C-24/90

The background to the cases 3. In Case C-25/90 the plaintiff, Wünsche Handelsgesellschaft K G (hereafter 'Wün- sche'), purchased 3 300 tonnes of preserved mushrooms from a Chinese trading organ- ization in October 1980. In the same month it sold the goods on to a Greek under- taking. The Greek undertaking sold them 2. The transactions in question in all the back to the plaintiff, with a sales confir- cases go back some ten years. In Case mation note and invoice dated 2 January C-24/90 the plaintiff, Werner Faust O H G 1981 (i. e. one day after Greece's accession (hereafter 'Faust'), applied between 20 and to the Community). The sales invoice 25 March 1981 for the release into free contained the statement: 'Duty paid/free circulation of a large quantity of goods customs cleared in Greece'. According to declared as wild mushrooms in cans. It Wünsche, the goods were released into free produced an import licence for wild circulation in Greece, but that point is mushrooms in cans. The Hauptzollamt contested by the customs authorities. Hamburg-Jonas charged duty accordingly at a rate of 2 3 % . It subsequently levied an additional amount of D M 4 310 612.10, calculated on a total weight of 895 135 kg. It did so on the ground that the goods imported were not in fact wild mushrooms but cultivated mushrooms and so were not 4. The goods were imported in part- covered by a valid import licence. It cited as consignments through various customs posts the legal basis of its decision Council Regu- in Hamburg, between 27 January and 25

* Original language: English.

March 1981. Wünsche presented a transit a rate of D M 464.91 per 100 kg for the document issued by the customs office in imports in June 1981 and an additional Piraeus on 2 January 1981. T h e authenticity amount at a rate of DM 425.06 per 100 kg of that customs document is in dispute for the imports in July 1981. The additional between the parties. N o import licence was amounts demanded totalled over submitted by Wünsche. Initially the customs D M 4 000 000. As its legal basis it cited authorities charged duty at the preferential Regulation N o 1697/79 and also (with rate for Greece, namely 20.7% of the value. regard to the imports in June 1981) They subsequently decided to levy duty at Commission Regulation (EEC) N o 796/81 the rate applicable to non-member countries of 27 March 1981 (Official Journal 1981 namely 2 3 % , and demanded an additional L 82, p. 8) and (in respect of the imports in amount of DM 15 827 239.90 pursuant to July 1981) Commission Regulation (EEC) Regulation N o 3429/80. N o 1755/81 of 30 June 1981 (Official Journal 1981 L 175, p. 23). The last two regulations were both concerned with the adoption of protective measures applicable to imports of preserved mushrooms. Regu- lation N o 796/81 was valid until 30 June 1981 and was then superseded by Regu- 5. In Case C-26/90 the plaintiff is again lation N o 1755/81. Wünsche. Between 26 June and 3 July 1981 it applied for the release into free circulation of a total of 90 000 cartons of goods described as wild mushrooms in cans, weighing 896 400 kg. The collective customs declarations were submitted on 6 July and 6 August 1981 to the Hauptzollamt Hamburg-Jonas. On both occasions 7. In its statement of reasons the Haupt- Wünsche produced import licences for wild zollamt maintained that the goods mushrooms, from which the Hauptzollamt concerned were cultivated mushrooms in deducted the quantities imported. The cans for which no valid licence had been Hauptzollamt charged import duty at the produced on importation. They could not rate of 2 3 % , subject to a subsequent properly be deducted from the import inspection. licences produced subsequently, because production of an import licence was part of the customs application and its retrospective presentation was therefore not permitted.

mushrooms, whereas the goods imported valid, in particular as regards the level at were — so it is alleged — cultivated which the additional amount is fixed?' mushrooms. In Case C-25/90 the Haupt- zollamt maintains that the goods, which originated in China, were not released into free circulation in Greece and so required an import licence when they cleared 10. In Case C-26/90 the questions are as customs in Hamburg. N o such licence was follows : produced. In Case C-26/90, as in Case C-24/90, the licence originally produced was for wild mushrooms whereas the goods imported turned out to be cultivated mushrooms. Although a licence for ' 1 . Is an additional amount under Article 1 cultivated mushrooms was produced later, of Commission Regulation N o 796/81 the Hauptzollamt declined to accept it on or Article 1 of Commission Regulation the ground that it should have been N o 1755/81 also to be levied in the case produced at the time of the customs of preserved mushrooms which have application. been released into free circulation without a valid import licence?

2. If Question 1 is answered in the 9. Faust and Wünsche contested the affirmative, are Regulations N o 796/81 decisions requiring them to pay additional and N o 1755/81 valid, in particular as amounts. The Finanzgericht quashed the regards the level at which the additional decisions and the Hauptzollamt appealed to amount is fixed?' the Bundesfinanzhof. In Cases C-24/90 and C-25/90 the Bundesfinanzhof has referred the following questions to the Court:

The relevant legislation

12. The content of the three regulations is 'Release into free circulation in the very similar. The purpose of all three was to Community of preserved mushrooms falling adopt protective measures applicable to within subheading 20.02 A of the Common imports of preserved mushrooms, as is clear Customs T a r i f f . . . in excess of the quan- from their titles. There is some confusion tities set out in Article 2(1) and (3), shall, about whether the regulations were during the period 1 April to 30 June 1981, concerned solely with cultivated mushrooms be subject to the levying of an additional or whether they also applied to wild amount of 175 ECU per 100 kilograms net.' mushrooms. On that point there are discrepancies between the various language versions. Some versions give the impression that the first two regulations applied both to wild and to cultivated mushrooms, whereas 15. Article 1 of Regulation N o 1755/81 the third regulation applied only to provides so far as material: cultivated mushrooms. Other versions suggest that wild mushrooms lay outside the scope of all three regulations. Since, however, the national court has asked no question on that point and since in my view 'Release into free circulation in the nothing turns on it I shall not deal with it Community of preserved cultivated further. mushrooms falling within subheading 20.02 A of the Common Customs T a r i f f . . . in excess of the quantities set out in Article 2(1) and (3), shall, during the period 1 July to 30 September 1981, be subject to the levying of an additional amount of 160 ECU per 100 kilograms net.' 13. Article 1 of Regulation N o 3429/80 provides so far as material:

' 1 . If, by reason of imports or exports, the Community market in one or more of the products specified in Article 1 is or is likely — the total or partial discontinuation to be exposed to serious disturbances which of the issue of certificates, as a result might endanger the objectives set out in of which new applications will not Article 39 of the Treaty, appropriate be accepted, measures may be applied in trade with non-member countries until such distur- bances or the threat thereof has ceased. — the rejection of all or some of the applications for the issue of certificates which are being The Council, acting by a qualified majority examined; on a proposal from the Commission, shall adopt rules for the application of this paragraph and shall define the cases and the (b) for products not subject to the system of limits within which Member States may take import certificates: total and partial protective measures. suspension of imports;

20. It may be noted that after the expiry of Commission Regulation N o 1755/81 a Question 1 Council regulation came into force, namely Council Regulation (EEC) N o 1796/81 of 30 June 1981 on measures applicable to imports of preserved cultivated mushrooms (Official Journal 1981 L 183, p. 1). That 22. Question 1 is in substance the same in regulation was purportedly based on Regu- all three cases. It asks whether, under the lation N o 516/77 and in particular on respective regulations, the additional Article 13(2). It retained the system adopted amount is also to be levied in the event of by the three Commission regulations and release of the goods into free circulation fixed the additional amount at the same rate without a valid import licence. The question as Regulation No 1755/81, namely arises because, in all three cases, the Finanz- E C U 160 per 100 kg. It is still in force to gericht considered that the regulation did this day. not apply to unlawful imports. In other words, the Finanzgericht appears to have taken the view that Article 1 of the regu- lations required the levying of an additional amount when the quantity of preserved mushrooms imported exceeded the quantity stated in the import licence, but did not 21. Finally, mention must be made of require such an amount to be levied when Council Regulation No 1697/79, Article preserved mushrooms were imported 2(1) of which provides: without a valid licence.

23. I agree with the Bundesfinanzhof that the view of the law taken by the Finanz- 'Where the competent authorities find that gericht cannot be sustained. It appears to all or part of the amount of import duties or disregard the scheme and purpose of the export duties legally due on goods entered regulations, which proceed on the for a customs procedure involving the obli- assumption that, beyond certain quantitative

26. The Bundesfinanzhof inclines towards the view that the regulations are invalid inasmuch as they fix the additional amount at a higher level than is necessary in order to make the protective measures effective. It cites the judgment in Case 77/86 The Queen 'If that argument were correct, it would be v Customs and Excise, ex parte National applicable to all import duties and taxes Dried Fruit Trade Association [1988] ECR used to protect the Community economy, 757. It points out that the additional amount including customs duties for example. was apparently intended to correspond Community law, however, proceeds on the approximately to the production costs for principle of the post-clearance recovery of preserved mushrooms in the Community: import duties for which payment see the fifth recital in the preamble to has — improperly — not been required (see Council Regulation No 1796/81 which was, Article 1 of Regulation N o 1697/79). That as I have already mentioned, the successor principle is, indeed, dictated in the interests to Regulation No 1755/81. It suggests that of equality; import duties must as a matter an additional amount equal to the difference of principle be imposed equally, irrespective between the cost price in the Community of the moment at which the correct level of and the price of imports from non-member those import duties is established. Such countries would have been sufficient to post-clearance recovery cannot therefore be achieve the aim of protecting Community considered an illegitimate penalty, as the producers.

30. Case 345/82, on which the Commission 28. Neither of the cases cited above is relies, concerned the validity of one of the decisive of the issues raised by the present regulations in issue in the present cases. In the National Dried Fruit Trade proceedings. In that case the Verwaltungs- Association case the Court declared invalid a gericht Frankfurt am Main sought a regulation imposing a countervailing charge preliminary ruling on the question whether at a fixed rate equal to the difference Regulation N o 3429/80 was valid. In its between the lowest price on the world order for reference the national court market and the minimum price fixed by the expressed doubts about the validity of the Community legislation. The Court stated regulation because (a) the requirements for that: the adoption of protective measures were not fulfilled, there being no disturbance, or threatened disturbance, of the Community market and (b) the Commission was not empowered to provide for the levying of an additional amount since such a measure did '. . . the aim of the countervailing charge is not figure among the protective measures to enforce the minimum price so as to that the Commission was expressly auth- ensure Community preference in the market orized to adopt by Article 2(1) of Council for dried grapes other than currants; the Regulation No 521/77. aim is not to inflict an economic penalty on the trader who has imported them below the minimum price. However, the introduction of a single, fixed-rate countervailing charge, imposed even where the difference between the import price and the minimum price is very small, amounts to an economic penalty 31. The Court ruled that consideration of and the Commission has not established that the question referred had disclosed no such a system is necessary for attaining the factor of such a kind as to affect the validity aim of Regulation N o 521/77.' of Regulation N o 3429/80. As regards the first alleged ground of invalidity, the Court held that the Commission had not committed a manifest error in concluding that the market was likely to suffer a serious disturbance. As regards the second alleged 29. As the Commission points out, there is ground of invalidity, the Court held that, a difference between that case and the since the Commission was expressly auth- present one. In that case the aim was to orized to take protective measures leading ensure that imported goods did not to a complete suspension of imports, it was

a fortiori entitled to adopt less restrictive dealt with in the previous judgment has measures, such as the levying of an been raised. That is confirmed by the order additional amount. in Case 69/85 Wünsche v Germany [1986] ECR 947 in which the Court refused to entertain a further reference from the Verwaltungsgericht Frankfurt am Main which called in question the validity of the 32. Wünsche did in fact plead further Court's judgment in Case 345/82. In grounds of invalidity in Case 345/82; in paragraph 15 of that order the Court particular, it argued that Regulation No expressly observed that the authority of a 3429/80 breached the principle of propor- preliminary ruling does not preclude the tionality by fixing the additional amount at national court to which it is addressed from a higher level than was necessary in order to making a further reference to the Court of achieve the aim of protecting the Justice in the same proceedings, in Community market against serious distur- particular 'when it submits new consider- bances or the threat thereof (see p. 2001 of ations which might lead the Court to give a the report). different answer to a question submitted earlier'. A fortiori a. further reference may be submitted by a different court in different proceedings, especially if that court raises 'new considerations'. 33. However, the Court did not deal with the issue of proportionality in its judgment, perhaps taking the view that it would be inappropriate to review the validity of the regulation on grounds that had not been drawn to its attention by the national court. Instead it confined itself to examining the 35. In order to determine whether the two grounds of invalidity referred to in the additional amount was fixed at such a level order for reference. Consequently the as to infringe the principle of propor- judgment in Case 345/82 does not establish tionality it is necessary to consider whether that Regulation No 3429/80 was necessarily the levying of such a charge was an appro- consistent with the principle of propor- priate means of pursuing the aim in question tionality. Although the issue of propor- and whether that aim could have been tionality was raised in those proceedings, pursued just as effectively by means less the Court did not pronounce on it. Nor, it burdensome to traders. may be noted, was the issue dealt with by Advocate General Rozès, who took the view that the regulation was invalid on the ground that the Commission had no power to provide for the levying of an additional amount. 36. T h e aim of the regulations in issue was to protect the Community mushroom industry, which was threatened with a serious disturbance on account of imports 34. In any event, there cannot be any doubt from non-member countries at prices well that the Court is free to consider again the below the Community industry's cost price question of the validity of Regulation No (see the first and second recitals in the 3429/80 since a ground of challenge not preamble to Regulation No 3429/80). Such

39. The Commission argues that it complied with the principle of propor- tionality by imposing a levy when it could in fact have opted for a more severe measure, namely an outright prohibition of imports. It 37. The preambles to the contested regu- states that it did not wish to impose a strict lations do not indicate on what basis the quota system in view of pending nego- additional amount was calculated. In its tiations with the most important exporting observations the Commission states that the countries. Additional imports were to figure of ECU 175 per 100 kg corresponded remain possible for special purposes, to the production cost of grade 1 preserved although the effect of the levy would be to mushrooms produced in France and keep such imports to a minimum. T h e delivered to Germany. Grade 1 mushrooms Commission states openly that the were chosen because they were the category protective measures were intended to have a most frequently encountered in the trade. prohibitive effect; imports above certain The production cost in France was chosen quantities were to be rendered economically because that was the most important unattractive. According to the Commission producer country in the Community. The that aim could not be achieved by means of cost of delivering the goods to the German an additional amount corresponding to the market was taken into account because difference between production costs in the Germany was the most important consumer Community and prices on the world market.

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WERNER FAUST

40. Notwithstanding that argument, I DM 0.81, to which must be added cannot see how the Commission can have DM 0.19 (customs duty) and D M 1.51 been justified in charging an additional (additional amount), making a total of amount equal to the full cost of producing DM 2.51. The cost of Chinese mushrooms mushrooms in the Community. In the would have exceeded the cost of French absence of some very compelling justifi- mushrooms by a margin of 151%. cation, to require an importer to pay a levy amounting to the full cost of the domestic product seems manifestly exorbitant. Moreover, it must be borne in mind that imported mushrooms were already subject to a customs duty of 2 3 % .

I - 4925

OPINION OF MR JACOBS — CASE C-24/90

44. Although the calculations effected achieving the aim in question, the one that above (in paragraph 41) relate to the is least burdensome to the individuals additional amount of 175 ECU per 100 kg concerned. The use of a cannonball to kill a imposed by Regulations Nos 3429/80 and fly cannot be defended on the ground that a 796/81, there cannot be any doubt in my nuclear missile might have been used opinion that the conclusions reached are instead. equally valid with respect to Regulation N o 1755/81, which provided for the levying of an additional amount of ECU 160 per 100 kg. That amount also greatly exceeded what was strictly necessary in order to counter the threatened disturbance.

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WERNER FAUST

the sums demanded in the present cases, they provide for the levying of the amounting in total to over DM 24 000 000, additional amount. That conclusion is themselves go far to demonstrate the lack of limited to the Commission regulations in proportionality. The additional amount issue in these proceedings; no finding is cannot be fixed on the hypothesis that it will necessary as to the validity of Council never be payable; it must be fixed on the Regulation No 1796/81, which is not in basis that traders may, for whatever reason, issue and which, as I have pointed out (at be held liable to pay it. paragraph 20), was not based on Article 14(2) of Regulation No 516/77 and did not therefore have to satisfy the requirement 49. I therefore reach the conclusion that the that the measures should be adopted 'only contested regulations are invalid in so far as to such extent... as is strictly necessary.'

Conclusion

50. In view of the conclusion which I have reached in relation to the second question, no answer to the first question need be included in the ruling to be given by the Court.

51. Accordingly, I am of the opinion that the questions referred to the Court by the Bundesfinanzhof should be answered as follows: