C-217/98

'Is the second paragraph of Article 33(1) of C o m m i s s i o n R e g u l a t i o n (EEC) No 3665/87 of 27 November 1997 in con- 2. In essence, the national court is asking the Court to define the precise scope of the duty to make repayment imposed on a * — Original language: Italian. trader who, after submitting to the national 1 — OJ 1987 L 3 5 1 , p. 1, as several times amended, in particular authorities an application for advance pay- for our purposes by Commission Regulation (EEC) N o 1615/90 of 15 June 1990 (OJ 1990 L 152, p. 33), ment of an export refund, withdraws that Article 1(2) of which reworded the original version of Article 33 of Regulation N o 3665/87 'in order to make [it] application before they have given their more intelligible' (see second recital). In accordance with the second paragraph of Article 2 of Regulation N o 1615/90, decision on it in order to return the goods the regulation is to apply to transactions for which the into the customs territory of the Commu- export declaration is accepted by the national authorities as from 1 July 1990 or a later date (see note 9 below). nity, but nevertheless receives the advance 2 — OJ 1985 L 205, p. 5. payment of the export refund originally

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O P I N I O N O F MR LA PERGOLA — CASE C-217/98

p e r i o d ( A r t i c l e 6 of R e g u l a t i o n 3. Council Regulation (EEC) No 565/80 of No 565/80). 4 March 1980 on the advance payment of export refunds in respect of agricultural products 3 (OJ 1980 L 62, p. 5), as amen- ded by Council Regulation (EEC) No 2026/83 of 18 July 1983 (OJ 1983 L 199, p. 12), provides for and regulates the possibility of facilitating finance for exports by means of the payment of a sum equal to the refund even before the under- taking concerned has produced evidence 4. The detailed rules for the actual applica- that the transaction has been duly comple- tion of Regulation No 565/80 were laid ted — that is to say, evidence that the goods down in Title 2, Chapter 3 of Regulation have left the Community customs territory No 3665/87. In order to be eligible for and been imported into a non-member advance payment of the export refund in country — just as soon as the goods respect of goods previously stored (or intended for export have been brought processed), the exporter concerned must under the customs warehousing or free lodge with the customs authorities a pay- ment declaration containing all the parti- culars necessary for determining the refund

Special Edition 1968(1), p. 237). For the purposes of exporter to lodge the security within a maximum period of Regulation N o 805/68, the grant of refunds on the export 30 days after acceptance of the payment declaration and of Deef or veal in order to compensate for the difference before advance payment of the refund is made and must between world market prices and Community prices is provide for the payment of an additional 2 0 % if the security intended t o protect Community participation in tne inter- is not lodged in time, save in case of force majeure national beef and veal market. (Article 31(3)).

5. At the time of acceptance of the payment declaration the goods intended for export are to be placed under customs control until they leave the customs territory of the Community (see Article 26). 7By virtue of Article 32(1) of Regulation No 3665/87 goods under the customs control or free 6. An export refund, the beneficiary's enti- zone procedure must leave that territory in tlement to which is subsequently estab- the unaltered state within 60 days from the lished, is set off against the amount pre- date on which they are no longer subject to viously paid to the beneficiary, subject to that procedure, that is to say, at the latest the exporter's right to any balance. In eight months after acceptance of the pay- accordance with Article 33(2) of Regula- ment declaration. The goods may remain tion No 3665/87, the security is released in under a customs warehousing or free zone full where the exporter produces proof that procedure, even in a Member State other (i) the time-limits laid down in Arti- than that in which the declaration was cles 28(5) and 32(1) have been complied accepted, for a maximum period of 6 with (see paragraph 5 above) and (ii) the months (see Article 28(5) and (6)). The products exported give entitlement to the export declaration is to be notified by the refund of an amount higher than or equal to that paid to the exporter in advance.

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OPINION OF MR LA PERGOLA — CASE C-217/98

Article 33(2) and (4)). To that end, in toms authorities applications for advance accordance with Article 33(1), the compe- payment of the export refunds for the tent authority is to initiate without delay goods in question on 1 August 1990. the procedure for forfeiture of the caution However, between 2 and 6 August 1990 laid down in Article 29 of Regulation Nordfleisch withdrew its applications, hav- No 2220/85 (see footnote 2 above). 8 ing decided not to export the goods but to return them into the customs area of the Community. 9The company thus requested and received from the German authorities, for each of the applications withdrawn, a copy of information sheet INF 3. 10 How- ever, on 24 August 1990 the Hauptzollamt Hamburg-Jonas ('the Hauptzollamt') also decided to grant Nordfleisch the refunds

I would observe at this point that, although the declarations were not accepted, it is Article 33 of Regulation No 3665/87, as 8 — Article 29 referred to in the text provides: 'Once the amended by Regulation No 1615/90 (see section 6 above), competent authority is aware of circumstances giving rise which must be applied in the circumstances. I agree with the to forfeiture of the security, in whole or in part, it shall Commission that the second paragraph of Article 2 of without delay demand that the party required to meet the Regulation No 1615/90 (see footnote 2 above) is a provi- obligation to pay the sum forfeited, allowing up to 30 days sional measure relating solely to prefinancing procedures from the day of issue of demand for payment. Where already under way on the date on which the measure was payment has not been made at the end of this period, the published in the Official Journal (16 June 1990).

Regulation No 2945/76 was repealed, with (ii) clear pledged cash deposits to its own account. effect from 1 January 1994, by Commission Regulation The competent authority may without delay clear any (EEC) No 2454/93 of 2 July 1993 laying down provisions security [in the form of cash] to the appropriate account for the implementation of Council Regulation (EEC) without first requiring the person concerned to effect No 2913/92 establishing the Community Customs Code payment.' (OJ 1993 L 253, p. 1).

9. The Hauptzollamt lodged an appeal for cassation of the judgment at first instance with the Bundesfinanzhof, which in con- trast declared itself to be inclined to uphold 8. Since it did not regard itself as bound to the appeal. According to that court, Arti- pay the additional sum, Nordfleisch, which cle 33(1) of Regulation No 3665/87, in on the other hand has no objection to conjunction with the first paragraph of repaying the sum wrongly paid to it by the Article 29 of Regulation No 2220/85, must authorities, challenged the abovementioned be interpreted having regard not only to the decision before the Finanzgericht (Finance letter of the provisions but also to the Court) Hamburg. Upholding Nordfleisch's objectives pursued. Consequently those action, the Finanzgericht decided that the rules are, in its view, applicable not only alteration of the destination of the goods, where export has actually taken place, even which is always possible even where the if after a period other than that stated in the products to be exported have been placed export declaration (see paragraph 5 above), in customs warehousing, implied that the but a fortiori where the obligation to trader had renounced Community finan- export arising from the acceptance of that cing for the transaction. The declaration declaration has not been fulfilled at all. The that the goods had been returned into the Bundesfinanzhof states that it is not possi- customs territory of the Community there- ble under the Community legal order by fore wiped out both the obligation to lodge withdrawing the payment declaration to a caution in accordance with Article 31 of negate the practical effects of placing goods Regulation No 3665/87 and, a fortiori, the in customs warehousing for export with a obligation to pay the additional amount in view to obtaining a refund. The declaration issue. Moreover, the Finanzgericht consid- became definitive once it was accepted by ered that that additional sum is intended the customs authorities. The exporter's solely to guarantee flat-rate compensation subsequent withdrawal of the application for the unjustified advantages enjoyed by for payment cannot therefore have any the exporter as a result of the granting of effect either, the one act being moreover credit free of charge and is not intended to independent of the other. On the basis of ensure completion of the customs ware- recital 22 in the preamble to Regulation housing procedure with a view to export. No 3665/87 (see footnote 6), the national The solution here propounded holds good, court concludes that the purpose of levying

the additional amount in question is not the penalties provided for the procedure for only to ensure repayment of the amount the issuing of certificates is independent of paid in advance and to deprive the trader of the procedure for placing goods under the corresponding financial advantage from customs warehousing. That, in its view, is which he has unjustifiably benefited. made quite clear by the fact that Arti- Besides, if that were the case, the rate of cle 33(1) of Regulation No 3665/87 (as 20% provided for would be disproportio- amended by Regulation No 1615/90, see nately high, since a rate just a few points footnote 2 above) makes no reference to above the applicable bank rate would be the provisions of Regulation No 3719/88.

Commission Regulation No 3719/88 of 16 November 1988 laying down common detailed rules for the application of the 10. The solution I intend to lay before the system of import and export licences and Court is in substance the same as that advance fixing certificates for agricultural proposed by the Commission, the observa- products 11 (see Articles 43(1) and (3) and tions of which are to my mind well founded 39(1)(b), second indent) would not be and persuasive. The Commission has exam-

to import or export. The issuing of such licences is, further requirement of an application for however, subject to the lodging of security to guatantee the payment can be explained only by the undertaking given to import or export within the period of validity of the licences. purpose of leaving the exporter free to

12 — See Case 288/85 Piange Kraftfutterwerke [1987] ECR 611, paragraph 14, and Joined Cases C-J/90 and C-206/90 Bremer Rolandmühle Erling and Others [1992] ECR I-1157, paragraph 36, with regard to similar additional amounts of 2 0 % provided for by Commission Regulation (EEC) N o 1957/69 of 30 September 1969 on additional detailed rules for granting export refunds on products subject to a single price system (OJ English Special Edition 1969 (II), p. 417) and Commission Regulation (EEC) N o 798/80 of 31 March 1980 laying down general rules on the advance payment of export refunds and positive monetary compensatory amounts in respect of agricultural products (OJ 1980 L 87, p . 42) respectively; Regulation N o 798/80 repealed Regulation N o 1957/69 as from 1 April 1980 and was in its turn repealed by Regulation N o 3665/87 as from 1 January 1988. The Court added that having regard to the purpose of the supplement, a rate of 2 0 % as provided for in the regulation could not be regarded as disproportionate, contrary to the view of the Bundesfinanzhof in the present case. The Court stated that 'Since the regulation laid down a standard rate for the whole of the Community, it was appropriate to take account, on the one hand, of the variety of interest rates applied in the Member States and, on the other, of the length of the period which could elapse between the grant The effect of not applying for payment (or of the refund and the actual repayment thereof' (Piange of withdrawing the application) is therefore Kraftfutterwerke, paragraph 15).

14 — Application of a flat-rate increase to the repayment of sums paid but not due constitutes, to my mind, a punitive sanction the purpose of which is general deterrence and the essence of which is detrimental to the person infringing the provision. The additional 20% provided for by Article 33 13. To my mind the principle of legality in of Regulation No 3665/87 has been explicitly described as relation to penalties enshrined in the a 'penalty' in Case C-263/97 First City Trading and Others [1998] ECR I-5537, paragraph 22. Since such penalties do Court's case-law is also of undoubted no more than guarantee the effective and proper perfor- mance of undertakings voluntarily entered into by eco- relevance for the purposes of this Opinion. nomic operators they must, according to the Court, be From that principle is derived, inter alia, treated as specific administrative instruments intended to ensure the sound financial management of the Community the rule prohibiting application by analogy public funds and forming an integral part of the scheme of aid in question based on the notion of solidarity (see Case in malam partem of provisions creating C-240/90 Germany v Commission [1992] ECR I-5383, liability. 13 I would point out that Arti- paragraph 26), and may not be equated with penal sanctions (see, ex multis, Case 11/70 Internationale Handelgesellschaft [1970] ECR 1125, paragraphs 17 to 20, and Case 25/70 Köster [1970] ECR 1161, paragraphs 33 and 34). However, the Court's case-law, according to which 'Community legislation must be certain and its 13 — See, ex multis, the judgment in Joined Cases C-74/95 and application foreseeable by those subject to it ... [in C-129/95 X [1996] ECR I-6609, paragraphs 23 to 26: 'the particular] in the case of rules liable to entail financial principle that a provision of the criminal law may not be consequences' (see, ex multis, Case 237/86 Netherlands v applied extensively to the detriment of the defendant, Commission [1987] ECR 5251, paragraph 19), is also which is the corollary of the principle of legality in relation applicable to non-penal sanctions. I would also observe to crime and punishment and more generally of the that the principle of the legality of administrative sanctions principle of legal certainty, precludes bringing criminal was given formal expression by Article 2 of Council proceedings in respect of conduct not clearly defined as Regulation (EC, Euratom) No 2988/95 of 18 December culpable' DV the national law implementing a directive, 1995 on the protection of the European Communities' even if only in interpreting the national implementing financial interests (OJ 1995 L 312, p. 1; see corrigendum measures in the light of the wording and objectives of the in OJ 1998 L 36, p. 16), which provides for non-punitive directive, and the Opinion of Advocate General Ruiz-Jar- measures and 'measures which shall not be regarded as abo Colomer delivered on 18 June 1996 in the same cases penalties'. (ECR I-6612, paragraphs 43 to 64).

expressly envisaged by the Community hof points out, subsists without any coun- legislature. Here, advance payment of the terpart linking it to eligibility for financial refund took place against the will of the benefits such as Community prefinancing recipient, which had in fact informed the for exports. It is, rather, bound up with the authorities in good time of its intention not need to ensure that the authorities to export and had withdrawn the applica- entrusted with the management of the tion previously submitted. Consequently, common organisation of a market should the trader is no longer bound by the have available precise forecasts of future statements made to the authorities in the commercial transactions. 15 payment declaration; moreover, the time- limits laid down in Articles 28(5) and 32(1) of Regulation No 3665/87 (see paragraphs 5 and 6 above), non-compliance with which may give rise to the sanctions consisting of release in part only of the The Court has, implicitly but clearly, con- security and of the additional sum payable firmed that the two obligations in question on the difference, are no longer applicable differ in nature, with reference to the to it. securities introduced by the Community legislature in order to secure their perfor- mance. The Court has more particularly examined the security provided for by Article 6 of Regulation No 565/80 — the subject of the specific rules for application u n d e r A r t i c l e 31 of R e g u l a t i o n No 3665/87 (see paragraph 4 above) — and the security introduced by Commission Regulation (EEC) No 3183/80 of 3 Decem- ber 1980 laying down common detailed rules for the application of the system of import and export licences and advance fixing certificates for agricultural pro- ducts, 16 to which the present equivalent under the law in force is the security provided for by Regulation No 3719/88 (see paragraph 9 above and footnote 17). In 14. That a trader given an export licence Maizena the Court declared that 'the should remain bound, for the purposes and purpose of the two securities at issue is consequences of Regulation No 3719/88 not the same. The function of the security (see footnote 11), even where the applica- provided for under Article 6 of Regulation tion for payment under Article 29 of Reg- No 565/80 is to ensure repayment of the ulation No 3665/87 has been withdrawn export refund paid in advance if exporta- before the competent authorities have tion does not take place, and not to adopted their decision regarding it, by the guarantee the exportation itself. The secur- obligation to export voluntarily entered ity at issue in this case is intended to ensure into by him which must be performed exactly and completely (in particular, dur- ing the period of validity of the licence) is 15 — Case 808/79 Fratelli Pardini [1980] ECR 2103, paragraph quite a different matter. This is, however, 17. 16 — OJ 1980 L 338, p. 1 (repealed by Regulation No 3665/87 an obligation which, as the Bundesfinanz- as from 1 January 1989).

(b) if export was effected under cover of an export licence or advance fixing certificate and such licence or certificate has not expired on the date on which the party concerned declares his intention to avail himself of the abovementioned returned-goods provisions: — the entry on the licence or certificate relating to the export ín question shall be cancelled, and — the security relating to the licence or certificate shall not be released in respect of the export in question or, if it has been released, it must be furnished anew in proportion to the quantities concerned to the body which issued the licence or certificate; (c) if export was effected under cover of an export licence or advance fixing certificate, and the licence or certificate has expired on the date on which the party concerned declares his intention to avail himself of the abovementioned returned-goods provisions, then: 17 — See Case 137/85 Maizena [1987] ECR 4587, paragraph — where the security relating to the licence or 22. On the basis of the principle referred to, the Court certificate has not been released in respect of the rejected the plea raised by the plaintiff company, alleging export in question, the security shall be forfeit, that a double penalty had been inflicted on them in respect subject to the rules applicable in the particular of the same facts, contrary to the principle ne bis in idem. case, 'Since, therefore, the purposes of the two securities are — where the security has been released, the titular completely different, the forfeiture of both of them, even if holder of the licence or certificate shall provide the it is triggered by the same event, cannot be regarded as body which issued the licence or certificate with disproportionate if the different risks in respect of which fresh security in respect of the quantities in the securities were lodged actually materialise' (ibid., question, and that security shall be forfeit, subject paragraph 23). to the rules applicable in the particular case.'

Article 33(1) of Commission Regulation (EEC) N o 3665/87 of 27 November 1987 laying down common detailed rules for the application of the system of export refunds on agricultural products — as amended by Article 1(2) of Commission Regulation (EEC) N o 1615/90 of 15 June 1990 — in conjunction with the first paragraph of Article 29 of Regulation (EEC) N o 2220/85 of 22 July 1985 laying down common detailed rules for the application of the system of securities for agricultural products, is inapplicable to the situation of an exporter who, having submitted to the competent national authorities an application in accordance with Article 29(2) for advance payment of an export refund in respect of goods placed under customs warehousing, withdraws that application before a decision is taken on it, having decided to return the goods to the Community customs territory, but none the less receives payment of the amount originally applied for. In those circumstances, the national customs authority is obliged to release in full the security lodged by the exporter pursuant to Article 31 of Regulation N o 3665/87 and does not possess any legitimate claim to apply the additional amount provided for by Article 33(1). The amount of the advance payment of the export refund paid to the exporter must be reimbursed by the latter in accordance with the national provisions governing repayment of sums unduly paid.

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