C-234/88

LAMPE-MÜHLE

OPINION OF MR ADVOCATE GENERAL VAN GERVEN delivered on 12 December 1989 *

Mr President, This article was amended in 1986, after the 2 Members of the Court, material facts in this case.

The carry-over payments are designed to 1. The Verwaltungsgericht Frankfurt am compensate for the fact that, towards the Main (hereinafter referred to as 'the end of the marketing year and in particular national court') referred to the Court the just before the beginning of the new following question for a preliminary ruling: marketing year (which begins with a lower intervention price) the monthly increases in 3 intervention prices constitute a very powerful stimulus as a result of which 'cereals that in normal conditions could remain on the market are liable to be 'Must Article 1(b) of Commission Regu­ 4 offered for intervention'. By providing a lation No 1821/81 of 2 July 1981 (Official payment to compensate to some extent for Journal 1981, L 182, p. 10) be interpreted the difference between the intervention price as meaning that the rye in respect of which at the end of the old marketing year and the a carry-over payment is applied for must be beginning of the new marketing year, this owned by the applicant milling undertaking undesirable increase in the cereals offered not only on 31 July of the marketing year in for intervention may be avoided. 5

question but also at the time when it is milled for human consumption, or is it sufficient if the rye is milled for human consumption by another milling under­ The regulations taking, to which it was sold by the applicant undertaking after the application was lodged?'

say the 'management committee for cereals' 'On the above date' refers to '31 July', the procedure. This procedure led to the date referred to in Article 1(a) with regard adoption of Commission Regulation No to common wheat. 1821/81 (hereinafter referred to as 'the implementing regulation'), Article 1 of 6 which is at issue in these proceedings. Another recital in the preamble to the implementing regulation states that the arrangements for carry-over payments are connected with those for intervention, so The recitals in the preamble to the that in order to qualify for carry-over implementing regulation state first of all payments the cereal must comply with the that stocks of cereal remaining at the end of quality requirements for intervention. 8 It a marketing year are generally held by the then states that in the case of rye held by trade or by the processing industry, and the milling industry, milling for human therefore, to simplify administration, in consumption should be accepted as proof of particular as regards supervision, the 8 sufficient quality. This rule is to be found carry-over payment should be granted at the in the second subparagraph of Article 2(2) trade or processing industry stage; in the of the implementing regulation, which reads case of rye, supervision requirements are as follows: such that the payment should be made only 7 to the milling industry. In the text of the implementing regulation, this recital led, as regards rye, to Article 1(b): 'In respect of rye held by the milling industry at the end of the season, milling for human consumption shall be accepted as proof of sufficient quality.' 'The carry-over payment fixed by the Council for a given marketing year shall be granted : 4. This case concerns rye which on 31 July 1985, that is to say at the end of the marketing year, was held by Wilhelm- Lampe-Miihle (hereinafter referred to as 'Lampe-Mühle'), a milling undertaking.

however, the Council had not yet done so, pan of the Bundesanstalt für landwirtschaft­ since at the very end of July 1985, a few liche Marktordnung (Federal Office for the days before the beginning of the new Organization of Agricultural Markets, here­ marketing year, it had not yet fixed prices inafter referred to as the 'Federal Office') to for the cereals sector; consequently the grant it a carry-over payment for a Commission on 26 July 1985 adopted consignment of rye (320.08 tonnes) owned precautionary measures in Regulation by it on 31 July 1985, in its stocks at that (EEC) No 2124/84 and decided in date and harvested in the Community. The particular that the Member States should reason given for the refusal was that, after grant a carry-over payment for rye intended submitting the application, Lampe-Mühle I0 for human consumption. The second had sold the rye in question to seven subparagraph of Article 4(3) of the regu­ different milling undertakings, each of lation states as follows: which had milled its own share of the rye. The Federal Office does not deny that the rye was milled; that is clear from the documents submitted by Lampe-Mühle ('Vermahlungsbestätigung' — declaration of 'For rye held by mills at the end of the milling), which I will consider further marketing year, the milling thereof with a below), on which the respective purchasers view to human consumption shall be taken confirm that they milled the rye in question. as proof of sufficient quality. Proof of such From this declaration it is also clear that milling shall be given by the end of 1985 at Lampe-Mühle did not attempt to conceal the latest.' that it had sold the rye and that the rye had been milled by the purchasers thereof.

milled but without delivering the rye until it milled for human consumption is purely a has been milled. quality requirement (in other words, the emphasis is on fitness for human consumption), which may be satisfied even where the rye is milled by an undertaking other than that which applied for the 7. In fact, however, it is clear from the carry-over payment. terms of the regulation, from the order requesting the Court for a preliminary ruling and from the observations submitted to the Court that the question whether the The Federal Office and the Commission applicant undertaking must own the rye at contend that the milling requirement is not the time of milling is of no real importance. purely a quality requirement. In their view it The only significant question is who must also performs an important supervisory mill the rye and it is on this question alone function which means that the rye can be that the observations submitted by Lampe- milled exclusively by the undertaking Mühle, on the one hand, and by the Federal applying for the payment. They dismiss the Office and the Commission, on the other, literal interpretation put forward by differ. According to the Federal Office and Lampe-Mühle on practical grounds of the Commission, the rye must be milled by supervision, which are in their view also the applicant itself, whether or not it is still clear from the relationship between the owner at the time. Lampe-Mühle considers provisions of the regulation and the annexes that the applicant need not own the rye at thereto. the time of milling or mill the rye itself.

say of showing that the rye is milled for The Federal Office's interpretation — even human consumption. if, as I have said, it were estab­ lished — might have given rise to a legitimate expectation on the part of Lampe-Mühle. It is not, however, for the Court to determine whether it should have 13 In support of its literal interpretation, those consequences under national law. Lampe-Mühle annexed to its observations a copy submitted by it of the déclarions of milling ('Vermahlungsbestätigungen') the standard form of which was published by the Federal Office in the Bundesanzeiger as Arguments based on the terms of the regu­ Annex 2 to a communication on carry-over lation payments for 1984/1985." According to Lampe-Mühle, it is clear from this form that the applicant and the milling undertaking do not have to be the same. This is, at least, what Lampe-Mühle seeks to show by 11. The rejection of any arguments which producing a copy of the declaration which it may be derived from the national submitted, and on which at the top, in the implementing rules does not necessarily space provided for 'name and address of mean that Lampe-Mühle's argument based applicant', Lampe-Mühle's address is stated, on the terms of the regulation (see 9 above) whereas below, on the line provided for is unfounded. I will now examine that 'date and commune' and 'signature and argument in connection with other elements stamp' another milling undertaking is which may be derived from Regulation No referred to. 1821/81.

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OPINION OF MR VAN GERVEN — CASE C-234/88

the applicant undertaking on 31 July. The strong, ' is weakened by the fact that the text is, however, ambiguous, as appears even regulation could have stated even more more clearly from the Dutch version, in clearly and expressly that the applicants which the milling requirement is referred to must themselves mill the rye, as could easily at the end. have been achieved by drafting the provision as follows: 'milling undertakings, in respect of stocks of rye harvested in the Community, to be milled by them for human consumption and owned by them on the 15 above date' (emphasis added).

12. The Federal Office bases its interpre­ tation, which it acknowledges cannot clearly The Federal Office states that the category follow from the text alone, on an exam­ of those entitled to the payment is limited ination of the system of control which is under Article 1(b) to milling undertakings centred on the person and undertaking on the grounds of supervision, as referred to receiving the payment. This system of in the first recital to the preamble. This control consists of measures which the restriction is narrower than that for other Member States are required to adopt and cereals referred to in Article 1(a) and (c), in implement by virtue of Article 8(1) (and the which all 'trade and processing under­ ninth recital in the preamble) of the takings' are eligible, not only milling under­ implementing regulation. takings. The question arises whether this is not an indication that the applicant under­ 14 — This argument is regarded as important by the Eighth takings must themselves mill the rye. Senate of the Hessische Verwaltungsgerichtshof, with regard to the identical Article 1(b) of Regulation (EEC) Otherwise, would it have been necessary to No 1554/73, the predecessor to Regulation No 1821/81, in its judgment cited in footnote 13, at p. 334. draw this distinction with other cereals? 15 — This is Lampe-Miihie's literal argument, to which This contextual argument, in itself quite reference is made in 8.

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LAMPE-MÜHLE

Article 8(1) of the implementing regulation In its observations to the Court, the Federal provides as follows: Office stated that if Lampe-Mühle's inter­ pretation were accepted, proof that the consignments of rye for which a carry-over payment was requested had actually been milled could not always be based on the stock books of undertakings which declare 'For purposes of the implementation of this that they carried out the milling. regulation, the competent authority of each Member State shall carry out the necessary checks. It shall for this purpose adopt all the measures necessary to take account of the special conditions within its territory, particularly with regard to variation and 14. In order to give this argument, which movement of stocks and the time for which was contested by Lampe-Mühle at the the stocks are subject to check.' hearing, a fair appraisal, the parties repre­ 17 sented were asked whether third parties, that is to say milling undertakings which had not applied for a payment, were subject to accounting obligations which, in addition to physical checks at the relevant time, The supervisory function of the authorities would enable an equivalent check to be of the Member State consists of checking made as to whether the milling obligation stocks at the end of the marketing year and had been carried out and could be the milling (which may be later) of the various consignments in stock at that date. 16 — 'Verordnung uber die Gewahrung von Apart from physical checks at that moment, Übcrgangsvergulung fur Getreide', 9 July 1979, Bandei- which can only be made on random geíetzblatt I, p 1021

supplemented by ex post facto checks of the In its observations on this information accounts. supplied by Lampe-Mühle, the Federal Office states that these compulsory returns were introduced for another purpose and are consequently not specifically adapted to supervision of the carry-over payments at issue and in particular are expressed globally, in tonnes — that is to say, in quan­ In this regard I would state that, in order to tities. They therefore cannot guarantee that make a serious contribution to supervision, registers will in fact be kept of the origin a milling register and stock records must be and destination of individual consignments. kept throughout the year, must relate to all The Federal Office acknowledges, however, millings carried out by the undertaking and that such records are probably required in must be available for checks by the auth­ order to comply with the obligation to make orities at any time in the year, by means of returns. It states in addition that small a comparison with the stocks and activities milling undertakings are either not subject established from a physical on-the-spot to that obligation (if their annual turnover is check. less than 250 tonnes) or required to make declarations at different intervals (if they have a turnover of between 250 and 500 tonnes).

15. In reply to the question asked, Lampe-Mühle referred to the 'Verordnung über Meldepflichten der Getreide-, Stärke- 16. As regards the supervision argument und Futtermittelwirtschaft', of 26 June and the parties' comments on it, I would 19 1978, which requires all milling under­ point out that in its judgments on aids the takings which mill a minimum quantity per Court has always attached great importance annum to make monthly returns giving data to interpretations which promote the relating to stocks at the beginning of the effective supervision of the use of the 22 year, stock changes during the year, and Community's financial resources. 20 stocks at the end of the period. The necessary information to enable them to make these returns must be made system­ 21 atically and kept for three years.

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LAMPE-MUHLE

consignments of rye which are in the stocks year to be milled by different milling under­ of milling undertakings at the end of the takings, provided that they are capable of marketing year, that is to say in this case on supplying the supervisory authorities, by 31 July, it is a matter of interpreting the means of reliable stock records and a provision in question in such a way that the reliable milling register, with detailed infor­ supervision measures adopted by the mation equivalent to that which the Member States are not rendered ineffective applicant milling undertaking must itself or unnecessarily complicated. At the same provide, that they keep such information at time, however, it is necessary to ensure that the disposal of the supervisory auth­ the supervision measures are kept within orities — and if necessary send the books to reasonable limits and interfere with normal those authorities — and that they also allow dealings as little as possible. the supervisory authorities to carry out an on-the-spot check on their premises if they so wish. Under those circumstances it seems to me that it is not incompatible with Article 1(b) of Commission Regulation No 1821/81 for It is of course for the national court to stocks owned by the applicant milling examine whether these conditions may be undertaking at the end of the marketing satisfied in this case.

Conclusion

17. On the basis of the foregoing considerations, I propose that the Court should give the following reply to the preliminary question: