C-155/89

2. On 18 March 1981, Philipp Brothers SA, 4. In any event, since this is a case in which a commercial firm specialized in interna- the rate of refund varies according to desti- tional trade in raw materials and agri- nation, as referred to in Article 20 of Regu- cultural produce, received from the Belgian lation No 2730/79, it was for Philipp intervention agency, the Office central des Brothers to demonstrate that the customs contingents et des licences (the 'OCCL'), formalities governing the entry of the wheat advance payment of refunds corresponding for home use had been accomplished in to two consignments of common wheat, one Finland and Norway. exported to Finland, and the other to Norway, in respect of which it had obtained export licences dated 23 and 28 January 1981 respectively. The export operations seem to have taken place on 26 and 29 January 1981. By way of security for the 5. Proof should have been furnished by the sums advanced, Philipp Brothers had production of the documents listed in provided two guarantees. Article 20(3) ('the customs documents') or possibly Article 20(4) ('the substitute documents') and the transport document referred to in Article 20(5). According to Article 31(1) those documents should, 3. On 24 April 1981, the OCCL released except in cases of force majeure, be the security provided for the exports to submitted 'within six months following the

* Original language: French.

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(i) on 17 September 1982, the customs 8. For the exact wording of the questions documents relating to the two export and details of the written observations operations, only one of which, that submitted to the Court, which I shall incor- relating to the consignment for Norway, porate in my Opinion only in so far as is was forwarded in the form of a certified necessary for the reasoning, I would refer to true copy, as required by Article 20(3) of the Report for the Hearing. In order to Regulation No 2730/79, whereas the facilitate discussion of the issues and to other was forwarded in the form of a avoid repetition, however, I shall begin with mere copy; some general remarks concerning the nature of the security provided for in Article 25 and the obligations whose performance it is meant to ensure. (ii) on 24 December 1982, a copy of the transport documents, specifying that the original documents had been despatched on 19 August 1981; the OCCL 9. It should be noted in the first place that, maintains that it never received the apart from the security under consideration originals, which are available in the form in this case, exporters must provide a further of copies, but in respect of which no deposit which is connected with the issue of provision is made for an extension of an export licence. Its aim is to guarantee time (I would also point out that it seems in any event to be undisputed that on 19 August 1981 only the transport documents were sent and not the customs documents or the substitute ' t h a t . . . exportation will be effected during documents). the period of validity of the licence'

13. In those circumstances, it is in order to guarantee 'repayment of the amount 'the competent authorities must be in a advanced if it should later be found that the position constantly to follow trade refund ought not to be paid' (see the 19th movements in order to assess market trends recital in the preamble to Regulation No and to apply the measures laid down in this 2730/79) that, in accordance with Article regulation as necessary'. 2 25, security is to be provided by an exporter wishing to qualify for the refund as soon as customs export formalities are completed. 11. But what is the purpose of the security Accordingly, that security is not intended in at issue in this case? In that regard it must any way to guarantee exportation itself. be remembered that, normally, refunds are (Hence the application for an advance paid only after proof has been furnished that reflects at most, on the part of the trader, a the product has left the geographical desire or an intention to export.) As is clear territory of the Community (Article 9 of from the Court's judgment of 18 November Regulation No 2730/79) or, in the case of a 1987 in Case 137/85 Maizena [1987] ECR variable refund, only after proof has been 4587, that distinction is far from artificial furnished that the product has been and the concurrent provision of two imported into a non-member country securities, in connection with a single export (Article 20). In those circumstances an operation, one of which is intended to exporter who fails to comply with the ensure that the undertaking to export is time-limit for submitting the documents honoured and the other to ensure does not receive a refund. It should be repayment of the export refund paid in noted that Article 31 forms part of Title 4 advance, is quite legitimate (see, in of Regulation No 2730/79, which is entitled particular, paragraphs 22 and 23 of the 'Procedure for payment of the refund' and judgment). applies not only where refunds have been paid in advance but in all cases in which application for payment is made. 14. The wording of Article 25(2) and (3) confirms, moreover, that forfeiture of the security is not the penalty for 12. It is only where a Member State avails non-compliance with a hypothetical obli- itself of the possibility of advance payment 3 — For ease of comprehension, the term 'exportation' is to be understood throughout this Opinion as covering in some 1 — Article 12 of Regulation (EEC) No 2727/75 of the cases the fact of leaving the geographical territory of the Council of 29 October 1975 on the common organization Community (Article 9) and in others the fact of of the market in cereals (OJ 1975, L 281, p. 1). importation or entry for home use in a non-member 2 — Twelfth recital in the preamble to Regulation No 2727/75. country (Anicie 20).

gation to export. It is only 'if the amount is the security where the proof required has not repaid after being requested' (paragraph not been furnished within the prescribed 3) that the security provided is forfeited 'in periods. proportion to the quantities in respect of which the proof required . . . to qualify for the refund is not furnished within the period stipulated in Article 31' (paragraph 2). Loss 1. The effects of the release of the security of the security therefore 'penalizes' (first and second questions) non-compliance with the obligation to repay the advance which is borne by an exporter who has not fulfilled the conditions laid 17. It can be argued a contrario from the down in order to 'qualify for the refund'. finding that the security provided is not intended to guarantee exportation that its release cannot be interpreted as evidence that exportation has actually taken place.

16. As the rest of my Opinion will show, in a situation of that kind. the foregoing considerations are destined to exert a powerful influence on the answers to be given, in particular to the question relating to the consequences of the release 19. That is confirmed by the Court's of the security and to that relating to loss of judgment of 5 February 1987 in Case 288/85 Piange Kraftfutterwerke [1987] ECR 4 — Judgment of 5 February 1987 in Case 288/85 Hauptzollamt 611. In that judgment the Court expressly Hamburg-Jonas v Plange Kraftfutterwerke [1987] ECR 611, stated, in connection with rules similar to

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advantage for the trader which is justified if even by the principle of legal certainty (see certain conditions.. . are fulfilled', the paragraphs 43 and 44 of the judgment). Court added that, if those conditions are not fulfilled, 'the refund is not due to the exporter and it must be repaid if it has already been received, for example under 21. Finally, with regard to the argument arrangements for advance payment' that it was legitimate for the exporter to (paragraph 11). If the exporter can escape assume that everything was in order because the obligation to repay the refund only if he the administration had released the succeeds, even after the release of the securities or that, in the light of that security, in fulfilling the conditions laid consideration, the administration did not down and furnishing the proof required in show any flexibility towards him inasmuch order to qualify for it, such release cannot as he had failed to comply with the have had 'the effect of discharging [the] exporter from all or part of his obligations, prescribed period, I would recall that the particularly as regards the form of and the Court has traditionally been extremely strict time-limit for submitting the proof required in its attitude to traders. In that connection in order to qualify for the refund' (see the I would refer to the judgment of 13 wording of the first question). November 1984 in Joined Cases 98/83 and 230/83 Van Gend and Loos v Commission [1984] ECR 3763, paragraph 16, in which the Court stated that:

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23. By way of conclusion, I propose that 25. According to the 23rd recital in the the Court answer the first two questions as preamble to Regulation No 2730/79, that follows : period was introduced 'in the interests of sound administration'. In its judgment of 22 July 1986 in Case 266/84 Denkavit France [1986] ECR 149, the Court considered, in a 'The release of the security provided for in virtually identical context, that having Article 25 of Commission Regulation No regard to that aim, namely the settlement of 2730/79 does not have the effect of administrative matters without undue delay, discharging the exporter from all or part of 'the setting of a mandatory time-limit for his obligations, particularly as regards the the submission of applications is a necessary form of and the time-limit for submitting measure' (paragraph 20). It went on to add the proof required in order to qualify for that 'the barring of claims on the ground the refund. If the conditions of eligibility for that the requisite documents have been the refund are not fulfilled, the obligation submitted out of time i s . . . , as a general on the part of the exporter to reimburse the rule, the normal consequence of the expiry amount of the refund paid, plus a possible of any prescribed period the observance of increase, and the obligation on the part of which is m a n d a t o r y . . . ' (paragraph 21). the Member State to recover that amount, Such a mandatory time-limit would cease to are not affected by the fact that the security have effect of barring claims if it were has been released.' permissible for a request for an extension of time to be made after its expiry.

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acted with all due diligence to obtain them certificate) may be granted after the expiry within such a period, he may be granted an of the period of validity of the licence' or extension of time for the submission of certificate. In its judgment, the Court these documents.' extended that possibility 'in the absence of any provision in the regulation' to requests for cancellation of the licence or certificate. In this case the situation is quite different: 27. Moreover, Article 47(5) of Regulation Article 31 expressly provides that the period (EEC) No 3665/87 of 27 November 1987 prescribed is one which has the effect of (Official Journal 1987, L 351, p. 1), which barring claims submitted out of time, in replaced Regulation No 2730/79, whilst other words, any request for an extension again using the words 'n'ont pas pu être must be submitted before its expiry. produits' (past tense), expressly provides that

6 — Judgment of 30 January 1974 in Case 158/73 Kampffmeyer 7 — Judgment of 25 May 1974 in Case 3/74 Einfuhr- und v Einfuhr- und VorratsstellefitrGetreide [1974] ECR 101. Vorratiitelle fur Getreide v Pfiitzenreuter [1974] ECR 589

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the possibility offered to an exporter by 'Article 31(2) of Regulation No 2730/79 Article 20(4) of submitting a series of does not make the grant of an extension of substitute documents where the customs time for the submission of the requisite documents referred to in paragraph 3 documents subject to the existence of force cannot be produced owing to circumstances majeure, but conditional on the exporter beyond the exporter's control, are, in my having acted with all due diligence to obtain view, sufficient to mitigate the strictness of them within the prescribed period.' both the time-limit and its mandatory character, and I therefore consider it unnecessary for provision to be made, as the Belgian Government suggests in the alter- 3. The grant of an extension of time for the native, for the possibility of requesting an submission of the transport documents (fifth extension of time after the expiry of the and sixth questions) normal time-limits if it was impossible for the exporter to submit that request within the prescribed period on account of force 34. As Article 31(2) expressly limits the majeure. possibility of granting an extension of time for the submission of the relevant documents to the customs documents and the substitute documents, it is difficult, in 32. In the light of the foregoing consider- my view, to apply that provision to the ations, I propose that the Court answer the transport documents by analogy. Is that third question in the affirmative: provision therefore to be regarded as invalid?

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persuasive and are based, moreover, on 38. If, therefore, Article 31(2) in its initial contradictory arguments. On the one hand, version is neither discriminatory nor dispro- to argue that in a situation in which only portionate, the fact that Article 1(14) of the transport documents are missing it is Regulation (EEC) No 568/85 8 and Article contrary to the principle of proportionality 47(4) of Regulation No 3665/87, 9 which to decide that the security is forfeit clearly replaced Regulation No 2730/79, provide amounts to calling in question the need to for the possibility of granting an extension produce the transport documents and, of time also for the submission of the consequently, the fact that Article 20 of transport documents cannot be interpreted Regulation No 2730/79 provides for the as a posteriori proof to the contrary. In submission of the customs documents or particular, the arguments put forward by the substitute documents and of the transport Commission to justify that amendment, document. That argument therefore namely the need for the documents to be disregards the very premiss on which Philipp properly processed, however sound and Brothers based its reasoning, namely that convincing they may be, show at most that release of the security is conditional on the the previous legislation may have submission of all the relevant documents for complicated the work of the national auth- payment of the refund (see p. 35 of Philipp orities but not that the reasons which had Brothers' written observations). On the led the Commission to treat the transport other hand, Philipp Brothers maintains that documents differently were unlawful and the grant of an extension of time for the incapable of justifying the requirement of submission of the customs documents or the greater strictness with regard to the substitute documents should automatically submission of the transport documents by be extended to the transport documents comparison with the other documents. precisely because release of the security is subject to submission of all the relevant documents and it would therefore serve no purpose not to provide for an extension of time for the submission of the transport documents.

40. In this question, the national court 42. Let us return, however, to the question seeks in substance to ascertain whether the of non-compliance with the time-limit. It obligation to reimburse the refund paid in follows from the order for reference that advance plus 15%, or, failing reimbur- the doubts expressed by the national court sement, the loss of the security, where the with regard to the legality of the provision proof required by Article 25(2) has not been at issue arose from the consideration that produced within the periods prescribed by 'the fundamental obligation to be Article 31, even though the export operation guaranteed by the provision of security, in has actually been carried out, is contrary to the event of advance payment of a refund, is the principle of proportionality. the actual exportation of the agricultural products in question and their entry for home use in the country of destination'. Philipp Brothers also relies on the 41. In that regard, it must be borne in mind distinction between the primary obligation, in the first place that, for the principle of namely to export the goods, and the proportionality to come into play in the secondary obligation, namely to submit the event of non-compliance with the time-limit, requisite proof within the prescribed it is not sufficient to state that exportation periods, in support of the view that, in those has taken place but it must be possible to circumstances, according to the case-law of prove that such is the case with the aid of the Court, Community legislation 'cannot, the documents required for the purpose. without breaching the principle of propor- The opposite solution would be tantamount tionality, penalize failure to comply with the to calling in question the very obligation to secondary obligation as severely as failure to submit the requisite proof. That is precisely comply with the primary obligation'. 10 the attitude taken by Philipp Brothers, which states, in its proposed answer to the first two questions, that 'where it is estab- lished that the agricultural products have actually been exported and entered for 43. I do not believe, however, that those home use in the non-member countries decisions are applicable in connection with concerned' (established how and by whom?) the legislation at issue in these proceedings. 'release of the security' (even as the result of an error) 'has the effect of discharging an exporter from his obligation to submit the documents relating to payment of the 44. The premiss underlying the reasoning of refund in the form and within the time-limit Philipp Brothers, namely that it is clear from prescribed by Regulation No 2730/79'. In other words, once the administration no 10 — See, in particular, the judgment of 24 September 1985 in Case 181/84 Man (Sugar) v IBAP [1985] ECR 2889, longer has a direct hold on the trader, paragraph 20. See also the judgment of 27 November 1986 through the security provided by him, the in Case 21/85 Maas v BALM [1986] ECR 3537, paragraph 15.

the wording of Article 25(2) of Regulation element of proportionality since the refund No 2730/79 that the aim of the provision is is to be repaid only in proportion to the to penalize failure to fulfil two distinct obli- quantities in respect of which proof cannot gations (see p. 13 of its written obser- be furnished. vations) — hence the reference to the aforesaid case-law of the Court — is unsound in my view. Article 25(2) does not distinguish between the obligation to export and the obligation to submit the documents

I the documents required. That also applies in would remind the Coun 'that the grant of the case of the second indent of Article the refund constitutes an advantage for the 25(2) inasmuch as, in order to come within trader which is justified if certain conditions its terms, the exponer must of course concerning the characteristics of the product furnish proof within the prescribed periods exported and the method of exportation are that the product has been delivered to a fulfilled' and that 'when . . . that has not destination other than that for which the been the case, the refund is not due to the advance was calculated. It is on the basis of exporter and it must be repaid if it has such proof that the amount unduly paid can already been received, for example under be ascertained and thus repaid. arrangements for advance payment'. 11 Hence it is not the grant of an advance on the refund which requires the trader to export the goods; proof of exportation constitutes merely the condition for the trader to be allowed to keep the refund

47. It follows, moreover, from the regu- advance plus 15%. The first exporter, unlike the second, has in fact furnished lations on the common organization of the within the prescribed periods the proof markets in various agricultural products, required in order to be able to retain and in particular from Article 16 of Regu- one-half of the refund paid in advance. 11 — Judgment of 5 February 1987 in Piange Kraftfutterwerke, Hence the system already contains an paragraph 11, cited above.

'is intended above all to ensure that the 49. In the Buitoni case 12 the system of undertaking, voluntarily entered into by the securities at issue was 'intended to trader, to export the quantities of sugar in guarantee that the obligation to import or respect of which tenders have been accepted export, which has been voluntarily is fulfilled' (paragraph 21) undertaken, will be fulfilled during the period of validity of the licence issued for that purpose'. The loss of the security therefore constituted a genuine penalty for that the Court held as contrary to the non-compliance either with the obligation principle of proportionality to import or export, or with the obligation to furnish within the prescribed periods proof of performance of the first obligation. None of the trader's financial advantages, 'the automatic forfeiture of the entire which could simply have been recovered, security, in the event of an infringement was therefore at stake and it seemed significantly less serious than the failure to excessive to penalize non-compliance with fulfil the primary obligation, which the the time-limit more severely than security itself is intended to guarantee' non-compliance with the obligation to (paragraph 29). import or export 'which the security itself [was] intended to guarantee' and which was sanctioned by an essentially proportionate penalty. 51. The Atalanta case 14 (referred to by the Commission) was concerned with a provision which expressly denied a trader 50. The situation which arose in the Man the benefit of storage aid only if the primary (Sugar) case 13 was entirely comparable. obligations assumed by him were not fulfilled in their entirety. 12 — Judgment of 20 February 1979 in Case 122/78 Buitoni v Farma [1979] ECR 677, paragraphs 17 to 20. 14 — Judgment of 21 June 1979 in Case 240/78 Atalanta v 13 — Judgment of 24 September 1985 in Case 181/84 Man Produktshap voor Vee en Vieti [1979] ECR 2137, (Sugar) [1985] ECR 2889. paragraph 10.

52. Finally, the situation in Maas was so the interests of sound administration', was specific and so different from the present initially fixed at six months and case that the judgment of the Court 15 subsequently extended to 12 months 17 and cannot serve as a precedent applicable to was subject to a reservation in the case of this case as such. Moreover, there the Court force majeure. However, no provision was did not rule on the 'proportionality' of the made for the possibility of obtaining an loss of the security in the event of extension of time.

It is quite clear sea a few days behind schedule' from paragraph 19 of the Court's judgment (paragraph 17). In the absence of such an infringement, therefore, the question of the in that case that it was the fixing of a loss of the security did not arise. time-limit for the payment of monetary compensatory amounts, and not for the submission of applications, that was designed 'to prevent distortions of compe- tition between the trade interests concerned in the Member States' . 18 Furthermore, it is

. . . which . . . . must be identical throughout the 54. As we have seen, in its judgment the Community'. More specifically, that recital Court was extremely inflexible in that explains Article 8 of the regulation, which, regard and, in circumstances substantially in paragraph 1 and the first subparagraph of identical to the present situation, it came to paragraph 2, lays down the principle that the conclusion that 'there are no grounds the refund is to be paid upon proof that the for stating that the r u l e . . . which bars products have been exported and, in the claims submitted out of time is out of proportion to the aim pursued by the 17 — The section on detailed rules of administrative application in Commission Regulation (EEC) No 1380/75 of 29 May Community legislature' (paragraph 22). I 1975 laying down detailed rules for the application of would recall that there, as in this case, the monetary compensatory amounts (OJ 1975, L 139, p. 37), which was at issue in Case 266/84 Denkavit France, was period prescribed for the submission of the replaced by Commission Regulation (EEC) No 1371/81 of 19 May 1981 laying down detailed rules for the adminis- documents expressly barred claims trative application of monetary compensatory amounts (OJ submitted out of time, was established 'in 1981, L 138, p. 1). The Court's judgment of 5 February 1987 in Case 145/85 Denkavit Belgie v Belgium [1987] ECR 565 was concerned with the latter regulation. 15 — Judgment of 27 November 1986 in Maas, cited above. 18 — See, in that regard, also the judgment of 5 February 1987 16 — Case 266/84 Denkavit france v Forma [1986] ECR 149. in Denkavit België, paragraphs 7 and 8, cued above.

56. That is also the position in this case, where the financial advantage takes the form of an export refund and where, as we 59. The measure adopted, which is charac- have seen, payment of the refund is also terized by a degree of flexibility, merely subject to the requisite proof being provides that, if the proof required is furnished within a time-limit which bars furnished after the expiry of one year, but claims submitted out of time. In my view, a before 18 months have elapsed, the amount strict approach is all the more acceptable, to be reimbursed is to be equal to 85% of since here the additional possibility exists of the usual amount. Hence the difference is obtaining an extension of time. The logical not very great. (Moreover, Philipp Brothers consequence of this is that a person who exceeded the period of 18 months as well.) does not comply with the time-limit is not In any event, a mere amendment to existing entitled to the refund except in the case of legislation is not sufficient evidence that the force majeure or where he is granted an previous legislation was unlawful. Besides, it extension of time. follows from the final recital at the bottom of p. 3 in the relevant Official Journal (L 351, 14.12.1987, p. 1, at p. 3) that, in the circumstances, the Community legis- 57. If that inference is correct, it cannot of lature considered only that the rules on course be otherwise where the refund has been paid in advance, so that, like the rule 19 — See the definition of the principle of proportionality in the case-law of the Court, in particular at paragraph 17 of the barring claims submitted out of time, a mere Denkavit France judgment.

(ii) by the production of a certified true (v) a statement of acceptance of delivery copy or photocopy thereof; issued by an official agency of the non-member country, if the goods have been bought by that country or by an official agency of that country or form (iii) by the production of a 'customs entry part of a food-aid programme; certificate' made out in accordance 20 — Not emphasized in the original. It is therefore sufficient with the specimen annexed to the regu- for the Consul of any Member State in the port of arrival lation. to issue such a certificate.

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(vi) a statement of acceptance of delivery (i) several alternative kinds of proof may issued by an international organization be furnished, if the goods form part of a food-aid programme. (ii) the time-limit for furnishing such proof is one year,

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(2) The grant of an extension of time, as provided for in Article 31(2) of Regu- lation N o 2730/79, must be requested before the expiry of the normal time-limit provided for in Article 31(1) if entitlement to the refund is not to be lost.

(3) Anicie 31(2) of Regulation No 2730/79 does not make the grant of an extension of time for the submission of the requisite documents subject to the existence of force majeure, but conditional on the exporter having acted with all due diligence to obtain them within the prescribed period.

(4) Article 31(2) of Regulation No 2730/79 precludes the grant of an extension of time for the submission of the transport document referred to in Article 20(5). However, that cannot affect the validity of Article 31(2).

(5) Consideration of the seventh question has disclosed no factor of such a kind as to effect the validity of Articles 25 and 31 of Regulation No 2730/79.'