Opinion of Mr Advocate General Mayras delivered on 12 April 1978. # August Töpfer & Co. GmbH v Commission of the European Communities. # Annulment of licence or compensation. # Case 112/77.

(1)

It is true that the abolition of the right to choose between cancellation and compensation derives from Regulation No 1583/77 but the latter regulation only confirmed the abolition which already derives from Regulation No 937/77, which has been in force since 1 May 1977 and is itself only the necessary consequence of the last sentence of the second subparagraph of Article 4 (2) of Regulation No 878/77. Moreover the applicant does not plead that this Council regulation is illegal.

This subparagraph provides that ‘Before the date of application of the new rate it may be decided to offset this disadvantage by an appropriate measure’. It states ‘date of application’ not ‘date of fixing’. I do not therefore think that fixing on 14 July 1977 an amount of DM 1.87 instead of the original amount of DM 2.33 is a breach of this provision.

Although the new representative rate of the mark was actually fixed on 26 April 1977 by Regulation (EEC) No 878/77 the latter regulation did not enter into force until 1 May 1977. It was onlyapplicable, as regards sugar, as from 1 July 1977 the date when the new sugar year opened but it was only actually applied when the customs export formalities were completed, that is to say on or after15 July 1977, the date when Regulation No 1583/77 was published and entered into force. The Commission took care to state in Regulation No 1583/77 that it only applied ‘to export operations in respect of which the customs export formalities are completed on or after its entry into force’. Until that date the amount of the compensation constituting the ‘appropriate measure’ could be fixed or rectified by the Commission.

The entitlement to exercise such a right is the counterpart of the admissibility of the application and of the individual nature of the measure at issue. As the Commission points out, although the fact that the number of licences issued was known when Regulation No 1583/77 was adopted is relevant for the purposes of the admissibility of the application, it cannot be put forward in connexion with the question whether subjective rights or, on the contrary, mere expectations have been adversely affected. With regard to the question whether this amount is ‘appropriate’ I refer to my observations which come later.

In fact it seems to me that the origin of these different regulations can be explained as follows: Article 4 (2) of Regulation No 878/77 was adopted by the Council on 26 April 1977 having regard to the facts giving rise to the action brought before the Court in Case 88/76 Société pour l'Exportation des Sucres, S.A. v Commission of the European Communities [1977] ECR 709 upon which the Court adjudicated by judgment of 31 March 1977; the aim of the regulation was to authorize the Commission, as long as the new exchange rate had not been applied, to discontinue the cancellation of advance fixing certificates of refunds and replace it by an ‘appropriate measure’.

The Commission implemented this authorization in its Regulation No 937/77. But after adopting it the Commission realized that the participants in partial invitations to tender had the right and the duty to apply for an export licence within a period of ten days after the award. As the most recent partial invitation to tender pursuant to Commission Regulation (EEC) No 2101/75 of the Commission on a standing invitation to tender in order to determine a refund on exports of white sugar took place on 20 April 1977 licences could still be applied for — and had to be issued — up to 30 April 1977. That is why Commission Regulation No 1372/77 of 24 June 1977 carried forward to the 30 April following the final date for the issue of export licences so that their cancellation might give rise to a right to compensation.

At the same time the regulation added to the persons entitled to the amount fixed by Regulation No 937/77 the tenderers who took part in the partial invitation to tender on 20 April 1977 arranged under Regulation No 2732/76 for the sale of white sugar held by the German intervention agency and intended for export. We know that the applicant was one of them.

Since it had been decided by Regulation No 937/77 before 1 July 1977, the date from which the new representative rate applied, that the disadvantage flowing from the revaluation of the ‘green’ rate of the mark would be offset by granting compensation, it was no longer possible to allow traders to have the option to obtain cancellation of the advance fixing of the refund.

Furthermore if the right to cancel export licences issued pursuant to partial invitations to tender arranged under the provisions of Regulations Nos 2101/75 and 2732/76 had been widely used there would have been the danger that such use would have seriously hindered good Community administration of the sector under consideration.

But it was at that moment that the figure of DM 2.33 appeared to be too ‘generous’ in the case of the participants in invitations to tender held before 26 April who would not complete the customs export formalities for the quantities of sugar in respect of which they had been declared successful tenderers until after 1 July 1977, the date of commencement of the new sugar year and of the application of the new representative rate.

The Commission, for reasons which it states, did not ‘adjust’ this figure until 14 July 1977; but at this moment those traders who had already completed the customs export formalities had an established right to the advance fixing of compensation. That is why the new amount of DM 1.77 was only applied to certificates discharged after 15 July 1977. It remains for us to find out whether this way of proceeding adversely affected the normal expectations of traders who exported only after 15 July.

(2)

The applicant then claims that the fixing of the new compensation by Regulation No 1583/77 is illegal because the holders of export licences for sugar are more severely affected than the holders of export licences for other agricultural products: the latter had the opportunity to decide within a period of 30 days either to carry out the transactions covered by their licences or to obtain their cancellation whereas this option was withdrawn from the holders of licences in the sugar sector. But this abolition of the right to obtain cancellation derives from Commission Regulation (EEC) No 937/77 which itself derives directly from Council Regulation (EEC) No 878/77 (second subparagraph of Article 4 (2) thereof).

(a)

I have already said that there is a difference between admitting that the number of persons affected by Regulation No 1583/77 was known on the date when it was adopted and acknowledging that this regulation actually has retroactive effect. The applicant did not have an established right at this date: it was merely in the course of being established; the right only vested at the moment when the applicant's export licence was ‘discharged’, that is to say when the customs export formalities were completed. The Commission was only entitled to alter the amount of compensation in the case of transactions irrevocably and finally completed before 15 July 1977, the date when the said regulation entered into force and was published. As Mr Advocate General Reischl states in his opinion in Case 88/76, Société pour l'Exportation des Sucres, S.A. v Commission of the European Communities [1977] ECR 735‘No more than in that case’ (judgment of 5 July 1973 in Case 1/73 Westzucker GmbH v Einfuhr- und Vorratsstelle für Zucker [1973] ECR 728) ‘can the possibility be ruled out that further modifications of the law may be undertaken up to the time when the condition is fulfilled, that is up to the time when an actual right arises’.

Consequendy the applicant had at best a mere prospect. Can its legitimate expectation with regard to that prospect be regarded as having been frustrated in circumstances which might render the Community liable?

(b)

Since this submission is in the highest degree subjective it is necessary to ascertain first of all the nature of the damage alleged. In fact the protection of the legitimate expectation of traders in the continuance of a given legal situation can only have the purpose of sheltering them from any positive damage which they have suffered precisely as a result of that expectation, but not of indemnifying them against loss of profits.

The disadvantage pleaded by the applicant stemming from the change in the ‘green’ rate corresponds to the alteration of the monetary compensatory amount compared with what it was before this rate was changed.

It considers that offsetting the disadvantage must include the increase of the monetary compensatory amount caused by the increase in the price of sugar as from 1 July 1977and of the change in the exchange rate.

I am unable to accept the applicant's claim. In fact the Tdpfer company, before and after, collected the whole of the refund fixed in advance in its licences. As the Commission states this sum does not in the end undergo any alteration by reason of the simultaneous adjustment of the coefficient referred to in Article 4 (3) of Commission Regulation No 1380/75 which gives the ratio between the representative rate of exchange and the actual rate of exchange of the currency under consideration.

The applicant complains only of the difference between the monetary compensatory amounts as calculated at the end of a marketing year and as calculated after a change in the representative exchange rate coinciding with the commencement of a new marketing year. The differences affecting the positive compensatory amounts which accompanied these refunds as a matter of fact represent altogether a sum which is by no means inconsiderable. But this amounts at most to a ‘loss of profit’ compared with the compensation which the applicant claims was ‘fixed in advance’ by Commission Regulation (EEC) No 937/77; we have seen that this way of representing the situation is not correct: the ‘advance fixing’ thus effected was complied with in the case of the quantities of sugar in respect of which customs export formalities were completed before 15 July 1977.

It rested entirely with the applicant to try to discharge its licences before that date. As soon as Council Regulation (EEC) No 878/77 of 26 April 1977 was published it could have been foreseen that the discontinuance of the monetary compensatory amounts relating to licences applied for and issued before 26 April 1977, the date when the principle of the new fixing of the rate of the ‘green’ mark had been adopted, would only be offset to an ‘appropriate’ extent.

(c)

It remains to be seen whether this is in fact the case.

Even if the compensation is mandatory and replaces the right to cancel, it is only intended to protect the trader from a reduction in the aggregate amount on which he could count but not to provide him with additional profit, whether unexpected or even expected, by reason of the market trend which supervened after the developments affecting the currency.

If what Mr Advocate General Reischl said in his opinion in Case 88/76 Société pour l'Exportation des Sucres, S.A. v Commission of the European Communities [1977] ECR 737 is transposed, the sole aim of the compensation is to make good the difference between the monetary compensatory amounts applicable before and after 1 July 1977 and this could be regarded as sufficient for the interests of exporters because it had the effect of preventing the disadvantages which were the only matters in respect of which Council Regulation (EEC) No 878/77 in principle gave a guarantee.

In fact care has been taken by this method to ensure that a person who has complied with the rules, that is to say who made his arrangements only after 15 July 1977, could export without suffering any loss on the basis of the licences issued originally.

The figure of 2.33 is determined, not by the difference between, on the one hand, the monetary compensatory amount (11.20), calculated in accordance with the new gross intervention price (34.60) taking into account the old representative rate (3.48084) and the old percentage for revaluing the mark in relation to the intervention price (0.093), and, on the other hand, the compensatory amount (8.86) calculated in accordance with the new gross intervention price taking into account the new representative rate (3.41258) and of the new percentage (0.075), but by the difference between, on the one hand, the compensatory amount (10.73), calculated in accordance with the old gross intervention price (33.14) taking into account the old representative rate and the old percentage, and, on the other hand, the compensatory amount (8.40), calculated in accordance with the new net intervention price taking into account the new rate and the new percentage.

This method of calculating the intervention price was not formally stated until 1 July 1977 by Commission Regulation (EEC) No 1466/77 but it emerges clearly from the explanations given as early as 5 May 1977 by the applicant's trade association and also from Council Regulation (EEC) No 1358/77 of 20 June 1977.

As the Commission explains, this new definition which takes into account the amount of the levy charged on sugar of Community origin within the framework of the system of compensation for storage costs (Article 1 of Commission Regulation (EEC) No 1466/77) meets the desire to have a better basis of negotiation for the preferential sugar of the African, Caribbean and Pacific countries. It is criticized by the applicant on the ground of politico-economic expediency but that does not in law call in question the provisions by which it has been established.

It follows from this that the terms of reference adopted by Commission Regulation (EEC) No 937/77 for the purpose of calculating the amount of the compensation were not comparable; therefore the Commission was perfectly justified in taking the gross intervention price for the 1977/78 marketing year as a comparative reference and this gave a difference of 1.87, which when added to the compensatory amount of 8.86 fixed by Commission Regulation (EEC) No 1474/77 of 30 June 1977, which has not been called in question by the applicant, gives exactly the compensatory amount of 10.73, in force when Commission Regulation (EEC) No 937/77 was adopted.

(d)

The applicant claims that it can legitimately entertain hopes based on the Commission's earlier practice. It is true that the effect of the method of calculation applied by the Commission in 1976 (Regulation (EEC) No 557/76) was to award exporters more than the compensation for the disadvantages of the impact caused by a new representative rate on the monetary compensatory amounts to be granted.

But the fan that the Commission was particularly ‘generous’ in the previous year and continued to be ‘generous’ in the case of licences which were issued before 26 April 1977 and were due to be discharged before 14 July 1977 (I have explained that the Commission had to do this as rights had been established) does not constitute a precedent by which it is bound.

Logically the Commission ought to have made this correction even before 1 July 1977 at the same time as it adopted Regulation (EEC) No 1474/77. But the fact that it did not do so until 14 July 1977 has no effect on the legality of its Regulation (EEC) No 1583/77 and does not give the applicant grounds for complaint since the regulation expressly exempted exports in respect of which the customs formalities were completed by that date.

One reason of general importance might make the Commission depart from this practice. In view of the applicant's claims account must be taken of the not inconsiderable financial incidence on the charges which are a heavy burden on the budget of the European Agricultural Guidance and Guarantee Fund in so far as the items ‘monetary compensatory amounts’ and ‘storage costs’ are concerned.

The applicant alleges that the Commission completely loses sight of the fact that as from 1 July 1977 the Commission must itself pay sugar manufactures the increased intervention price taken as the basis of its dealings with its suppliers. The applicant in fact made its arrangements on the basis of the old intervention price. If that is not the case it has speculated on the trends of compensatory amounts or else has tried to pass on to the Community the effect of the increased intervention price which has been determined by the interplay of clauses in contracts for which it alone must assume responsibility vis-à-vis its suppliers.

To allow its claims would amount to considering as predetermined the monetary compensatory amount relating to refunds fixed in advance before 26 April 1977 for quantities exported after 15 July 1977.

Once again this advance fixing of the compensatory amount has been accepted in the case of exports effected before 14 July 1977, because it was made necessary by the fact that the expiration of the period within which application was to be made for export licences had been deferred until 30 April 1977 and Commission Regulation (EEC) No 1372/77, which granted this extension, remained in force until 14 July 1977. But this advance fixing of compensatory amounts was altogether exceptional and apart from this specific case it has been impossible to award such a benefit except after the adoption very recently of Regulation (EEC) No 243/78 of 1 February 1978.