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Súdny dvor Európskej únie·Rozsudok·13.10.1982

C-213/81

ECLI:EU:C:1982:351

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Súdny dvor Európskej únie
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61981CJ0213

JUDGMENT OF 13. 10. 1982 — JOINED CASES 213-215/81

categories of traders and the total 3. The financial advantage which traders quantities to which those categories derive from receiving a share in a have access are not determined in an Community tariff quota is not granted arbitrary manner. Such a system does through State resources but through not end equal treatment of those Community resources because the persons if it is applied by the States levy which is waived is part of concerned to all persons established Community resources. Therefore any within their territories. incorrect application of Community law, even if taking the form of an 2. It is not contrary to Article 7 (1) of incorrect allocation of a tariff quota, Regulation No 805/68, the aim of may only be dealt with as a breach of which is to avoid any disturbance of the relevant provisions of Community the market when products bought in law; it may not be regarded as State by intervention agencies are disposed aid or aid granted through State of and to ensure equal access to resources. goods held by those agencies, for a Member State to take account, to a 4. It is not contrary to Council Regu­ limited extent, of purchases of beef lation No 2956/79 for a Member and veal held by intervention agencies State to take account of imports and as a criterion for allocating its share exports of beef and veal in other of the Community tariff quota for Member States and exports of beef frozen beef and veal. However, it is and veal to non-member countries not proper to take account solely of when allocating its share of the purchases from a particular Community tariff quota for frozen intervention agency. beef and veal.

In Joined Cases 213 to 215 / 81 ,

REFERENCES to the Court under Article 177 of the EEC Treaty by the Hessischer Verwaltungsgerichtshof [ Higher Administrative Court , Hesse ] for a preliminary ruling in the actions pending before that court between

NORDDEUTSCHES VIEH- UND FLEISCHKONTOR HERBERT WILL , Hamburg ,

TRAWAKO , TRANSIT-WARENHANDELS-KONTOR GMBH & Co ., Hamburg ,

GEDELFI GROSSEINKAUF GMBH & Co ., Cologne ,

and

BUNDESANSTALT FÜR LANDWIRTSCHAFTLICHE MARKTORDNUNG [Federal Office for the Organization of Agricultural Markets ], Frankfurt am Main ,

NORDDEUTSCHES VIEH- UND FLEISCHKONTOR v BALM

on the interpretation of Article 3 (1) of Council Regulation (EEC) No 2956/79 of 20 December 1979 opening, allocating and providing for the administration of a Community tariff quota for frozen beef and veal falling within subheading 02.01 A II (b) of the Common Customs Tariff (Official Journal 1979, L 336, p. 3) and Article 7 (1) of Regulation (EEC) No 805/68 of the Council of 27 June 1968 on the common organization of the market in beef and veal (Official Journal, English Special Edition 1968 (I) p. 187),

THE COURT

composed of: J. Mertens de Wilmars, President, U. Everling and A. Chloros (Presidents of Chambers), P. Pescatore, Lord Mackenzie Stuart, G. Bosco and T. Koopmans, Judges,

Advocate General: P. VerLoren van Themaat Registrar: P. Heim

gives the following

JUDGMENT

Facts and Issues

I — Facts and written procedure share of the quota to each Member State. Under Article 3(1) Member States are to "take all appropriate steps to Pursuant to an obligation undertaken guarantee all persons concerned, under the General Agreement on Tariffs established within their territories, free and Trade (GATT), the Community access to the quota shares allocated to opens each year a tariff quota for frozen them". beef and veal falling within subheading 02.01 A II (b) of the Common Customs Until 1979 access to the quota in the Tariff. For 1980 that quota, which is Federal Republic of Germany was subject to a customs duty of 20 % and reserved almost entirely to undertakings exempt from any levy, was fixed at which habitually imported beef and veal 50 000 tonnes by Regulation No from non-member countries. A new 2956/79. That regulation allocates a system of allocation was introduced by

JUDGMENT OF 13. 10. 1982 — JOINED CASES 213-215/81

the Order of 19 December 1979 of the Minister of Finance of 19 December Federal Minister of Finance concerning 1979, which gave rise to the reduction, the principles for allocating the German was contrary to Community law, each of share of the Community tariff quota for the three undertakings brought actions 1980 (Bundesanzeiger No 241, p. 2). before the Verwaltungsgericht [Admin istrative Court] Frankfurt am Main seeking from the German authorities Under Article 2 of that order 75 % of quota certificates for a quantity greater the quota share is to be allocated than they had been granted.

Those between importers according to their actions were dismissed by the court of imports into the Federal Republic of first instance but by three orders of 25 Germany from 1977 to 1979, 85 % of June 1981 the Hessischer Verwaltung that quantity being reserved to importers sgerichtshof, to which they appealed, who have imported beef and veal from referred to the Court of Justice under non-member countries and 15 % to Article 177 of the EEC Treaty the importers of beef and veal from Member following questions for a preliminary States of the EEC. A further 15 % of the ruling; German quota share is allocated on the basis of exports to non-member countries and to Member States of the EEC, the " 1 . Is Article 3 (1) of Council Regu reference years also being 1977 and lation (EEC) No 2956/79 of 20

1979. The remaining 10 % is allocated December 1979 opening, allocating according to the amounts of beef and and providing for the administration veal purchased from the intervention of a Community tariff quota for agency, the Bundesanstalt für landwirt frozen beef and veal falling within schaftliche Marktordnung [Federal subheading 02.01 A II (b) of the Office for the Organization of Agri Common Customs Tariff (1980) cultural Markets]. The intervention (Official Journal 1979, L 336, p. 3)

agency is also responsible for adminis to be interpreted as meaning that the tering the allocation of the quota, which equal treatment of the 'persons is done by means of quota certificates. concerned' established in the various Member States of the European Communities is suspended as far as Since the Community prices for beef and the allocation of the respective veal are much higher than in the main shares of the 1980 Community tariff non-member overseas countries quota for frozen beef and veal by producing those commodities, the sale of the individual Member States is frozen beef and veal imported under the concerned? quota is very advantageous and so parti cipation in the quota provides traders with high profits. 2.

Must Article 7 (1) of Regulation (EEC) No 805/68 of the Council of 27 June 1968 on the common The undertakings 1 Will, Trawako and organization of the market in beef Gedelfi habitually import into Germany and veal [Official Journal, English frozen beef and veal from non-member Special Edition 1968 (I), p. 187] be countries. In 1980, after the new rules on interpreted as meaning that the the allocation of the quota had entered general equal treatment of all into force, they were allocated a share of persons buying goods from the the German quota which was less than national intervention agencies is to their share in previous years. Taking the be ensured until the completion of view that the Order of the Federal the individual transaction?

Or does

NORDDEUTSCHES VIEH- UND FLEISCHKONTOR v BALM

that provision permit purchasers of (b) whether the national rules on the intervention products in a particular allocation of the share of the tariff Member State later to be granted, in quota accorded to Germany are the form of a share in the compatible with Community law Community tariff quota, advantages inasmuch as they grant access to the which such purchasers in another quota to several categories of traders Member State do not receive? who were not taken into consideration under the rules pre­ viously in force.

3. Is the allocation of a share in the 1980 Community tariff quota for frozen beef and veal to German The orders for reference were registered importers who imported beef and at the Court on 20 July 1981. veal from Member States of the European Communities and to German exporters, in particular those who exported beef and veal to Owing to the connexity between the Member States of the European questions and the identical nature of the Communities, compatible with Regu­ facts underlying the disputes the Court lation No 2956/79 or does it, in decided by order of 16 September 1981 particular, constitute aid granted to join the three cases for the purposes through State resources? of the oral procedure and the judgment.

In accordance with Article 20 of the 4. Does the term 'persons concerned' Protocol on the Statute of the Court of within the meaning of Article 3 (1) Justice of the EEC written observations of Regulation No 2956/79 include a were submitted by the Government of person who buys up beef and veal in the Federal Republic of Germany, a Member State and then disposes of represented by its Agent, Martin Seidel; it abroad?" by the undertaking Will represented by Peter Wendt and Hans E. Hein, Rechtsanwälte, Hamburg; by Trawako, represented by Fritz Modest and In stating the grounds for its orders the Partners, Rechtsanwälte, Hamburg; by Hessischer Verwaltungsgerichtshof set Gedelfi, represented by Dietrich Ehle out the reasons which prompted it to and Partners, Cologne; and by the request an interpretation of Community Commission of the European Com­ law. munities, represented by Jörn Sack, a member of its Legal Department acting as Agent.

It considers that such an interpretation is necessary to determine: Upon hearing the report of the Judge- Rapporteur and the views of the Advocate General, the Court decided to (a) whether Regulation No 2956/79 is open the oral procedure without any itself valid, since its provisions (parti­ preparatory enquiry. However, at the cularly Article 3(1)) would appear to hearing it asked Gedelfi and the conflict with superior rules of Commission to answer a number of Community law; and questions and to clarify certain points.

JUDGMENT OF 13. 10. 1982 — JOINED CASES 213-215/81

II — Observations submitted and continuous access" to those quotas pursuant to Article 20 of to "be ensured for all persons the Protocol on the Statute concerned" in the Community (second of the Court of Justice of recital in the preamble to Regulation No the EEC 2956/79).

Therefore in principle the allocation of (a) The first question those quotas into shares reserved to the various Member States is incompatible with their Community nature. Moreover, Will considers that Article 3 (1) of Regu­ the fourth recital in the preamble to lation No 2956/79 is simply the logical Regulation No 2956/79 shows that the consequence of the division of the tariff Council permitted such division and left quota, in Article 2, into national quota the choice of a system for administering shares according to each Member State's the quota shares to the Member States requirements. As such, those rules are simply because of the relatively low entirely compatible with Article 40 (3) of volume of the quotas. the EEC Treaty.

After observing that the first question That view is shared by Gedelfi, which really concerns the validity of Article 3 considers that traders on the Community of Regulation No 2956/79 the market are still treated equally if Government of the Federal Republic of Member States are allocated different Germany states that that provision is not quota shares which are then allocated in discriminatory and does not therefore accordance with rules of national law, infringe any superior rule of Community provided however that the action of law. Member States is entirely restricted to administering the allocation of the national quota share (cf. judgment of the Under the general principle of equality Court of 12 December 1973 in Case contained in the EEC Treaty similar 131/73 Grosoli [1973] ECR 1555). situations should not be treated National rules on the allocation of differently "unless the differentiation is quotas must not 'affect the mechanisms objectively justified". However, it is of Community law and market policy objectively necessary to allocate the governing the market organization in share which each Member State receives question. Otherwise the common of a Community tariff quota according elements of the organization of the to the place of establishment of the market would be in jeopardy and in persons concerned in order to avoid determining the criteria for allocating the deflections of trade which could lead to tariff quota, which receives favourable Member States' quotas being used in a treatment as regards customs duties, manner inconsistent with the allocation Member States would be able to pursue a effected by the Council. national agricultural policy benefiting certain undertakings on the national market, which as such no longer exists. The Commission stresses first of all that in its previous judgments on national measures to implement the Community Trawako contends that the Community tariff quota the Court has never taken nature of GATT quotas requires "equal objection to the allocation of that quota

NORDDEUTSCHES VIEH- UND FLEISCHKONTOR v BALM

between Member States on the basis of the negative. They contend that the new objective criteria or to the delegation to German regulation clearly offends Member States of powers to administer against Community law. the quota within the limits of the share allocated to them. They point out that, according to Article 7 of Regulation No 805/68, when From that it must therefore be concluded the commodities bought in by the that this method of administering the intervention agencies are disposed of tariff quota is basically compatible with (a) any disturbance of the market must its Community nature. It is not perhaps be avoided, (b) all interested persons the best possible solution but it does must be allowed access to the goods, and offer many advantages: it ensures a wide (c) all purchasers must be treated regional distribution of the commodity; equally. The allocation of 10 % of the it enables the particular needs of traders quota to persons established in Germany established in the territory of the who have purchased meat from the Member States to be better assessed; it intervention agency offends against each involves a simpler administrative of those principles. procedure for the allocation of the quota.

They contend that a disturbance of the Thus the allocation of a Community market will occur where an undertaking quota between the Member States is established in Germany which has justified on objective grounds which rule bought meat from intervention stocks out any breach of the principle of equal derives financial advantages from having treatment. Although the administration a share in the tariff quota when all other by the Member States of their shares in undertakings established in other the Community quota might lead to Member States are excluded from those some differences in the treatment of advantages. traders in the various Member States, that is kept in sufficient check by the operation of the prohibition of arbitrary Not all traders have the same access to action and the guarantee which all the commodity. Because a large quantity traders have under Community law of of the beef and veal sold by the equal access to the quota. intervention agency is subject to a condition that it must be used for processing, only the trading branch of The Commission therefore suggests that the processing industry is entitled to buy the answer to the question should be it. Normally operators in that branch are that, in delegating to Member States the "traditional importers" of beef and veal power to administer on their own However, in Germany they receive an responsibility the tariff quota shares additional advantage because some sales allocated to them, Regulation No of meat held in intervention are 2956/79 does not offend against the channelled towards their sector with the principle of equal treatment. result that the processing industry's quota share is increased more than the share of undertakings which only import meat. (b) The second question

Will, Gedelfi and Trawako take the view Finally, the acquisition of a share in a that this question should be answered in GATT quota is an advantage which is

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repugnant to the principle that all pur­ That departure necessarily involves some chasers of commodities held in inter­ interference in the mechanisms of the vention should enjoy equal treatment. market organization, no matter what Because they receive a benefit in the allocation system is adopted. form of a right to import meat under the GATT quota owing to their purchases of In adopting the provisions on the GATT meat from their intervention agency, the quota the Council adopted rules distinct undertakings established in Germany are from those governing the organization of thus also able, when answering a new the market and the limits to their validity invitation to tender for meat held in are only to be found in the EEC Treaty intervention, to tender a better price than itself. competitors from other Member States who do not receive the same benefit. The Commission believes that the question submitted to the Court contains two aspects which should be kept Trawako adds that GATT quotas are separate : opened in order to maintain and develop trade relations with traditional meat- exporting countries and thus — partly (a) may Member States use purchases for political reasons — to prevent trade from intervention agencies as a patterns which have existed for a long criterion for the allocation of their time from being jeopardized, altered or share of the GATT quota; broken off. However, purchases of commodities held in intervention have (b) are they permitted to take account nothing to do with trade relations with solely of purchases from their own the beef-exporting countries, nor are intervention agency? they likely to maintain or promote those relations. On the first point the Commission observes that the Court has attributed a wider meaning to the term "person The Government of the Federal Republic concerned" used since Regulation (EEC) of Germany recalls first of all that the No 2861/77 than the term "importer" Court has already held that national used in the previous regulations and that rules allocating a specific share of the it is therefore compatible with national quota on the basis of previous Community law to take into account purchases from the intervention agency other groups of traders besides importers are compatible with Community law of meat from non-member countries. In (Grosoliv Ministry of Trade [1980] ECR this respect purchases of beef and veal 177). It then makes some observations on from intervention agencies may be the relationship between the common considered an entirely suitable criterion organization of the market in beef and for selection. veal, on the one hand, and the GATT tariff quota on the other. It considers that, contrary to the opinion of the The Commission recognizes that the fact national court, which would appear to that purchasers of meat held in want the GATT provisions and those of intervention who are established in the market organization to correspond, Germany have a share in the GATT the GATT tariff quota represents a quota might cause purchasers in the deliberate departure, for reasons of trade Community to be treated unequally but policy, from the principles of the stresses that this is the result of the common organization of the market. power given to Member States to

NORDDEUTSCHES VIEH- UND FLEISCHKONTOR v BALM

administer their quota shares and is an restricting participation in the GATT inevitable consequence of the system. quota on the basis of purchases of meat The limits which the decisions of the from the German intervention agency. Court place on Member States cannot be Under Community law all Community regarded as having been exceeded in this traders should in principle have access to regard. purchases and sales of beef and veal by the intervention agencies. The foun­ dation of that principle is that the The question becomes more complicated intervention measures apply to beef and when it is borne in mind that some sales veal originating from throughout the of meat held in intervention are done by Community and are financed by the tender, in which case German buyers Community. From the economic point of can tender a higher price than their view intervention stocks do not belong to competitors because by being able to the various Member States but to the have a share in the GATT quota they Community. obtain an advantage which is not given to buyers from other Member States. However, the advantage actually Therefore it is arbitrary for an economic received must be very slight because the advantage based on a Community quota number of participants is very large and to be attached to purchases made from a the total quantity of meat distributed in particular intervention agency. Purchases that way is very small. from any intervention agency must therefore be treated equally, for there is no reason to give preferential treatment Moreover, if a Member State's entire to stocks held by the German quota share is allocated between a small intervention agency. Moreover, the number of undertakings importing taking into consideration of purchases frozen beef and veal from non-member from other intervention agencies does countries the market position of not entail administrative difficulties. those undertakings is considerably strengthened by the financial advantage which each thereby receives, so that The Commission therefore suggests that when beef and veal are sold by tender the answer to the question should be that they can offer higher prices than other it is not contrary to Article 7 (1) of traders. If, however, the financial Regulation No 805/68 for a Member advantage arising from having a share in State to take account to a limited extent the quota is spread more widely the of purchases of beef and veal held by effect which it has on undertakings' intervention agencies as a criterion for competitiveness is reduced. Therefore an allocating the Community tariff quota allocation system which takes into consideration the largest possible number for frozen beef and veal. However, it is of traders provides greater equality of not proper to take account solely of access to sales conducted by invitation to purchases from one particular tender and greater equality of treatment intervention agency. than a system which concentrates the advantages in a few hands. (c) The third question

On the second point, however, the Commission considers that the German Will, Gedelfi and Trawako submit that rules do offend against Community law. this question should also be answered in There is no reasonable justification for the negative.

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Referring to their arguments put forward operation should not attract advantages with regard to the second question, the twice under the provisions of the market three undertakings contend that intra- organization. However, exports of beef Community trade and exports to non- and veal to non-member countries member countries have nothing to do already attract refunds and monetary with trade relations with the countries compensatory amounts under Regulation exporting frozen beef and veal, relations No 974/71. Intra-Community trade is which the opening of the GATT quota already assisted by the prohibition on was intended to promote. Although customs duties and charges having Member States may themselves choose equivalent effect. It should not therefore the system for administering their quota enjoy further advantages in the context shares, in making their choice they of the allocation of the GATT quota. should not pursue economic policies of The grant to undertakings which have their own not laid down in Community carried out such operations of import law. According to. "Will, in adopting the rights bearing advantages as regards the new regulation governing the allocation payment of levies could also come within of the quota, the German Government the concept of State aid, since that pursued aims entirely alien to the concept includes not only the payment of Community rules and even sought to subsidies but also "any measure which remove "old-established firms" from the reduces the charges which an under­ import market and replace traditional taking normally has to bear". traders with agricultural cooperatives. Nor should Member States adopt allocation criteria which cause distortions of competition, affect trade patterns or discriminate between traders in ways which prejudice the common organiz­ According to "Will and Trawako, the new ation of the market. In this regard criteria for allocation appear moreover to Gedelfi states that it knows of cases in be overtly discriminatory because they which firms have repeatedly exported the do not take account of operations such same meat to other Member States and as the supplying of ships and aircraft or re-imported it in order to obtain a larger deliveries to international organizations quota share on the basis of such and armed forces which, although made involvement in intra-Community trade. within the territory of a Member State, under Community rules are deemed to be exports to non-member countries.

The three undertakings argue in particular that the German rules offend against the principles of the common organization of the markets and against "Will contends that the taking into the prohibition of State aid laid down in account of exports for the purpose of Article 92 et seq. of the EEC Treaty. allocating quota shares cannot be justified by the argument that such exports create the necessary openings for imports on the home market. In fact the kinds and quality of meat exported from the Community by no means correspond One of the fundamental principles of any with those imported from non-member market organization is that the same countries.

NORDDEUTSCHES VIEH- UND FLEISCHKONTOR v BALM

Moreover, by adopting as a criterion not The Commission confines itself to the only frozen beef and veal but also fresh question of aid granted through State refrigerated meat the German regulation resources, leaving the other issues to be allocating the 1980 quota is contrary to dealt with in its answer to the fourth the fourth recital in the preamble to question. Regulation No 2957/79, according to which it is left to each Member State to choose a management system for its share of the quota "so that it may ensure It observes that it appears from the an allocation which is appropriate from wording of Article 92 (1) of the EEC an economic viewpoint". Treaty that the section of the Treaty in which that article appears only applies to aid "granted by a Member State or through State resources". Since this case concerns the administration of a tariff quota opened by the Community, it The Government of the Federal Republic follows that the resultant financial of Germany observes that, according to advantage enjoyed by traders receiving the decisions of the Court, Member shares of the quota is not granted States may, when allocating their quota through State resources but through share among the persons concerned, also Community resources because the levy take account of imports in respect of which is waived is part of Community which advantages in the form of reduced resources. The concept of "aid granted levies have been granted (van Walsitm v trough State resources" is admittedly Produktschap voor Vee en Vlees [1980] wider than that of "aid granted by a ECR 813) and may treat persons trading Member State"; nevertheless it in a limited geographical area of the presupposes that the resources from common market or not even considered which the aid is granted come from the trading undertakings as persons Member State. The incorrect application concerned (Grosoli v Ministry of Foreign of Community law, in the form of an Trade [1980] ECR 177). In view of those incorrect allocation of a Community decisions there is therefore nothing to tariff quota, may only be dealt with on prevent intra-Community trade from the basis of the infringement of the being used as a criterion for allocation of relevant provisions of that law and may a Community quota share. not be treated as aid granted by a Member State or through State resources. If a different view were adopted the Commission would be able to prosecute breaches of Community law In any event, it must be assumed that the committed by Member States which fail basis for the German regulation to levy duties provided for under allocating the quota share is a Community law or which wrongly grant Community authorization given in the benefits accorded under Community law context of GATT. It must therefore be not only under Article 169 but also judged in that light and with regard to under Article 93 of the EEC Treaty. the provisions of the EEC Treaty. The That certainly cannot be so. rules of the market organization are not relevent for this purpose. Nor is there any question of aid granted through State resources since the advantages in question are advantages provided under Community law itself and paid for by the The Commission therefore suggests that Community. the answer to the question should be that

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measures adopted by a Member State The criteria for allocating each Member which do no more than merely allocate a State's quota share laid down in the Community tariff quota do not legislation of the various Member States constitute aid granted by a Member State serve to define that interest in the impor­ or through State resources within the tation of beef and veal. This may be meaning of Articles 92 to 94 of the EEC done in three ways : Treaty. (a) by considering the quantities of frozen beef and veal previously (d) The fourth question imported;

Gedelfi and Trawako take the view that a (b) by identifying those groups needing person who buys beef or veal in a imported frozen beef and veal; and Member State and then sells it in a non- member country is not a "person (c) by a combination of the first two concerned" within the meaning of methods. Article 3 (1) of Regulation No 2956/79. They base their view on the same arguments which they put forward with Those three methods, all of which have regard to the first three questions. In been held permissible by the Court, their view, the fact that exporters of beef necessarily involve the adoption of and veal are given shares in the quota criteria for allocation which are offends against the principle of equal objectively related to the importation of treatment because it leads to the grant of frozen beef and veal from non-member a kind of "additional" refund, which is countries. not compatible with the principle that refunds should be the same throughout However, the criteria used in the the Community and is likely to disturb German regulation do not take into the market and distort competition. consideration "persons concerned" Gedelfi concedes that the term "persons within the meaning of Article 3 (1) of concerned" contained in Article 3 of Regulation No 2956/79. The German Regulation No 2956/79 has a wider rules therefore tend to prevent persons meaning than the term "importers" used actually concerned from having free in previous regulations but disputes that access to a large part of the quota share. this may serve as justification for the new The existence of an interest in impor- German regulation. tation cannot be demonstrated on the basis of previous exports, participation in intra-Community trade or previous Will also believes that the last question purchases from the intervention agency. In must be answered in the negative. In its fact the new German rules artificially view the word "person" undoubtedly has create import needs for persons who a very wide meaning but it is would not otherwise import meat and, in considerably restricted by the adjective the final analysis, do not take into "concerned". Only persons who "have account the persons really concerned but an interest in the importation of frozen give arbitrary preference to other beef and veal from non-member persons. countries" can be concerned by the opening of a Community tariff quota; in other words, the word "concerned" must The Government of the Federal Republic be understood as meaning "having an of Germany considers that persons who interest in importation". export beef and veal to non-member

NORDDEUTSCHES VIEH- UND FLEISCHKONTOR v BALM

countries may also come under the term the financial advantage from being "persons concerned". It is true that the concentrated in the hands of a few firms uniform application of export refunds in which import beef and veal from non- the Community might be jeopardized member countries. That aim does not if in addition to the refund paid conflict with Regulation No 2956/79 or throughout the Community exporters of with other provisions of Community law. beef and veal were given the advantage A wider distribution of the advantages of being able to import beef and veal on gained from having a share in the quota favourable terms as regards the payment tends to foster equal conditions of of levies; but the reason for that is that competition rather than to distort the market organization and the GATT competition within or outside the tariff quota are two distinct legislative common market. areas each having its own separate and specific aims and thus resting on different legal bases. Consequently the Commission proposes that the fourth question should be answered as follows: Exporters are also market participants; their activity is just as much part of the "market" as importing. Like importers of "It is not contrary to Council Regulation meat from non-member countries, they (EEC) No 2956/79 for a Member State may be regarded as "persons concerned" to take account to a limited extent of within the wider meaning which the imports or exports of beef and veal from Court has attributed to those words in its or to other Member States and exports decisions. of beef and veal to non-member countries when allocating its share of the Community tariff quota for frozen beef The German Government concludes that and veal." all undertakings trading in meat, and thus having a legitimate interest in its importation, may be regarded as "persons concerned", irrespective of III — Oral procedure whether they trade within the Com­ munity, import or export meat from or to non-member countries or transact their business with intervention agencies. At the hearing on 21 May 1982 the following persons presented oral argument and replied to questions asked The Commission considers that the by the Court: Hans E. Hein, inclusion of exporters of meat among the Rechtsanwalt, Hamburg, for Will; Klaus persons benefiting from the allocation of Landry, Rechtsanwalt, Hamburg, for the German share of the GATT quota is Trawako; Dietrich Ehle, Rechtsanwalt. not contrary to Community law; that is Cologne, for Gedelfi; Günter Drexelius, true both of undertakings which export acting as Agent, for the Bundesanstalt to non-member countries and of those für landwirtschaftliche Marktordnung; which export to other Member States of and Jörn Sack, acting as Agent, for the the Community. Commission of the European Com­ munities.

The aim of the new German rules is to increase the number of persons having The Advocate General delivered his a share in the quota and to prevent opinion at the sitting on 9 June 1982.

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Decision

1 By three orders dated 25 June 1981, which were received at the Court on 20 July 1981, the Hessischer Verwaltungsgerichtshof [Higher Administrative Court, Hesse] referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a number of questions on the interpretation of Article 3 (1) of Council Regulation (EEC) No 2956/79 of 20 December 1979 opening, allocating and providing for the administration of a Community tariff quota for frozen beef and veal falling within subheading 02.01 A II (b) of the Common Customs Tariff (Official Journal 1979, L 336, p. 3) and Article 7 (1) of Regulation (EEC) No 805/68 of the Council of 27 June 1968 on the common organization of the market in beef and veal (Official Journal, English Special Edition 1968 (I), pi 187). Since the questions submitted in the three orders were worded identically the Court decided by order of 16 September 1981 to join the three cases for the purposes of the procedure and the judgment.

2 The questions were submitted in connection with three actions between the Bundesanstalt für landwirtschaftliche Marktordnung [Federal Office for the Organization of Agricultural Markets] and three German undertakings which import frozen beef and veal from non-member countries.

3 Regulation No 2956/79 opened for 1980 a Community tariff quota for 50 000 tonnes of frozen boned or boneless beef and veal. Article 2 of the regulation allocates that quantity between the Member States and allots the Federal Republic of Germany a quota share of 9 660 tonnes.

4 Whereas under the legislation in force until 1979 in the Federal Republic of Germany national shares in quotas opened by Community regulations were almost entirely reserved for undertakings which habitually imported beef and veal from non-member countries, a new system of allocation, introduced by an order of the Ministry of Finance of 19 December 1979, provided that in 1980:

(a) 75 % of the German quota share would be allocated between traders on the basis of their imports and 85 % of that amount would be reserved for importers of meat from non-member countries and 15% for importers of meat from the Community;

NORDDEUTSCHES VIEH- UND FLEISCHKONTOR v BALM

(b) a further quantity of 15% of the German quota would be allocated on the basis of exports to countries both within and outside the common market;

(c) the final 10% of the German quota would be allocated according to the amounts of beef and veal purchased from the German intervention agency; and

(d) the reference years in every case would be 1977, 1978 and 1979.

5 After the introduction of the new system the quota shares of the under­ takings Will, Trawako and Gedelfi, which as habitual importers of frozen beef and veal from non-member countries had been allotted part of the German quota share in previous years, were reduced because the number of participants had increased. All three undertakings considered that the new system did not comply with Community law and brought actions before the Verwaltungsgerichtshof [Administrative Court] Frankfurt am Main to obtain quota certificates for a quantity greater than that which they had been allotted. The Hessischer Verwaltungsgerichtshof, to which they appealed after their actions had been dismissed at first instance, submitted the following questions to the Court of Justice for a preliminary ruling:

" 1 . Is Article 3 (1) of Council Regulation (EEC) No 2956/79 of 20 December 1979 opening, allocating and providing for the administration of a Community tariff quota for frozen beef and veal falling within subheading 02.01 A II (b) of the Common Customs Tariff (1980) (Official Journal 1979, L 336, p. 3) to be interpreted as meaning that the equal treatment of the 'persons concerned' established in the various Member States of the European Communities is suspended as far as the allocation of the respective shares of the 1980 Community tariff quota for frozen beef and veal by the individual Member States is concerned?

2. Must Article 7 (1) of Regulation (EEC) No 805/68 of the Council of 27 June 1968 on the common organization of the market in beef and veal [Official Journal, English Special Edition 1968 (I), p. 187] be interpreted as meaning that the general equal treatment of all persons buying goods from the national intervention agencies is to be ensured until the completion of the individual transaction? Or does that provision permit purchasers of intervention products in a particular Member State later to be granted, in the form of a share in the Community tariff quota, advantages which such purchasers in another Member State do not receive?

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3. Is the allocation of a share in the 1980 Community tariff quota for frozen beef and veal to German importers who imported beef and veal from Member States of the European Communities and to German exporters, in particular those who exported beef and veal to Member States of the European Communities, compatible with Regulation No 2956/79 or does it, in particular, constitute aid granted through State resources?

4. Does the term 'persons concerned' within the meaning of Article 3 (3) of Regulation No 2956/79 include a person who buys up beef and veal in a Member State and then disposes of it abroad?"

The first question

6 The first question asks whether, by requiring Member States to guarantee only persons concerned "established within their territories" free access to the quota shares allocated to them, Article 3 (1) of Regulation No 2956/79 ends equal treatment of persons established in the various Member States of the Community inasmuch as it distinguishes between persons established in one Member State, who have access to the quota share allocated to that Member State, and persons established in the other Member States, who do not.

7 Article 3 (1) of Regulation No 2956/79 provides that: "The Member States shall take all appropriate steps to guarantee all persons concerned, established within their territories, free access to the quota shares [in the Community tariff quota for beef and veal] allocated to them." It is explained in the fourth recital in the preamble to that regulation that, since the tariff quota in question is relatively small, it ought to be possible to provide for a system of allocation based on a single apportionment between the Member States, without thereby derogating from its Community nature, and "to leave to each Member State the choice of the management system for its share of the quota, so that it may ensure an allocation which is appropriate from an economic viewpoint".

8 First of all, it should be recalled that in 1962 the Community undertook," under the General Agreement on Tariffs and Trade (GATT), to open each

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year a Community tariff quota for frozen beef and veal from non-member countries, which since 1980 has been fixed at 50 000 tonnes. The quotas in question are opened each year by Council regulations which determine their apportionment between the Member States and, using broadly similar terms, leave the management of the quota shares to the authorities of the Member States.

9 In its judgments of 12 December 1973 (Case 131/73 Grosoli [1973] ECR 1555) and 23 January 1980 (Case 35/79 Grosoliv Ministry of Foreign Trade [1980] ECR 177) the Court has already had occasion to state that the management of the shares was left to the Member States, who might apportion them according to their own administrative provisions, but that reference by the regulations to such provisions could not be interpreted as going beyond the scope of technical and procedural rules designed to ensure compliance with the general terms of the quota and with the principle of equal treatment for those entitled to take advantage of it.

10 That interpretation, which sets out the limits of the power delegated to Member States to adopt administrative measures, is also valid for Regulation No 2956/79, which opened the tariff quota for 1980 and contained the usual provisions on the administration of the quota shares by the Member States.

11 It is on that basis, therefore, that the question submitted by the Hessischer Verwaltungsgerichtshof should be answered. Although the limits of a Member State's administrative powers are exceeded if it subjects the use of the tariff quota to conditions designed to pursue objectives of economic policy which are not laid down in the provisions adopted by the Community, neither the letter nor the spirit of Regulation No 2956/79 nor the Community nature of the tariff quota in question prevents a Member State from regulating, within the limits of its administrative powers, access by the persons concerned to the quota share which it has been allocated. The administration of that share may, under the specific conditions prevailing on the market for frozen beef and veal within the territory of a Member State, reasonably involve the expediency, or even the necessity, of defining the different categories of persons concerned and of determining in advance the total quantity to which each of those categories may lay claim.

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12 As the Court stated in Grosoli v Ministry of Foreign Trade, such a system does not exceed the limits of the administrative powers left to the Member State concerned, so long as it does not deprive some persons concerned of access to the share allocated to that State and so long as the different cate­ gories of traders and the total quantities to which those categories have access are not determined in an arbitrary manner. In order to comply with those requirements the Member State concerned may find itself obliged to resort to a number of criteria.

13 Those criteria, which are intended to ensure an allocation which is "appro­ priate from an economic viewpoint", may vary from one Member State to another, depending on the economic situation in each State. It follows that the prohibition of all discrimination between traders in the Community, since it can only apply to comparable situations, relates in this case solely to the persons concerned who are "established" within the territory of the Member State which has chosen this system of administration.

14 The reply to the first question must therefore be that Article 3 (1) of Regu­ lation No 2956/79 must be interpreted as meaning that a system of administering a national share of the Community tariff quota for frozen beef and veal which is based on a number of criteria in order to define the different categories of persons concerned does not end equal treatment of those persons if the system is applied by the States concerned "to all persons established within their territories".

Second question

15 Article 7 (1) of Regulation No 805/68 of the Council of 27 June 1968, to which the second question submitted by the national court refers, provides that: "Disposal of the products bought in by the intervention agencies ... shall take place in such a way as to avoid any disturbance of the market and to ensure equal access to goods and equal treatment of purchasers." The plaintiffs in the main action maintain that the new system adopted by the Federal Republic of Germany to allocate the share of the Community quota

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which it has been allotted is in breach of that provision inasmuch as it allows buyers of meat held in stock by intervention agencies, more precisely buyers from the German intervention agency, to have a 10 % share in the quota.

16 The first argument of the plaintiffs in the main action is that that system causes a disturbance of the market because undertakings established in the Federal Republic of Germany which have bought meat held in intervention derive a pecuniary advantage from participating in the tariff quota, whereas any other undertaking established within the territory of another Member State is excluded from such advantages.

17 That argument cannot be accepted. The German rules governing the allocation of the national share of the quota do not cause any disturbance of the market; on the contrary, by widening access to the quota they prevent the creation of privileged positions which might indeed have the effect of disturbing the market. Nor is equality of access to goods held in intervention affected as such. The fact that a buyer based in the Federal Republic of Germany might derive an additional advantage over his competitors based in other Member States by having a share in the quota is an inevitable consequence of the structure of the system and is, moreover, counterba­ lanced by other advantages which may accrue to traders based in other Member States under the systems of allocation which those States adopt.

18 The plaintiffs in the main action further contend that the German system is in breach of the principle of equal treatment of traders in the Community inasmuch as shares in the tariff quota are allocated only on the basis of purchases from the German intervention agency.

19 In this regard it should be observed that under Community law purchases from, and sales to, the intervention agencies for beef and veal should be open to all traders in the Community. It would therefore appear impermissible to make a financial advantage based on a Community quota dependent on purchases from a specific intervention agency, such as the German intervention agency in this case.

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20 The reply to the second question should therefore be that it is not contrary to Article 7 (1) of Regulation No 805/68 for a Member State to take account, to a limited extent, of purchases of beef and veal held by intervention agencies as a criterion for allocating its share of the Community tariff quota. However, it is not proper to take account solely of purchases from a particular intervention agency.

The third question

21 By the third question the national court asks in substance whether, by allowing German importers who have imported beef and veal from Member States and German exporters who have exported beef and veal to Member States to have a share in the quota, the German system is in breach of the principles of the common organization of the markets and the prohibition of State aid laid down in Article 92 et seq. of the EEC Treaty.

22 The question whether the system in question is compatible with the common organization of the market in beef and veal is best examined in connection with the fourth question submitted by the national court. As regards the alleged breach of the prohibition of State aids, it must be noted that Articles 92 to 94 of the EEC Treaty cover "aid granted by a Member State or through State resources in any form whatsoever". The financial advantage which traders derive from receiving a share in the quota is not granted through State resources but through Community resources because the levy which is waived is part of Community resources. Although the term "aid granted through State resources" is wider than the term "State aid", the first term still presupposes that the resources from which the aid is granted come from the Member State.

23 Therefore any incorrect application of Community law, even if taking the form of an incorrect allocation of a tariff quota, may only be dealt with as a breach of the relevant provisions of Community law; it may not be regarded as State aid or aid granted through State resources.

24 The reply to the third question should accordingly be that measures adopted by a Member State which do no more than merely allocate a Community

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tariff quota do not constitute aid granted by a Member State or through State resources within the meaning of Articles 92 to 94 of the EEC Treaty.

The fourth question

25 By the fourth question the national court wishes to know, in substance, how the term "persons concerned" in Article 3 (1) of Regulation No 2956/79 must be understood and whether it includes persons who participate in intra- Community trade or export to countries outside the Common Market.

26 The Court has already held, in Grosoli v Ministry of Foreign Trade, that the term " persons concerned ", used in all the Community regulations in this field since the time of Regulation No 2861 / 77 , has a wider scope than the term " importers concerned ", which was used in the previous regulations, and that whilst regular importers of frozen beef and veal cannot be disqualified from access to the national share of the quota they are not necessarily the only traders interested in the importation of meat on favourable terms.

27 In fact, any person who buys beef and veal wholesale, either in order to sell it as a trader or to use it in a processing business or for direct consumption , has an interest in acquiring a share in the quota. The interest which the provision in question has in view is therefore an interest existing at the present time.

28 Although previous transactions are a good indication of a person's interest and should be taken into account both in order to maintain the previous patterns of trade and to prevent the acquisition of shares in the quota from deteriorating into mere financial speculation, they are not the only evidence of such an interest and by themselves are insufficient.

29 In that respect the allocation of part of the German share of the GATT quota to meat exporters, whether they export to non-member countries or to other Member States of the Community, is not incompatible with

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Community law. The same considerations also hold true of traders who have imported beef and veal from Member States.

30 The aim of the new German system is to increase the number of persons having a share in the quota and to prevent the financial advantage from being concentrated in the hands of firms which import beef and veal from non-member countries. That aim does not conflict with Regulation No 2956/79 or with other provisions of Community law. In fact, a wider distri­ bution of the advantages gained from having a share in the quota will tend to foster equal conditions of competition rather than distort competition within or outside the common market.

31 The reply to the fourth question should accordingly be that it is not contrary to Council Regulation No 2956/79 for a Member State to take account of imports and exports of beef and veal in other Member States and exports of beef and veal to non-member countries when allocating its share of the Community tariff quota for frozen beef and veal.

Costs

32 The costs incurred by the Government of the Federal Republic of Germany and by the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. As the proceedings are, as far as the parties to the main proceedings are concerned, in the nature of a step in the proceedings before the national court, the decision as to costs is a matter for that court.

On those grounds,

THE COURT ,

in answer to the questions submitted to it by the Hessischer Verwaltungs­ gerichtshof by orders of 25 June 1981, hereby rules:

1. Article 3 (1) of Council Regulation No 2956/79 of 20 December 1979 must be interpreted as meaning that a system of administering a

NORDDEUTSCHES VIEH- UND FLEISCHKONTOR v BALM

national share of the Community tariff quota for frozen beef and veal which is based on a number of criteria in order to define the different categories of persons concerned does not end equal treatment of those persons if the system is applied by the States concerned "to all persons established within their territories".

2. It is not contrary to Article 7 (1) of Regulation No 805/68 of the Council of 27 June 1968 for a Member State to take account, to a limited extent, of purchases of beef and veal held by intervention agencies as a criterion for allocating its share of the Community tariff quota. However, it is not proper to take account solely of purchases from a particular intervention agency.

3. Measures adopted by a Member State which do no more than merely allocate a Community tariff quota do not constitute aid granted by a Member State or through State resources within the meaning of Articles 92 to 94 of the EEC Treaty.

4. It is not contrary to Council Regulation No 2956/79 for a Member State to take account of imports and exports of beef and veal in other Member States and exports of beef and veal to non-member countries when allocating its share of the Community tariff quota for frozen beef and veal.

Mertens de Wilmars Everling Chloros

Pescatore Mackenzie Stuart Bosco Koopmans

Delivered in open court in Luxembourg on 13 October 1982.

J. A. Pompe J. Mertens de Wilmars Deputy Registrar President

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