C-256/90

* Original language: English.

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MIGNINI

Where the first purchaser is the processor of No 1231/89 of 3 May 1989 (OJ 1989 the beans, the aid shall be granted once L 128, p. 24), provides: proof of processing has been provided.

‘The aid shall be paid to the first purchaser In other cases, the aid shall be granted to after verification that the beans have been first purchasers: either:

(a) where the first purchaser is the — meeting certain conditions to be processor, processed in the Community determined, for the production of oil or for other uses in human food or animal feeding,

Identification of the beans shall be carried out once they enter into the processing 8. Article 11 of Regulation No 2537/89 undertaking but before they are processed.' provides :

6. Article 4a of Regulation No 2194/85, as '1. Application may be made to the amended, provides: competent agency referred to in Article 6 of this Regulation for the ID part of the certificate for a single lot or for several lots. In no case may an application be made for the ID part of the certificate in respect of a lot for which an ID part has already been 'A two-part Community certificate shall be issued. introduced, one part to provide evidence that beans harvested in the Community have been identified and the other to certify, if appropriate, that the aid has been fixed in advance. Both parts of the certificate shall "Lot" shall be understood to mean a be issued by the Member State to any quantity of seeds covered by a delivery interested party who requests them and who declaration, numbered by the interested fulfils the conditions specified in Article 2.' party when it enters the undertaking and analysed pursuant to Article 30.

7. Article 10 of Commission Regulation 2. The application for the ID part of the (EEC) No 2537/89 of 8 August 1989 certificate shall be considered only if the laying down detailed rules for the seeds entered the undertaking at the latest application of the special measures for soya on the day on which it was submitted. beans (OJ 1989 L 245, p. 8) provides:

The application must be accompanied by delivery declarations corresponding to the 'The two-part certificate referred to in quantities for which identification is applied Article 4a of Regulation (EEC) for.'

10. On 3 April 1989 Mignini entered into a contract with a soya bean grower for the — any building or other place within supply of 3 770 kg of soya beans. The goods the precincts of the establishment were delivered on 19 October 1989 and where production takes place, were stored in a warehouse belonging to Mignini but situated outside the precincts of its production establishment. Mignini requested AIMA to 'identify' the beans and to issue the ID part of the certificate provided for in Article 10 et seq. of Regu- — any warehousing unit outside such lation No 2537/89. AIMA issued the precincts located in the customs certificate on 12 February 1990 and the territory of the Member State where following day Mignini requested advance the production establishment is payment of the aid. located in which the stored products can be properly controlled and which has been approved in advance by the authority responsible for that control; 11. On 19 February 1990 AIMA wrote to Mignini rejecting its application for advance payment of the aid on the ground that the goods identified were stored in a warehouse situated outside the precincts of Mignini's (b) an establishment manufacturing feed- production establishment. That was, ingstuffs or foodstuffs intended for use according to AIMA, contrary to Article by the final consumer without further 2(1 )(b) of Regulation No 2537/89, which, processing; it must have, on the it will be recalled, defines an 'undertaking' premises, storage facilities which are of as an 'establishment manufacturing feed- a capacity determined by the authority ingstuffs or foodstuffs intended for use by responsible for control and which meet the final consumer without further the requirements of this Regulation as processing' and, as amended by Regulation regards the identification of the beans No 150/90, requires such an establishment and the verification of their presence to have adequate storage facilities on the and their use by the undertaking; premises. In fact, it seems to me that, if that

12. In any event, it appears to be accepted by all concerned that a processor of soya beans (other than an oil producer) cannot qualify for aid, under the applicable legis- lation, until the goods in question enter the The principle of equal treatment precincts of the establishment in which the processing is to take place. Mignini contends that that condition is invalid on the ground that it is contrary to the prin- ciples of equal treatment and propor- 16. Mignini submits that the contested tionality. provision is contrary to the principle of equal treatment laid down in Article 40(3), second subparagraph, of the Treaty, inasmuch as it imposes on undertakings that process soya beans into animal feedingstuffs or food for human consumption a 13. On 28 June 1990 Mignini commenced requirement that is not imposed on under- proceedings against AIMA before the takings that use soya beans to produce oil. Pretore di Perugia, who was invited to According to Mignini, the various types of declare Article 2(l)(b) of Regulation undertaking are in similar situations and No 2537/89, as amended, invalid (having there is no objective justification for treating first obtained a preliminary ruling from the them differently. Court of Justice) and to order AIMA to pay Mignini the aid in question.

17. I do not think that this submission can succeed. According to the case-law of the Court, the principle laid down in the second 14. By order of 6 August 1990 the Pretore subparagraph of Article 40(3) of the Treaty, stayed the proceedings and asked the Court which constitutes a specific enunciation of for a preliminary ruling 'on the validity of the general principle of equality, prohibits Article 2(1 )(b) of Commission Regulation dissimilar treatment of producers who are in No 2537/89 of 8 August 1989, as supple- similar situations. For the principle to apply mented by Regulation No 150/90 of 19 to producers, their products must be in January 1990'. competition with each other: see, in

. . . in the absence of specific reasons capable 20. The Commission's assertions were chal- of justifying a difference of treatment, the lenged but in my view it is unnecessary for provision in Article 40 prohibiting discrimi- the Court to resolve the issue. The issue nation stands in the way of any measure the would only arise if it were accepted that the effect of which is to place one group of principle of non-discrimination is capable of producers in a privileged position compared applying, that is if the products are in with another group of undertakings which competition. But if the view is taken that are their competitors.' they are not, then there is no need to show objective justification for the difference in treatment. 18. It is clear that, for the principle of non-discrimination to be applicable at all, it is not sufficient for the raw materials — here, soya beans — to be identical or similar products. It is necessary for the 21. According to the Commission's obser- end-products to be in competition with each vations the referring court sees a further other. Mignini makes no attempt to show potential breach of the principle of equal that oil produced from soya beans is in treatment in the fact that the regulations competition with other food products or governing the granting of aid for sunflower animal feedingstuffs produced from soya seed and rape seed apply the extended defi- beans. It seems unlikely that such products nition of an 'undertaking' both to oil would generally be in competition with each producers and to producers of animal fecd- other. More than a limited degree of inter- ingstuff. Thus undertakings that produce changeability is required if the principle of animal feedingstuff from sunflower seed or

23. If the different treatment of the two types of animal feed producer were relied on as a breach of the principle of equal treatment, Mignini would be on stronger ground than when it relies on the different treatment of animal feed producers and oil producers. The two types of animal feed producer are presumably in competition with each other. I consider, however, that for the reasons given by the Commission, which I have summarized above in 22. It does not seem to me that either the paragraph 21, the difference in treatment national court or Mignini is arguing that the accorded to animal feed producers who use legislation is invalid on account of a soya beans and those who use sunflower difference in treatment between the two seed or rape seed is objectively justified. types of animal feed producers, i. e. those One should, moreover, be wary of the who use soya and those who use sunflower argument to the effect that, because the or rape seed. The only difference in institutions have opted for a particular treatment that they regard as a breach of system of control for imports of one agri- the principle of equal treatment is that cultural product, which makes it possible to between undertakings which produce animal apply less stringent requirements when feed from soya beans and undertakings paying production aids to domestic which produce oil from soya beans. It is producers, they are bound to accord the true that the national court and Mignini same treatment to domestic producers of refer to the aforesaid difference between the another product which is not subject to the rules on soya beans and the rules on same system of import controls. The insti- sunflower and rape seeds, but they do so tutions must be accorded a certain margin solely with a view to suggesting that the of appraisal in determining which system of

25. According to Mignini, storage of the goods within the production establishment does not help to prevent fraud. Since the production processes are standardized and transparent, adequate surveillance could be exercised by checking accounting documents and warehouse records. The requirement in question imposes an excessive sacrifice on processors such as Mignini because a modern, well-equipped producer of feedingstuffs operates a 'just- in-time' system of stock management under 27. I cannot accept Mignini's submission which warehousing at the processing plant is that the contested provision has the effect of kept to a minimum. Mignini claims that the excluding it from the aid system altogether. requirement results in the exclusion of feed- It reduces the extent to which such an ingstuff producers from the system of aid undertaking can claim advance payment of for soya beans for the following reasons. the aid. But it is clear from the regulations The contracts for the purchase of soya that, processors such as Mignini may beans are entered into at the time when the contract to buy a year's requirements of seed is sown. Feedingstuff producers are soya beans in the planting season, take only able to buy such amount as they can delivery of the beans when they are store at their production establishment. That harvested, store them wherever they like amount is very small in relation to their and claim payment of the aid as and when annual requirements. the beans arc transferred to warehouses

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OPINION OF MR JACOBS — CASE C-256/90

located within their production estab- inherent potential for fraud in the system of lishment. production aids is only too evident.

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MIGNINI

question (e. g. Case C-24/90 Faust [1991] concerned. Certainly, I cannot accept ECR I-4905 and Cases C-25/90 and Mignini's assertion that a system of control C-26/90 Wünsche [1991] ECR I-4939). based on accounting documents and warehouse records would be adequate. Such documents and records could all too easily 31. Hence, the question that must be asked be falsified. If soya beans awaiting is whether the contested provision facilitates processing could be stored in a number of effective supervision and thus contributes, locations situated outside the production albeit only modestly, to the fundamental establishment, it would be more difficult for aim of preventing the fraudulent misappro- the authorities to monitor their movements. priation of Community funds. I think it is Effective surveillance is obviously facilitated, clear that that question must be answered in at least to some degree, by the requirement the affirmative. Nor has it been shown that that the beans should be physically present that aim could be achieved by other means within the processing establishment before less burdensome to the undertakings the production refunds may be claimed.

Conclusion

32. Accordingly, I am of the opinion that the question referred to the C o u r t by the Pretore di Perugia should be answered as follows:

Consideration of the matters examined has disclosed no factor of such a kind as to affect the validity of Article 2(l)(b) of Commission Regulation N o 2537/89 of 8 August 1989 laying down detailed rules for the application of the special measures for soya beans, as amended by Commission Regulation N o 150/90 of 19 January 1990.