Court of Justice 20-02-1986 ECLI:EU:C:1986:72

Opinion of Mr Advocate General Mancini

delivered on 20 February 1986^(*)

Mr President,

Members of the Court,

As is generally known, from 1 January 1971 the revenue from agricultural levies and from Common Customs Tariff duties became the own resources of the Communities which the Member States are to collect and make available to the Commission (Articles 3 and 6 of Council Decision No 70/243/ECSC, EEC, Euratom of 21 April 1970, Official Journal, English Special Edition 1970 (I), p. 224). By an action brought on 21 December 1984 under Article 169 of the EEC Treaty, the Commission is seeking to ensure the compliance of the Federal Republic of Germany with the provisions governing the way in which those resources are determined. In particular, it complains that the German Government has failed to observe the prescribed periods for determining and crediting to the Commission's account the sugar production levies provided for by Regulation (EEC) No 700/73 of the Commission of 12 March 1973 (Official Journal 1973, L 67, p. 12).

I would like first to examine the material legislation. By virtue of Article 5 of Regulation No 700/73, the national authorities are to collect before 15 January the production levy from sugar producers who have exceeded their quotas. The reasoning behind that deadline is simple: as is noted in the antepenultimate recital in the preamble, the sugar marketing year runs from 1 July to 30 June, and because sugar is largely disposed of during the marketing year in which it is produced, it is appropriate for payment of the production levy to begin during the same marketing year. To that end Article 5 (3) provides that ‘Member States shall determine the amount to be paid ... not later than 15 days before’ the due date mentioned above, that is to say before 31 December of the preceding year.

I should also refer to Council Regulation (EEC, Euratom, ECSC) No 2891/77 of 19 December 1977 (Official Journal 1977, L 336, p. 1), which has the object of ‘enabling the Communities to dispose of their own resources under the best possible conditions’ (penultimate recital in the preamble). The provision which is of greatest interest for our purposes is Article 1, which provides that those resources ‘shall be established by Member States in accordance with their own provisions laid down by law, regulation or administrative action and shall be made available to the Commission and inspected as specified in this regulation ... ’. At first sight, the procedure outlined in that provision appears to fall into two distinct phases, the first of which — the ‘establishment’ of the Communities' own resources is governed by national rules, while the second — making them available — takes place under the Community rules.

In reality the position is rather different, as is confirmed by Articles 2, 9 and 10. Article 2 provides that: ‘For the purpose of applying this Regulation [the purpose being to make Community own resources available to the Commission], an entitlement shall be deemed to be established as soon as the corresponding claim has been duly determined by the appropriate department or agency of the Member State.’ Article 9 provides that: ‘The amount of own resources established shall be credited by each Member State to the account opened ... in the name of the Commission with its Treasury.’ Finally, Article 10 lays down that such entry ‘shall be made at the latest by the 20th day of the second month following the month during which the entitlement was established’.

Although it divides into stages having a different content, the procedure therefore represents a single process entirely entrusted to the national authorities. Here I should add that those provisions are accompanied by a penalty. This is laid down in Article 11 : ‘Any delay in making the entry in the account... shall give rise to the payment of interest by the Member State concerned at a rate equal to the highest rate of discount ruling in the Member States on the due date.’

The facts of the case arose in the 1980-81 sugar year. As a result of an administrative oversight, the German authorities did not determine the amount of the levies — about DM 466 000 — until 1 February 1982, which was a month after the due date (31 December) laid down in Article 5 of Regulation No 700/73.

That amount was credited to the Commission's account on 20 April 1982, 57 days after the date on which the determination should have taken place. The Commission thereupon asked the German Government to pay interest of DM 15 000 on the arrears pursuant to Article 11 of Regulation No 2891/77, but its request met with an outright refusal. The Federal Republic of Germany asserted that according to the wording of Article 10 the period of one month and 20 days for crediting the amount in question ran from the day on which the levies were actually determined. Since the amounts were paid on 20 April 1982, having been determined on 1 February 1982, it was not late in making its payment. In any event, the penalty laid down in Article 11 applied only to delays in crediting the amounts to the specified account and it would be arbitrary to extend it to delays in determining the amounts.

On 12 June 1984 the German Government replied to the opinion notified to it by the Commission under the first paragraph of Article 169 of the Treaty reaffirming its earlier position. The matter has now been brought before the Court. The Commission charges the Federal Republic of Germany with failure to fulfil its obligations on three counts: failure to determine in due time the levies provided for by Regulation No 700/73, failure to credit the corresponding amounts to the Commission's account in due time, and refusal to pay the interest on arrears.

The German Government stresses above all that it has already admitted in the prelitigation stage of the proceedings that the sugar production levies were not determined in due time. It argues that in view of that admission and its undertaking to observe the prescribed periods in future, the Commission no longer has an interest in seeking a declaration relating to a failure to observe a time-limit which has already expired and is quite incapable of being complied with after the event. The Court should therefore confine itself to establishing whether Germany must pay the interest on arrears.

That objection, if it may be so called, was discussed at length by the parties. However, having regard to the Court's previous decisions, I do not think it can be accepted. As the Court has stated, a Member State ‘cannot... be allowed to rely upon a fait accompli of which it is itself the author so as to escape judicial proceedings’. Furthermore, a finding of failure to fulfil an obligation under Community law ‘may be of substantive interest as establishing the basis of a responsibility that a Member State can incur... as regards other Member States, the Community or private parties’ (judgment of 7 February 1973, Case 39/72 Commission v Italy [1973] ECR 101, at p. 112). Furthermore, in this instance the Commission has a clear interest in the Court's judgment because the true point at issue is whether it is also entitled to apply the interest penalty in the event of a delay in the determination of the Communities' resources.

This brings us to the heart of the matter. The Commission, taking a comprehensive view of all the material rules, both those relating to the obligation to determine the Communities' own resources and those governing the crediting of those resources, seeks to establish that the words ‘any delay in making the entry’ in Article 11 of Regulation No 2891/77 are general in scope and seek to ensure that Member States do not derive any advantage from their own failure to fulfil their obligations to the detriment of Community finances. The Commission's argument is based on an analysis of Article 10, under which — as I have said — the amounts are to be credited within one month and 20 days.

As a general rule, the Commission observes, that due date is calculated from the time at which ‘the entitlement was established’. Thus, for instance, where a Member State makes the relevant determination before the due date laid down by the Community rules (in this instance before 31 December), the period for crediting the amounts runs from the date on which the determination was made. Accordingly, if that Member State then allows more than one month and 20 days to elapse, it will be liable to pay interest on the arrears. What happens, however, in the exceptional case where the determination is made after the prescribed date? Here, the Commission argues, Article 10 can only be interpreted as meaning that the period for crediting the amounts does not run from the date on which the determination was belatedly made but from the date on which it should have been made. On any other reading of Article 10, the Commission concludes, the interest penalty would be deprived of the deterrent effect which the Community legislature surely intended it to have.

A further point made by the Commission is that the interval between the date on which Community resources are determined and that on which they are credited is administratively advantageous to the Member State because it enables it to collect Community resources before making them available. However, that advantage is justified only where the national authorities have made the required determination in due time; where they have not acted promptly, it would be unjust to give them the benefit of that rule from the date on which the determination is actually made. A different result such as that proposed by the German Government would have illogical consequences. The Commission cites the hypothetical example of a Member State which refused to determine the Communities' resources until compelled to do so by a judgment of the Court: according to the argument put forward by Germany, that State would even then not be required to pay interest on the arrears provided that it credited the relevant amounts within one month and 20 days from the ‘enforced’ determination !

The Commission, then, takes the view that the law aids only the vigilant and not those who sleep upon their rights. If the penalty in Article 11 is to be effective, that is the principle which must be held to govern the rules relating to the determination and the crediting of the Communities' resources.

The array of arguments put forward by the German Government is also formidable. Its principal case is that even in the context of Community law the specific nature of taxation requires the legislature to adopt provisions which are imperative and as precise as possible in order to ensure legal certainty and the equal treatment of those who are subject to those provisions. Those aims would be defeated if the administration could interpret and apply the provisions on the basis of its own ‘general’ considerations or ‘practical’ requirements. Accordingly the distinction which the Commission draws between ‘normal’ and ‘exceptional’ cases for determining the time-limit for the crediting of resources is inconsistent both with the wording of Article 10, which refers only to the date on which the entitlement was established, and with its purpose, which is to define as clearly as possible the dates on which the period commences and expires.

The Federal Republic of Germany goes on to state that Regulation No 2891/77 regulates the crediting of the Communities' own resources and the Member States' obligations in that regard but not the way in which the resources are to be determined and collected. Its provisions, therefore, also cannot be held to lay down the conditions and the basis for the imposition of the interest penalty which the Commission thinks should be applied to States which do not determine the Communities' resources in due time. Moreover, that explains why Article 11 only lays down penalties for delays in the crediting of own resources.

In other words, the obligation that the Commission claims Germany has not fulfilled has no basis in the provisions of Regulation No 2891/77. Only the legislature could create such an obligation and extend the penalty laid down by Article 11 to cover breaches of it. Until it lays down provisions for that purpose, however, the administration and the courts must apply the law as it stands and not seek to substitute themselves for the legislature.

I must say at once that neither of those arguments satisfies me entirely, for all the energy with which they were put forward. In fact I find that, as often happens, the weaknesses of the one correspond to the strengths of the other. For instance, the Commission's arguments fly in the face of the wording of Article 11 (‘any delay in making the entry ... shall give rise to the payment of interest’), which is one of the main pillars of the German Government's case. The German Government, on the other hand, is reduced to blaming the authors of the legislation for the illogical results to which its own arguments lead, while the Commission, which is at its most effective when it condemns those illogical results, lacks conviction when its search for a remedy leads it to the equally absurd opposite extreme, which is to impose the penalty laid down by Article 11 on a Member State which fails to determine the relevant amounts before 31 December even though it credits them within one month and 20 days from that date. Those inconsistencies prompt me to look elsewhere for the solution to the point at issue.

I would first point out that the purpose of Council Decision No 70/243 ‘is to define own resources allocated to the Community budget and not to stipulate the [authorities] competent to impose duties, taxes, charges, levies or other forms of revenue. As a measure adopted under budgetary law, that decision does not prevent the [Community institutions] from creating a levy such as the one imposed on the production of [sugar] ... [The] power ... to create that levy has its basis ... in the provisions of the Treaty’ (judgment of 30 September 1982, Case 108/81 Amylumv Council [1982] ECR 3107). As for Regulation No 2891/77, I have already said that its purpose is to implement that decision so as to enable ‘the Communities to dispose of their own resources under the best possible conditions’. This means that its provisions are financial in nature as well. It follows that the two legislative measures do not call in question the principle that in certain sectors, and in particular in agricultural and customs matters, the power to impose taxes and charges of a fiscal nature belongs to the Community, while it is only in order to finance the Community budget that the Member States are to determine the revenue and credit it to the account of the Commission.

In the light of that distribution of powers, it is evident that the actual determination of the relevant resources by the Member States cannot defer the time at which the Community's right to those resources arises. It cannot have that effect because the right arises — as indeed happens under the tax law of most of the Member States — once the conditions laid down for that purpose by the Community legislation are fulfilled. Put in another way, the determination of own resources (except in a case which I shall be discussing later on) is not the event which gives rise to the right to the resources but only the event which gives rise to the Member States' obligation to place those resources at the Commission's disposal. If it were otherwise, and the creation of the right depended on the determination of the resources by the Member States, the States would in practice recover a power to impose taxes which they have surrendered.

In fact the distinction I have drawn between the event giving rise to the right to own resources and the actual determination of those resources is reflected in the budgetary provisions of Regulation No 2891/77. In this regard I note that the French and Italian versions of Article 2 are less specific than the equivalent English, German and Dutch versions in so far as the latter do not provide that the entitlement ‘is’ but that it ‘shall be deemed’ (‘gilt als’, ‘geldt als’) ‘to be established as soon as the corresponding claim has been duly determined’. What do those expressions in fact mean? In my view they clearly demonstrate that the legislation has set up a legal presumption regarding the time at which the entitlement is established. In any event, such a presumption was indispensable if the intention was — as indeed it must have been — to prevent the actual establishment of an entitlement which has already been determined, and is therefore legally perfect, from depending on the initiative of the national authorities responsible for making the determination, because otherwise the crediting of the resources might be postponed at will.

In that perspective, the decisive factor is that the entitlement should have been ‘duly determined’, an operation which is obviously intended to take place subject to the provisions laid down from time to time by the regulations which introduce Community resources. In this case, as we have seen, Article 5 of Regulation No 700/73 requires the Member States to determine the amounts to be paid not later than 31 December and to collect them before 15 January of the following year. At that point there are two alternatives. If the Member, State determines the amount to be credited before 31 December, the entitlement is established and arises before the date specified in the regulation by virtue of the determination. If the Member State does not take the necessary action at the proper time, the entitlement arises at the moment when the time-limit expires and, by virtue of the abovementioned presumption, it ‘shall be deemed to be’ established. Article 2 should therefore be read as follows: for the purpose of making Community resources available to the Commission, an entitlement shall be deemed to be established as soon as the corresponding claim has been duly determined by the national authorities and, in any event, when the conditions laid down by the Community regulation creating it are fulfilled.

From this point the solution to the dispute is only a short step away. Because of the presumption which I have mentioned, the period of one month and 20 days laid down by Article 10 of Regulation No 2891/77 for the entry of own resources runs from the date on which the relevant entitlement is deemed to have been established and not, as the German Government argues, from the date on which the national authorities actually had the entitlement established. Since the production levy on sugar for the 1980/1981 sugar year is to be deemed to have been established on 31 December 1981, the corresponding amounts should have been entered in the Commission's account by 22 February 1982. Since that time-limit was not respected, the Federal Republic of Germany was therefore bound, by virtue of Article 11 of the regulation, to pay interest on the arrears.

One last point. From what I have said, it follows that the failure to observe the different time-limit laid down by Regulation No 700/73, despite being established and undisputed, cannot form the subject of a specific declaration by the Court under Articles 169 and 171 of the EEC Treaty. In fact that noncompliance is, in a manner of speaking, subsumed in the presumption of the establishment of the entitlement under Article 2 of Regulation No 2891/77.

On the basis of the foregoing considerations, I propose that the Court should uphold the application lodged on 21 December 1984 by the Commission of the European Communities against the Federal Republic of Germany and declare that by refusing to pay the interest provided for by Article 11 of Regulation No 2891/77, that Member State has failed to fulfil its obligations under the EEC Treaty.

The Federal Republic of Germany should be ordered to pay the costs under Article 69 (2) of the Rules of Procedure.