C-89/83

D I M E X NAHRUNGSMITTEL I M - U N D E X P O R T G M B H & C o . KG

o n the interpretation of Article 6 (2) of Regulation (EEC) N o 8 7 6 / 6 8 of the Council of 28 J u n e 1968 laying d o w n general rules for granting export refunds on milk and milk p r o d u c t s and criteria for fixing the a m o u n t of such refunds and of Article 6 (1) and the second and third subparagraphs of Article 11 ( l ) . o f Regulation ( E E C ) N o 192/75 of the Commission of 17 J a n u a r y 1975 laying d o w n detailed rules for the application of export refunds in respect of agricultural p r o d u c t s ,

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

composed of: T . K o o p m a n s , President of C h a m b e r , K. Bahlmann, P. Pescatore, A. O'Keeffe and G. Bosco, Judges,

Advocate G e n e r a l : C. O . L e n z Registrar: D . L o u t e r m a n , A d m i n i s t r a t o r

gives the following

3. Additional provisions may be adopted I — Facts and p r o c e d u r e in accordance with the procedure laid down in Article 30 of Regulation (EEC) No 804/68. A — Legislation In accordance with Article 6 (3) Pursuant to Article 17 (3) of Regulation "additional provisions" were adopted in (EEC) No 804/68 on the common the form of Regulation (EEC) No organization of the market in milk and 192/75 of the Commission of 17 January milk products (Official Journal, English 1975 laying down detailed rules for the Special Edition 1968 (I), p. 176), the application of export refunds in respect Council adopted on 28 June 1968 Regu- of agricultural products (Official Journal lation (EEC) No 876/68 laying down L 25, p. 1). general rules for granting export refunds on milk and milk products and criteria Article 6 (1) of that regulation provides for fixing the amount of such refunds as follows: (Official Journal, English Special Edition 1968 (I), p. 234), Article 6 of which In the following circumstances payment provides as follows: of the refund shall be conditional not only on the product's having left the 1. The refund shall be paid upon proof: geographical territory of the Community but also — save where it has perished in — that the products have been transit as a result of force majeure — on exported from the Community, its having been imported into a third and country and where appropriate into a — that the products are of specific third country: Community origin, except where the provisions of Article 7 apply. (a) where there is serious doubt as to the true destination of the product; or 2. Where Article 4 applies, the refund shall be paid under the conditions laid (b) where by reason of the difference down in paragraph 1, provided it is between the rate of the refund on proved that the product has reached the exported product and the import the destination for which the refund charge applicable to the like product was fixed. on the day when customs export

A product shall be considered to have — a receipt issued by an official body of been imported when the customs the third country, in the case of formalities for entry into free circulation goods purchased by that country or in the third country concerned have by an official body of that country, been completed. Proof that customs or in the case of a food-aid formalities have been completed shall be transaction, furnished by production of the relevant customs document, or of a copy or photocopy of such a document certified — a receipt issued by an international by the competent authorities. organization, in the case of a food-aid transaction. However, if owing to circumstances beyond the control of the importer, proof of completion of customs The Commission may, under the formalities cannot be furnished, or if the procedure laid down in Article 38 of proof furnished is considered insufficient Regulation No 136/66/EEC and in the in view of the particular circumstances in corresponding articles of the other regu- the country of destination, the competent lations on the common organization of authorities of Member States shall markets, provide in certain specific cases require proof that the goods have been to be determined that the proof of unloaded in the country concerned. Such importation referred to in the first proof shall be deemed to have been subparagraph be furnished by a single furnished by production of one or more specified document. of the following documents :

— a copy of the port document issued In addition, the party concerned shall in or endorsed in the country of all cases produce a copy or photocopy of destination, the transport document.

B — Summary of the facts On Dimex's application, the Haupt- zollamt Hamburg-Jonas had by notice of 20 August 1976 granted Dimex by way of advance payment a variable export refund amounting to D M 31 948.02. The notice was subject to the due furnishing of proof, in accordance with Regulation No 192/75 of the Commission of 17 In performance of a contract of sale January 1975 as amended by Regulation concluded with the Kuwait Agriculture No 2818/75 of 30 October 1975, that Company, Dimex Nahrungsmittel Im- "the goods had left the geographical und Export GmbH & Co. KG (herein- territory of the Community and had after referred to as "Dimex") despatched been imported into the country of 900 tins of Feta cheese in brine produced destination". Since it was unable to in the Federal Republic of Germany by furnish the original of the control copy lorry to Livorno for shipment on the within three months from the date of M / S Rostock to the port of Shuwaikh in completion of the customs formalities, Kuwait. On arrival in Livorno some of Dimex requested that it be permitted to the brine was found to have escaped furnish proof of exportation and proof from the tins. According to a letter of 2 of importation into the country of March 1978 from the Middle East destination by means of substitute Verschiffungsagentur GmbH the damage documents and it enclosed with the letter was minimal and was confined to the of 7 April 1977 the bill of lading issued packaging. After the goods were loaded on 9 August 1976 by Interschiff the Interschiff Schiffsagentur GmbH Schiffsagentur GmbH, its own sales issued bill of lading No 62 of 9 August invoice of 10 August 1976, evidence of 1976 in respect thereof. On 27 August payment against documents from the 1976 the Rostock reached the port of bank and finally the landing certificate Shuwaikh where it was unloaded, issued on 11 October 1976 by the according to the landing certificate, General Superintendance Company. between 27 September and 6 October The Hauptzollamt recognized those 1976. According to the survey report documents as "equivalent documents" drawn up by Lloyd's the goods were and as proof within the meaning of received by the customs authorities Articles 13 (2) and 11 (1) of Regulation between 22 September and 7 October No 192/75. and were released on 5 October 1976. Also according to the survey report the goods were inspected in the recipient's cold-storage depot on 7 October 1976 and were found to be "dented, holed, bulged out, . etc.". The buyer was invoiced by Dimex on 10 August 1976 and paid for the goods on 1 September 1976, by means of a documentary credit which it had previously established. On 25 October 1976 Dimex received a telex As a result of an inspection conducted at message from the buyer to the effect Dimex's premises, in the light of which that, as a result of an inspection carried the Hauptzollamt came to the conclusion out by the health laboratory in Kuwait, that since the goods had proved to be the goods had been declared unfit for unfit for human consumption on arrival human consumption and had to be in Kuwait they had not been cleared for destroyed or re-exported. entry into free circulation in that country, the Hauptzollamt by decision of

27 February 1978 demanded repayment Regulation N o 2818/75. There could be of the export refund unduly granted. On no requirement that the goods must in 30 January 1979 the Hauptzollamt addition have been marketed in the non- rejected Dimex's objection against that member country. decision as unfounded on the basis of information provided by the Embassy of the Federal Republic of Germany in Kuwait to the effect that "if the goods are found to be defective by the health authorities and have to be either destroyed or re-exported the goods are In an appeal against that decision to the not cleared for customs purposes, that is Bundesfinanzhof on a point of law, the to say they are not allowed to enter into Hauptzollamt contended that since the free circulation." Finanzgericht had failed to go adequately into the facts, in particular the question whether a deterioration of the goods had not already occurred at the time of their exportation from Livorno, there was considerable doubt as

itself. The fact that the goods might have incorrect in considering that production been destroyed after they were unloaded of the landing certificate amounted to in Kuwait because they were no longer documentary proof justifying the grant fit for human consumption did not of the refund under the third subpar- prevent payment of the export refund agraph of Article 11 (1) of Regulation where proof of exportation was duly No 192/75. Finally, acceptance of such furnished in accordance with the third proof in the circumstances of the case subparagraph af Article 11 (1) of Regu- was contrary to the very wording of the lation No 192/75. In its decision the third subparagraph of Article 11 (1) of Finanzgericht accepted the argument Regulation N o 192/75.

HAUPTZOLLAMT HAMBURG-JONAS v DIMEX

JUDGMENT OF 11. 7. 1984 — CASE 89/83

HAUPTZOLLAMT HAMBURG-JONAS v DIMEX

comply with those requirements upon Article 6 (2) of Regulation No 876/68 as their release into free circulation in the meaning that where the refund is country. Similarly, if the event which variable, the goods must have been caused the deterioration in the goods cleared through customs and released occurred before they were released into into free circulation in the territory of free circulation, their subsequent de- destination, regard being had in terioration constitutes a ground for particular to the fact that the refund withholding the refund since it is not in varies in order to take account of the the interests of the Community to peculiar characteristics of each market subsidize damaged goods which no and that it loses its purpose if the goods longer prossess the qualities of conser- fail to reach the relevant market vation inherent in the concept of mer- (paragraphs 5 and 6 of the decision). chantable quality.

JUDGMENT OF 11. 7. 1984 — CASE 89/83

192/75 does not necessarily imply that documents are inadmissible even if they proof of fulfilment of the conditions of have already been accepted by the entitlement to the variable refund is competent authority in the belief that irrebuttably furnished by production of such circumstances existed. The decision the substitute documents referred to in to accept substitute documents is in no the third subparagraph. That is way discretionary. It is based on an confirmed by Regulation No 2730/79 interpretation of the relevant law and the (Official Journal L 317, p. 1), as process whereby the decision was amended, since the second subparagraph reached can be traced by the party of Article 10 (1) thereof — in spite of concerned. Since the latter is able to the reference to Article 20 (2) according ascertain whether the decision to accept to which a product is to be regarded as substitute documents is correct, it must imported when the customs entry anticipate the .revocation thereof if it is formalities for home use in the non- incorrect. Revocation of such a decision member country concerned have been is not in breach of the principle of the completed — allows satisfactory ad- protection of legitimate expectation if, as ditional proof to be required that the in the present case, essential information product "has in fact been placed on the was not brought to the attention of the market in the non-member country of competent authority when it accepted import". proof of unloading.

HAUPTZOLLAMT HAMBURG-JONAS v DIMEX

is not regarded as having been furnished irrebuttable where, after recognition of the substitute document, it becomes apparent that it was not a case in which In the light of those observations, the proof of completion of customs for- answer to the first part of the third malities within the meaning of the question should, in the Hauptzollamt's second subparagraph of Article 11 (1) of view, be as follows: Regulation No 192/75 could not be furnished owing to circumstances beyond the control of the importer.

do so." In the opinion of the Hauptzollamt it is not necessary to adopt a position on the second part of the third question since it Finally, as regards the third question the is clear form the order making the Hauptzollamt refers to its observations reference that Dimex has not furnished on the first question, observing that in its proof that the goods were put into free view the term "imported" presupposes in circulation and imported into Kuwait any event that the goods have reached although in its capacity as claimant of the market of the territory of destination. the variable refund it bears the burden of Since marketing is a requirement, it is proof.

Since, as a result of that However, there is no doubt in its opinion inspection, the goods were destroyed and that the goods have not reached the were thus kept off the Kuwait market,

C — Observations submitted by Dimex Public interest demands that the auth- ority responsible for granting refunds Dimex prefaces its observations with a must be permitted not only to check a number of general remarks regarding the posteriori whether the conditions for the background to the main proceedings, grant of such refunds were fulfilled, or entitlement to the refunds, the purpose whether owing to particular circums- of the refunds and the interpretation tances they were either not met or later which in its opinion should be placed on ceased to be satisfied, but also subs- the main provisions applicable. equently to reject proof furnished to and initially accepted by it and to recover refunds already paid out; however, those With regard to the facts, Dimex states powers are subject to certain restrictions that when it was loaded on board ship in deriving form the principle of legal Livorno the feta cheese which it sold to certainty, the principle of the protection Kuwait was in sound condition and of of legitimate expectation and the purpose good and merchantable quality. That is of the refund. shown by the fact that the captain of the ship made out a "clean" bill of lading. Had the feta cheese been spoiled at that time, this would have been visible The competent authority must be able to externally because the gas emitted by the demand repayment of the refund where cheese would have caused the tins to it provides evidence that the documents bulge. The captain of the ship would submitted were forged or untruthful or have noticed that and would not have that the exporter relied on unlawful made out a "clean" document. The factors as in Case 125/75, cited above, goods only became spoiled after they and in Case 250/80 Anklagemyndigheden had left the territory of the Community, v Töpfer [1981] ECR 2465. It cannot, possibly during transport but probably however, without breaching the principle after their arrival at the port of Kuwait, of the protection of legitimate ex- before or after customs clearance. pectation, state a posteriori that the documents submitted to it in lieu of the customs documents, altough deemed As regards the first two questions, Dimex sufficient at the time of payment of the considers that their purpose is in refund, are no longer sufficient and substance to ascertain in what manner proceed to recover the refund unless the and under what conditions the proof exporter submits the customs document furnished by the exporter in accordance of the country of destination or other with the third subparagraph of Article 11 evidence. Similarly, where it sub- (1) of Regulation No 192/75 by the sequently obtains irrebuttable proof that submission of documents other than the the goods were, or were not, actually costums document may be rejected by released into free circulation in the the authority responsible for paying the country of destination, it cannot sub- refund. However, the wording of the sequently demand production of the questions is contradictory. The second customs documents in the former case

or, in the latter case, repayment of the that country for reasons beyond the refund on the ground that the goods exporter's control does not justify the were not placed on the market in the withdrawal of the refund. country of destination. In that regard, it contends that it cannot be inferred from either the purpose or the spirit of the system of refunds that payment thereof is subject to the overriding condition — even where the amount of the refund is variable — that the exported goods have been released into free circulation in good condition in the country of destination and have been put on the

The incurred. Although as a rule goods are word should, as is now expressly presented to customs in the country of provided for by Article 20 (4) of destination and released into free circu- Commission Regulation No 2730/79 lation in that country, it is possible in which has taken the place of Regulation exceptional cases that — in the absence No 192/75, be replaced by the term of any involvement of the Community "exporter". If that correction is made exporter or even without his knowledge and the control of the exporter is — the goods may not be presented to acknowledged to be decisive, the answer the customs authorities for release into, to that question is straightforward free circulation, as is the case here, either because •• it must be acknowledged that because they have perished or because the exporter is not in a position to they have simply remained in transit in compel his customer in a • non-member the port of the country of destination country to release into free circulation in with a view to their being exported, the country of destination the goods without the exporter's knowledge, to delivered to him an subsequently to place another non-member country. A Com- the customs documents at the exporter's

Even on the the exported goods have reached the assumption that it is the control of the country of destination and have been importer which is decisive, how can the unloaded there. Those are the only factors exporter be expected to furnish proof of open to subsequent rebuttal by conclusive the importer's intention if the latter has evidence to the contrary. The subsequent not forwarded the customs documents to dsicovery that the goods exported and him? It must be acknowledged that the unladed in the country of destination importer does not knowingly and were not released into free circulation in deliberately allow goods to perish and

Dimex refers to its general observations on the purpose of the system of refunds (refunds, which are first and foremost aids to milk producers, are the inevitable Dimex therefore suggests that the answer and necessary consequences of the to the third question submitted by the common organization of the market in Bundesfinanzhof should be as follows: milk which offers producers the guarantee that their products will be sold in the Community at a price higher than the world market price; their purpose is not to influence the domestic markets of non-member countries by increasing or Where goods lawfully loaded on a vessel reducing the volume of supply of by a Community exporter for shipment products exported by the Community) to a given country perish in transit or in and contends that even the Bundes- the geographical territory of the State of finanzhof does not question the destination, it is immaterial whether they exporter's entitlement to a refund and his perished or were destroyed before or retention of that right where the goods after completion of customs formalities have perished in the country of in the State of destination. The exporter destination after presentation to customs cannot be held responsible for the event for release into free circulation and have in question and in those circumstances been destroyed. It is reasonable not to his right to a full refund remains intact.

HAUPTZOLLAMT HAMBURG-JONAS v DIMEX

III — Oral procedure Hamburg, and the Commission, represented by B. Jansen, presented oral argument. At the sitting on 11 April 1984 the respondent in the main proceedings, rep- The Advocate General delivered his resented by F. Modest, Rechtsanwalt, opinion at the sitting on 29 May 1984.

JUDGMENT OF 11. 7. 1984 — CASE 89/83

4 According to the order making the reference, the main ground given by the Finanzgericht for its annulment of that decision was as follows: Since the Hauptzollamt had accepted that certain of the documents referred to in the third subparagraph of Article 11 (1) of Regulation N o 192/75, in particular the landing certificate, could be produced instead of the customs document and as equivalent proof, irrebutable proof had been furnished that the goods had reached the destination for which the refund was granted. The Fmanz- gericht held that it was not possible to require in addition proof that the goods had been marketed in the non-member country.

5 It is against that background that the Bundesfinanzhof has referred the following questions to the Court:

"1 Must the proof required by Article 6 (2) of Regulation N o 876/68 in conjunction with Article 6 (1) of Regulation No 192/75 that the product has been imported into the territory of destination be regarded as having been furnished irrebuttably if the person concerned has submitted a sub- stitute document requested by the responsible authority under the third subparagraph of Article I I (1) of Regulation No 192/75?

2. If the first question is answered in the affirmative: is that also the case where the responsible authority has requested the production of the sub- stitute document and it then emerges that it was not a case in which proof of completion of the customs formalities within the meaning of the second subparagraph of Article 11 (1) of Regulation N o 192/75 could not be furnished 'owing to circumstances beyond the control ot the importer' (third subparagraph of Article 11 (1) of Regulation N o 192/75) 5 How ought the last-mentioned words of the third sub- paragraph of Article 11 (1) of Regulation No 192/75) to be interpreted?

8 It should first be noted in that regard that, as the Court pointed out in its judgment of 2 June 1976 (Case 125/75, Eier-Kontor, [1976] ECR 771) the system of variable export refunds is intended to gain and maintain access for Community exports to the markets of the non-member countries concerned and the variation in the refund is based on the desire to take account of the particular characteristics of each import market in which the Community wishes to play a part.

9 In the above-mentioned judgment and in later judgments (see in particular the judgment of 2. 3. 1977 in Case 44/76, Eier-Kontor, [1977] ECR 393), the Court held that if it sufficed, in order to qualify for payment of the refund at a higher rate, for the goods simply to be unloaded, without reaching the market or the territory of destination, the raison d'etre of the system of varying the refund would be disregarded.

10 That is moreover the reason why the second subparagraph of Article 11 (1) of Regulat.on N o 192/75 makes payment of the variable refund subject to the completion of customs formalities for entry into free circulation in the

JUDGMENT OF 11. 7. 1984 - CASE 89/83

non-member country, since the completion of those formalities is normally sufficient to ensure that the goods have actual access to the market ot the territory of destination.

„ The fact that the third subparagraph of Article 11 (1) of the reguládon permits the competent authorities to require other documents when they consider, in view of the particular circumstances in the country ot destination, that proof of completion of customs formalities is insufficient showsT a t such proof amounts only to rebuttable evidence that the objective of the variable export refunds has in fact been attained.

HAUPTZOLLAMT HAMBURG-JONAS v DIMEX

Article 6 (1) of Regulation No 192/75, if it was destroyed or re-exported within a few days of being unloaded in that territory. It asks further whether the answer depends on whether the product was destroyed or re-exported before or after being cleared for entry into free circulation in that territory and whether the deterioration of the goods which was the case of the destruction or re-exportation occurred before or after such clearance.

16 It follows from the considerations set out below that, in view of the objectives of the system of variable refunds, it is essential that products subsidized by such refunds should actually reach the market of destination and be marketed there.

17 Since actual access to the market of destination is generally subject to the completion of formalities for release into free circulation in the country of destination, the fact that the product is destroyed or re-exported before being released into free circulation means that it cannot, for the purpose of the payment of the variable refund, be regarded as having been imported within the meaning of Article 6 (2) of Regulation No 876/68 and Article 6 (1) of Regulation N o 192/75.

18 The same is true where the destruction or re-exportation takes place after the completion, in the country of destination, of the formalities prescribed by that State as a precondition for the entry into free circulation or marketing of the product within its territory, in so far as the destruction or re-expor- tation of the product was the result of decisions taken by the competent authorities of the State of destination on completion of those formalities and the deterioration which was the cause of the destruction or re-exportation occurred before their completion. In that cause, too, actual access to the market of destination is not possible.

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

in answer to the questions submitted to it by the Bundesfinanzhof by order of 21 April 1983, hereby rules:

1. The proof required by Article 6 (2) of Regulation No 876/68, in conjunction with Article 6 (1) of Regulation No 192/75, that the product has been imported into the territory of destination is not furnished irrebuttably where the documents listed in the third subpar- agraph of Article 11 (1) of Regulation No 192/75 are produced in place of the customs document authorizing entry into circulation.

2. A product which has had to be destroyed or re-exported after being unloaded in the territory of destination cannot be regarded as having been imported within the meaning of Article 6 (2) of Regulation No 876/68, in conjunction with Article 6 (1) of Regulation No 192/75, where its destruction or its re-exportation was a result of decisions taken by the competent authorities of the State of destination on

HAUPTZOLLAMT HAMBURG-JONAS v DIMEX

completion of the formalities prescribed by that State as a pre- condition for the entry into free circulation or marketing of the product within its territory and where the deterioration of the product which was the cause of its destruction or re-exportation occurred before completion of those formalities.