 31 January 1973 (Official Journal 1973, L 27, p. 25) by a certificate issued on 29 July 1975 advance fixing of an "accession" compensatory amount in its favour for the exportation of 5 000 tonnes of wheat to the United Kingdom from Denmark, at the rate of 24.05 units of account per tonne — which was subsequently reduced to 26.62 units of account pursuant to Article 4 (2) of Regulation No 3280/73 (Official Journal 1973, L 337, p. 11) — and for that purpose furnished a security of three units of account per tonne.

9 Since the "accession" compensatory amount in question applied to a product for which no refund was fixed, the exporter was obliged — by virtue of Article 5 (2) of Regulation No 269/73 — to complete control copy T / 5 . For that purpose, it specified the United Kingdom in that document as the destination of the product in question and stated in Section 104 that the product was "Bestemt til afsætning til forbrug" ("intended for entry for home use"). By virtue of that copy, which had/ been duly endorsed by the British import authorities, the exporter received a compensatory amount in Denmark of 20.62 units of account per tonne and his security was released. On effecting the importation into the Federal Republic of Germany on the other hand, he paid, on the basis of the importation certificate obtained in Belgium, an "accession" compensatory amount of two units of account per tonne and the security in respect thereof was released.

10 Having regard to the particular features of this exportation and to the statements made on the T / 5 control copy submitted to the Danish authorities, the Statsadvokat for Særlig Økonomisk Kriminalitet, by

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indictment of 14 November 1979, charged the exporter and three of its employees with making an incorrect and misleading declaration to those authorities by indicating on the control copy that the exportation was to the United Kingdom whereas the goods had been immediately re-exported from that Member State after completion of the customs import formalities.

"Is a Member State (A) in a case where it has issued an advance-fixing certi- ficate concerning an "accession" compensatory amount on the export of wheat to a second Member State (B) entitled pursuant to Article 5 (2) of Regulation (EEC) No 269/73 of the Commission, as amended by Article 2 1 of Regulation (EEC) No 1466/73, to refuse payment of the amount to the claimant if the wheat is placed in free circulation, for customs purposes in B, and the claimant submits a control document issued in B, as referred to in Regulation (EEC) No 2315/69 of the Commission, inter alia containing the information 'Bestemt til afsætning til forbrug' [literally 'intended for sale for use', translated as 'intended for entry for home use'] or 'Für den freien Verkehr bestimmt' but the wheat is placed in free circulation in Β for the sole purpose of its re-exportation immediately thereafter to a third Member State (C)? In this connection it is assumed that the provisions concerning the

1 — Translator's note: The relevant article is in fact Article 1.

JUDGMENT OF 27. 10. 1981 — CASE 250/80

'accession' compensatory amounts are observed in relation to the exportation from Β to C."

1 3 Having regard to the disparity between the various language versions of the abovementioned provisions of Regulation N o 269/73, it is appropriate, in order to answer the national court's question, to place those provisions and the regulation of which they form part within the context of the totality of the Community rules concerning tne system of "accession" compensatory amounts and to interpret them with particular regard to the objectives of that system.

16 It may be seen therefore from those rules that the mere fact that a product originating in a new Member State or in the Community as originally

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constituted has remained on the territory of the Member State designated as the importing State solely for the purpose and for the duration of completion of the customs formalities and, without being marketed in that State, has immediately been re-exported so as to be marketed in a third Member State, is insufficient to justify the application between the exporting State and the importing State of an "accession" compensatory amount. Since in such circumstances the objective of offsetting prices has not been attained, an essential condition for application of an "accession" compensatory amount has not been fulfilled.

JUDGMENT OF 27. 10. 1981 — CASE 250/80

Costs

The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the national court, the decision on costs is a matter for that court.

On those grounds,

THE COURT

in answer to the question submitted to it by the Københavns Byret, by order of 17 October 1980, hereby rules: