C-38/90

LOMAS AND OTHERS

OPINION OF MR ADVOCATE GENERAL TESAURO delivered on 31 December 1991 *

Mr President, clear from the orders for reference, the Members of the Court, criminal proceedings brought against the defendants cannot succeed unless the Crown can establish that there was an 'assigned matter' in relation to which the customs authorities were obliged to require 1. In these proceedings the Court is once statements which, in the circumstances, again called upon to give a ruling on the proved to be false. The defendants main­ validity of the Community system of tained before their respective national courts collecting, at the time when sheep are that the Community provisions laying down exported from the United Kingdom, an detailed rules for collecting the 'clawback' amount equal to that of the variable were invalid, and consequently that the slaughter premium for sheep, hereinafter to national authorities were not entitled to as the 'clawback'. In particular, the require the statements in question, whilst questions submitted for a preliminary ruling the — seemingly undisputed — fact that by the Crown Court at Maidstone (Case those statements were false is immaterial. C-38/90) and the Crown Court at Leeds (Case C-151/90) concern the validity of Article 4(1) and (2) of Commission Regu­ lation (EEC) No 1633/84 of 8 June 1984 laying down detailed rules for applying the That is the factual background to the variable slaughter premium for sheep. 1 national courts' request for a preliminary ruling from the Court of Justice.

Article 9 of that regulation, as amended by- question took place'. Under Article 3(1) of Regulation (EEC) No 871/84, the United the regulation, ' ... the level of the premium Kingdom, which is the only Member State shall be fixed each week by the Commission which has this possibility, may grant the in respect of the week commencing 21 days premium in question where the prices before the week of fixing'. recorded on its representative market are below a 'guide level' corresponding to 85% of the basic price, always provided that intervention measures in the form of To put it briefly, and simply, the machinery purchases by the intervention agencies are established by the Commission provides that not applied (Article 9(1]. (a) the slaughter premium is to be granted at the rate fixed for the week in which the sheep are first placed on the market with a view to slaughter, or the day of slaughter; (b) the sheep (live animals) in respect of which the premium has been granted must In order to prevent the grant of the variable be exported within 21 days; (c) the slaughter premium from giving rise to clawback is to be collected at the rate of distortions of competition when the premium fixed for the week in which export carcasses or the animals to be slaughtered, takes place. or both, are exported outside the United Kingdom, Article 9(3) provides that 'should the (slaughter) premium ... be paid ..., the Commission shall take the necessary Article 4(2) of the regulation provides for measures to ensure that an amount equi- the lodging of a security in order to cover valent to the premium actually granted is the amount due pursuant to paragraph (1); charged on all products (which qualified for that security, which is to be fixed by the the premium) ..., when they leave the 4 competent authorities in the United region concerned'. Kingdom, must not be less than the forecast amount of the premium for the week preceding that during which export from the United Kingdom takes place.

overstepped the bounds of the powers valent to the premium actually granted is to conferred on it by Article 9 of the basic be interpreted as meaning that the two regulation. amounts in question must be identical or, as the United Kingdom and the Commission maintain, that the two amounts may also differ, provided the difference is negligible and is in any event offset over a longer To begin with, it is undisputed that the period. system established by the Commission in Regulation No 1633/34 inevitably leads to the consequence that the amount of the slaughter premium is different, or may differ, from that of the clawback. That is precisely because, as is apparent from the Let me say at once that I am not swayed by legislation described above, whilst the the argument that the phrase set out in slaughter premium is granted at the rate in Article 9(3) in no way implies that the two force during the week in which the animals amounts (the amount of the premium and are placed on the market or at the rate in the amount of the clawback) must be force on the day of slaughter, the clawback identical but only 'equivalent' without is geared instead to the rate of premium in further qualification. Leaving other matters force during the week in which export takes aside, I am obliged to point out that two place. In other words, in the case of an amounts which are equivalent, that is to say animal (x) the clawback collected on export have the same value, are by definition is equal to the amount of the premium identical. Furthermore, the word 'actually' which would be granted in that week to the strengthens the notion that the two amounts producer, but not to the premium actually in question must be the same. granted in respect of the same animal (x). The two amounts are therefore identical only when the animal is placed on the market with a view to slaughter and is exported during the same week.

of products within the common market', slaughter premium. That is so precisely the Court stated that 'Article 9(3) amounts because the clawback is closely connected to a derogation from the fundamental prin­ with the nature of the slaughter premium, ciples of any common organization of the which is intended to contribute to balanced market and must therefore be interpreted prices on a specified market. It follows that 6 narrowly". the aim of preventing it from taking effect outside that market as well can be achieved only by recovering the amount which had already been granted when the animal or its carcass leaves the State in question. More particularly, the Court laid down in Commission v United Kingdom that the collection of the clawback 'was not to be regarded as a charge having an effect equi­ valent to a customs duty in so far as it was inseparable from the intervention system which was constituted by payment of the It seems to me that the conclusion which I variable slaughter premium and which was have reached cannot be invalidated by the intended to offset exactly the effects of the Commission's argument that during a given slaughter premium and thereby to enable period (which is not more closely iden­ products from the Member States or regions tified), the differences between the amounts in which the premium was paid to be of premium and the amounts of clawback exported to other Member States without offset one another with the result that, over 7 disturbing their markets'. It follows, as the that period, the amounts of clawback which Court stated in the same judgment, that are collected — viewed in aggregate Article 9(3) 'must be understood as pres- terms — are equivalent to the amounts of cribing solely the recovery of the amount of premium actually granted. All I have to say premium actually paid in respect of an in that respect is that the Commission has animal when it leaves the region in which not produced any supporting evidence the premium was granted'. 8 which demonstrates that the amounts in question actually offset one another. On the other hand, I am compelled to point out that the variations in the rate at which the premium is fixed are frequently substantial, 9 even over a short period. 6. It is clear, therefore, from the Court's interpretation of Article 9(3) of the basic regulation, that that provision provides solely for the recovery of the amount corre­ sponding to that granted by way of the

by both the Commission and the United sponding to that of the slaughter premium, Kingdom that a system of collecting the as provided for in Article 9(3) of the basic clawback which provides for the amount of regulation, the Commission overstepped the the premium and the amount of the bounds of the powers conferred on it by the clawback to be exactly the same would be Council regulation. impractical or would in any event give rise to very serious technical and administrative difficulties and to excessive costs. In that regard, whilst acknowledging that the diffi­ culties in question are in fact enormous and that the method at present in force has the merit of being practical and of facilitating Accordingly, Article 4(1) of Commission checks, I do not believe there are insur­ Regulation No 1633/84 must be declared mountable obstacles to the implementation invalid in so far as it provides that the of a method which is in conformity with amount of the clawback does not have to be Article 9(3) of the basic regulation. A exactly the same as the amount of the possible solution, for instance, would be to slaughter premium actually paid. Similarly, establish a system of issuing certificates to Article 4(2) must be declared invalid in so accompany each animal or batch of animals far as it provides for the lodging of a from the time they are first placed on the security in order to cover the amount due market until such time as they are exported, pursuant to paragraph (1). if at all, in such a way as to enable the producer, and therefore the amount of premium actually granted, to be traced.

Hence I consider that in accordance with the aforesaid case-law of the Court, in this case as well, by way of exception, a With regard to the case under declaration that the system of collecting the consideration, let me point out in the first clawback referred to in Regulation No place that the declaration of invalidity of 1633/84 is invalid must not permit the Article 4(1) of Regulation No 1633/84 amount of the difference between the affects, from the financial point of view, premium actually granted in respect of an only the amounts of 'clawback' in excess of animal and the clawback collected in respect the corresponding premiums and that, in of that animal to be called in question. any event, the recovery of those amounts is not at issue in the main proceedings. I would remind the Court that the defendants have challenged the validity of the system of collecting the clawback only in order to escape the consequences of the offence with However, in order to ensure observance of which they are charged. proper judicial safeguards, I suggest that the declaration of invalidity should be capable of being relied upon by those who, prior to the date of the judgment, have instituted proceedings (or lodged an equivalent Having said that, however, allow me to complaint) against measures adopted on the point out that the invalidity of the legis­ basis of the provisions declared invalid. lation in question, whilst not affecting the clawback principle as such, does affect the system of collection as a whole.

That question raises the issue whether, even precisely in the name of Community law to in the absence of detailed rules of escape the consequences of an attempt to application adopted by the Commission, the make fraudulent use of Community clawback system can continue to operate, finances. that is to say whether, on the basis of another Community provision, the United Kingdom is obliged (or at least authorized), Having said that, let me point out that pending the adoption of new legislation, to although Article 9(3) of the basic regulation continue to collect the clawback, with all provides for the collection of the the consequences which that entails, namely clawback — in substance, the amount requiring the production of documentation thereof—the fact remains that that and the possibility of instituting criminal provision confers on the Commission the proceedings for infringements. power to lay down the relevant detailed rules of application. In the absence of such rules, therefore, the United Kingdom is not in principle obliged under Community law I must confess that the temptation to answer to require production of the documentation that question in the affirmative is very in question or to institute criminal strong indeed, but that is perhaps because I proceedings on account of any false am repelled by the idea that it is possible statements in such documentation.

9. In the light of the foregoing considerations, therefore, I propose that the Court answer the questions submitted by the Crown Courts at Maidstone and Leeds for a preliminary ruling as follows: