C-156/82

and

HAUPTZOLLAMT [Principal C u s t o m s Office] HAMBURG-JONAS,

for a preliminary ruling o n the interpretation of certain provisions of R e g u - lation N o 1 2 5 9 / 7 2 of the Commission of 16 J u n e 1972 o n the disposal of butter at a reduced price to certain C o m m u n i t y processing u n d e r t a k i n g s (Official J o u r n a l , English Special Edition 1972 (II), p. 559) and Regulation N o 9 7 4 / 7 1 of the Council of 12 M a y 1971 on certain measures of conjunctural policy to be t a k e n in agriculture following the t e m p o r a r y widening of the margins of fluctuation for the currencies of certain M e m b e r States (Official J o u r n a l , English Special Edition 1971 (I), p. 257),

CORMAN v HAUPTZOLLAMT HAMBURG-JONAS

T H E C O U R T (Fifth C h a m b e r )

composed of: J. M e n e n s de Wilmars, President, U . Everling (President of C h a m b e r ) , Lord M a c k e n z i e Stuart, O . D u e and Y. Galmot, Judges,

After finding that the butter had not 1. In 1975 the plaintiff in the main been used for the purposes stipulated in action, SA Nicolas Corman & Fils Article 6 of the regulation the German (hereinafter referred to as "Corman"), authorities levied, on the occasion of the Brussels, bought butter from the German re-importation from Belgium into intervention agency pursuant to Regu- Germany, the difference between the lation No 1259/72 of the Commission of reduced monetary compensatory amount 16 June 1972 on the disposal of butter at laid down in Article 20 of Regulation No a reduced price to certain Community 1259/72 and the full amount. processing undertakings (Official Journal, English Special Edition 1972 (II), p. 559). In its judgment of 28 June 1979 in Case 217/78 Corman v Hanptzollamt Aachen-Süd [1979] ECR 2287 the Court (First Chamber) held that such a Corman exported the butter to Belgium reassessment was possible under where it was processed into concentrated Community law.

JUDGMENT OF 11. 5. 1983 — CASE 156/82

After finding that that ground was that tenderers must further lodge a irrelevant the Finanzgericht stayed the processing deposit. According to Article proceedings and referred the following 18 (2) that deposit "shall be released question to the Court: only for quantities in respect of which "Regard being had to Regulation (EEC) the successful tenderer has furnished to No 1259/72, is Regulation (EEC) No the competent authority proof that the 974/71 of the Council of 12 May 1971 conditions referred to in Article 6 have concerning the system of monetary been met". compensatory amounts to be interpreted as meaning that according to the general Article 20 of the regulation provides that rules governing the application of the monetary compensatory amounts monetary compensatory amounts the applicable to butter and concentrated difference between the reduced monetary butter for the part consisting of butter is compensatory amount and the full to be three-tenths of full amount.

It follows, according to full amount not to be granted sub- the Court, that the fixing of monetary sequently?" compensatory amounts is based inter alia on the prices of the products in question. 3. Regulation No 1259/72 of the According to the Court it is in Commission established a system of implementation of those rules that standing invitation to tender for the Article 20 of Regulation No 1259/79 purposes of the sale by the intervention makes provision for the application of a

reduced monetary compensatory amount compensatory amounts contained in because, having regard to the restrictions Regulation (EEC) No 974/71 apply and on marketing to which the butter sold in the goods are to be regarded as having accordance with the regulation is subject, been marketed at the normal market its market value, and consequently its price, this would mean, in so far as the price, are proportionately reduced. export of the butter from storage is Finally it declared that it is in accordance concerned, that the difference between with the same principle that the German the reduced monetary compensatory authorities reassessed the reduced amount and the full amount compensatory amounts for the butter corresponding to the supplementary levy which was not used in accordance with on importation must subsequently be the provisions of the said regulation. " I n paid. Mr Advocate General Warner al;;o fact in so far as the importer has failed drew that conclusion with regard ':o to furnish proof with the [prescribed] importation into a depreciated currency period that the goods have reached the country (Opinion delivered on 3 May destination which was made a condition 1979 in Case 216/78 Beljatzky v Haužt- of the reduction of the compensatory zollamt Aachen-Süd [1979] ECR 2285). amounts, the goods cannot be considered In cases where on exportation of butter as having the conventional value from storage a reduced monetary attributed to them on the basis of the compensatory amount was granted and minimum selling price referred to in after the re-importation of concentrated Regulation No 1259/72 and they must butter a supplementary monetary be considered as butter sold at the compensatory amount was levied because

were initially applied. Since that butter are carried out by the same under reassessment has regard to the market taking (as in this case) it is questionable price of the products in question its legal whether different treatment depending basis is to be found in the general rules on whether levies for the Community or themselves which govern the application reductions for the trader are at issue is of monetary compensatory amounts." permissible. If the application of the general rules governing monetary 5. The Finanzgericht Hamburg, after compensatory amounts on the basis of summarizing the grounds of the the normal market price depends on the aforesaid judgment of the Court of 28 requirements of Article 20 of Regulation June 1979, makes the following obser (EEC) No 1259/72 not being met, that vations: also applies to the reduced monetary "If that reasoning is used as the basis for compensatoiy amounts granted on the general proposition that in cases exportation. Furthermore, in the light of where the reduced monetary com the processing deposit which must be pensatory amounts provided for by lodged (Articles 12 and 13 of Regulation Article 20 of Regulation (EEC) No (EEC) N o 1259/72), which is intended 1259/72 later ceased to be applicable to cover the difference between the because the goods have either not been acquisition price of the butter from put to the required use or have not been storage and the normal market price of used within the prescribed period, the butter (cf. statement by the Commission

JUDGMENT OF 11. 5. 1983 — CASE 156/82

1259/72. Since it was intended that Regulation (EEC) No 1259/72 should exclude any use other than that pre- II — W r i t t e n o b s e r v a t i o n s sub- scribed therein, the subsequent grant, of m i t t e d to t h e C o u r t the . .difference between the., reduced monetary compensatory amount and the full amount could amount to an appro- A — Observations of Corman bation of conduct inconsistent with the prescribed use, which would be contrary to the aims of Regulation (EEC) No According to Corman the considerations 1259/72. set down by the Court in,the aforesaid judgment of 28 June 1979 in relation to It should not be overlooked, moreover, the content and scope of Article 20 of that if a supplementary payment is made Regulation No 1259/72 apply similarly even where goods are not put to the both to the levy and the subsequent grant prescribed use, this may encourage such, where the goods are diverted from their misuse." prescribed use. The consideration that the reduction in the monetary

CORMAN v HAUPTZOLLAMT HAMBURG-JONAS

That is the aim of the provisions relating to the processing Corman observes further that the deposit. Finanzgericht is not justified in enter- taining doubts about that result on the ground that Community law does not It is apparent from the views of the expressly provide for the subsequent Commission in Joined Cases 99 and grant of the full monetary compensatory 100/76 Beste Boter and Hoche [1977] amount. In that respect Corman states ECR 868 that it is for the purchaser of that in its aforesaid judgment of 28 June the butter to decide whether he wishes to 1979 the Court took the view that comply with the prescribed use and thus Article 20 of Regulation No 1259/72 definitively obtain the price advantage or constitutes an exception to the general whether, on the contrary, he wishes to rules of Regulation No 974/71, which use the butter for other purposes and means that the general rules must apply thereby lose the price advantage. if the conditions for the definitive application of the reduced monetary Even if the objective of Regulation No compensatory amount are not satisfied. 1259/72 required that butter sold pursuant to its provisions should in no event come on to the normal market the According to Corman there is nothing in regulation provides precise measures to either Article 20 of Regulation No that end and they do not include a 1259/72 or in Regulation No 974/71 to reduction in the monetary compensatory justify the proposition that that amount. Thus the fourth recital in the procedure should be followed only in the preamble to the regulation in question case of levying a monetary compensatory states as follows: amount and not in the case of granting

JUDGMENT OF 11. 5. 1983 — CASE 156/82

such. That function is to offset price On the basis of those considerations differences between Member States Corman proposes that the question resulting from currency fluctuations. referred to the Court by the Finanz- gericht should be answered as follows : It is because of that function that the monetary compensatory amount is "Regulation (EEC) No 974/71 must be always subject to a particular price. That interpreted as meaning that according to is also the idea behind the reduction in the general rules governing the the monetary compensatory amount for application of monetary compensatory butter from storage sold at a lower price, amounts the difference in relation to full as is shown by the penultimate recital in monetary compensatory amount must be the preamble to Regulation No 1259/72. subsequently granted where on the exportation of butter from storage the Corman finally points out that the notion reduced monetary compensatory amount that the subsequent payment of the was paid pursuant to the first paragraph difference in the monetary compensatory of Article 20 of Regulation (EEC) No amounts on export may encourage abuse 1259/72 but the concentrated butter is grossly mistaken. produced from the butter was not used for the purpose and within the period As the fourth recital in the preamble to prescribed by Regulation (EEC) N o Regulation No 1259/72 shows, it is 1259/72 and after re-importation was above all the risk of loss of the therefore subjected to a reassessment processing deposit which is intended to based on the difference between the prevent abuse.

In Regulation No 2815/72 of the answer in the affirmative. In its view the Commission of 22 December 1972 decision on the grant cannot be different amending Regulation N o 1259/72 from that in relation to the levy. In both (Journal Officiel, L 297, p. 3) the cases the provisions to be interpreted are Commission gave that practice legislative the same and neither Article 20 of Regu- authority by amending Article 9 (2) to lation No 1259/72 nor Article 2 of the effect that the processing deposit Regulation No 974/71 makes any does not cover only the difference distinction.

As the Court has stated in its aforesaid therefore foreseeable. The provisions on judgment of 28 June 1979 the general monetary compensation contain no rules rules governing monetary compensatory comparable to those of Article 18 (2) of amounts of which Article 20 of Regu- Regulation No 1259/72 according to lation No 1259/72 is also part are based which the sanction arises independently on the principle that the amounts must of the question who is responsible for the relate to the prices of the goods in use of the goods contrary to the end question, that is to say their market pursued. value. Therefore the monetary com- pensatory amounts are not reduced pursuant to Article 20 of Regulation No 1259/72 where the goods, after first being sold at a reduced price pursuant to C — Observations of the Commission the regulation, have not been used in conformity with the regulation and their market value is not diminished by a restriction on use. That legal In the Commission's view cases of sub- consequence arises independently of sequent levying and granting of the whether in the particular case a difference between the reduced monetary monetary compensatory amount must be compensatory amount and the full charged or granted. amount are not comparable. As regards the charging of a monetary com- pensatory amount, the butter sold pursuant to Regulation No 1259/72 may benefit therefrom only on condition that, The grant of full monetary compensatory having regard to the restrictions on its amounts does not mean approving a use use, the product in fact retains the contrary to the objective of Regulation reduced value it has under the regulation No 1259/72. The provisions on until it is processed. That is what the monetary compensatory amounts are Court said in its aforesaid judgment of neutral. They relate to a particular price 28 June 1979. regardless of how that price was arrived at. The legislature's sole concern is that goods sold at a reduced price should be used as prescribed. Otherwise the price A priori there is no right to the grant of reduction must be nullified, which is a monetary compensatory amount in done by not releasing the processing excess of that provided for in Article 20 deposit. of Regulation No 1259/72. If there were such a right it would in fact run counter to the object of the other provisions of the regulation which seek to ensure that the butter is not used for purposes other Any other penalty such as refusal of the than those prescribed. full monetary compensatory amount for goods used otherwise than in conformity with their destination would not be compatible with the neutral machinery of Nor do the general rules on monetary adaptation to prices which is contained compensatoiy amounts provide any basis in the provisions on monetary for such a right. The object of the grant compensation nor would it be compatible of monetary compensatoiy amounts is to with the principle of legal certainty maintain Community preference for according to which a measure involving products of Member States whose prices a charge must be fixed by law and in national currency are higher than

those of other Member States because of difference between the market price and certain alterations in the central rates. the price at which the butter was sold. Where Community law restricts the use The Commission admits that would be of a particular agricultural product the the result in cases such as the present monetary compensatory amounts to be one, where the butter, is sold by the granted in respect thereof in trade intervention agency in a Member State between Member States can have no aim where the rate of the green currency is other than to allow its sale in accordance lower than the real value of the national with its restricted use in the country currency and where the butter, after where prices are lower.

argument unconvincing. First of all the There are, however, valid grounds for trader concerned cannot claim an subsequently levying the full monetary interest meriting protection in not being compensatory amount where the butter charged an amount higher than that is used for purposes which give it a corresponding to the difference between greater value but which are not in the market price and the selling price conformity with its destination. The where the butter is not used for the pre- levying of a monetary compensatory scribed purpose.

minimum selling price. The Commission In the Commission's view the only valid fails to see what reason there might be in ground for taking into account the sub- other cases for excluding the levying of sequent grant of the difference in that greater amount. relation to the full monetary com- pensatory amount when applying monetary compensatory amounts in the The Commission emphasizes moreover case or the use for non-prescribed that the person who provides the purposes of butter from storage sold at a processing deposit and the person who reduced price is that in the absence of pays or receives the monetary com- the grant the butter would be charged pensatory amount need not necessarily with an amount greater than the be the same.

CORMAN v HAUPTZOLLAMT HAMBURG-JONAS

intermediary user of the butter sub- butter from storage but the butter or sequently receives the difference in concentrated butter made therefrom was relation to the full monetary com- not used for the purpose and within the pensatory amount although he is period prescribed by the regulation. That concerned neither by the loss of the is also the case where the product has processing deposit nor by the profit been subject to several successive made on the use of the goods for a transfers from one Member State to purpose other than that prescribed. That another and, where a monetary result would be quite absurd. compensatoiy amount is chargeable, the In conclusion the Commission proposes difference in relation to the full that the Court should answer the monetary compensatory amount has had question raised by the Finanzgericht to be paid subsequently." Hamburg as follows: "Neither Regulation No 974/71 of the Ill — Oral procedure Council of 12 May 1971 nor Regulation No 1259/72 of the Commission of 16 June 1972 is to be understood as At the sitting on 26 January 1983, the meaning that the difference in relation to plaintiff in the main action, represented the full monetary compensatory amount by P. Wendt, and the Commission, must be paid subsequently where the represented by J. Sack, acting as Agent, reduced monetary compensatory amount presented oral argument. was paid pursuant to Article 20 of Regu- The Advocate General delivered his lation No 1259/72 on the exportation of opinion at the sitting on 9 March 1983.

4 On export to Belgium and then upon re-importation into the Federal Republic of Germany the German customs authorities respectively granted and levied monetary compensatory amounts at the reduced rate provided for in Article 20 of Regulation N o 1259/72.

5 After finding that the butter had not been used for the purpose prescribed by the said regulation the German authorities, by a notice of corrective assessment, levied on the re-importation into Germany a sum equal to the difference between the reduced monetary compensatory amount and that applicable outside the system established by the Regulation N o 1259/72.

6 In its judgment of 28 June 1979 in Case 217/78 Corman [1979] ECR 2287 the Court held that such reassessment has its legal basis in the general rules governing the system of monetary compensatory amounts as established by the aforesaid Regulation N o 974/71.

7 Subsequently the undertaking alleged that the considerations set out by the Court in the aforesaid judgment applied in identical fashion both to the grant and to the levy of monetary compensatory amounts and claimed from the German authorities the grant of the difference between the reduced amount and the amount at the full rate in respect of the export from the Federal Republic of Germany to Belgium.

s The Finanzgericht Hamburg before which the undertaking brought the matter stayed the proceedings and referred the following question to the Court:

CORMAN v HAUPTZOLLAMT HAMBURG-JONAS

io It is clear from those rules, and in particular from Article 2 of Regulation No 974/71, that the fixing of monetary compensatoiy amounts is based inter alia on the prices of the products in question. As the penultimate recital in the preamble to Regulation No 1259/72 shows, Article 20 thereof is thus intended to adjust the monetary compensatoiy amounts on the basis of the prices of the products in question, representing their market value, which is reduced by reason of the restrictions relating to the ultimate use of the products. If those restrictions are not observed the butter has its normal market value and the reasons for a reduction of the monetaiy compensatory amounts disappears.

n In its above-mentioned judgment the Court drew from the foregoing considerations the conclusion that in so far as the importer has failed to furnish proof within the prescribed periods that the goods have reached the

JUDGMENT OF 11. 5. 1983 — CASE 156/82

destination which was made a condition of the reduction of the compensatory amounts, the competent customs authorities are required under Regulation N o 974/71 of the Council to apply the compensatory amounts laid down for butter marketed at the normal price and thus to reassess the reduced compensatory amounts which were initially applied.

12 "Where the goods in question have also been exported in circumstances giving rise to the grant of reduced monetary compensatory amounts the same considerations lead to the grant of additional amounts.

1 3 In the observations which it has lodged with the Court the Commission has nevertheless contended that such a grant would be contrary to the spirit and purpose of the other articles of Regulation No 1259/72 whose purpose is precisely to ensure that the butter is not put tó uses other than those recognized as lawful by the regulation.

On those grounds,

T H E C O U R T (Fifth Chamber),

in answer to the question referred to it by the Finanzgericht Hamburg, by order of 31 March 1982, hereby rules:

Regulation No 974/71 of the Council of 12 May 1971 and Regulation No 1259/72 of the Commission of 16 June 1972 must be interpreted as meaning that the difference between the monetary compensatory amount at the full rate and reduced monetary compensatory amount paid upon exportation of butter from storage pursuant to the first paragraph of Article 20 of Regulation No 1259/72 is to be granted a posteriori when the butter has not been used after re-importation for the purpose and within the period prescribed by the regulation and for that reason the balance of the monetary compensatory amount at the full rate was a posteriori levied after re-importation.

Mertens de Wilmars Everling

Mackenzie Stuart Due Galmot