ECLI:EU:C:1983:61

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DELIVERED ON 9 MARCH 1983 ( 1 )

Mr President,

Members of the Court,

Pursuant to Regulation No 1259/72 of the Commission on the disposal of butter at a reduced price to certain Community processing undertakings (Official Journal, English Special Edition 1972 (II), p. 559), the plaintiff in the proceedings which gave rise to the reference for a preliminary ruling with which we have to deal today acquired in 1973 from the German intervention agency butter at a reduced price in order to process it into concentrated butter. For that purpose the butter was exported to Belgium and attracted therefore the reduced monetary compensatory amount pursuant to Article 20 of the said regulation which reads :

“The compensatory amounts applicable to butter, concentrated butter and concentrated butter with added sugar ... for the part consisting of butter, shall be equal to the compensatory amounts fixed pursuant to Regulation (EEC) No 974/71, multiplied by a coefficient of 0.3.”

After the concentrated butter was made it was re-imported into the Federal Republic of Germany and the reduced rate under Article 20 of Regulation No 1259/72 was again applied, albeit this time in connection with the levying of monetary compensatory amounts.

After it had been found that the firm in Germany to which the goods had been sold had not used some of it for the requisite purpose or within the requisite period, monetary compensation representing the balance of the full monetary compensatory amount was subsequently levied. That gave rise to proceedings before the Finanzgericht [Finance Court] Düsseldorf and, in connection therewith, to the reference to this Court for a preliminary ruling in Case 217/78 ( 2 ) By judgment of 28 June 1979 it was held:

“The definitive application of the reduced monetary compensatory amounts provided for the Article 20 of Regulation (EEC) No 1259/72 of the Commission of 16 June 1972 and in Article 20 of Regulation (EEC) No 232/75 of the Commission of 30 January 1975 presupposes that the goods in question, having regard in particular to the use to which they are to be put, have the reduced value attributed to them by virtue of those regulations. In so far as the importer has not furnished the proof, within the period prescribed in Article 6 of the said regulations, that the goods have been put to the use to which the reduction of the compensatory amounts is subject, the legal basis for the subsequent reassessment of such amounts is to be found in the general rules governing the system of monetary compensatory amounts, as established by Regulation No 974/71 of the Council of 12 May 1971.”

Following that ruling, the Finanzgericht Düsseldorf decided in May 1980 that the subsequent levying of monetary compensation on the importation of the concentrated butter into the Federal Republic of Germany was lawful.

Both before the ruling (in February 1978) and after it (in May 1981) the plaintiff claimed payment of the difference between the reduced monetary compensation granted on the export of

the butter and the full monetary compensation at the time of export. When that was rejected by the Hauptzollamt [Principal Customs Office] Hamburg-Jonas on the ground that the claims in respect thereof were out of time there were once again court proceedings and this time before the Finanzgericht Hamburg.

That court takes the view that the action cannot fail on the ground that the claims were submitted out of time. It is however not certain whether it should endorse the practice of the German customs authorities of subsequently paying monetary compensation also on the exportation of butter for the purpose of processing if the butter sold at a reduced price has not been used in due time for the requisite purpose. In favour thereof, in the view of the court, is the fact that, according to the preliminary ruling mentioned above, in the event of use of the butter for other than the requisite purpose and within the prescribed period the normal market price applies and therefore, since it hardly seems justifiable to accord different treatment to imports and exports carried out by an undertaking, the general rules of Regulation No 974/71 should apply and not the reduced monetary compensation. On the other hand the court has reservations in view of the fact that there is no express provision for the grant of the full monetary compensation in such a case and thinks that since Regulation No 1259/72 was intended to exclude any use of the butter sold at a reduced price other than that prescribed therein, grant of the full monetary compensation might be contrary to the meaning and purpose of that regulation and moreover a posteriori payments of monetary compensation might encourage misuse.

Therefore by order of 31 March 1982 the proceedings were stayed and the following question referred to the Court for a preliminary ruling pursuant to Article 177 of the EEC Treaty:

“Regard being had to Regulation (EEC) No 1259/72, is Regulation (EEC) No 974/71 of the Council of 12 May 1971 concerning the system of monetary compensatory amounts to be interpreted as meaning that according to the general rules governing the application of monetary compensatory amounts the difference between the reduced monetary compensatory amount and the full amount is subsequently to be granted, where on the exportation of butter from storage the reduced monetary compensatory amount was paid pursuant to the first paragraph of Article 20 of Regulation (EEC) No 1259/72 but the concentrated butter produced from the butter was not used for the purpose and within the period prescribed by Regulation (EEC) No 1259/72 and after reimportation was therefore subjected to a supplementary levy equal to the difference between the reduced monetary compensatory amount and the full amount, or is the difference between the reduced monetary compensatoiy amount and the full amount not to be granted subsequently?”

The plaintiff in the main action and the Hauptzollamt consider it right to answer the first part of the question in the affirmative whereas the Commission is of the contrary view.

My view of the question is as follows:

Of great, if not decisive assistance, were certain findings in the judgment in Case 217/78 ( 3 ) especially if, disregarding the fact that German was the language of the Case, the French text is looked at, since that was the language which conveys directly the result of the deliberations.

(a)

First of all the judgment contains the main finding that the application of reduced monetary compensatory amounts pursuant to Article 20 of Regulation No 1259/72 does not constitute one of the measures intended to promote the disposal and marketing of butter from storage but forms part of the general rules set out in Regulation No 974/71 (paragraph 11 of the Decision).

In the light of that there does seem to be some pertinence in the plaintiff's observation that Article 20 does not in reality fall within the field governed by Regulation No 1259/72 and should therefore not be interpreted by reference to the purpose of that regulation, as is further indicated by the fact that in the statement of the reasons on which the regulation is based monetary compensation is mentioned only at the end without any reference to the purpose of the regulation and only the principle that account must be taken of the value of the product in question is stressed. Also of significance, accordingly, is the reference ih the present proceedings to the fact that since monetary compensation must be objective and neutral and is intended only to compensate price differences, monetary compensation, according to the principle stated in Article 1 of Regulation No 974/71, has to be uniform in cases of levying and granting and according to the wording of Article 20 of Regulation No 1259/72 both cases must be treated in the same way.

(b)

Furthermore, in the abovementioned judgment it is pointed out not merely that the fixing of monetary compensatory amounts is based on the prices of the products in question (reference is made in this connection to the recitals in the preamble to Regulation No 1259/72 to the effect that as regards the compensatory amounts fixed pursuant to Regulation No 974/71 account should be taken of the value of the products concerned (paragraph 12 of the Decision)). It is above all stated quite generally, following on from this, that if the goods have been diverted from their intended use or have not been used in accordance with their purpose within the period prescribed by Article 6 of Regulation No 1259/72, which is a condition of the reduced monetary compensatory amounts, the goods cannot have the contractual value attributed to them on the basis of the minimum selling price mentioned in Regulation No 1259/72 but must be regarded as butter sold at the normal market price. The conclusion is then drawn that in accordance with the principle of monetary compensation, the criterion being the trade value, it is necessary to apply the monetary compensatory amounts applicable to butter marketed at such a price and to reassess (“redresser”) (which is translated in the German version of the judgment, on the basis of the facts of the case, too narrowly as “nachfordern”) the reduced monetary compensatory amounts originally applied.

At the end of paragraph 14 of the Decision it is stated quite generally that such reassessment (in the German version again translated too narrowly as “Nachforderung”) has its legal basis in the general rules which govern the application of monetary compensatory amounts. Thus the judgment supports the view put forward by the plaintiff in the main action and the Hauptzollamt, especially if it is borne in mind that the Commission in those proceedings took the view that the subsequent levying and the subsequent granting of monetary compensation after application of Article 20 of Regulation No 1259/72 should be dealt with quite differently.

Seen in that light the real question in the present case is thus whether, after what has been said in the present proceedings, the general findings in the above-cited judgment must be rectified, which naturally could only be properly done by the full court, even if the remarks in the judgment in Case 217/78 ( 4 ) in so far as they go beyond the problems of the main proceedings in that case amount only to obiter dicta.

However, I can see no grounds for such a rectification. Several considerations lead me to take this view.

(a)

There seems to be agreement that if the Commission's view is followed then in certain circumstances it is possible that purchasers of butter may face increased charges if butter at a reduced price is acquired in a country having a hard currency and the diversion from the prescribed use occurs in a country with a weak currency or if after the butter is bought in a country having a hard currency preliminary processing is carried out in a country with a weak currency and then the goods are re-imported into the country with the hard currency and are there diverted from the prescribed use. Contrary to what the Commission thinks, I consider this for various reasons to be unacceptable.

(i)

Certainly it is not permissible merely to point out, as the Commission has done, that if the butter is diverted from its prescribed use — the Commission uses the term “deceit” — there is no interest in avoiding higher charges which merits protection. To argue so is to overlook the fact that the first purchaser of the butter is not necessarily the same person as the one who diverts it from its prescribed use and therefore additional charges in respect of monetary compensation may fall upon the wrong person.

(ii)

Further it is true that under the system of Regulation No 1259/72 in the event of diversion from the prescribed use no specific limitation on subsequent charges applies because the rules on deposits are so framed that not only the difference between the minimum selling price and the market price but also an additional amount may come into consideration and because, in addition, the actual price offered and paid is frequently higher than the minimum selling price. If, however, as the Commission has itself emphasized, the actual rules on checking and penalties contained in Regulation No 1259/72 may be considered sufficient to achieve their purpose it is hard to understand how additional penalties in the monetary sphere can be justified in the event of a diversion of butter from its prescribed use.

(iii)

Not least of all, it may be pointed out, as against the opinion that the latter was in fact intended, that there is no rule in Article 20 similar to that in Article 18 to the effect that the deposit is not forfeited in the event of force majeure. It must further be admitted that the consequences considered by the Commission to be correct would be discriminatory because such additional penalties would arise only if a frontier were crossed, that is if the butter were exported from a country with a hard currency before being diverted from its prescribed use, whereas if the diversion occurred in the State in which the butter was bought without any crossing of a border the forfeit of the deposit would be the only penalty. That however can scarcely be regarded as appropriate.

(b)

On the other hand it also became clear in the proceedings that the subsequent granting of monetary compensation, in the form at issue in the main action, is surely not likely to frustrate the aim of Regulation No 1259/72. This — namely that forfeiture of the deposit, at least in conjunction with the subsequent levying of monetary compensation, is sufficient to exclude unjustified profits even in the event of the subsequent grant of monetary compensation — has been demonstrated by the plaintiff with the aid of various examples and even the Commission has admitted that the subsequent grant of monetary compensation does not lead in normal circumstances to a currency profit.

When the Commission, however, in addition expresses the view that the situation might be different in very special circumstances, for instance where price increases on the butter market are to be observed from one marketing year to the next or where the person who lodges the deposit and the person responsible for the crossing of the frontier, which gives rise to the payment or levying of monetary compensation, are not identical or where price increases occur in a country where the currency is devalued because the green rate of the currency is adjusted to the normal rate, it is still possible to raise against the Commission in regard to those considerations, and against the conclusion that its view can be justified by them, the following matters :

(i)

If I have understood the position correctly, it is precisely the flexibility introduced in the course of time in the rules on deposits which should cover the first-mentioned situation; should that however not be possible in a completely satisfactory manner, then the obvious course is to amend the rules on deposits rather than accept the disadvantages which are clearly involved in the interpretation of Article 20 of Regulation No 1259/72 which the Commission considers to be correct.

(ii)

With regard to the second case mentioned it is quite certain that the first purchaser of butter at a reduced price who has to lodge the deposit will pass the burden on, by means of an appropriate agreement, to subsequent purchasers and thus no doubt also to intermediary users engaged in operations involving the crossing of the frontier and the first processing. It is therefore hard to imagine that, where it is subsequently ascertained that the butter has been diverted from its prescribed use, such an intermediary buyer from a country with a weak currency would, without being affected by the forfeiture of the deposit, only receive the balance of the full monetary compensatory amount and thus receive an unjustified benefit.

(iii)

Finally, as regards the third case, it must be borne in mind that in practice it has as yet apparently never happened that monetary compensation has been demanded a posteriori where butter has been exported to a country with a weak currency and then used otherwise than as prescribed. In fact, as we have heard, the practice, which is not approved by the Commission, occurs only in the Federal Republic of Germany after temporary export to a country with a weak currency and then it is a condition that subsequent decisions imposing a charge must have become operative. Even the Commission admits that the cases it mentions are rare exceptions where speculations with a view to a currency gain are essentially the result of a fortuitous development. If, however, it should in fact not be possible to find a special remedy, such as the Commission considers indispensable, within the ambit of the rules on monetary compensatory amounts, then in my view the currency gains feared by the Commission in exceptional cases are more acceptable than the other disadvantages to which I have previously referred and which are associated with the Commission's interpretation of Article 20 of Regulation No 1259/72.

I therefore propose that the question submitted by the Finanzgericht Hamburg should be answered as suggested by the plaintiff in the main proceedings and by the Hauptzollamt Hamburg-Jonas, as follows:

Regard being had to Regulation No 1259/72, Regulation No 974/71 must be interpreted as meaning that where, upon the export of butter from storage pursuant to Article 20 of Regulation No 1259/72 monetary compensation at a reduced rate is paid but the concentrated butter manufactured therefrom is not used in accordance with Regulation No 1259/72 so that upon re-importation it is subjected to the difference between the reduced and the full monetary compensatory amount then the difference between the reduced and full monetary compensatoiy amount to be granted upon export must subsequently be granted.

( 1 ) Translated from the German.

( 2 ) Judgment of 28 June 1979 in Case 217/78 SA Nicolas Corman & Fils v Hauptzollamt Aachen-Süd [19791 ECR 2287.

( 3 ) Judgment of 28 June 1979 in Case 217/78 SA Nicolas Corman & Fill v Hmpttolhmt Aachen-Sild [1979] ECR 2287.

( 4 ) Judgment of 28 June 1979 in Case 217/78 SA Nicolas Corman & Fill v Haiiptzollamt Aachen-Süd 11979] ECR 2287.

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