C-356/97

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4. Initially, the additional levy was speci- 6. In accordance with this principle, the fied for five consecutive periods of first subparagraph of Article 2(2) of the 12 months. This was then firstly extended basic regulation establishes that 'as regards to eight periods 4and subsequently to a deliveries, before a date and in accordance ninth period. 5 with detailed rules to be laid down, the purchaser liable for the levy shall pay to the competent body of the Member State the amount payable, which he shall deduct from the price of milk paid to producers who owe the levy or, failing this, collect by any appropriate means.'

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calculation of the levy, the measures to the purchaser shall establish a statement for ensure payment of the levy in good time each producer showing, opposite the pro- and appropriate verification rules. ducer's reference quantity and the repre- sentative fat content of his production, the quantity and fat content of the milk and/or milk equivalent which he has delivered during the period.'

9. The fifth recital of the implementing regulation underlines that 'experience gained has shown that major delays in both the transmission of figures on collec- tions or direct sales and payment of the The first subparagraph of paragraph 2 levy, have prevented the arrangements from indicates the time-limit by which this being fully effective' and that 'the necessary information must be notified to the com- conclusions [should be] drawn by laying petent authority of the Member State. This down strict requirements as regards notifi- provision states that 'before 15 May 9each cation and payment deadlines and provid- year, the purchasers shall forward to the ing for penalties where deadlines are not competent authority of the Member State a met'. summary of the statements drawn up for each producer or, where appropriate, by decision of the Member State, the total quantity, the quantity corrected in accor- dance with Article 2(2) and average fat content of the milk and/or milk equivalent delivered to it by producers and the sum of The seventh recital of this Regulation also the individual reference quantities and the states that 'under Regulation (EEC) average representative fat content of such No 3950/92 purchasers bear chief respon- producers' production.' sibility for the correct implementation of the arrangements'.

— if the communication referred to in the first subparagraph is made before 1 June, the penalty shall be equal to Paragraph 4 of Article 3 provides that the amount of the levy due for a 0.1% 'Before 1 September each year, the purcha- overrun on the quantities of milk and ser liable for levies shall pay the competent milk equivalent delivered to them by body the amount due in accordance with producers. Such penalty may not be rules laid down by the Member State.' A less than ECU 500 nor more than ECU penalty is also specified in this case. 20 000, According to the second subparagraph of this paragraph, 'where the time-limit for payment is not met, the sums due shall bear interest at a rate per annum fixed by the Member State and which shall not be lower than the rate of interest which the latter applies for the recovery of wrongly paid — if the communication referred to in the amounts.' first subparagraph is made after 31 May but before 16 June, the pen- alty shall be equal to the amount of the levy due for a 0.2% overrun on the quantities of milk and milk equivalent delivered to them by producers. Such penalty may not be less than ECU 1 000 nor more than ECU 40 000,

11. It should also be noted that, in May 1998, the Commission amended the provi- sion disputed in this case. 10 Pointing out the absolute necessity for the time-limit fixed for the communication of informa- — if the communication referred to in the tion to be observed, 11 the Commission first subparagraph is made after reinforced the pecuniary penalties and 15 June but before 1 July, the penal- graduated them according to the extent of ty shall be equal to the amount of the the delay. It also introduced a provision to levy due for a 0.3% overrun on the protect smaller dairies. According to the quantities of milk and milk equiv- alent delivered to them by producers. Such penalty may not be less than 10 — By Commission Regulation (EC) No 1001/98 of 13 May ECU 1 500 nor more than ECU 1998 (OJ 1998 L 142, p. 22). 11 — In the first recital. 60 000,

The relevant national provisions 14. On 9 April 1997 the Lindau Hauptzol- lamt (hereinafter the 'Lindau HZA') sent the dairy a reminder that, in accordance 12. The relevant national provisions on the with both the national provisions and additional levy are contained in the Milch- Article 3(2) of the implementing regula- Garantiemengen-Verordnung (Regulation tion, the dairy was required to forward on Guaranteed Quantities for Milk, here- before 14 May the summary of the state- inafter the 'MGVO'). In implementation of ments on the quantity of milk delivered by the Community provisions, Paragraph each producer. 11(3) of the MGVO establishes the time- limit of 15 May for the statements drawn up for each producer by the purchaser to be forwarded to the national body responsible for applying the scheme. In Germany, the competent body is the Hauptzollamt (Prin- cipal Customs Office). Paragraph 11(4) of 15. The dairy sent this summary by post the MGVO also introduces the time-limit only on 16 May 1997. As a result of the of 31 July for the submission to the Haupt- Whit Monday holiday on 19 May 1997 zollamt of a notification from the dairy on this communication did not reach the the levies. Lindau HZA until 20 May 1997. In view

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of the delay, the Lindau HZA, in accor- 18. Agreeing that the outcome of the case dance with the provisions of the second turned on the validity of the aforemen- subparagraph of Article 3(2) of the imple- tioned provision, the national court stayed menting regulation, imposed a pecuniary the proceedings in order to refer the penalty of DEM 16 661.80. following question to the Court:

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delivered — is called into question with regarded as a valid legal basis for an regard to two aspects. Firstly, the national implementing regulation which provides court raises doubts as to whether the for pecuniary penalties to be imposed on Commission was competent to impose a milk purchasers as this implementing reg- penalty on milk purchasers as it considers ulation exceeds the Commission's compe- that the regulation in question has no valid tence in this respect. legal basis. Secondly, the national court also doubts the legality of the penalty itself as it considers this disproportionate to the objective pursued. Added to these two aspects are another two raised by the dairy, which is the plaintiff in the main proceed- 22. On a preliminary basis, it must be ings, concerning an alleged infringement of recalled that the Court has on several the principles of criminal law inherent in occasions ruled, particularly with regard the rule of law and an infringement of the to the agricultural sector, that 'the concept principle of non-discrimination. During the of implementation must be given a wide hearing the Commission also asked that, if interpretation. More particularly, only the the Court were to rule that the provision in Commission is in a position to keep track question was invalid, the retroactive effect of agricultural market trends and to act of the judgment should be limited to only quickly where necessary and therefore the those cases in which an appeal had already Council may find it necessary to confer on been lodged. Finally, it should be noted that it wide powers in that sphere; those powers the assessment of the validity requested by may also apply to some extent to the the national court concerns the second finding of the basic facts, and the limits to subparagraph of Article 3(2) of the imple- which they are subject must be determined menting regulation in the version prior to by reference among other things to the the amendment made by Commission Reg- essential general aims of the market orga- ulation No 1001/98. 12 The latter entered nisation'. 13 into force after the order for reference.

specified that Articles 145 and 155 of the terms provides a sufficient basis for the EC Treaty (now Articles 202 EC and 211 authority to act'. 16 EC), regulating the Commission's imple- menting power, 'distinguish between rules which, since they are essential to the subject-matter envisaged, must be reserved to the Council's power, and those which being merely of an implementing nature may be delegated to the Commission'. 24. Naturally, certain criteria must be According to the Court, rules which are obeyed when exercising this implementing essential are those which are intended to power. The Court has on several occasions give concrete shape to the fundamental ruled that 'the Commission is authorised to guidelines of Community policy. However, adopt all the measures which are necessary this definition does not include penalties or appropriate for the implementation of intended to guarantee the implementation the basic legislation, provided that they are of these fundamental guidelines. Therefore, not contrary to such legislation'. 17 This 'measures consisting of the imposition of means that the Commission, when exercis- penalties ... amount to no more than ing its implementing power, must remain implementation of the principles estab- within the framework of the provisions to lished in the basic regulations and, since be implemented, by respecting the guide- the Council did not reserve that power to lines and the objectives of these. itself, it was properly delegated to the Commission'.

dairy, in the past, did not have sufficient The national court concludes therefore that means to meet in good time the require- the difference between the guidelines fol- ments imposed on it by the Community lowed by the two institutions means that provisions. In the national court's opinion, Article 11 of the basic regulation cannot be this should be interpreted as meaning that regarded as a valid legal basis for the the Council, in reforming the additional penalties in question. Also, given that levy, favoured an approach aimed at adequate legal bases cannot be found in strengthening the position and rights of the Treaty either, it follows that the Com- the purchaser. The national court also mission, in order to establish such a considers this to be the most 'appropriate' provision, would have required special interpretation given that, with the reform authorisation from the Council through a of the additional levy, the dairies assumed regulation adopted under Article 145 of the the burden of all the administration in Treaty. managing the milk quotas which, particu- larly for the smaller dairies, can be parti- cularly onerous.

19 — See point 9 or this Opinion. 20 — See point 6 of this Opinion.

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same time, wide freedom as regards the forwarding the information on the milk means for collecting this, intended to give delivered. This means that the amount of these purchasers chief responsibility for the the pecuniary penalty is always the same correct application of the additional levy. whether this involves a delay of a few days Consequently, it must be considered that or much longer delays, or even in the the introduction of a penalty such as that in absence of any communication. According this case is perfectly in line with the guide- to the national court, this disproportion is lines established by the Council. This worsened by the fact that, in view of the penalty is therefore fully within the imple- numerous requirements imposed on dairies, menting powers given to the Commission the period of time between the end of the by Article 11 of the basic regulation which milk year on 31 March and the time-limit constitutes a valid legal basis. of 15 May for forwarding the statements on the quantities of milk delivered can be particularly short for the dairies. It is therefore very difficult for the latter to observe the time-limit specified by the Commission. Furthermore, the dairy main- tains that the situation described above also infringes the principle of non-discrimina- tion as, by not graduating the amount of the penalty according to the extent of the delay, this has the effect of treating in the On the infringement of the principle of same way situations which are actually proportionality and non-discrimination very different in terms of the negative consequences on the scheme.

30. Thirdly, according to the national court and the dairy, a further cause of dispropor- tion lies in the fact that the pecuniary penalties are calculated based on the quan- tities of milk delivered and not on the 32. It should firstly be recalled that, amount of the additional levy which may according to settled case-law, 'the principle be due. Also in this respect, this choice has of proportionality, which is one of the the effect that the sum to be paid if the general principles of Community law, time-limit is exceeded is too high in pro- requires that measures adopted by Com- portion to the objective pursued by the munity institutions do not exceed the limits Commission of rapid communication and of what is appropriate and necessary in punctual payment of the levy. order to attain the objectives legitimately pursued by the legislation in question; when there is a choice between several appropriate measures recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued'. 21

the case concerning the common agricul- teed total annual quota is fixed for each tural policy, the Community legislature Member State. This is then divided into enjoys a wide discretion as to the nature individual quotas for each producer. As is and scope of the measures to be taken'. 22 apparent in particular from the third recital of the basic regulation, these individual quotas are separated into quantities of milk for delivery to the dairies and quantities of milk for direct sale. The first of these destinations accounts for almost all the milk production. 24 It is evident from this brief description that the quantities of milk delivered to the dairies are the element on which the whole system is based. These 34. Particularly in terms of provisions quantities are used as a real and appro- which provide for penalties, the recognition priate 'unit of measurement' for the of this wide discretion has often led the scheme. Consequently, the obligation Court to consider even particularly severe imposed on the dairies to communicate to and dissuasive penalties as completely law- the competent national authorities the ful. This is true, in particular, in those cases quantities of milk delivered by the produ- where the penalty was linked to a principal cers must be regarded as a principal obligation or to an obligation whose obser- obligation in that the infringement of this vance was of fundamental importance to may jeopardise the whole functioning of the functioning of a Community system the additional levy scheme and the func- such as a common organisation of the tioning of the common organisation of the market. 23 market in milk and milk products.

provide for pecuniary penalties differing specify pecuniary penalties differing according to the extent of the delay with according to the extent of the delay, does which the dairy has forwarded the state- not infringe the principle of proportionality ments to the national authority should be if this time-limit is essential, that is if it can regarded as an infringement of the principle be demonstrated that any delay, regardless of proportionality and in particular of the of its extent, produces specific effects likely criterion of necessity or whether this can be to jeopardise the proper functioning of the regarded as justified in the light of the Community scheme in question. This discretion which, based on the case-law means that, if this time-limit is not essen- cited above, the Commission must be tial, the negative effects produced on the allowed. scheme by the infringement of the obliga- tion will vary according to the delay. Therefore, a penalty which does not take account of this circumstance must be regarded as disproportionate in that it is not necessary to attain the objective pur- sued. 26

37. I consider that the first proposal is most appropriate. The Court has clearly estab- lished that, even in relation to penalties linked to principal obligations, the wide discretion enjoyed by the Community leg- islature on agricultural policy must, how- ever, remain within the limits imposed by the principle of proportionality. 25

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41. As regards the case in question, the specific objective of the penalty contained

29 — For the sake of completeness, it should be noted that the 40. It is also interesting to consider the Court regarded the obligationto submit the stock declara- tion before the time-limit to be a secondary obligation and Court's judgment in the case of Pressler, 28 not a principal obligation. However, at the time, Advocate General Tesauro, in his Opinion on the case of Pressler, also on the preventive distillation of wine. underlined that 'the most recent case-law shows the traditional distinction between principal and secondary In this case, the disputed provision con- obligations to have been surpassed, inasmuch as, in regard cerned the requirement for traders to to the former, it is considered whether the means employed are appropriate to attain the objective pursued and whether or not they go beyond what is necessary to do so' (point 6 of the Opinion). Therefore, the principles set out by the Court in this judgment can safely be extended to 28 — Pressler, cited above, paragraphs 16 and 17. the case in question.

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42. In my opinion it seems, inter alia, that the Commission itself implicitly confirmed this conclusion when in 1998 30 it amended the provision disputed in this case by introducing pecuniary penalties differing Although the above considerations show according to the extent of the delay recor- that the date of 15 May is an important ded by the dairies in forwarding the and fully justified time-limit in view of the statements. The fourth recital of the new rules on the additional levy, it must, regulation expressly indicates that 'the however, be added that the Commission more a purchaser delays communication has not put forward any argument which of the information, the more serious are the leads to the conclusion that this time-limit consequences for the competent authorities must be regarded as essential. The Com- which have to ensure payment of the levy mission has not demonstrated that any before the time limit'. In addition, the fifth delay, even a brief one, actually affects the next time-limit resulting in the negative effects described. Therefore, in my opinion, 30 — By Regulation No 1001/98, cited above.

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With regard to the argument put forward by the national court and the dairy relating 43. If the considerations set out up to this to the fact that the pecuniary penalty is point have led to the conclusion that the calculated based on the quantities of milk penalty specified in the second subpara- delivered and not on the amount of the graph of Article 3(2) of the implementing levy, it must be underlined that, as already regulation is disproportionate, for the rea- recalled, the penalty specified in the second sons cited above, in that it does not take subparagraph of Article 3(2) of the imple- account of the extent by which the time- menting regulation has the specific objec- limit is exceeded, it must also be concluded tive of inducing the dairies to respect the for the same reason that this penalty obligation to communicate the information infringes the principle of non-discrimina- on the quantities of milk delivered by tion which, in the sector of the common producers. It is clear that this obligation agricultural policy, is expressly set out in does not directly relate to the obligation, Article 40(2) of the EC Treaty (now, after which is linked but separate, for payment amendment, Article 34 EC). As it is estab- of the levy. It follows that, if this criterion lished that the harm caused to the addi- were used to determine the amount of the tional levy scheme by the time-limit of penalty, this would exclude from the pay- 15 May being exceeded is not always the ment of the penalty all those dairies which, same, but depends on the extent of the

although late in forwarding their informa- correctly reasoned, concern potential pro- tion, are not liable for the levy according to blems which may arise between the dairies the statements. This circumstance would and the competent national authorities in not only be discriminatory but would also respect of the additional levy scheme. hinder attainment of the objective for Despite this, these arguments cannot be which the penalty is specified. As under- regarded as relevant as these types of lined by the Commission, in order to be problem are irrelevant for the purpose of able to carry out the national calculations, assessing the proportionality of a Commu- the communications from the dairies which nity provision. have not exceeded the individual reference quantities and therefore are not liable for the levy are just as important as the communications from the dairies which have exceeded these quantities. Finally, it should also be taken into account that, by linking the calculation of the penalty to the quantities of milk delivered, it is possible to On the infringement of principles of crim- introduce an element of graduation allow- inal law ing the amount of the penalty to differ according to the turnover of the dairy. In the light of these considerations, it must therefore be concluded that the criterion 47. The final defect in the act claimed by chosen by the Commission for the calcula- the dairy in relation to the validity of the tion of the penalty specified by the disputed second subparagraph of Article 3(2) of the provision is in proportion to the objective implementing regulation concerns the pursued. alleged infringement of the principles of criminal law inherent in the rule of law. As to the substance, the plaintiff in the main proceedings maintains that, due to its extent and importance, the penalty which is the subject of this procedure is criminal in nature. In the plaintiff's opinion, a penalty assumes this nature when it exceeds certain limits. In this case, according to the dairy, the limits in question should be regarded as being exceeded as the penalty specified by the disputed provision does not 46. Finally, with regard to the last three take account of whether or not the dairy, arguments put forward by the dairy, I according to the statements, is liable for the consider that it is sufficient, as regards the levy and establishes the calculation of the fact that in the event of delay the pecuniary penalties solely based on the quantities of penalty is imposed regardless of whether or milk delivered. In addition, the dairy main- not the dairy, according to the statements, tains that, given the huge administrative is liable for the levy, to refer to the above costs to which it is subject under the statements on the criterion for calculating additional levy scheme, the fact of having the penalty. However, as regards the other to pay a pecuniary penalty of a consider- two arguments put forward by the dairy, in able amount for barely exceeding a sec- my opinion both of these, although not ondary time-limit is undoubtedly criminal.

49. In general, it must be noted that the Court has never found it necessary to define specifically the nature of the European Community's power to impose penalties and has avoided distinguishing between 51. It must therefore be considered that the administrative penalties and criminal argument put forward by the dairy simply penalties. 3 3The Court has preferred to raises in another form the problem of the mark out the outlines of this power by proportionality of the disputed penalty. In establishing its main characteristics. In this my opinion, it is therefore unnecessary to respect the Court has used the attainment dwell any further on this question as of the objectives set out in the Treaty as the main guiding criterion. 34 — See, as to the substance, point 34. 35 — See Joined Cases 100/80 to 103/80 Musique Diffusion française [1983] ECR 1825, paragraphs 106 and 107, and Case T-15/89 Chemie Linz [1992] ECR II-1275, para- 3 3 — In those cases in which the Court has been called to rule on graphs 355 to 364. the criminal nature or otherwise of Community penalties, the Court has never proposed a 'positive' definition b u t has 36 — See Tetra Pak, cited above, paragraph 235. limited itself to excluding in the case in question the 37 — See Case 183/83 Krupp [1985] ECR 3609, paragraph 40; criminal nature of the disputed penalty. See, as t o the Musique Diffusion française, cited above, paragraph 109; substance, Germany v Commission, cited above, para- Case T-77/92 Parker Pen [1994] ECR II-549, paragraph graphs 24 and 25, and Case T-83/91 Tetra Pak [1994] 92, and Joined Cases T-213/95 and T-18/96 Stichting ECR II-755, paragraph 235. [1997] ECR II-1739, paragraphs 146 and 147.

53. In this respect, it must be recalled that, according to settled case-law, 'a judgment of the Court in proceedings for a prelimin- ary ruling declaring a Community act to be invalid takes effect, like a judgment annul- ling an act, from the date on which the act entered into force .... The Court may, how- ever, limit in the judgment itself the tem- poral effects of a preliminary ruling declar- 56. I therefore consider that the request by ing a Community regulation invalid, where the Commission to limit the retroactive that is justified by overriding considera- effects of any judgment by the Court tions of legal certainty'. 38 declaring the disputed provision to be invalid should not be accepted. 38 — Case C-212/94 FMC [1996) ECR I-389, paragraphs 55 and 56. See also Case 145/79 Roquette Frères [1980] ECR 2917, paragraph 51; Case 41/84 Pinna [1986] ECR 1, 39 — See Case C-35/97 Commission v France [1998] ECR paragraph 26, and Joined Cases C-38/90 and C-151/90 I-5325, paragraph 49, and Case C-262/96 Sema Sürül Lomas [1992] ECR I-1781, paragraphs 23 and 24. [1999] ECR I-2685, paragraphs 107 and 108.

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57. I therefore propose that the Court give the following answer to the national court's question:

The second subparagraph of Article 3(2) of Commission Regulation (EEC) No 536/93, relating to the imposition of penalties on dairies, is invalid in that it does not provide for a graduation of this penalty according to the extent by which the time-limit of 15 May specified in the first subparagraph of Article 3(2) of this Regulation is exceeded for the forwarding of the statements on the quantities of milk delivered by producers.