C-147/81

JUDGMENT OF THE COURT (THIRD CHAMBER) 29 APRIL 1982

Merkur Fleisch-Import GmbH v Hauptzollamt Hamburg-Ericus (reference for a preliminary ruling from the Finanzgericht Hamburg)

(Customs procedure — Security on imports for processing)

Case 147/81

Agriculture — Common organization of the market — Beef and veal — Frozen meat intended for processing — Importation subject to suspension of the levy — Time-limit jor processing — Failure to observe — Forfeiture of security by way of levy — Breach of principle of proportionality — None (Commission Regulation No í72/78, Art. 1 (3))

Whilst special arrangements for the Community preference cannot be importation, subject to suspension of the guaranteed if a time-limit for processing levy, of certain frozen meat intended for is not prescribed for undertakings processing is intended to guarantee qualifying for suspension of the levy on adequate supplies for the processing imports. Failure to carry out the industries in the Community, that must processing within the period laid down not be at the expense of the fundamental thus directly jeopardizes the objectives principle of preference for Community- pursued by the system and the penalty produced meat. attached to it, namely forfeiture or the security by way of levy, is by no means Since the Community market is capable disproportionate. of developing relatively swiftly.

HAUPTZOLLAMT [Principal Customs Office] HAMBURG-ERICUS

on the validity of Article 1 (3) of Commission Regulation ( EEC ) No 572 / 78 of 21 March 1978 laying down detailed rules for the application of special import arrangements for certain types of frozen beef intended for processing , and repealing Regulation ( EEC ) No 597 / 77 (Official Journal , L 78 , p . 17),

THE COURT ( Third Chamber )

composed of: A. Touffait , President of Chamber , Lord Mackenzie Stuart and U . Everling , Judges ,

Advocate General : F. Capotorti Registrar : P . Heim

gives the following

made a written declaration at the time of "Whether Article 1 (3) of Commission importation that the frozen beef was Regulation (EEC) No 572/78 of 21 intended for the manufacture of other March 1978 is invalid in so far as it products as referred to in Article 14 (1) provides that the security lodged by the (b) of Regulation No 805/68 of the importer shall be forfeit and retained as a Council. As a consequence of making levy if the period laid down in that that declaration the plaintiff was not provision for the due processing of required immediately to pay a levy on frozen beef is exceeded, or whether the the goods but was required, pursuant to regulation is rather to be interpreted, in Article 1 (1) (b) of Regulation No accordance with the Treaty, as allowing 572/78, to lodge a security equal to the for the security not to be forfeit if the amount of the levy applicable on the day period has been exceeded by only 12 of importation, whilst the national auth­ days." orities reserved the right to charge the levy subsequently if the plaintiff should be unable to prove at the proper time In accordance with Article 20 of the that it had processed the imported frozen Protocol on the Statute of the Court of beef within three months following Justice of the EEC, written observations the month of importation in the were lodged by Merkur Fleisch-Import establishment specified for that purpose. GmbH, represented by Mr Landry, of Modest and Partners, Rechtsanwälte, Hamburg, and by the Commission of the In the course of an inspection of the European Communities, represented by processing establishment the German J. Sack, a member of its Legal customs administration found that only Department. 5 150 kg of frozen beef had been processed within the period of three On hearing the report of the Judge- months. In accordance with the second Rapporteur and the views of the and third subparagraphs of Article 1 (3) Advocate General the Court decided to of Regulation No 572/78 the amount of open the oral procedure without any the security proportionate to the beef preparatory inquiry. By an order of 11 processed too late was forfeited and, in November 1981 the Court decided to accordance with Article 1 (8) of the said assign the case to the Third Chamber. regulation, the additional sum to be paid in satisfaction of the levy was fixed at DM 42 044.49.

Council, as amended by Regulation No forfeited if the importation or expor 425/77, which authorizes the Com tation is not effected, or is only partially mission to lay down detailed rules for effected, within that period. the application of Article 14 of Regu lation No 805/68 and particularly those concerning control of the end use of imported meat. The plaintiff in the main action also considers that the fixing of time-limits on pain of forfeiture is in breach of the principles of equality and of pro On the one hand, that authorization portionality. In this connection it claims implies that the implementing provisions first of all that the provision in question adopted by the Commission must relate is in breach of these principles since it to, and serve to attain, the objective of prescribes an identical penalty for Article 14 of Regulation No 805/68, infringements of very different degrees namely to preserve the competitive of gravity, ranging from a slight, and capacities of the Community processing indeed minimal, failure to observe the industry in relation to competitors time-limits for processing to a total established outside the Community. That failure to carry out any processing. objective does not require the fixing of Furthermore, since the provision in time-limits for processing or a fortiori the question provides for the entire forfeiture fixing of time-limits involving forfeiture. of security unless proof of processing is furnished within six months of the month of importation it is in breach of the principle of proportionality, as the Court of Justice has already decided in Cases

In order to confer merely constitutes a means of checking, such a power on the Commission an failure to comply with which should not express, or at any rate a clear, auth result in withdrawal from the under orization by the Council would have taking in default of the right to the been necessary but, according to the suspension of the levy. plaintiff, there has been no such auth orization. The need for an express auth orization by the Council is furthermore established by comparison of Article 14 of Regulation No 805/68 with Article 15 The plaintiff in the main action of the same regulation in which the concludes that, even if the Commission Council has expressly provided that the was entitled to prescribe time-limits for issue of licences for imports or exports is processing carrying penalties for failure to be conditional on the lodging of a to comply with them, there was no deposit guaranteeing that the impor power to make such penalties entail the tation or exportation will be effected total loss of the right to the suspension during the period of validity of the of the levy and, in any case, they should licence and that the deposit will be have been graduated in accordance with

The Commission next considers the question of the validity of Article 1 (3) B — Observations of the Commission of and (8) of Commission Regulation no the European Communities 572/78. With regard to the compatibility of the provision in question with the powers conferred by Regulation No 805/68 of the Council the Commission The Commission of the European first of all claims that, in this case, it is Communities is concerned first of all to not the arrangements regarding the establish that it is impossible to provide security as such which adversely affect an interpretation of Article 1 (3) of the plaintiff but the very fact that Regu Regulation No 572/78 which could lación No 572/78 makes provision for a justify a failure to charge the whole of period of three months for processing the levy when the period prescribed for and for the subsequent charging of the processing has been only minimally levy where that period is exceeded.

In fact, in another construction should take accordance with that provision the precedence. In this case the provision Commission is required to enact prescribing the subsequent charging of implementing provisions for the special the levy, even where the period pre arrangements for the importation of scribed for processing is exceeded by a certain meat for processing provided for relatively slight margin, is in accordance by Article 14 and in particular the with the clear intention of the provisions necessary for supervising the Commission and the objective of the use of the meat. Supervision of the use of particular arrangements regarding the meat inevitably entails fixing a time- imports laid down by Article 14 of Regu limit for processing which the

JUDGMENT OF 29. 4. 1982 — CASE 147/81

three-monthly allocation of requirements ensure that the person concerned for imported meat for processing performs the main obligation binding determined for one year in the Council's him to the administration, which is estimate and it is accordingly natural that necessitated by the objective of the the Commission should make provision system laid down. In cases of that type for a regular allocation not only of the Court has on the other hand held imports but also of processing for the that forfeiture of a security as a penalty year as a whole. In any case, a short for exceeding the periods prescribed was period is justified by the need to avoid in accordance with the principle of pro­ storing unprocessed frozen meat with a portionality (judgment of 17 December view to speculation and to ensure 1970 in Case 11/70 [1970] ECR 1125, effective control within the undertakings. judgment of 30 January 1974 in Case 186/73 [1974] ECR 533 and judgment of 11 May 1977 in Joined Cases 99 and 100/76 [1977] ECR 861).

MERKUR FLEISCH-IMPORT v HAUPTZOLLAMT HAMBURG-ERICUS

provision is made where the period pre­ following: Klaus Landry, of Modest and scribed for processing is exceeded, or Partners, of the Hamburg Bar, for with regard to the prior lodging of a Merkur Fleisch-Import GmbH and by J. security involved in this system." Sack, a member of the Commission's Legal Department, for the Commission of the European Communities. III — Oral procedure The Advocate General delivered his At the sitting on 14 January 1982 oral opinion at the sitting on 11 February argument was presented by the 1982.

Decision

1 By an order of 7 May 1981 which was received at the Court on 10 June 1981 the Finanzgericht [Finance Court] Hamburg referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a question as to the validity of Article 1 (3) of Commission Regulation (EEC) No 572/78 of 21 March 1978 laying down detailed rules for the application of special import arrangements for certain types of frozen beef intended for processing (Official Journal, L 78, p. 17).

2 The file shows that the plaintiff in the main action, by a customs declaration of 16 October 1978, asked the German customs administration for clearance for the release into free circulation of 13 539-1 kg of frozen boned beef intended for processing. Clearance was granted on the conditions laid down by Article 1 of Commission Regulation (EEC) No 572/78. The customs administration subsequently found that only 5 150 kg of frozen beef had been processed in the period between 25 and 31 January 1979, that is within the time-limit of three months laid down by Article 1 (3) of Regulation No 572/78, and that 8 389· 1 kg was processed between 1 and 12 February 1979.

7 Article 14 (4) (c) provides that the Commission must determine detailed rules for the application of the suspension of the levy on frozen meat intended for processing, and particularly those concerning control of the end use of imported meat. The conferment of that power, expressed in general terms, implies that the Commission has the right and the duty to take all appro­ priate measures in order to ensure that the rules laid down by the Council are implemented in such a way as to attain fully the objectives pursued by such rules.

8 The objectives pursued by the Council in establishing special arrangements for the importation of certain beef intended for processing were defined in the seventh recital in the preamble to the basic regulation, Regulation No 805/68 of the Council. That recital states that whilst the suspension of the levies is intended to guarantee adequate supplies for the processing industries in the Community that must not be at the expense of the fundamental

MERKUR FLEISCH-IMPORT v HAUPTZOLLAMT HAMBURG-ERICUS

principle of preference for Community-produced meat. In other words the existence and extent of the right to the suspension of the levy in this field depends directly on the situation and development of the Community market.

9 Since that market is capable of developing relatively swiftly it is necessary to be able to adapt the special import arrangements to meet that development. For that purpose Regulation No 805/68 of the Council, as amended by Regulation No 425/77, in addition provides in Article 14 (4) (a) that the quantities which may be imported under suspension of the levy must be determined by the Commission on a quarterly basis. That provision would be rendered nugatory if it were possible for processing undertakings to build up stocks with a view to speculation so that they could nullify the effects of any restriction or indeed abolition by the Commission of the special import arrangements intended to ensure the protection of the Community market.

1 4 Since consideration of the question submitted has disclosed no factor of such a kind as to affect the validity of the provision in question the reply to be given to the Finanzgericht Hamburg should be that Anicie 1 (3) of Regu­ lation No 572/78 is not invalid in providing that the security lodged by the imponer must be forfeit and retained as levy when the period prescribed by that provision for the due processing of the frozen beef is exceeded.

Costs

15 The costs incurred by the Commission of the European Communities which has submitted observations to the Coun are not recoverable.

16 As these proceedings are, in so far as the panies to the main action are concerned, in the nature of a step in the action pending before the national coun the decision on costs is a matter for that coun.

On those grounds,

THE COURT (Third Chamber),

For the Registrar H . A. Rühi A. Touffait Principal Administrator President of the Third Chamber

OPINION OF MR ADVOCATE GENERAL CAPOTORTI 1 DELIVERED ON 11 FEBRUARY 1982

Mr President, October 1978, requested the customs Members of the Court, authorities of the Federal Republic of Germany to release into free circulation some 13 tonnes of frozen boned or 1. This reference for a preliminary boneless beef and stated that it was ruling raises one problem of the validity intended for the manufacture of products and another of the interpretation of the other than preserved beef. The customs Community rules requiring importers of office at Hamburg-Ericus cleared the frozen beef intended for processing to goods for release into free circulation lodge a security in order to qualify for and suspended the charging of the levy the total or partial suspension of the since the beef was for industrial import levy. processing and for its part Merkur lodged a security in the form of a bank Let me give a brief summary' of the facts. guarantee; all this was in accordance with the relevant Community rules The undertaking Merkur Fleisch-Import whose salient features I shall summarize of Hamburg, by a declaration of 16 below. However, the customs authorities

I —Translated from the ltalian.