Court of Justice 10-03-1971 ECLI:EU:C:1971:25

Summary of the facts and procedure

The facts underlying the dispute and the procedure may be summarized as follows:

By letter of 13 May 1969, Compagnie Continentale d'Importation (Hollande) requested the Produktschap voor Granen, Zaden en Peulvruchten (hereinafter referred to as ‘the Produktschap’), the Netherlands agency entrusted with the application of Regulation No 473/67/EEC of the Commission, to review the position which it had adopted in a circular of 28 June 1967 on the interpretation of Article 8(3)(b) of the said regulation. That provision is worded as follows:

‘The amounts to be taken into consideration in calculating the deposit or part of the deposit which is forfeit shall be:

1. …

2. in the case of import licences for which the levy is fixed in advance: 0,50 unit of account per metric ton, increased by an amount equal to:

   • tne levy fixed in advance, increased by a premium provided for in the scale of premiums in force on the day of lodging the request for the licence for the month of importation shown in the licence, or for the final month of the period of validity of the licence, if the latter is higher; and

   • reduced by the levy applicable on the final day of the period of validity of the import licence.’

By a debit note of 7 July 1969 the Hoofdproduktschap voor Akkerbouwprodukten (hereinafter referred to as ‘the Hoofdproduktschap’) charged Compagnie Continentale (France) with the amounts declared forfeit for non-utilization of the five advance fixings of the levy relating to importation into the EEC of maize from third countries.

After lodging a complaint against that debit note, Compagnie Continentale d'Importation effected payment of the amounts appearing in the said note, at the same time reserving the right subsequently to request a revision of the method of calculation applied by the Hoofdproduktschap, if the Commission should support the point of view put forward by that company in its letter of 13 May 1969.

By application of 22 October 1969, Compagnie Continentale (France) and Compagnie Continentale d'importation (Hollande) brought an action before the College van Beroep voor het Bedrijfsleven against the decision of the produktschap, on which the abovementioned debit note was based.

By order of 9 October 1970, which was received at the Court Registry on 12 October 1970, the College van Beroep voor het Bedrijfsleven decided to stay the proceedings until the Court of Justice of the European Communities gave a reply to the following question:

‘Must the expression “levy fixed in advance” appearing in Article 8(3)(b) of Regulation No 473/67/EEC of the Commission of the European Communities, as it was worded before the entry into force of Regulation (EEC) No 638/70 of the said Commission, be understood as referring to the levy fixed in advance applicable for the month of importation envisaged in the import licence or as referring to the levy fixed in advance applicable for the final month of the period of validity of that licence?’

In that order, the court referring the matter to the Court of Justice observes that the dispute arises from the fact that the Hoofdproduktschap gives the expression ‘levy fixed in advance’ appearing in Article 8(3)(b) of Regulation No 473/67/EEC an interpretation different from that advocated by the plaintiffs in the main action. The Netherlands administrative agencies are of the opinion that the levy fixed in advance is ‘the levy which by reason of the fixing would have had to be paid if importation had been effected on the last day of the period of validity of the advance fixing’.

The plaintiffs pointed out before the College van Beroep that in the regulation in question the expression ‘levy fixed in advance’ is not accompanied by the abovementioned condition. The last month of the period of validity of the import licence is mentioned in Article 8(3)(b) only in connexion with the premium.

The plaintiffs, as also the Belgian and German authorities entrusted with the implementation of the regulation, consider that ‘the levy fixed in advance’ is ‘the levy fixed for the month indicated in the import licence as the month during which importation is intended to be effected’.

The application of the method of calculation resulting from the interpretation defended by the Netherlands agencies had the effect of charging Compagnie Continentale (France) Fl. 308 090,78 more than the amount which it ought to have paid, by reason of imports not effected, if Article 8(3)(b) had been interpreted in the manner advocated by the plaintiffs in the main action.

While the proceedings were pending before the College van Beroep, Article 8(3)(b), the provisions of which were applied differently by the Member States, was amended by Regulation (EEC) No 638/70, in order to ensure uniform application throughout the Community. Under the terms of Article 1 of that regulation, Article 8(3)(b) is replaced by the following:

1. in the case of import licences for which the levy is fixed in advance: 0,50 units of account per metric ton, increased by an amount corresponding to the difference between:

   • the levy fixed in advance, for application in the final month of validity of the import licence, increased by the amount of the premium provided for by the premium rates in force on the day on which the application for a licence was lodged for the month indicated in the licence as the month of import or for the final month of the period of validity of the licence if this latter premium is greater; and

   • the levy applicable for the final day of the period of validity of the import licence should this latter amount be less than the former.’

This provision is applicable for import licences issued on and after 11 April 1970.

The plaintiffs in the main action consider .that this regulation does not provide an exhaustive answer to the problem of the interpretation of Article 8(3)(b) of Regulation No 473/67 as originally worded.

For this reason the Netherlands court decided to refer the matter to the Court of Justice.

In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the EEC written observations were submitted by the parties to the main action, the Government of the Kingdom of the Netherlands and the Commission of the European Communities.

After hearing the report of the Judge-Rapporteur and the views of the Advocate-General, the Court decided to open the oral procedure without any preparatory inquiry.

The defendants in the main action and the Commission of the European Communities submitted their oral observations at the hearing on 3 February 1971.

In the procedure before the Court the plaintiffs in the main action were represented by R. van Delden, Advocate of the Rotterdam Bar, the defendants in the main action by J. R. Hommes, Deputy Secretary-General of the Hoofdproduktschap, the Government of the Kingdom of the Netherlands by W. Riphagen, Legal Adviser to the Ministry for Foreign Affairs, and the Commission by its Legal Adviser J. H. J. Bourgeois.

The Advocate-General delivered his opinion at the hearing on 10 February 1971.

Written observations submitted to the Court

The observations submitted in accordance with Article 20 of the Protocol on the Statute of the Court may be summarized as follows:

Compagnie Continentale (France) and Compagnie Continentale d'Importation (Hollande), the plaintiffs in the main action, observe first of all that in the recitals of the preamble to Regulation (EEC) No 638/70, amending Regulation No 473/67/EEC, the Commission, without indicating what interpretation of the wording of the former Article 8(3)(b) it considers appropriate, merely states that that provision was applied in different ways. They emphasize in addition that it is expressly stated that the new (regulation is applicable only for the future, which, it is alleged, clearly shows that the Commission altered the previous situation by that provision.

These compames go on to allege that, according to their interpretation of the former wording of the provision in question, an importer who has obtained an advance fixing but does not make use of it pays more than an importer who has not obtained that fixing. They supply examples to demonstrate this. They claim that it is begging the question to say that, according to the former wording, the interpretation of which is requested in this case, the penalty must be equal to the difference between the levy applicable to the day on which importation is to be effected and that fixed for the final month of the period of validity of the import licence.

The Hoofdproduktschap and the Produktschap, the defendants in the main action, consider that the question put to the Court calls for the following reply:

‘The expression “levy fixed in advance” appearing in Article 8(3)(b) of Regulation No 473/67/EEC, as that provision was worded before the entry into force of Regulation (EEC) No 638/70, must be understood as referring to the levy fixed in advance applicable for the final month of the period of validity of the import licence.’

These agencies refer in addition to the pleadings and observations submitted to the College van Beroep.

In the pleading lodged by it on 1 December 1969 in the Netherlands court, the Hoofdproduktschap comes to the conclusion, after an examination of the regulations establishing the detailed rules of application with regard to import and export licences for cereals and processed products, that it follows clearly from those provisions, as well as from the studies preceding them, that the levy fixed both in law and in fact is that which is applicable for each month of the period of validity of the licences and not solely the levy applicable during the expected month of importation.

The Hoofdproduktschap observes further that the system of deposits is principally aimed at avoiding the situations whereby importers and exporters obtain fictitious fixings with a view to speculation. If an importer were able to avoid his obligation to import without any pecuniary sanction he would have the choice, at the time when he effected the importation, between importation on the basis of the advance fiixng and importation after payment of the levy applicable on the day on which importation is effected.

The Hoofdproduktschap acknowledges that the wording of Article 15(2) of Regulation No 120/67/EEC of the Council, which replaced Article 17 of Regulation No 19 as from 1 July 1967, would have been clearer if it had not reenacted ‘the errors in Regulation No 19’. That new regulation refers to the ‘levy applicable on the day on which application for a licence is made, adjusted for the threshold price which will be in force during the expected month of importation’. Despite this, the Hoofdproduktschap considers that the legal situation remains basically unaltered and that what is suggested by Article 15(2) of Regulation No 120, namely that only the levy applicable during the expected month of importation is subject to advance fixing, is contradicted first in law by Article 9 of Regulation No 140/67, which replaced Article 7 of Regulation No 54, and secondly in fact because the effect of advance fixing is to establish simultaneously the various levies which will be in force during each month of the period of validity of the import licence.

The Hoofdproduktschap goes on to compare the effects resulting in the Netherlands from the application of the system of deposits with those to which that system could give rise if it was applied in accordance with the plaintiffs' argument, and supplies examples in order to demonstrate that, according to the system applied in the Netherlands, the system of deposits realizes its objective, which is to oblige the holders of licences with advance fixing to utilize them even when it would have been better for them to import at the ‘rate on the day’, as they cannot realize a profit by avoiding the obligation to import which devolves on them from a licence with advance fixing. On the other hand, according to the interpretation advocated by the plaintiffs, there would be cases in which an importer could profit from a levy lower than the levy resulting from his licence with advance fixing, by ignoring the obligation undertaken by him to import within the framework of the licence.

In their pleading of 16 July 1970, the defendants in the main action observe that, if Regulation No 638/70 is applicable only for the future, this tends to avoid any interference with rights acquired by the holders of import licences issued in countries, such as the Federal Republic of Germany, in which the application of the Community system in question was based on an interpretation other than that in the Netherlands. They claim that it may therefore be excluded that this limitation in time of the scope of Regulation No 638/70 is an indication of a ‘change of attitude’ by the Community legislature.

The Netherlands Government states that it fully subscribes to the submissions of the defendants in the main action. In addition it refers to the last part of the written observations which it submitted in Case 38/70, in which it attempted to show that the system of deposits fulfils the aim assigned to it only if it gives the greatest effectiveness to the penalty attaching to the failure to carry out the obligation to import or export. It alleges that such is not the case in the system applied by the German authorities, to which the plaintiffs look for support.

The Netherlands Government provides some examples in order to show the consequences resulting from the application from one system and the other. It claims that it follows from those examples that in the Netherlands system it will still be in the interest of an importer who has an advance fixing to use his licence since, if he imports at the rate fixed for the day of importation, not only will he lose the profit realized but he will also have to pay a penalty equal to the amount fixed. In the German system, on the other hand, the profit realized by an importer who has preferred to import at the ‘rate on the day’ will not be lost to him as long as the increase in price does not exceed the equivalent of three monthly graduations, that is to say, as long as the variable component in the deposit remains negative. In this system, an importer may allegedly calculate himself the amount of the profit which he will realize by importing at the ‘rate on the day’, despite the licence with levy fixed in advance.

The Commission of the European Communities maintains, after setting out the two hypotheses at issue and the arguments from the texts which may be deduced in favour of one or other, that the criteria of interpretation, and in particular the objective of the system of deposits, clearly militate in favour of the second hypothesis, according to which the expression ‘levy fixed in advance’ refers to the levy fixed for the final month of the period of validity of the import licence.

The additional amount of the deposit is obtained by a comparison between, on the one hand, the ‘levy fixed in advance’ plus a premium, and on the other hand, the ‘levy applicable on the final day of the period of validity of the import licence’. The latter consists of the threshold price, less the cif price in force on the same day. The threshold price is also used to calculate the levy fixed in advance for the final month of the period of validity of the import licence. This is not the case for the levy fixed in advance for the month of importation indicated on the licence. It is normal practice to compare levies calculated on the basis of the same point of reference.

The ‘levy fixed in advance’ is increased, for the purposes of the comparison, by a premium ‘fixed by the scale of premiums in force … or for the final month of the period of validity of the licence, if the latter is higher’. Since account is taken of the premium in force during the final month, it might be concluded that account must also be taken of the levy fixed in advance in respect of that final month.

The purpose of the deposit is to encourage importers to effect importations of the quantities indicated on the licence during its period of validity. In the case of a levy fixed in advance the deposit should therefore prevent the importers from succumbing to the temptation of requesting, for the same quantity, a new levy fixed in advance at a lower level or of importing the said quantity with a new licence not involving a levy fixed in advance, against payment of the lower levy fixed for the day of importation.

The advantage to the importer in abandoning the old licence is directly proportionate to the diminution of the levy during the period of validity of the licence. Article 8(3) of Regulation No 183/67 calculated it at a flat rate. That provision must be interpreted in accordance with its objective, so as to obviate as far as possible the temptation to abandon a licence.

There are good reasons for assessing the advantages to the importer of abandoning the old licence by comparing the levy fixed in advance and the levy in force on the final day of the period of validity of the licence. It is therefore in conformity with the purpose of the deposit to calculate the additional amount by comparing the levy fixed in advance for the final day of the period of validity of the licence, which is equal to the levy fixed for the final month, and the levy in force at the same time.

On the other hand, there is no plausible reason for assessing this advantage by means of comparison between the levy fixed in advance for the intended month of importation and the levy in force on the final day of the period of validity of the licence: these two levies never fall due at the same time and the importer would therefore have no interest in abandoning one in favour of the other.

What is more, to take into account the levy fixed in advance for the intended month of importation would be in contradiction with the objective of the system of deposits. In fact, this levy is, as a general rule, lower than that which has been fixed for the final month of the period of validity of the licence, since the threshold price is staggered on a monthly basis and rises during the cereal marketing year.

Article 8(3)(b) of Regulation No 183/67 is reproduced word for word in Regulation No 473/67 and has been interpreted and applied in a number of different ways by the Member States in pursuance of that regulation. In order to put an end to these difficulties of interpretation, Regulation No 638/70 amended the wording of Article 8(3)(b) in so far as the expression ‘levy fixed in advance’ must henceforward be understood as referring to the levy fixed for the final month of the period of validity of the import licence.

Costs

The costs incurred by the Commission and the Government of the Kingdom of the Netherlands, which have submitted observations to the Court, are not recoverable and as these proceedings are, in so far as the parties to the main action are concerned, a step in the action pending before the national court, costs are a matter for that court.