C-36/97
ECLI:EU:C:1998:265
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KELLINGHUSEN AND KETELSEN
OPINION OF ADVOCATE GENERAL JACOBS delivered on 28 May 1998 *
1. These are two test cases on the question certain arable crops. 1According to the second whether national authorities can require recital of the preamble the regulation aims to farmers benefiting from direct income subsi establish a new support system and the best dies in the form of compensatory payments way to achieve that objective is to approxi to pay for administrative costs where the rel mate the Community prices of certain arable evant Community regulations provide that crops to the prices of the world market and the amounts are to be paid in full to the ben to compensate the loss of income caused by eficiaries. Mr Kellinghusen and Mr Ketelsen the reduction of the institutional prices by a are farmers contesting before the Verwaltungs compensatory payment for producers who gericht (Administrative Court), Schleswig- sow such products. The regulation thus sets Holstein the (relatively small) amounts to be up a system of compensatory payments, laying paid in administrative fees for the processing down in considerable detail the criteria gov of their claims for compensatory payments. erning such payments. In essence, the com Their cases are of wider significance since the pensatory payments are fixed on a per hectare Commission has initiated pre-litigation pro basis and are regionally differentiated (see ceedings against the Federal Republic of Ger Article 2(2)). The provision in issue in the many pursuant to Article 169 of the Treaty in case of Mr Kellinghusen is Article 15(3), under relation to the charging of such fees by the Title II 'General and transitional provisions': Land Schleswig-Holstein, but has refrained from bringing an application before the Court under that article whilst awaiting the Court's judgment in the present cases.
'The payments referred to in this Regulation are to be paid over to the beneficiaries in their entirety.'
2. The regulations in issue were adopted in the framework of the 1992 reform of the Common Agricultural Policy. The case of Mr Kellinghusen concerns Council Regula 3. The case of Mr Ketelsen concerns Regula tion (EEC) No 1765/92 of 30 June 1992 estab tion (EEC) No 805/68 of the Council of 27 lishing a support system for producers of June 1968 on the common organisation of the
* Original language: English. 1 — OJ 1992 L 181, p. 12.
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market in beef and veal, as amended by Wasserwirtschaft (Office for Agriculture and Council Regulation (EEC) No 2066/92. 3The Water), Kiel, and Mr Ketelsen applied for preamble to the amending regulation states such payments under Regulation No 805/68, that in the context of measures to be applied as amended, to the defendant Amt für Land- in order to redress the situation of agriculture und Wasserwirtschaft (Office for Agriculture in general the intervention price for beef is to and Water), Husum. The applications were be reduced (second recital), and that, given approved, but in both cases a fee was charged the consequences for producers, substantial pursuant to the Landesverordnung über Ver compensation should be granted in the form waltungsgebühren (Land Regulation on of premiums (third recital). The amending Administrative Fees) of the Land Schleswig- regulation sets up such a system of premiums, Holstein, which contains specific provisions again in considerable detail, and introduces a on administrative fees to be paid by appli new general provision, Article 30a: cants for the compensatory payments pro vided for by the Regulations. In the case of Mr Kellinghusen the fee amounts to DM 788, made up of a basic fee of DM 80 and an addi tional amount of DM 3 per hectare of the area under crops, and corresponding to com pensatory amounts of a total of DM 'The amounts to be paid pursuant to this 175 945.07. Mr Ketelsen received DM Regulation shall be paid in full to the benefi 23 305.92 as special premium for beef pro ciaries.' ducers (for 67 cows), and was charged a fee of DM 214, made up of a basic fee of DM 80 and a fee per cow of DM 2.
4. I will hereafter refer to Regulation No 1765/92 and Regulation No 805/68, as amended, as 'the Regulations'.
5. In 1994 Mr Kellinghusen applied for com 6. The plaintiffs lodged complaints against pensatory payments under Regulation No those decisions on fees on the ground that the 1765/92 to the defendant Amt für Land- und Regulations preclude the charging of fees. The defendants dismissed those complaints, taking the view that, as the Regulations did not con tain any provisions on how the administra 2 — OJ, English Special Edition 1968(1), p. 187. tive expense incurred in examining applica 3 — Council Regulation (EEC) No 2066/92 of 30 June 1992 amending Regulation (EEC) No 805/68 on the common tions for support payments was to be financed, organisation of the market in beef and veal and repealing Regulation (EEC) No 468/87 laying down general rules the Member States and their regional subdivi applying to the special premium for beef producers and sions retained power to adopt appropriate Regulation (EEC) No 1357/80 introducing a system of pre miums for maintaining suckler cows, OJ 1992 L 215, p. 49. rules on fees.
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7. The plaintiffs then brought proceedings Schleswig-Holstein). The fees correspond in before the Verwaltungsgericht, Schleswig- amount to the rules laid down by the legis Holstein. They argued that a prohibition of lature, in particular the principle of equiva charging fees followed both from the wording lence and the principle of covering costs. of the provisions of the Regulations cited above and also from the spirit and purpose of those provisions, whose aim was to have equal implementation of the compensatory pay ments in the Member States.
10. The Verwaltungsgericht is of the opinion that the interpretation of the Regulations is not free from doubt. A strictly literal inter pretation would probably argue against a pro hibition of charging fees. On the other hand, 8. According to the defendants, on the other a prohibition of charging fees would be con hand, the provisions in issue were not to be sistent both with the general aims of the construed as prohibiting Member States from Treaty, including the avoidance of distortions charging fees but as prohibiting them from of competition (Article 3g of the Treaty) and imposing certain charges which would be of discrimination (second subparagraph of inappropriate to the objectives of the Com Article 40(3) of the Treaty), and also with the munity measures, such as parafiscal duties. specific objectives of the 1992 agricultural The defendants further argued that, if the reform, namely to give farmers direct income- provisions in issue were to be interpreted as supporting benefits for certain agricultural prohibiting the charging of fees, they were products: the charging of fees reduces by the then invalid for breach of higher-ranking amount of the fees the compensation for dis Community law in several respects. The defen advantages which the payment is intended to dants referred to the rule of cooperation provide. embodied in Article 5 of the Treaty, and the principles of subsidiarity and proportionality expressed in Article 3b of the Treaty.
11. If the second interpretation is correct the Verwaltungsgericht has doubts on the validity of the provisions in issue, in line with the arguments of the defendants. Accordingly, it 9. In the order for reference the Verwaltungs gericht clarifies the legal basis for the fees in issue, which is the Verwaltungskostengesetz des Landes Schleswig-Holstein (Law on 4 — Law of 17 January 1974, GVOBl. Schl.-H. p. 37, as amended by the law of 18 December 1978, GVOBl. Schl.-H. 1979, Administrative Costs of the Land of p. 2.
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referred the following questions for a pre In Case C-37/97: liminary ruling:
In Case C-36/97: '(1) Is Article 30a of Council Regulation (EEC) No 805/68, as amended, 5to be interpreted as prohibiting the authorities in the Member States from charging appli cants administrative fees for processing their applications for aid, if those admin '(1) Is Article 15(3) of Council Regulation istrative fees correspond to the rates (EEC) No 1765/92 ... to be interpreted which are otherwise usual in national law as prohibiting the authorities in the and are so low that they are not capable Member States from charging applicants of deterring applicants from applying for administrative fees for processing their aid? applications for support payments, if those administrative fees correspond to the rates which are otherwise usual in national law and are so low that they are not capable of deterring applicants from applying for support payments?
(2) If question 1 is answered in the affirma tive:
(2) If question 1 is answered in the affirma tive:
Does Article 30a of the said Council Regulation infringe higher-ranking Com munity law, in particular the principle of cooperation in good faith under Article Does Article 15(3) of the said Council 5 of the EC Treaty, the principle of pro Regulation infringe higher-ranking Com portionality under the third paragraph munity law, in particular the principle of of Article 3b of the EC Treaty, and the cooperation in good faith under Article principle of subsidiarity under the second 5 of the EC Treaty, the principle of pro paragraph of Article 3b of the EC Treaty?' portionality under the third paragraph of Article 3b of the EC Treaty, and the principle of subsidiarity under the second 5 — The national court's question erroneously refers to Article paragraph of Article 3 b of the EC Treaty?' 30a of Council Regulation (EEC) No 2066/92.
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12. Written and oral observations were sub sufficient for the fees to come within the pro mitted by the applicants and the defendants hibition of any deduction. in the main proceedings, the Commission, the Council, the German Government, the Greek Government and the Swedish Government. As the questions in both cases are materially identical I will consider them together.
14. At the hearing the Commission proposed a persuasive classification of the various The first question charges which might be imposed by national authorities in connection with compensatory payments. The first type are fees for admin istrative costs such as those in issue in the present cases, which are in the Commission's view the type of charges most clearly prohib ited by the Regulations. The second type are general taxes, for which the Court laid down the relevant criteria in Irish Creamery Milk 6 Suppliers Association v Ireland and Aliments 7 Morvan. The third type are other charges, 13. I agree with the Commission and the such as those pursuant to national rules of German Government that the terms of the set-off between fiscal debts owed under provisions in issue are conclusive. By pro national law and compensatory payments to viding for the payment of the relevant amounts farmers, which were the subject of the recent 'in their entirety' and 'in full' to the benefi 8 Bent Jensen case In his Opinion in that case ciaries, the Regulations prohibit any deduc Advocate General Fennelly also expresses the tion from the amounts received by the ben view that 'special charges to compensate for eficiaries. Indeed the defendants in the main national administrative costs ... would be proceedings accept that view. They none the clearly prohibited by Article 15(3)' of Regu less contend that the provisions do not pro 9 lation 1765/92. In its judgment the Court hibit the levying of fees, but merely indicate did not deal with that issue. It did however that the payments should be made in full. state that the national rules of set-off were However, it is clear that, if the prohibition on not such as to reduce the amounts received deductions is to be effective, it cannot be 10 by way of compensatory payments. It thus interpreted in a purely formal manner as cov emphasised the importance of the require ering only deductions which are actually made ment that the amounts are to be paid in full. on the occasion of the payments. Thus the prohibition of any deduction must of neces sity extend to all charges which are direcdy and inseparably linked to the amounts dis 6 — Joined Cases 36/80 and 71/80 [1981] ECR 735. 7 — Case C-235/90 [1991] ECR I-5419. bursed. That is clearly the case here: it is a 8 — Case C-13 2/95 Gårdejer Bent Jensen and Kom-og Foder- farmer's application for compensatory pay stofkompagniet v Landsbrugministeriet, EF-direktoratet, judg- ment of 19 May 1998 [1998] ECR I-2975. ments under the Regulations which triggers 9 — Opinion of 27 November 1997, paragraph 39. the charging of the fees. That is in my view 10 — Paragraphs 58 to 62 of the judgment.
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15. Such an interpretation of the provisions conformity with the aim of undistorted com in issue is consonant with the aims of the petition expressed in Article 3(g) of the Treaty. Regulations and with the general aims of the Treaty in the field of agriculture. The Regula tions establish a comprehensive system of compensatory payments, determining in con siderable detail the criteria to be applied in calculating those payments to eligible farmers. It would be a derogation from the uniform 17. I find none of the arguments to the con rules governing compensatory payments to trary persuasive. allow Member States the freedom to charge fees for administrative expenses, since that could lead to inequalities in the actual amounts which farmers in the various Member States receive. Such a derogation would have to be expressly provided for, which is not the case here. On the contrary, the Regulations 18. I do not accept the defendants' argument, expressly provide for full payment of the supported by the Greek and Swedish Gov amounts. Such full payment also corresponds ernments, that the provisions in issue do not to the aim of replacing price support mea clearly prohibit the charging of costs and that sures with direct income support. As farmers a clear prohibition is required since the Court accepted in Denkavit Futtermittel v Germany are not charged for the expenses which price that the Member States may impose charges support measures entail, it is consistent that for administrative costs. Denkavit concerned they cannot be charged for the compensatory the charging of costs by national authorities payments intended to replace price support. for inspections in the context of aid for skimmed milk. In its judgment the Court held that the objectives of the scheme would not be jeopardised 'if the charges which the under taking is asked to pay represent the normal cost of inspections of that nature and are not so great as to be liable to deter undertakings from carrying on the activities which the aid 1 is intended to encourage'. 1The defendants maintain that the fees in issue are in accor dance with those criteria. However, in Den- kavit the Court first established that the regu 12 lation in issue made no provision as to the costs of the inspections to be carried out by the Member States. Therefore, it did not pre vent Member States either from carrying out 16. The uniform character of the system of payments is also in conformity with the prin ciple of equal treatment, which is a general 11 — Case 233/81 [1982] ECR 2933, paragraph 10 of the judg principle of Community law, embodied, in ment. 12 — Commission Regulation (EEC) No 1725/79 of 26 July 1979 the field of agriculture, in Article 40(3), second on the rules for granting aid to skimmed milk processed into compound feedingstuffs and skimmed-milk powder intended subparagraph, of the Treaty. It is also in for feed for calves, OJ 1979 L 199, p. 1.
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such inspections free of charge or from 20. The defendants also submit that the inter requiring the undertakings in question to pretation of the provisions which they pro reimburse the expenditure which such inspec pose finds support in the circumstance that 13 tions entailed. It was only in such a con not all the regulations of the Council in the text, where there were no provisions as to 1992 agricultural reform package contain sim costs, nor provisions on full payment analo ilar provisions. They refer in particular to gous to the provisions in issue in the present Council Regulation (EEC) No 2069/92 of 30 cases, that the Court stated that the Member June 1992 amending the common organisa States' freedom to charge undertakings could tion of the market in sheepmeat and goat- 15 not be used in such a way as to jeopardise the meat. It is thus clear, according to the objectives of the rules. I thus agree with the defendants, that the provisions are purely Council that the Court essentially left it to declaratory and do not extend to fees for the Community legislature to determine administrative costs. whether national authorities are entitled to 14 charge fees for administrative costs.
21. However, I am unable to see how that 19. The defendants also point out that the conclusion follows. In my view it is open to aims and meaning of the provisions in issue the Community legislature simply to lay are not explained in the preamble, whereas a down, or not to lay down, rules on the matter, derogation from the general principle that the and it is only where no such rules are laid Member States are entitled to impose charges down that the principles stated in Denkavit 16
for administrative costs would have required become operative. I do not see in what way a explicit reasoning, in accordance with Article regulation not containing a provision requiring 190 of the Treaty. However, there is no such full payment is capable of assisting in the general principle in my view, and the fact that interpretation of regulations which do con the provisions in issue are not clarified in the tain such provisions. Furthermore, at the preamble is of course not such as to assist us hearing the Commission explained that the in any way in the interpretation of those pro common market organisation for sheepmeat visions. I further agree with the plaintiffs that and goatmeat already provided for direct the provisions on full payments are accessory income subsidies before the 1992 reform, and in nature and did not require specific rea that fewer inspections were required in that soning in the preamble so as to be valid. sector, which meant that the problem of fees for administrative costs was not likely to arise.
13 — Paragraphs 7 and 8 of the judgment. 14 — See also Case 31/78 Bustone v Italian Ministry for Agricul- ture and Forestry [1978] ECR 2429, paragraphs 12 to 25 of 15 — OJ 1992 L 215, p. 29. the judgment. 16 — Cited in note 11.
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22. The defendants also argue that it is in the Article 5 of the Treaty. In the absence of a interests of the eligible farmers that a well- specific rule on the reimbursement of costs in functioning administrative system is set up, respect of the considerable administrative that such a system entails considerable expense involved in processing applications expenses, and that national authorities should for the grant of Community agricultural sup be able to recover some of those expenses. port measures, the prohibition would consti That argument seems to suggest that the tute a failure by the Community institutions administrative system will be better organised to observe the legitimate interests of the if charges can be imposed. Such an approach Member States. Secondly, such a prohibition, would be unacceptable. The Member States to be classified as an unnecessary interference are of course required to implement Commu in national administrative law, is said to nity law in accordance with its requirements, infringe both the principle of proportionality and the quality of implementation cannot be laid down in the third paragraph and the dependent on where the administrative cost principle of subsidiarity in the second para falls. graph of Article 3 b of the Treaty.
23. I thus conclude in answer to the first question in both cases that the Regulations are to be interpreted as prohibiting the author ities in the Member States from charging 25. Again I do not agree with the defendants' applicants administrative fees for processing submissions. their applications for compensatory payments and premiums.
The second question
26. Article 5 provides that 'the Member States shall take all appropriate measures ... to ensure fulfilment of the obligations arising out of this Treaty or resulting from action taken by the institutions of the Community'. If the 24. The defendants in the main proceedings Regulations are to be interpreted as excluding argue that, if the provisions in issue are to be the imposition of charges for costs, as I think interpreted as prohibiting the charging of they should, then it follows from Article 5 administrative fees, they are in breach of that the Member States should take all appro higher-ranking principles of Community law. priate measures to fulfil that obligation. It is First, the prohibition is said to infringe the true that Article 5 also imposes on the Com principle of cooperation in good faith under munity institutions duties of cooperation with
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the authorities of the Member States. How does not apply in this area, in which, they ever, I agree with the submissions of the argue, the Community has exclusive compe Council and the Commission to the effect tence. In my view it is not even necessary to that Article 5 is not such as to limit the leg consider those arguments since it is clear that islative competence of the Community. Pur the Regulations are in any event in accor suant to Article 40 of the Treaty the Com dance with the principle of subsidiarity. As munity is to establish a common organisation the German Government emphasises, the of agricultural markets in order to attain the Community has broad competences in the objectives of the common agricultural policy field of agriculture, the Regulations were set out in Article 39 of the Treaty. The prin adopted in the framework and within the ciple of cooperation plainly cannot preclude limits of those competences, and the objec the Community institutions from providing tive of the prohibition of charging adminis that compensatory payments disbursed to trative fees, which is to ensure the uniform farmers in the framework of such common implementation of the system of compensa organisations are to be paid in full to the ben tory payments, cannot be achieved by action eficiaries, with a view to ensuring a uniform at national level. and non-discriminatory implementation of that system of payments.
28. Moreover the prohibition does not 27. Nor can there be any doubt that the infringe the principle of proportionality. The Regulations are in accordance with the prin Court has held that, in order to establish ciple of subsidiarity. Article 3b, second para whether a provision of Community law com graph, of the Treaty provides that, in areas plies with that principle, it must be ascer which do not fall within its exclusive compe tained whether the means which it employs tence, the Community shall take action, in are suitable for the purpose of achieving the accordance with the principle of subsidiarity, desired objective and whether they do not go 18 only if and in so far as the objectives of the beyond what is necessary to achieve it. It is proposed action cannot be sufficiently clear that the aim of ensuring full payment of achieved by the Member States and can there the compensatory amounts to farmers cannot fore, by reason of the scale or effects of the be attained otherwise than by providing that proposed action, be better achieved by the they should receive full payment. Community. The Council and the Commis sion argue that the principle of subsidiarity is inapplicable since the Regulations were adopted in 1992 and their validity can thus not be affected by subsequent modifications to the Treaty (since Article 3b took effect on 29. I thus conclude that examination of the 1 November 1993 by virtue of the entry into questions referred has disclosed no factor of force of the Treaty on European Union). They such a kind as to affect the validity of the also contend that the principle of subsidiarity Regulations.
17 — Case 230/81 Luxembourg v Parliament [1983] ECR 255, 18 — See Case C-84/94 United Kingdom v Council [1996] ECR paragraph 37 of the judgment and Case C-2/88 Imm. I-5755, paragraph 57 of the judgment, and Case C-233/94 Zwartveld and Others [1990] ECR I-3365, paragraph 17 of Germany v Parliament and Council [1997] ECR I-2405, the Order. paragraph 54 of the judgment.
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Conclusion
30. Accordingly I am of the opinion that the questions referred by the Verwaltungs gericht, Schleswig-Holstein should be answered as follows:
In Case C-36/97
(1) Article 15(3) of Council Regulation (EEC) No 1765/92 of 30 June 1992 estab lishing a support system for producers of certain arable crops must be inter preted as prohibiting the authorities in the Member States from charging administrative fees for processing applications for support payments, even if those administrative fees correspond to the rates which are otherwise usual in national law and are so low that they are not capable of deterring applicants from applying for support payments.
(2) Examination of the questions referred has disclosed no factor of such a kind as to affect the validity of the Regulation.
In Case C-37/97
(1) Article 30a of Council Regulation (EEC) No 805/68 of 27 June 1968 on the common organisation of the market in beef and veal, as amended by Council Regulation (EEC) No 2066/92, must be interpreted as prohibiting the authori ties in the Member States from charging administrative fees for processing applications for aid, even if those administrative fees correspond to the rates which are otherwise usual in national law and are so low that they are not capable of deterring applicants from applying for aid.
(2) Examination of the questions referred has disclosed no factor of such a kind as to affect the validity of the Regulation.
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