C-348/97

Relevant provisions

2. At the time the events took place, trade between the GDR and the FRG was 3. As regards the Community arrange- ments, it should be observed first of all that, pursuant to Article 1(c) and Arti- * Original language: Italian. cle 14(2) of Regulation No 804/68 of the 1 — OJ 1990 L 203, p. 61. Council of 27 June 1968 on the common

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organisation of the market in milk and milk Federal Republic of Germany and into the products, 2 a levy is to be charged on legal system of the Community in advance imports of butter into Community territory. of the formal unification of the two Ger- This levy was, however, suspended — manies'; under certain conditions which I will set out below — in respect of imports from the GDR. Some regulations which the Council and Commission adopted in July 1990 with a view to regulating the transitional period preceding the union between the GDR and the FRG and, accordingly, full application 'Whereas, during the period preceding of Community law in the Länder which unification, rules governing trade between were formerly part of the territory of the the German Democratic Republic, on the GDR, are of importance in this connection. one hand, and the Federal Republic of Germany and other Member States of the Community, on the other, should be geared towards the free access of Community products to the German Democratic Republic and towards equivalent access to the Community for the latter's products'.

4. First among these is Council Regulation (EEC) No 1794/90 of 28 June 1990 on transitional measures concerning trade with the German Democratic Republic. 3 The first and third recitals in the preamble 5. It is provided in Article 1(1) of that to this regulation are respectively worded regulation that '[i]n so far as the Commis- as follows: sion establishes, under the procedure laid down in Article 4, that the conditions of Article 2 are met, the application of cus- toms duties... shall be suspended... in Community trade with the German Demo- cratic Republic.'

6. On the basis of the rules I have just cited, the Commission adopted Regulation (EEC) No 1795/90 of 29 June 1990 concerning 7. The transitional arrangements were the methods of implementation of Council extended to the agriculture and fisheries Regulation (EEC) No 1794/90. 4Given the sectors by Council Regulation (EEC) fact that in the case of non-agricultural No 2060/90 of 16 July 1990 on transi- products 'the conditions set out in Article 2 tional measures concerning trade with the of Regulation (EEC) No 1794/90 are ful- German Democratic Republic in the agri- filled' (third recital in the preamble), Arti- culture and fisheries sector. 5 Given the fact cle 2 of Regulation (EEC) No 1795/90 that 'Article 15 of the Staatsvertrag pro- provides as follows: vides for the German Democratic Republic to suspend the collection of levies and the grant of refunds on trade with the Com- munity in the agriculture sector provided that the Community does likewise' 6and that accordingly 'in view of the scheme ' 1 . The Community transit procedure shall introduced or to be introduced by the apply to the movement of goods between German Democratic Republic, the Com- the Community and the German Demo- munity should adopt specific rules for cratic Republic. agricultural products, whether or not pro- cessed', 7the regulation provides, in Arti- cle 2, that '[I]n so far as the Commission establishes,... that the conditions of Arti- cle 3 are met, the collection of levies and the application of other charges,... shall be 2. For the implementation of this proce- suspended... in Community trade with the dure and without prejudice to the imple- mentation of Article 3, the "German 5 — OJ 1990 L 188, p. 1. 6 — Third recital in the preamble. 4 — OJ 1990 L 166, p. 3. 7 — Fourth recital in the preamble.

— imported from the Community and released for free circulation in the German Democratic Republic without 8. On the basis of that provision, the benefit of any Community export Commission adopted Regulation (EEC) refund.' No 2252/90. Given that 'mechanisms simi- lar to those of the common agricultural policy are to be applied by the German Democratic Republic' and it 'is to grant free access to its territory to Community goods on a reciprocal basis', 8the Commis- sion, in Article 1(1) of the regulation 9. Article 2 of that regulation further pro- 'established that the conditions laid down vides that Articles 2 to 5 of Regulation in Article 3 of R e g u l a t i o n (EEC) No 1795/90 apply to the movement of the No 2060/90 are met in respect of the products and goods referred to in Article 1 products referred to in Article 1 of the said of Regulation (EEC) No 2060/90 between Regulation', among them the products the Community and the GDR, including concerned in the present case. Moreover, the products concerned in the present case. still pursuant to the last regulation cited and in order to avoid abuses or intentional 'misuses' in trade in goods, the collection of levies in trade between the GDR and the Community in the agriculture and fisheries sector was only suspended subject to a 10. As regards the customs legislation in number of conditions. Pursuant to Arti- force — in particular the rules on the cle 1(2), that suspension could only arise in arising of customs debt — Article 1(2)(a) respect of products: of Council Regulation (EEC) No 2144/87 of 13 July 1987 on customs debt 9defines customs debt as 'the obligation on a person to pay the amount of the import duties (...) or export duties (...) which apply under the provisions in force to goods liable to such duties.' Article 2 of that regulation pro- '— wholly obtained in the German Demo- vides that the unlawful introduction into cratic Republic, the customs territory of the Community of

11. Reference should finally be made to Council Regulation (EEC, Euratom) No 1552/89 of 29 May 1989 implement- ing Decision 88/376/EEC, Euratom on the system of the C o m m u n i t i e s ' own resources. 11 Article 1 of that regulation provides that the Community's own resources, including agricultural levies, 'shall be made available to the Commission and inspected as specified in this regula- tion'. It is stated in the following article that '[F]or the purpose of applying this regulation, the Community's entitlement to... own resources... shall be established Article 2 of that regulation provides that as soon as the amount due has been notified '[G]oods brought into the customs territory by the competent department of the Mem- of the Community shall, from the time of ber State to the debtor. Notification shall be their entry, be subject to customs super- given as soon as the debtor is known and vision.' In accordance with Article 1(2), the amount of entitlement can be calculated 'customs supervision' means 'action taken by the competent administrative authori- in general by the customs authority with a ties, in compliance with all the relevant view to ensuring compliance with customs Community provisions'. Article 9(1) adds rules and, where appropriate, with other that 'each Member State shall credit own rules applicable to goods brought into the resources to the account opened in the customs territory of the Community.' Arti- name of the Commission with its treasury cle 3(1) then provides that '[G]oods or the body it has appointed.' Finally, brought into the customs territory of the Article 17(1) provides that 'Member States Community shall be conveyed by the shall take all requisite measures to ensure person bringing them into the Community that the amount corresponding to the without delay... to the customs office.' entitlements established under Article 2 According to paragraph 2 of that article, are made available to the Commission as '[a]ny person who assumes responsibility specified in this regulation'. In the first for the carriage of goods after they have sentence of subparagraph (2) it is stated been brought into the customs territory of that 'Member States shall be free from the

14. The Commission, finding the German Government's arguments inadequate, then Facts and pre-litigation procedure initiated the infringement procedure by sending it a letter of formal notice on 13 September 1995. As the German Gov- ernment, by letter of 12 January 1996, 12. Between 15 and 24 August 1990, con- maintained its position, the Commission signments of butter exported from the adopted a reasoned opinion on 30 October Netherlands, benefiting from export 1996 with which it confirmed the accusa- refunds, were imported into the GDR and tions that the obligations relating to the then immediately taken into FRG territory. collection of levies on imports of agricul- At the time of importation into the FRG, tural products from third countries had the German authorities did not apply any been breached. As the German Government levy to the goods in question. did not conform to the reasoned opinion within the time-limit set, the Commission brought the present action on 2 October 1997.

16. As regards the first of these charges, the Commission maintains that, in accordance w i t h A r t i c l e 14(2) of R e g u l a t i o n No 804/68, butter falls within those pro- ducts whose importation is subject to levy. 18. The Commission next observes that, in In its submission, the conditions for a this connection, no relevance can be attrib- suspension of the collection of the levy set uted to the fact that the export refund was o u t in Article 1(2) of Regulation erroneously granted when the goods were No 2252/90 had not been met at the time exported from the Netherlands. Even the Netherlands butter crossed the FRG assuming that argument were true and border. Whereas the provision referred to that, by virtue of court proceedings insti- did permit suspension where it was proved tuted in the Netherlands, the sums could be that the products had been 'imported from recovered, this could not in any event rule the Community and released for free circu- out liability on the part of the German lation in the German Democratic Republic authorities, since the rules governing the without benefit of any Community export export and import of agricultural products refund', in the present case the butter are based on two autonomous Community consignments had the benefit of refunds in systems, which must consequently be the Netherlands at the time of their export clearly distinguished. There is therefore to the GDR. The Commission concludes nothing to prevent proceedings being taken that the defendant ought accordingly to simultaneously in respect of the two infrin- have collected the levy, the amount of gements of Community law, namely the which should have been made available to erroneous grant of the export refund and the Commission pursuant to Regulation the failure to collect the levies. No 1552/89.

21. The defendant also observes that the same conclusion ought also to be reached, as regards the absence of formalities to be 20. The FRG replies that, contrary to what complied with at the time of the introduc- the Commission maintains, no customs tion of the products in question into the delay arose in this case. It points out that, territory of the FRG, in relation to the pursuant to Article 2(1 )(b) of Regulation provisions of Regulation No 1795/90, to No 2144/87, for a customs debt to be which Article 2 of Regulation No 2252/90 incurred it is necessary that the goods in refers. The first of those regulations pro- question should not only be among those vides, in Article 2(1), for the Community whose importation is the subject of levy, transit system to apply to the movement of according to the relevant Community rules, goods between the Community and the but also that the goods themselves should German Democratic Republic and the same have been unlawfully introduced into Com- system applies to agricultural products munity territory. In its submission, in the pursuant to Regulation No 2252/90. How- present case there was no 'unlawful intro- ever, contrary to what is maintained by the duction' inasmuch as when the goods Commission, the provisions of the two

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The defendant also points out that with the constitution of a 'de facto economic union' between the two Germanies, following the According to the Commission, Regulation entry into force on 1 July 1990 of the No 2252/90 was expressly aimed at pre- Staatsvertrag, no rule relating to the clear- venting the entry of products into the ance of goods at the border could have FRG — as part of Community territory — been infringed. Whatever the origin of the being able to take place via the GDR goods, no measure involving customs clear- without collection of the levy. In this ance or customs supervision could be connection, the Commission refers to the applied to consignments of butter which, wording of the fifth recital in the preamble in free circulation in the territory of the to that regulation, cited above. It consid- GDR, had been introduced in August 1990 ered it to be obvious that the maintenance into the territory of the FRG. of the control measures was essential for verifying compliance with the conditions imposed by the regulation for goods origi- nating from the GDR to be able to benefit from the suspension of collection of levies. Goods not falling within the three cate- 22. The Commission next submits that the gories had, in the Commission's view, to be abolition of customs controls at the border subjected to the levies provided for by between the two Germanies in respect of general legislation, so that the customs goods which, pursuant to the legislation supervisory measures did not in any way referred to, ought to have been subject to become pointless. The premature abolition levy, constitutes a further breach of Com- of all border controls, on the other hand, munity law. Up to 3 October 1990 (the opened up a breach of the single market's date of unification), the border between the external protection system, from which the FRG and the GDR continued to be an parties involved in the trade in the goods in

24. Proceeding now to examine the merits of the pleas put forward by the Commis- sion, it should be observed first of all that the facts on which those pleas are founded are not disputed. In August 1990, consign- ments of butter were introduced into FRG 23. The FRG replies that the purpose of territory which were not subjected to any customs and agricultural union between the levy pursuant to the relevant Community Community and the GDR was precisely to provisions relating to the system of agri- discontinue controls on goods crossing the cultural prices. These goods came from border between the two Germanies. The GDR territory which they had reached establishment of the de facto union with from the Netherlands, a Member State effect from 1 July 1990 (and from 1 August where they had benefited from export 1990 in the case of agricultural products) refunds. The dispute between the two was not only provided for by the agreement parties in the present proceedings relates between the two Germanies but expressly to the conformity, or otherwise, of the called for by the Commission in the course FRG's failure to collect agricultural levies of meetings held between the German when the goods from the GDR entered its customs administration and officials from territory, with the obligations arising from the Commission. The defendant further the Treaty and from the Community reg- observes that the only parties on whom ulations on trade in agricultural products obligations are incumbent in connection with third countries. It is further alleged — with customs relations are private indivi- and this, as in my opinion, is a plea which, duals and not States. No customs debt can in one way or another, is subsumed under therefore be imputed to the State for the first plea, alleging that the Community discontinuing formalities at the border provisions in relation to customs control between the two Germanies. The con- (and therefore Regulation No 4151/88) duct — allegedly not in accordance with were infringed by reason of the premature Community obligations — which the Com- abolition of customs formalities. In the mission attributes to the FRG is therefore Commission's view, that abolition facilita- at a different level from that of customs ted the failure to collect levies payable on

25. While not denying that the relevant Community requirements are not of shin- ing clarity, I would say at the outset that the pleas put forward by the Commission do appear well founded. At the time when the disputed consignments of butter entered FRG territory, the relevant Community provisions required customs controls to be maintained at the inter-German border. Before the actual incorporation into the 26. It is true that, taking account of the FRG of the five Länder which previously Staatsvertrag 13 and in the perspective of constituted the GDR, which took place the extension of Community law to the five with the entry into force in October 1999 Länder of the former GDR, the Commu- of the Treaty on Union, 12 the GDR was to nity introduced a transitional system which be regarded in law as a third country in partly derogated from the general system relation to the Community, with obvious for customs treatment of goods from third consequences in terms of customs controls countries in the case of goods coming from on the crossing of goods at the border and the GDR. Pursuant to 2(1) of Regulation therefore of the application of the rules No 2060/90, the collection of levies and relating to the collection of agricultural the application of other charges, quantita- levies. Any deviations from the general tive restrictions and measures having system could not plainly arise from the equivalent effect under the common application of the Staatsvertrag, which arrangements is suspended for agricultural established a monetary, economic and products referred to in Annex II to the EC social union between the two Germanies Treaty, under certain conditions. By Reg- with effect from 1 July 1990. Formally, the ulation No 2252/90, the Commission, Staatsvertrag is an agreement concluded while it established that the conditions between one Member State and a third stipulated by the Council were met, limited country, which cannot bind the Commu- this suspension exclusively to the products nity inasmuch as it is not a contracting listed in Article 1(2), specifically those party. Accordingly, the entry into force of 'wholly obtained in the German Demo- that agreement cannot, as such, have the cratic Republic', 'imported and released for effect of amending Community provisions free circulation in the German Democratic or creating new obligations for the Com- Republic on collection of a levy at the Community level' and 'imported from the Community and released for free circula- 12 — It is therefore only from that time that, pursuant to the provisions relating to the territorial sphere of the Treaties (Article 227 of the EC Treaty (now, after amendment, Article 299 EC), Article 79 of the ECSC Treaty and 13 — The agreement is in fact cited in the first recital in the Article 198 of the Euratom Treaty), Community law preamble to Regulation No 1794/90 and the third recital extended automatically to the new territories. in the preamble to Regulation No 2060/90.

In the case we are concerned with, the importation of the consignments of butter 28. I do not consider that the interpretation does not fall within any of the categories of the Community legislation applicable listed. Although imported from the Com- which is put forward by the defendant is munity (the Netherlands) and placed in free correct. On the contrary, it appears reason- circulation in the GDR, these goods had able to consider that the reference made by benefited in the Netherlands from export Article 2 of Regulation No 2252/90 to refunds. It is therefore obvious that they Article 2 of Regulation No 1795/90 in fact were not among those goods which could concerns only goods falling within the have benefited from the suspension of levies categories listed in Article 1 of the former under Article 1(2) of R e g u l a t i o n regulation, in other words those not sub- No 2252/90. jected to levies by reason of crossing the inter-German border. In other words, the transitional arrangements governing trade in agricultural and fisheries products between the two Germanies were more rigorous and restrictive than those applic- able to other products under Regulation No 1795/90. As the preamble to Regula- tion No 2252/90 points out, the limitation 27. However, the defendant maintains that of the suspension of levies — which is not the rules just cited do not apply erga omnes to be found in the general system for the but concern solely relations between the movement of products between the GDR GDR and the Member States of the Com- and the Community during the transitional munity other than the FRG. In other words, period — is justified by the need to 'avoid it maintains that at the time when the products that are not priced at a similar goods at issue crossed the inter-German level to that in the Community being border, the Community legislation in force imported into the Community without did not require any customs formality for any levy being collected.' On a proper goods passing from the territory of the view, what is involved is precisely the GDR to the territory of the FRG. In its situation which has come about in the case view, this results from Article 2 of Regula- before us, in which the goods, originating tion 2252/90 which reads: 'Articles 2 to 5 in the Community, were re-introduced into of Regulation (EEC) No 1795/90 shall apply to the movement of the products and goods referred to in Article 1 of 14 — The products in question are, I would point out, the Regulation (EEC) No 2060/90 between agricultural products referred to in Annex II to the EC Treaty and goods resulting from the processing of agricul- the Community and the German Demo- tural products.

Any other reasoning would be tantamount to inferring from the Commission's regula- tion that there are two different systems for agricultural products imported from the GDR: the first, concerning trade between the GDR and the Member States of the Community excluding the FRG, would consist, on the one hand, of the suspension of the collection of agricultural levies and 29. I therefore consider that the reference therefore the application of the Community to Article 2 of Regulation No 1795/90 internal transit system under the particular should be regarded as a supplement to the circumstances listed in Article 1(2) and, on rule contained in Article 1(2) of Regulation the other, the collection of agricultural No 2252/90; on the one hand, the Com- levies where those circumstances did not munity transit system, for the relations exist. The second system, applicable solely between the Community and the GDR, to trade between one Member State of the and, on the other, the legal fiction assim- Community (the FRG) and the GDR, ilating the territory of the two Germanies would mean that the movement of all to that of a single Member State (with the goods, including agricultural products, result of excluding the internal transit would have had to be regarded as taking system in respect of that trade) obviously place in the territory of one Member State can only relate to those products which alone. I consider first of all that such a benefit from the suspension of import levies distinction ought to have emerged clearly on goods from the GDR, in other words from the text of the regulation concerning products which have been obtained entirely the treatment of agricultural products; yet in the GDR, or which have been imported this refers explicitly to the movement of and placed in free circulation there follow- goods between the Community (as a whole) ing the collection of a Community levy, or and the GDR as an autonomous subject of finally imported from the Community and international law. It cannot, however, be placed in free circulation in the GDR inferred from a general reference to a without having benefited from any export preceding regulation. Secondly, I would refund. The products which did not fall observe that accepting this reconstruction within the three categories which I have would risk rendering the rule referred to in just referred ought to have been subject to Article 1(2) of Regulation No 2252/90 the collection of agricultural levies when

To answer the argument of the FRG that, once the refund of what was unduly obtained in the Netherlands at the time of export has been obtained, there is no detriment to Community finances, it should 31. It should be added that the infringe- be added that, in the context of the ment by the FRG of the Community infringement proceedings under Arti- provisions governing customs formalities cle 169 of the Treaty, the finding by the for the introduction of goods from third Court of Justice of the breach of a Com- countries cannot be cured by any recovery munity obligation leaves the Member State of the sums improperly granted by way of free to determine the specific measures to export refunds in another member country be adopted in order to comply with the (in this case, the Netherlands). The defen- Court's judgment. In the case before us, the dant refers, in particular, to the decision of breach of Community law committed by a Netherlands court which is said to have the FRG did, admittedly, entail detriment upheld the claim by the Netherlands to Community finances. However, it is the administrative authority for the reimburse- responsibility of the Member State in ment of refunds wrongly obtained at the question to determine whether the proper time of export. compliance with the Court's judgment

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32. Next, I consider that the Commission's second plea is also well founded. I would point out that the Commission charges the FRG with prematurely abolishing customs formalities in respect of the goods subjected to levy under Regulation No 2252/90. The German Government replies that the dis- continuation of customs formalities was due to the institution of a de facto customs and agricultural union between the two Germanies with effect from 1 July 1990, this being the consequence of the entry into Equally lacking in relevance are the asser- force of the Staatsvertrag. In this connec- tions by the defendant that the Commis- tion, it need merely be observed that no sion, by its conduct, induced the German authorities to consider their conduct as lawful, particularly the effective disman- 15 — I note that the Commission tefrained — and rightly so — tling of customs formalities which took from asking the Court to order the FRG to pay the sums place when the goods crossed the inter- not collected but only to declare its failure to fulfil Community obligations. 1 therefore consider any assess- German border. Even assuming that in the ment as to the existence or otherwise, in the system laid down by regulations cited above, of any obligation on the meetings cited by the defendant certain pan of the Member State to provide itself for the payment Commission officials did express opinions to the Commission of the sums which should have been paid by the private individual at the time of the importa- as regards the lawfulness of the German tion of the products in question, to fall outside the scope of the proceedings. authorities' conduct — although the facts

33. To conclude, I consider that the regula- tions which governed trade in agricultural products with the GDR in the period immediately preceding its incorporation in the FRG should have been applied in all the Member States, including the FRG: it is plain that no article of the regulations I therefore concur with the Commission's exempts the FRG from applying them. contention that the elimination of all The fact that, as the FRG maintains, there customs controls at the inter-German bor- were no longer any controls at the inter- der was not permissible: the FRG infringed German border at the material time is of no Community law by prematurely abolishing relevance; on the contrary, that is precisely the controls at what were still external the conduct, contrary to Community law, borders of the Community, even taking which made the failure to collect the levy account of the combined provisions of payable in respect of the goods in question Articles 1 to 3 of Regulation No 1795/90, possible. It is equally clear that the entry referred to in Article 2 of Regulation into force of the Staatsvertrag between the No 2252/90. The FRG and the GDR are two Germanies was no basis for exempting regarded as a single Member State, for the the FRG from the obligations assumed in a limited purposes of the Community transit system, exclusively as regards the treatment of goods not subject to levy in accordance 16 — Case C-415/93 Bosman (1995] ECR I-4921, para- graph 136; Case C-340/96 Commission v United Kingdom w i t h A r t i c l e 1(2) of R e g u l a t i o n [1999] ECR I-2023, paragraph 31. No 2252/90.

(b)by abolishing all customs formalities in inter-German trade and by not adopting the measures required to implement Regulation No 2252/90,

failed to fulfil its obligations under the EC Treaty;

— order the Federal Republic of Germany to pay the costs.

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