C-364/89

OPINION OF MR DARMON —CASE C-364/89

O P I N I O N OF MR ADVOCATE GENERAL DARMON delivered on 16 May 1991 *

Mr President, the adoption of a monetary measure Members of the Court, introducing or increasing monetary compensatory amounts but are to be performed after that amendment. In some cases, the amendment is such as to give rise to an additional expense for the operator in 1. The questions referred to the Court by question. the Finanzgericht (Finance Court), Düsseldorf, will require the Court to determine the scope of several provisions of Commission Regulation (EEC) N o 926/80 of 15 April 1980 on exemption from the 4. In order to ensure that the operator does application of monetary compensatory not bear the risk of loss connected with amounts in certain cases ' (hereinafter monetary measures, the Commission, referred to as 'the regulation'), as amended beginning in 1974, adopted a succession of by Commission Regulation (EEC) 'equity regulations', the last of which, dated N o 2899/81 of 7 October 1981. 2 That 15 April 1980, forms the subject-matter of legislation, since repealed, calls for a brief this reference for a preliminary ruling. I reminder of its context. shall first of all mention the provisions of that measure now at issue, which provides on certain conditions for exemption from the payment of the new monetary 2. As the Court has stated, compensatory amounts.

9. An Bord Bainne, an Irish company and the plaintiff in the main proceedings, on February 11 1983 entered into contracts with a Netherlands undertaking for the 6. Article 9(1) of the regulation defines the delivery of skimmed milk powder additional expense as the payment of a new between April and September 1983 to an monetary compensatory amount which is undertaking established in Germany. not necessary, in the circumstances of the Payment of the price for the goods was to case, to offset the effect of the monetary be made in Deutschmarks. An Bord Bainne measure on the contractual price of the undertook to bear the risk of the German product. Paragraph (2) indicates several monetary compensatory amounts. On the factors to be taken into consideration when same day it concluded a forward currency assessing the circumstances of the case; it operation for the purchase of United States then provides that forward currency oper- dollars in two tranches, one for DM 3.65 ations are not to be taken into account if million, the other for D M 7 million, for a they are undertaken before the conclusion total amount of German marks equivalent of the contract or after the monetary to the whole of the proceeds expected from measure, or if there is no direct or indirect the operation for the goods. By means of economic connection with the contract what are known as swap transactions, it sold relating to the product. the amount of US dollars against German marks and, on 15 February 1983, carried out other forward currency operations whereby German marks purchased under the swap arrangements were definitively changed into US dollars. 7. It should be noted that the Commission repealed that regulation in 1984 on estab- lishing certain cases of abuse by economic operators; it took the view that there was a general awareness of the existence and functioning of monetary compensatory amounts and that the risks of changes in the 10. An Bord Bainne explained in its obser- monetary compensatory amounts following vations that it was customary to carry out variations in forward currency rates had to forward currency operations by means of a be guarded against, in particular by means 'swap' transaction based on three parallel of appropriate contractual provisions. exchange operations. It also pointed out that the difference in dates between 11 and 15 February 1983 was due to the fact that the banks do not state the value date until two working days after the transaction has been concluded, and also that 11 February 8. The facts occurred at a time when the 1983 was a Friday and there were no regulation was still in force. As set out in exchange operations on the Saturday or

13. The first question essentially seeks to 17. Secondly, if the advantage could not be ascertain whether Article 8(3) of the regu- calculated on the basis of non-Community lation, as amended by Regulation currencies, that interpretation could have N o 2899/81, must be interpreted as the consequence that advantages actually meaning that the advantage referred to obtained by the operator in question therein may be calculated on the basis of a following a forward currency operation non-Community currency. having an economic connection with the import or export operation could not be deducted from the additional expense. 5 14. I would first of all observe that the provision under consideration includes no restriction on operations concluded in a 18. Consequently, I consider that Article currency other than that of the Member 8(3) of the regulation must be interpreted as State of the applicant, in particular a meaning that the advantage referred to non-Community currency. therein is the actual advantage obtained by

5 — Let it be understood that I am here referring to situations in which the forward currency operation and the contract 15. It should next be pointed out that only for goods were not concluded on the same day; when the dates in respect of those operations are the same, in the the specific advantage received by the express words of the third subparagraph of Article 8(3) of person concerned must be taken into the regulation, the advantage may not be calculated; see, on that point, my observations on the second question account in the implementation of Article 8 referred by the national court, below.

19. In view of my proposed reply, there is no need to answer the question submitted in 24. It thus follows from the provision under the alternative. consideration that proof of the economic connection must, in principle, be produced for forward currency operations. Is that the case, however, for all forward currency operations, as the national court is asking? 20. The second question includes a main There remains the difficulty of dovetailing question and three subsidiary questions Article 9 with the third subparagraph of submitted in the event that the Court should Article 8(3). Although the second answer the main question in the affirmative. subparagraph of Article 9(2) undeniably That question seeks to ascertain whether requires the economic connection to be under the terms of the second subparagraph established in order for forward currency of Article 9(2), it is, as a general rule, operations to be taken into account, the necessary to produce evidence in the case of third subparagraph of Article 8(3) of the each forward currency operation of the regulation provides, for its part, that no economic connection with the contract exchange advantage — in the form, I would relating to the product. recall, of a deduction from the additional expense — may be taken into account when the forward currency operation was concluded on the same day as the contract for goods. Does it follow from that provision that the 21. As I have said, Article 9(1) of the regu- economic connection between the oper- lation defines the concept of additional ations in question may none the less be expense. In that respect, I would recall that checked? the existence of such an expense constitutes the condition subject to which exemption from payment of the monetary compensatory amount may be granted under Article 8(1) of the regulation. 25. Allow me first of all to recall the objectives of that provision. The recitals in the preamble to Regulation N o 2899/81 state in that connection that 'in that 22. Article 9(2) sets out in its first situation, one may reasonably consider that subparagraph certain criteria to be taken the forward currency rate is reflected in the into consideration for the 'assessment of the price of the goods and, accordingly, is the circumstances of the case', and in its second rate employed for concluding the contract, subparagraph, provides in particular that which implies that there is no difference forward currency operations which 'have no between the conversion rates to be direct or indirect economic connection with compared and that there is no exchange the contract relating to the product' are not advantage to be taken into consideration to be taken into account. when determining the additional expense'.

33. The wording of Article 8(3) is clear: 29. In the first situation, it will then be where the dates of the two operations are ascertained whether the forward currency the same, no advantage is to be taken into operation has produced an advantage for account. There is no doubt that a provision the trader. However, when the dates of that of this nature contains an automatous operation and of the contract relating to the element. Nevertheless, it cannot be deemed goods are the same, no advantage may be not to have been enacted and it taken into account according to the express undoubtedly constituted the law in the terms of the third subparagraph of Article matter at the material time. 8(3).

34. Accordingly, I am of the opinion that 30. In the second situation, where there is the finding on its own that the date of the no economic connection, the operation is forward currency operation and that of the

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contract for goods are the same constitutes 35. In view of the solution which I suggest the requisite and sufficient condition for to the Court on that point, there is no need precluding the calculation of any exchange to consider the questions submitted in the advantage. alternative by the Finanzgericht Düsseldorf.

36. I therefore propose that the Court should rule: