C-411/92
ECLI:EU:C:1994:199
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FRANCE v COMMISSION
OPINION OF ADVOCATE GENERAL GULMANN delivered on 18 May 1994 *
Mr President, those amounts were wrongly refunded by Members of the Court, the French authorities. The Commission points out that under the relevant rules the levy must be paid when cereals are placed on the market and that cereals sold subject to a repurchase clause are placed on the market within the meaning of those rules.
1. In these proceedings the French Republic is seeking the partial annulment of Commis- sion Decision 92/491/EEC of 23 September 1992. 1 That decision concerns the clearance of the accounts presented by the Member States in respect of the expenditure for 1989 financed through the European Agricultural Guidance and Guarantee Fund (EAGGF), guarantee section. In that decision the Com- mission refused to recognize an amount of 3. The co-responsibility levy was introduced some FF 8.5 million borne by the French as a result of the surplus cereal production in authorities as expenditure chargeable to the the Community. In order to ensure that sup- EAGGF. ply corresponded to demand and to make producers aware of the lack of market out- lets the Council decided to introduce a co-responsibility levy for cereals. That levy was introduced by Council Regulation N o 1579/86 of 23 May 1986 2 amending Regulation N o 2727/75 on the common organization of the market in cereals. 3 Arti- cle 4 of Regulation N o 2727/75, as amended, 2. That amount represented refunds of provided that the levy was to be collected co-responsibility levies for cereals paid by inter alia for cereals undergoing 'first pro- the French authorities to farmers who had cessing'. It further provided that 'the defini- sold cereals subject to a repurchase clause tion of the first processing' and operations and who subsequently actually repurchased exempted from the co-responsibility levy the cereals. The Commission considers that would be the subject of implementing rules.
* Original language: Danish. 2 — OJ 1986 L 139, p. 29. 1 — OJ 1992 L 298, p. 23. 3 — OJ 1975 L 281, p. 1.
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4. The Commission adopted implementing 5. By judgment of 29 June 1988 in rules in Regulation No 2040/86 Case 300/86 Van Landschoot v Mera 6 the of 30 June 1986, 4 which was subsequently Court of Justice ruled on the validity of that amended by Regulation N o 2572/86 of provision. The Court held: 12 August 1986. 5 Anicie 1(2) of Regulation N o 2040/86, as amended, provides:
'(1) The second subparagraph of Arti- cle 1(2) of Commission Regulation N o 2040/86 of 30 June 1986, as amended by Commission Regulation N o 2572/86 of 12 August 1986, is invalid in so far as it exempts from the 'For the purposes of this Regulation, "first- co-responsibility levy the first-stage stage processing" shall mean any treatment processing of cereals carried out on the of grain such that the product obtained may producer's own agricultural holding by no longer be classified under Chapter 10 of means of the machinery of the farm, the Common Customs Tariff. Processing of provided that the products of the cereals delivered or placed at the disposal of processing are used on that holding, but an undertaking by a producer with a view to does not provide for such exemption for subsequent utilization on his holding shall be first-stage processing carried out off the considered first-stage processing. producer's agricultural holding or by means of machinery which does not form part of the agricultural installations of the farm, where the products of the processing are used on that farm.
Cereals shall be exempted from the levy where first-stage processing is carried out by (2) It is for the Community legislature to the farmer on his own agricultural holding act upon this judgment by adopting and the products of the processing are used such measures as may be appropriate in as animal feed on the holding, provided that: order to establish equal treatment for operators as regards the contested exemption rules.'
— the processing machinery is part of the temporary or permanent agricultural 6. Before that judgment, the Council had installation of the farm ...'. amended the rules on the co-responsibility levy by Regulation N o 1097/88 of 25 April
4 — OJ 1986 L 173, p. 65. 5 — OJ 1986 L 229, p. 25. 6 — [1988] ECR 3443.
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1988 amending Regulation N o 2727/75 on That provision thus makes it possible for a the common organization of the market in producer to pass cereals to a processing cereals. 7 Article 4 of Regulation N o 2727/75 undertaking for processing into feed for use was amended so that the event giving on the producer's own holding — contract rise to the levy was no longer defined processing — without giving rise to any pay- as the processing but as the placing ment of levy. It is common ground that, even on the market by the producers. New if it is not expressly stated in that provision, implementing provisions applying to the it was always interpreted and applied as co-responsibility levy were laid down in meaning that the exemption from the levy Commission Regulation N o 1432/88 of was not conditional on the cereals consigned 26 May 1988 8 which repealed Regulation for processing and the processed products N o 2040/86, which was the subject of the being identical. This dispute concerns the Court's judgment. Following the Court's interpretation and application of that provi- judgment, the Commission amended Regula- sion. tion N o 1432/88 by Regulation N o 2324/88 of 27 July 1988 9 since the Commission con- sidered that Regulation N o 1432/88 might be subject to the same criticism as Regulation N o 2040/86.
8. The Commission laid down the rules con- cerning the reimbursement of the co-responsibility levies wrongfully charged under Regulation N o 2040/86 in Regulation N o 3779/88 of 2 December 1988. '° That regulation was the subject of the Court's 7. Article 1(2) of Regulation No 1432/88, as judgment of 20 September 1990 in Case amended, defines placing on the market as C-203/89 Van Landschoot v Mera n which is of relevance to these proceedings.
'sales ... by producers of the products referred to in paragraph 1 either as such or in 9. The main proceedings in Case C-203/89 the form of processed products ... to collec- — which, incidentally, also gave rise to the tion, trading and processing undertakings, to reference for a preliminary ruling leading to other producers and to the intervention the Court's 1988 judgment — concerned a agency'. situation in which a farmer had sold some 5 000 kilograms of wheat to a process- ing undertaking which subsequently sold the farmer some 13 000 kilograms of compound 7 — OJ 1988 L 110, p. 7. That regulation also introduced an addi- tional co-responsibility levy which, in so far as concerns the point at issue in this case, is subject to the same rules as the co-responsibility levy. 8 — OJ 1988 L 131, p. 37. 10 — OJ 1988 L 332, p. 17. 9 — OJ 1988 L 202, p. 39. 11 — [1990] ECR 1-3509.
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feedingstuffs for hens. The compound whoever he may be, even if the producer feedingstuffs consisted of 35% wheat, subsequently buys back the cereals from the some 4 500 kilograms. O n that basis processor in the form of processed products. the farmer contended that in respect of 4 500 kilograms no co-responsibility levy was payable. The Cantonal Court of Brass- chaat, before which the dispute was brought, referred a question to the Court of Justice on whether the regulation on reimbursement of the levy was valid in so far as the levy con- tinued to be charged for cereals sold to a In the light of the same criterion, it must also processing undertaking 'even if they are later be considered that producers are in different bought back by the producer in the form of situations and may thus be accorded differ- feed with a view to using it on his own agri- ent treatment according to whether they sell cultural holding'. the cereals to a processor, even with a view to buying back from him, for the needs of their farm, compound feedingstuffs pro- duced from those cereals, or whether they merely have the cereals processed on their account by a processor. In the former case, the products are placed on the market, but in the latter case they are not.' 10. The Court held that the regulation was not invalid. In paragraph 22 it stated that the objective of the levy, which is to limit sur- plus cereal production, 'provides justification for imposing the levy only on the processing of cereals placed on the market, since the quantities of cereals remaining in a closed circuit do not contribute to the creation of 11. The issue in these proceedings is whether surpluses'. It further held in paragraph 24 the sale of cereal subject to a right for the that 'having regard to the objective pursued producer to repurchase can be regarded as by the co-responsibility levy, the question placing on the market. Sale subject to a right whether or not the products are placed on of repurchase — 'vente avec clause de the market is the distinguishing criterion for réméré' — is a form of contract regulated in determining whether or not traders are liable Anieles 1659 and 1673 of the French Civil to pay the levy'. It further stated in para- Code. graphs 25 and 27:
12. The French Government has explained 'In that regard, it should be noted that plac- the background for the application of that ing on the market occurs as soon as a pro- form of contract in the cereal trade by stat- ducer divests himself of the cereals which he ing that following the Court's 1988 judg- has produced to sell them to a processor, ment in Case 300/86 and the amended rules
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to which it led there was a possibility of conditions, including in particular the fol- exemption from the levy, on the one hand, in lowing: situations in which the producer had cereals processed by a third party for the purposes of subsequent use on his holding and the same corn was returned to him after process- ing, and, on the other, in situations where the producer consigned cereals to a third party for processing but the processed cereals — the agreement subject to the right of returned to him did not come from the same repurchase must be concluded before the cereals supplied by the producer. According supply of the cereals; to the French Government, the situation where the cereals supplied and the cereals processed are not identical would be treated for value added tax purposes as two sales. The Sixth VAT Directive leaves it to the indi- vidual Member States themselves to deter- mine whether such a situation is to be regarded as a double sale and the French — there can be no repurchase before the Government has undertaken to do so. Since supply; the transaction in question is, under French law, classified as one sale, that transaction cannot be exempt from the payment of the co-responsibility levy. So that French farm- ers, like other farmers in the Community, should not have to pay the levy in that situ- ation, it was decided to inform French farm- — the agreement may be concluded only for ers that no levy was to be payable on the the current harvest year; return of cereals sold subject to a repurchase clause. The detailed rules were set out in a circular from the French intervention agency, Office National Interprofessionnel des Céré- ales (ONIC).
— the co-responsibility levy is actually paid on sale, with the result that the burden of financing it is borne by the producer;
— upon the conclusion of the agreement, an estimate must be submitted of the quan- tities subject to the right of repurchase 13. According to that circular the use of that for processing into feed which will be form of contract is subject to a number of used on the producer's holding;
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— at the simple request of the seller, the repurchased cannot be considered to have buyer is obliged to return the quantity of been placed on the market. It does not deny cereal covered by the right of repurchase. that ownership of the cereals has passed to the buyer on sale. It considers, however, that that circumstance is legally immaterial. In support of its view that when the cereals were sold there was no placing on the mar- ket, the French Government points inter alia 14. In the course of its negotiations with the to the conditions applying to the use of that Commission before the clearance of the form of contract and to the fact that the buy- accounts the French Government gave the er's right to dispose of the cereals is limited following details of that form of contract and in so far as he must be able when the time its application: comes to fulfil his obligation under the repurchase clause.
'Where a producer considers that a quantity of cereals is to be reserved for him, i. e. for 16. The starting point for resolving the issue his own use or for subsequent processing, he in this case is the concept of 'placing on the sells it with a repurchase clause at the price market' as defined by the Court. It seems to applicable on the date of sale but with pay- me that it is clear from the 1990 judgment ment of the co-responsibility levy. There is that the Court considered that in determin- thus no question of any exemption from the ing the time of placing on the market it is levy ... but it is a normal sale since the effect not decisive whether the cereals in question of the agreement subject to a right of repur- are, after the sale, returned to the holding chase is simply that in law on the repurchase from which they came. The Court's judg- of the quantity in question the sale is can- ment must be construed as meaning that the celled with the result that the situation fact that a holding uses cereals does not in remains as it was as if the sale had never itself lead to exemption from the levy. The taken place. The effect of the repurchase is use by the holding of cereals or processed thus to cancel the sale and consequently the cereals is only exempt from the levy in so far placing on the market. Under French law, as the cereals have not been placed on the the repurchase may be from the first buyer market. but also from persons acquiring the cereals subsequently in whom ownership of the quantities in question is vested at the time of the repurchase, which may be the processing undertaking.' 17. I agree with the Commission that in determining the time of placing on the mar- ket account must be taken of the fact that the price is fixed and also invoiced when the agreement is concluded. After supply of the 15. The French Government has contended cereals, the producer is not under any obliga- that the quantities of cereals which are sold tion as regards the cereals and in that respect subject to a repurchase clause and which are is in the same position as someone who has
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sold cereals without any right of repurchase. tions under the repurchase clause using other Perhaps he is in an even better position since, cereals. depending on price trends, he can speculate as to whether he will make use of his right of 18. I thus do not doubt that what the French repurchase. In so far as it is considered likely, Government has stated regarding the appli- when the contract is concluded, that the cation of the form of contract and the pre- repurchase will take place, it is of course cautions taken so that it is not misused is conceivable that the effect on the market will correct. That information might, for exam- be less than in the case of sale without any ple, have been relevant if the aim of the levy possibility of repurchase. It may be assumed had been to impose a charge on the use of that in the latter case the processing under- cereals, with the exception of a farmer's own taking will be more inclined to try to resell use. However, the aim is to keep cereals off the cereals. However, so long as the producer the market and that aim is frustrated once may refrain from using his right of repur- cereals are placed on the market, whether or chase the difference between sale subject to a not that is subject to a repurchase clause. I right of repurchase and an ordinary sale is of therefore conclude that the Commission less importance. Moreover, the limitation on should not hold that the French authorities the buyer's right to dispose of the cereal can were right to refund the levy for quantities hardly be onerous if, in a market character- which were subsequently repurchased by the ized by surpluses, he can fulfil his obliga- producer in question for use on his holding.
Conclusion
19. I therefore p r o p o s e that the C o u r t :
— dismiss the action against the C o m m i s s i o n , and
— order the F r e n c h Republic t o p a y the costs.
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