Judgment of the Court of 10 december 1975 Union Nationale des Coopératives Agricoles de Céréales and Others v Commission and Council of the European Communities

In Joined Cases 95 to 98/74, 15 and 100/75

THE COURT composed of: H. Kutscher, President of Chamber, President, A. M. Donner, J. Mertens de Wilmars, P. Pescatore, M. Sørensen, Lord Mackenzie Stuart and A. O'Keeffe, Judges, Advocate-General: A. Trabucchi Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts

The facts and the arguments of the parties presented in the course of the written procedure may be summarized as follows:

I — Facts

These cases arise out of a change in the method of calculation of the compensatory amounts which occurred between April and June 1973. The applicants are cereal exporters who, with the exception of the Comptoir Commercial Andre et Cie and, in the case of certain contracts, the Compagnie Continentale France, entered into contracts for the export of cereals to third countries before the change and executed their contracts after the change. The Comptoir Commercial Andre et Cie entered into its contract after the change but before the date when it took effect. Certain export contracts of the Compagnie Continentale France were entered into after the date when the change took effect. All the applicants were able to fix in advance the amount of the export refund.

1. The refunds and the export certificates

Regulation No 120/67/EEC of the Council provides that in order to allow the export of certain products, including barley and common wheat, on the basis of quotations or prices for those products on the world market, the difference between those quotations or prices and the prices in the Community may be covered by an export refund.

The amount of this export refund, which fluctuates from day to day according to the price level on the world market as established by the Commission's services, is normally that applicable on the day of exportation. Nevertheless, in order to provide the exporter with a measure of security, the export refund may, at the request of the exporter addressed to the competent national agency, be fixed in advance at the level ruling there on the day on which application for an export licence was made.

As regards the period of validity of the export licences, the Community rules know two different systems. At the relevant time the normal period was two months following upon the date of the application for an export licence (Article 1 of Regulation No 133/73). A longer period intended to facilitate some special exports was laid down for individual cases (Article 24 of Regulation No 2637/70).

The grant of this longer period of validity is dependent upon a prior decision of the Commission, taken after consulting the Management Committee on the basis of particulars furnished by the competent national agency.

The decision of the Commission lays down the period of validity granted and further prescribes that the contract relating to the transaction contemplated must be submitted to the national intervention agency within a specified period, failing which the decision becomes inoperative and the application for the licence does not take effect.

Unlike the normal licences which are issued immediately, the applicant only obtains a licence for an extended period after the procedure in question, which often takes several weeks, has been concluded.

Before the Commission's decision, the exporter has no guarantee of being able to effect the operation in question under specific conditions.

A minimum quantity of 75000 metric tons is required before a licence valid for an exceptional period is granted.

2. Compensatory amounts

The compensatory monetary amounts, devised initially to deal with the temporary increase in the margin of fluctuation of the Deutschmark and of the Guilder were instituted by Regulation (EEC) No 974/71 of the Council (OJ 1971, L 106, p. 1; OJ (English Special Edition) 1971 (I), p. 257. The compensatory amount is obtained by applying a certain percentage to the representative world market price for the product in question. Since it is broadly based, it cannot take into account the specific circumstances relating to a particular transaction. The compensatory amount cannot be fixed in advance but is always that in force at the date of exportation. The system of compensatory monetary amounts was changed in order to deal with the situation created by the progressive revaluation of the other Community currencies and devaluation of the US dollar.

In February 1973 the method of calculation of the compensatory monetary amount, which remained the same notwithstanding different changes, was as follows:

The compensatory amounts … shall be equal to the amount obtained by applying to the prices the percentage difference between:

the parity of the currency of the Member State concerned declared to and recognized by the International Monetary Fund, on the one hand, and

the arithmetic mean of the spot market rates of this currency against the US dollar during a period to be determined (Article 2 of Regulation No 974/71).

The mean of the US dollar rate is found during the period of reference (approximately three weeks) preceding the weekly fixing of the compensatory amount.

Article 7 of Regulation No 974/71 (as amended by Regulation (EEC) No 2746/72 of the Council of 19 December 1972) lays down that:

‘1. With effect from 1 July 1972, for the purposes of the financing of the common agricultural policy, the compensatory amounts granted in trade with third countries shall be treated as part of the expenditure on refunds granted on exports to third countries. 2. With effect from 1 January 1973, for the purposes of the financing of the common agricultural policy, the compensatory amounts charged or granted in trade with Member States shall be treated as part of the expenditure on intervention intended to stabilize the agricultural markets’.

Under the provisions of Article 8 (2) of Regulation No 974/71, which still remains in force, the regulation

‘shall cease to be applicable as soon as all the Member States concerned again apply the international rules on margins of exchange rate fluctuation around official parity’.

Regulation No 837/72 of the Commission of 24 April 1972 (OJ L 98, p. 10; OJ (English Special Edition) 1972 (II), p. 345) laying down special provisions in respect of levies and refunds fixed in advance for cereals, which still remains in force, provides a special system in the event of changes in the calculation of compensatory monetary amounts.

The second recital in the preamble thereto reads:

‘Whereas the present system of compensatory amounts is likely to change considerably with the gradual return to a more stable monetary situation; whereas this may lead to a significant reduction in the compensatory amounts which would not be due either to a fall in spot market rates or in prices;’

The fourth recital reads:

‘Whereas … it might no longer be possible, in view of the reduced compensatory amounts, to effect exports for which the refund has been fixed in advance, since the calculations of the parties concerned were based on the granting of refunds fixed in advance and of these compensatory amounts which, in most cases, have not changed much over a relatively long period; whereas the adverse effects of this situation could also be avoided by maintaining the economic situation which faced the parties at the time of the advance fixing.’

The fifth recital reads:

‘Whereas it is fair to give the parties concerned the opportunity of cancelling the advance fixing, while maintaining their obligation to import or export.’

In the event of a change in the rules as to calculation of the compensatory amounts, this regulation provides for two possibilities:

either the application of the compensatory amount valid on the day on which the refund was fixed in advance

or, on application by the interested party, the cancellation of the advance fixing, with as a consequence, the fixing of the compensatory amount and of the refund according to the date of exportation.

Under the provisions of the fourth recital in the preamble to Regulation No 648/73 of the Commission of 1 March 1973 (OJ 1973, L 64, p. 1) laying down detailed rules for the application of ‘monetary’ compensatory amounts which result from Regulation No 509/73

‘Whereas it should be stressed that compensatory amounts are essentially quite different from levies and refunds’.

With the devaluation on 13 February 1973 of the US dollar, which gave rise to the adoption of Regulations Nos 509/73 and 648/73, the international monetary crisis continued. The abnormal influx of dollars which again occurred in several Member States, obliged the latter to take special defensive measures.

During a lengthy period in which the money markets were closed, the measures to be taken by the Member States were laid down in the course of a meeting of the Council of the Ministers for Finance on 11 and 12 March 1973.

The measures which were adopted in the course of that meeting provided for a floating of the currencies of the six Member States in relation to third countries with the maintenance of the margins of fluctuation agreed between the majority of the Member States, whilst the currencies of the three other Member States, the United Kingdom, Ireland and Italy were to float for the time being individually, unlinked to the other Community currencies.

Consequently the central banks of the Member States refrained from supporting the US dollar.

On 12 March 1973, the Council of Ministers for Agriculture also asked the Commission to make proposals for a reform of compensatory amounts in order to take account of the new situation.

On 21 March 1973 the Commission made and published its price proposals for the 1973/74 marketing year, laying down the compensatory amounts. Until the adoption of these proposals by the Council, the Commission continued to apply the system of compensatory amounts laid down by Regulation No 974/71 which, whilst subject to several amendments, did not undergo important changes in its fundamental structure.

In the interval between the publication of the Commission's proposals on the amendment of Regulation No 974/71 and its adoption by the Council on 30 April 1973 contracts were entered into between the applicants and the importers in the USSR and Poland, these being transactions which resulted in the applicants' claim in Cases 95 to 97/74 and 15/75, and, in part, in Case 98/74.

By Regulation No 1112/73/EEC of the Council of 30 April 1973 (OJ 1973, L 114, p. 4) which entered into force on 1 May 1973, the wording of Article 2 (1) of Regulation 974/71/EEC was amended as follows:

‘The compensatory amounts … shall be equal to the amounts obtained by applying to the prices: (a) in respect of those Member States the currencies of which are maintained among themselves within a spread at any given moment of 2-25 %, the percentage difference between: the conversion rate used under the common agricultural policy, and the conversion rates resulting from the central rate; (b) in respect of Member States other than those referred to in (a), the average of the percentage differences between: the relationship between the conversion rate used under the common agricultural policy for the currency of the Member State concerned and the official parity, or, where this parity is not observed, the central rate of each of the currencies of the Member States referred to in (a), …’

Under the provisions of Article 3 of Regulation No 1112/73, that regulation shall apply ‘from the date on which the detailed rules required for its application … enter into force’.

On 18 May 1973 the applicant in Case 100/75 entered into a sale contract with a Japanese company, such contract forming the basis of its application.

On 30 May 1973 the Commission adopted two regulations implementing Regulation No 1112/73 (Regulations Nos 1463/73 and 1469/73) which were only published in the Official Journal on 4 June 1973, this being the date on which they entered into force.

According to the third recital in the preamble to Regulation No 1469/73, applying the new method of calculating monetary amounts to Denmark and France, no such amounts should be fixed for those two countries.

Regulation (EEC) No 2042/73 of the Commission (OJ 1973, L 207, p. 34) making transitional provisions consequential upon the application as from 4 June 1973 of the new system of monetary compensatory amounts explains in its preamble the consequences of the new method of calculation:

‘Whereas one of the consequences of the introduction of the new system of monetary compensatory amounts on 4 June 1973 is that the monetary compensatory amount of a Member State no longer reflects the relationship between its currency and the US dollar; whereas the fluctuation of the dollar and other currencies in relation to the currencies of the Member States taking part in the joint float is taken into consideration in the calculation of levies and of refunds;… Whereas operators have been aware of the new rules to be applied to parities laid down by Council Regulation (EEC) No 1112/73 of 30 April 1973, amending Regulation (EEC) No 974/71 …; Whereas, however, the date of application of the new system was fixed on 4 June 1973 by Commission Regulation (EEC) No 1463/73 of 30 May 1973 laying down detailed rules for the application of monetary compensatory amounts; Whereas if an importer or exporter had fixed a levy or refund in advance before that date, he may sustain loss in future variations in the value of the dollar since the time of the transition from one system to the other; Whereas, in view of the entry into force of the new system on 4 June 1973, it seems fair to provide that, for all imports or exports in respect of which advance fixing of the levy or refund had been requested before that date, the compensatory amount should be that applicable on 3 June 1973; … whereas, however, the benefit of this provision should only apply on request.’

Article 1 thereof reads:

‘At the request of the party concerned, the monetary compensatory amount, including the coefficient by which the levy or refund is adjusted, applicable on 3 June 1973, shall, in lieu of the amount applicable on the date of importation or exportation, apply to all transactions carried out before 3 June 1973 in respect of which the levy or refund was fixed in advance before 4 June 1973 or, in the case of sugar, the refund was the subject of an award upon tender made before 4 June 1973.’

This regulation which entered into force on 28 July 1973 applied as from 4 June 1974.

3. The applicants are all cereal exporters established in France who obtained export licences in respect of quantities of barley and common wheat produced in France and exported to the USSR, Poland and Japan. The licences were obtained on the following dates and subject to the following conditions: Union Nationale des Cooperatives Agricoles de Cereales, the holder of 131 extracts of certificates relating to 169599 metric tons of barley for export to the USSR which resulted from the splitting of five certificates granted between 20 and 24 April, the original applications for which had been lodged on 30 March 1973 by the Compagnie Continentale France. In all the cases the last date for export (exceptional period of validity) was 31 July. The applicant became holder of these extracts on dates between 25 April and 26 July. The Société Cooperative Agricole de la Haute Normandie is holder of an extract for 6000 metric tons of barley for export to the USSR. This extract was part of a certificate applied for by the Compagnie Continentale France on 30 March with a period of validity to 31 July (exceptional period of validity) and issued between 20 and 24 April. The Société de Commerce, de Stockage et d'Études de l'Ouest Européen is holder of seven extracts relating to 60000 metric tons of barley for export to the USSR, originating from the splitting of the certificates obtained by Compagnie Continentale France between 20 and 24 April (exceptional period of validity); the last date for export was 31 July. The extract was transferred to the applicant by the Compagnie Continentale France on or about 20 July. The certificates held by the Compagnie Continentale France can be divided into three groups relating to March, April and May 1973. (1) Six certificates applied for by the Compagnie Continentale France on 30 March and relating to exports of barley to the USSR; they were granted on 20 April with validity to 31 July (exceptional period of validity) and, in respect of certain deliveries, the validity was extended to 15 August. They were split into 278 extracts, relating to a total of 226919 metric tons, issued between the beginning of May and end of July. (2) Two certificates applied for by the Compagnie Continentale France on 2 April for the export of barley to the USSR with validity to 30 June (normal period of validity) and being the subject of three extracts in respect of 1906 metric tons, issued between 15 May and 21 June. (3) Seven certificates applied for by the Compagnie Continentale France between 9 and 15 May for the export of barley to the USSR to take place by 31 July (normal period of validity) which are the subject-matter of 88 extracts, relating to a total of 16952 metric tons, issued in June/July. Nine certificates applied for by the Compagnie Continentale France between 2 and 22 May in respect of the export of common wheat to the USSR to take place by 31 July (normal period of validity) the subject-matter of 88 extracts, relating to a total of 191017 metric tons, issued in July. La Compagnie Algerienne de Meunerie is the holder of a single certificate in respect of 35 metric tons of barley for export to Poland on a contract dated 23 March, which it applied for on 30 March. It was granted on 20 April for export before 31 July (exceptional period of validity). Le Comptoir Commercial Andre et Cie is holder of an extract in respect of 14000 metric tons of barley for export to Japan. This extract forms part of a certificate applied for by Établissements G & P Levy on 11 May 1973 with a period of validity to 31 July (normal period of validity). It was forwarded to that undertaking on 27 June 1973 under the provisions of a protocol between Établissements J & P Levy and the applicant dated 24 May 1973.

4. In April 1973 a protocol was signed by ten French cereal exporting companies governing the execution of a contract of 28 March 1973 entered into between those companies and VO Exportkhleb of Moscow for the delivery of 500000 metric tons of barley produced in France. This contract was negotiated by the French Government. In this case it is a ‘prestige contract’ involving a reduced profit margin. The applicants in Cases 95 to 98/74 are part of the ‘France Cereales’ consortium. Under the provisions of Article 3 of the protocol of April 1963, the Compagnie Continentale France was responsible for all administrative action, both with the French authorities and, if need be, those of the common market, including the application for certificates relating to export, the obtaining of refunds and generally all negotiations with the said authorities, with power to compromise in the event of litigation. This explains why the majority of the export certificates in question were obtained by the Compagnie Continentale France to be transferred in due course to the applicants in Cases 95 to 97/74.

5. According to the new system of compensatory amounts, the latter no longer take direct account of the exchange rate of the US dollar. As against this the export refund is henceforth calculated on the basis of world prices converted into units of account and into French francs, such calculations being not on the basis of the official parity of the dollar but on the basis of the representative exchange rate of the dollar. At any rate, even with this new method of calculation of the export refund, the latter was as from June 1973 reduced to nil. As against this, those of the applicants who were able to obtain the advance fixing of the export refund at the amount thereof as at 30 March benefited from a maximum refund of 38 u.a. per metric ton. As from 5 June some of the applicants drew the Commission's attention to the fact that the new system applied to exports which remained to be carried out in relation to certificates already issued and they asked for transitional measures to be adopted. The applicants received under the provisions of Regulation No 2042/73 and at their request the compensatory amount in force on 3 June 1973. The reference period for the purposes of the mean rate of the US dollar for the purpose of calculating this amount was the period from 17 to 23 May, the rate at that time being FF 4-425. The applicants consider that if the former method of calculating compensatory amounts had remained in force they would, as at the actual date of export, have benefited from a compensatory monetary amount in excess of that which was in force on 3 June 1973.

II — Procedure

Considering that Regulation No 2042/73 had only partially made good the financial consequences of the application of Regulation No 1112/73, in conjunction with Regulation No 1463/73 the applicants each brought an action for damages against the Commission and the Council.

By order of 25 February 1975, Cases 95 to 98/74 were joined for the purposes of procedure and judgment.

By order of 17 March 1975, Case 15/75 was added to Joined Cases 95 to 98/74 for the purposes of procedure and judgment.

By order of 26 September 1975, Case 100/75 was added to Joined Cases 95 to 98/74 and 15/75 for the purposes of procedure, the applicant waiving its right to lodge any further statement. As regards the possible liability on the part of the Community, the defendants indicated that their statements filed in Cases 95 to 98/74 and 15/75 were also deemed to be statements lodged in Case 100/75.

Upon 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 Court asked the applicants in Cases 95 to 97/74 to produce copies of the original export certificates and the applicant in Case 98/74 to produce copies of the contracts relating to the exports in question.

III — Conclusions of the parties

In Case 95/74

The applicant claims that the Court should

‘Order the Council and the Commission jointly and severally to pay it the sum of FF 3314203·67 by way of damages, plus interest as prescribed by law, as from the date of the claim.’

In Case 96/74

The applicant claims that the Court should

‘Order the Council and the Commission to pay it the sum of FF 153 460-31 by way of damages, plus interest as prescribed by law, as from the date of the claim’.

In Case 97/74

The applicant claims that the Court should

‘Order the Council and the Commission jointly and severally to pay it the sum of FF 418 369-47 by way of damages, plus interest as prescribed by law, as from the date of the claim.’

In Case 98/74

The applicant claims that the Court should

‘(1) Order the European Economic Community as represented by the Council and the Commission to pay it the sum of FF 11662442·21 by way of compensation for the damages which it has suffered in the circumstances set out above, together with interest at the discount rate of the Banque de France from the date when the present application was lodged; (2) And further order the European Economic Community as represented by the Council and the Commission to pay the entire costs of the present proceedings.’

In Case 15/75

The applicant claims that the Court should

‘Order the European Economic Community to pay the applicant, if need be after expert checking of the statement produced by the applicant, the sum of FF 671011·84 by way of compensation, together with interest at the discount rate of the Banque de France as from the date of this application and further order the European Economic Community to pay all the costs’.

In Case 100/75

The applicant claims that the Court should

‘(a) Declare that its application against the European Economic Community, as represented by the Council of the European Communities and the Commission of the European Communities is admissible and well-founded in reparation for the injury caused to the applicant, on the occasion of exportations of barley to Japan which it effected after 4 June 1973 under Certificate No FA/079593 — Extract FA/112019, by the violation of the applicant's vested rights or at least the violation of the general rule by virtue of which the legitimate expectation of persons concerned with regard to the application of rules in pursuance of which they have entered into commitments deserves protection; (b) Declare alternatively that its application against the European Economic Community as represented by the Council of the European Communities and the Commission of the European Communities is admissible and well founded, in reparation for the injury suffered by the applicant on the occasion of exportations of barley after 4 June 1973 under export certificate No FA/079593 — Extract FA/112019, in view of the wrongful acts or omissions committed by the Commission first by leaving cereal exporters until 28 July 1973 in a state of uncertainty as to the transitional measures to be adopted with regard to the implementation of the new system of monetary compensatory amounts applicable as from 4 June, and secondly by not taking account in its Regulation No 2042/73 the fact that in any event cereal exporters could not undertake any operation to cover their exchange risk in relation to the dollar before 5 June 1973 at the earliest; (c) in either case order the European Economic Community to pay the applicant, if necessary after expert checking of the statement produced by the applicant the sum of FF 175 368-61 by way of compensation with interest at the discount rate of the Banque de France as from the date of this application and further order the European Economic Community to pay all the costs’.

The Council claims that the Court should

‘Declare applications 95 to 98/74, 15/75 and 100/75 inadmissible and in any event illfounded, reject them and order the applicants to pay the whole of the costs’.

The Commission claims that the Court should

‘Reject applications 95 to 98/74, 15/75 and 100/75 and order the applicants to pay the costs of the action.’

IV — Summary of the submissions and arguments of the parties

1. Admissibility

The Council pleads inadmissibility in the case of applications 95 to 97/74 on the ground that the applicants, having acquired by way of transfer which took place after 4 June certificates dated prior to that date, cannot claim that there had been an infringement either of their right to legal certainty or to vested rights. On that date, that is to say on 4 June, the Commission's implementing regulations were already in force. Since the grounds on which the applicants rely are thus vitiated the applications are inadmissible.

In reply, the applicants in Cases 95 to 98/74 point to the existence of the trading partnership (societe en participation), France Cereales of which they are members. Within the framework of this partnership the Compagnie Continentale France was instructed to obtain all the certificates which were ultimately transferred to the other members. The Compagnie Continentale France had thus managed the interests of an association of which the applicants were members. The fact that the date on which the export certificates had been forwarded was subsequent to 4 June 1973 cannot deprive them of a right of action which was theirs as members of the trading partnership.

2. The nature of the new system of compensatory amounts subsequent to Regulation No 1112/73 of the Council

The Compagnie Continentale France points out that under cover of an arithmetical rearrangement of compensatory amounts, there had been a drastic amendment in their objective. At the date of the entry into force of the regulation the Member States in question did not go back to applying the international rules, the only circumstance which under Article 8 of Regulation No 974/71 would allow the system set up by this regulation to be terminated; cf. Case 9/73 — Schlüter v Hauptzollamt Lorrach ([1973] ECR 1160).

The practical effect of Regulation No 1112/73, in the case of exportation from a Member State to a third country, even though there are fluctuations as between the rate of the US dollar and the exchange rate of the currency by that Member State within the framework of the common agricultural policy, is to deny any compensation for such fluctuations.

Since they no longer correct the effects of a failure to adjust the currency of one Member State in relation to its US dollar parity, the compensatory amounts no longer serve to protect exporters against monetary fluctuations, for which purpose they were conceived. The Commission thereupon left the refunds themselves to protect exporters against currency fluctuations.

The Compagnie Continentale France considers that this change in the function of the refund goes beyond the mere application of a regulation of the Council.

According to the Commission, the change in the method of calculation of the compensatory amounts is rather an adaptation of this system to new data confirmed at the international monetary level.

Nowhere in the Community regulations is there any question of a guarantee of exchange rates against the fluctuation of the dollar. As is shown by the recitals in the preamble to Regulation No 974/71 the system was set up in order to prevent a disruption of the intervention system and ‘abnormal movements of prices jeopardizing a normal trend of business in agriculture’.

The objective of compensation inherent in this system was therefore conceived in an abstract and broad manner necessarily ignoring individual data in relation to commercial transactions; cf. Case 5/73 — Balkan ([1973] ECR 1091).

Whilst it is true that in cases where the contract provides for payment in dollars and that the value of the dollar at the time of the transaction has changed as compared with its value at the time when the contract was concluded, the trader was more or less protected under the former system against the unfavourable consequences of such a change. This is a question of fact which depends on a number of individual circumstances and in no way on the objective of the former system.

The change in the calculation of levies and refunds for the purpose of taking into account the actual exchange rate of the dollar and not its official parity comes within the powers held by the Commission under Article 3 of Regulation No 129/62.

The Council adds that the basic conceptions relating to compensatory amounts have not changed. The Council drew certain conclusions from the monetary decisions of 11 March 1973 and eliminated the causes of the difficulties.

3. The applicants' rights

In the opinion of the applicants in Cases 95 to 97/74 Regulation No 1112/73 is illegal by reason of the effects which it had on the transactions which were previously entered into and the fact that, affecting vested rights as it does, it has a retroactive effect.

A vested right of barley exporters to payment of a compensatory amount results from the fact that the compensatory amount which was originally optional became compulsory and automatic with Regulation No 2746/71.

The applicants argue that as from the moment of the grant of the export certificates comprising the advance fixing of the amount of the refunds, they acquired the right to a continuance of the method of calculation of the compensatory amount in force at that time in respect of exports effected during the period of validity of the certificates. It follows from the following facts that a right is at issue:

i) the grant of a compensatory amount has become compulsory and automatic as from the entry into force of Regulation No 2746/72;

ii) the compensatory amounts are treated, in so far as the financing of the common agricultural policy is concerned, as an integral part of third-country export refunds; the entitlement to a method of calculation of compensatory amounts is acquired on the same basis as the right to refunds;

iii) Regulation No 1112/73 had laid down that it applied not immediately but only as from the day when the necessary rules for its application came into force, which implies a desire on the part of the legislator to see an end to transitional measures, necessary by reason of the existence of a vested right.

The judgment in Case 1/73 — Westzucker v EVSt/Zucker ([1973] ECR 723) is not completely on all fours with the present case. It is obvious that there is a difference between the rules on compensatory amounts for sugar and those for cereals.

The applicant in Case 98/74 argues that the act of delivery of the export certificates comprising advance fixing results in the vesting of the following rights:

the right to receive the refund applicable at the date of the grant of the certificate,

the right to use the certificate within a certain period of time,

the right to receive the compensatory monetary amounts.

By changing the objective and method of calculation of the compensatory monetary amounts, the Council had deprived those exporters who held certificates as yet unused on 4 June 1973, in respect of which corresponding refunds had been fixed in advance, of rights legitimately acquired:

i) The abandonment of the practice of taking into account the US dollar meant the disappearance of the protection granted to exporters under the basic provisions;

ii) Whilst it is true that the variations of the US dollar were henceforth used in order to fix daily the effective amount of the levies and the refunds, the refunds, fixed in advance before 4 June 1973 did not reflect the variations in the US dollar. Exporters who found themselves in the applicant's position were entitled to refunds which did not take into account monetary variations. At the same time they were denied the specific compensatory monetary amount intended to cover these very variations;

iii) By transforming an option for the Member States to grant compensatory amounts into an obligation, in the event of a currency, fluctuating beyond the limits laid down, Regulation No 509/73 of the Council attached to the issue of any certificate a right to receipt of the compensatory amounts payable as soon as the conditions laid down by the regulations were fulfilled.

This analysis is confirmed by Regulation No 2042/73 of the Commission:

i) Having laid down transitional provisions for making good injury suffered by exporters holding certificates comprising advance fixing, the Commission showed that it admitted to being bound by a superior rule of law having the purpose of protecting the individual. Any other explanation would result in denying that the regulation was of the nature of an implementing regulation.

ii) This regulation reveals the infringement of vested rights. In order to remedy this infringement the regulation, which recognizes exporters' rights to a guaranteed rate of exchange, arbitrarily limits that guarantee to that by which they would have benefited if all the valid certificates had been cleared by 3 June 1973.

The applicant in Case 15/75 contends that the system of compensatory monetary amounts in force before 4 June 1973 provided cereal exporters with a guarantee against exchange risks in relation to the dollar. Under the provisions of this system the applicant had completed an export certificate with the refund fixed in advance. The applicant thereupon became entitled to have the former system applied in respect of this exportation.

The applicant in Case 100/75 submits substantially the same arguments as the applicant in Case 15/75.

According to the Council, two conditions at least are necessary for the existence of vested rights:

1) the individual decision on the basis of which a vested right is invoked must relate to the same matter as that to which the right attaches;

2) regulations must not be of an uncertain and variable nature, especially as they concern public policy.

The system of compensatory amounts constitutes a specific mechanism with a specific function, requiring independent rules of implementation in relation to the refunds. The change brought about by Regulation No 1112/73 in the method of calculating compensatory amounts admitted of immediate application since it came about by reason of the very function of that mechanism.

The assimilation of compensatory amounts to refunds effected by Article 7 of Regulation No 974/71 as amended up to the time of the matters in dispute is purely budgetary. It implements the decision whereby the financing of compensatory amounts is no longer done on a national but on a Community basis.

The fact that the rate of compensatory amount to be granted is that applicable on the day of exportation precludes any assimilation of function and calculation between compensatory amounts and advance fixing of the refund.

The function and nature of the compensatory monetary amounts are very different from those of refunds. Compensatory amounts represent a monetary corrective which allows the unity of prices to be maintained on the market notwithstanding the abandoning of fixed exchange parities. It is impossible to say that provisions relating to refunds can give rise to vested rights in so far as compensatory amounts are concerned. The compensatory amount is not a guarantee of exchange rates but has the sole purpose of avoiding distortions in trade between Member States.

For pressing reasons of economic policy the institutions can legitimately apply new provisions to the situations which came about while the old law was in force, cf. Case 57/72 Westzucker ([1973] ECR 321), 1/73 Westzucker ([1973] ECR 723) and 143/73 Sopad ([1973] ECR 1433).

As regards compensatory amounts, the Community institutions enjoy freedom of action not only to adopt measures having immediate effect but also to proceed to an overall appreciation of the advantages and disadvantages of the system to be instituted — 5/73 Balkan ([1973] ECR 1091).

Failure to recognize the essential requirements of the rules governing compensatory amounts and preventing their adaptation as the need arises would involve the risk of introducing into Community trade in agricultural products the state of disorder reigning in the international money market or in the world market in agricultural products.

Article 8 of Regulation No 974/71 only means that the Council has recognized that compensatory amounts are not perpetual but rather an exception to the unity of the market. The transient nature of compensatory amounts is also indicated in the six recitals in the preamble to that regulation. Another sign is the multiplicity of amendments. Finally, Regulation No 837/72 laid down what had to be done in case of amendment of the provisions governing the calculation of compensatory amounts.

In the opinion of the Commission there was in the system of compensatory monetary amounts a deliberate abstention from introducing the possibility of advance fixing.

In this respect the Commission refers to the two possibilities already afforded by Regulation No 837/72 in the event of an amendment of the rules of calculation of the compensatory monetary amounts.

The monetary amount cannot in general be likened to the refund provided for by the agricultural regulations since their objectives are different. The only similarity lies in the method of financing.

The present entitlement to benefit from a compensatory amount upon exportation is only created by effecting the exportation and then only as from the moment when it takes place. The system of compensatory amounts cannot be considered equivalent to a guarantee for traders against the risks of an alteration in exchange rates; Case 74/74 CNTA v Commission ([1975] ECR 533). The obligation upon a Member State to grant a compensatory amount does not affect the nature thereof.

4. The legitimate expectation of the applicants in the continuance of the method of calculation of compensatory amounts

In Cases 95 to 97/74 the applicants argue that they entered into commitments with their Soviet trading partners on the basis of the Community regulation existing on the day of concluding the export contracts. The completion of the Community certificates took place without exceptionally urgent measures having been taken for the shipping of the cargo since the applicants were confident that the compensatory amounts would be awarded to them in conformity with the legislation existing at the time of issue of the export certificates. Accordingly, even in the absence of any illegality in the regulations of 30 April and 30 May 1973, the Community authorities ought to make good the injury suffered by the applicants by reason of the application of these regulations to export certificates obtained prior to their publication.

The applicants are of the opinion that as long as the system of compensatory amounts provided for in Regulation No 974/71 and Regulation No 2746/72 remained in force they could not in fact have acted otherwise. They did not know and had no means of knowing that the amendments of the regulations concerning compensatory amounts were contemplated. The existing information did not show precisely the date on which the new regulations would enter into force. It would have been impossible without speculating on the fall in value of the dollar, to adopt a position other than the one they had adopted.

In the opinion of the applicant in Case 98/74 Regulation No 509/73 of the Council gave exporters the legitimate expectation of benefiting from compensatory amounts.

A prudent exporter, with knowledge of the decisions or proposals of the Community authorities, could not reasonably foresee the immediate application of new provisions without transitional measures.

A party cannot rely on a mere proposal of the Commission because, on the one hand, the Council retains complete freedom to reject the proposal or to send it back to the Commission and because, on the other hand, the interval between the submission of the proposal and the putting into force of the new rules may be very lengthy.

Numerous factors contributed to the applicant's feeling certain that, as regards the transactions in respect of which export certificates had been issued before 4 June 1973, it was entitled to receive compensatory amounts to bridge the gap resulting from fluctuations in the US dollar.

The very wording of Regulation No 1112/73 gave no cause at all for apprehending that in respect of contracts already running there would be any kind of modification in the method of calculation of compensatory amounts and of the refunds relating to exports to third countries.

The applicant in Case 15/75 considers the issue of the export certificate comprising advance fixing of the refund as comprising equally an implied ‘promise’ to apply the system of compensatory monetary amounts in force on 30 March 1973 to the exports of barley which it was to effect on the basis of the certificate having a period of validity limited to four months, all the more so, since it was and moreover still is the rule in the international cereal trade for the large majority of export sales to be effected in dollars. The applicant's expectation that the system of compensatory amounts in force on 30 March 1973 would be applied to exports to be made on its certificate bearing that date was accordingly legitimate.

The applicant could not itself cover the risk of a variation in the rate of exchange vis-à-vis the dollar so long as the former system of compensatory monetary amounts remained applicable: on the basis of this system the applicant had to receive a compensatory monetary amount in the event of a fall of the dollar vis-à-vis the franc but to pay a compensatory amount in the event of a rise in the value of the dollar vis-à-vis the franc: if the applicant had effected a forward sale of the dollars which it was to receive in payment of its exports and if the dollar had risen vis-à-vis the franc between the day when if effected the forward sale of dollars and the day on which it effected its exports the applicant would have been obliged to pay a compensatory monetary amount, thus suffering a considerable loss.

Under the provisions of its contracts the applicant could neither cancel nor accelerate its exports.

The applicant in Case 100/75 points out that its expectation that the former method of calculation of compensatory amounts would be applied deserved protection by reason of its obligation to export during the period of validity of the certificate at the risk of losing the whole or part of the deposit lodged.

In the Commission's view the conditions under which there could be a breach of the legitimate expectation of the continuance of a system of calculating compensatory amounts are as follows: it would require

i) that there be transactions irrevocably undertaken;

ii) that the losses resulting from exchange risks were inevitable;

iii) that there be no peremptory public interest to the contrary;

iv) that the discontinuance take place with immediate effect and without warning;

v) that the Community should have taken no transitional measures which would have enabled a ‘prudent’ trader either to avoid sustaining the loss or to obtain compensation, Case 74/74 CNTA v Commission ([1975] ECR 533).

The applicants for certificates with an exceptional period of validity had no guarantee at the time of making the application of obtaining such a certificate. The deposit which at that time they were obliged to lodge would not have been forfeited in the event of non-completion of the contract but being a temporary deposit would have been refunded if it had been established before the issue of the certificate that the transaction could not be effected. Before the issue of the certificates no transaction can be considered as irrevocably binding within the meaning of the Court's case-law.

The fact that the applicants entered into contracts dated 23, 28 and 29 March before the issue of the certificates and even before the completion of the preliminary authorization procedure would indicate that they were protected by a revision or cancellation clause against risks of the certificates not being issued, or that they had themselves undertaken a risk so that their expectation was not such as to deserve protection.

The change in the system could have been foreseen since the Commission's proposal of 21 March 1973. Whilst the change was not certain at that time, a prudent and circumspect trader ought to have taken precautions. Since no contract had as yet been entered into by 21 March 1973 the applicants could have cancelled the transaction contemplated. In any event the change in regulations had with the adoption of Regulation No 1112/73 become ‘foreseeable’ by 30 April 1973 at the latest.

As regards the rights arising from the export certificates forwarded after 4 June 1973, the applicants ought to have been on their guard bearing in mind the change in the system which in fact had taken place.

Neither were the losses inevitable. The applicants could have taken steps, at least as from 4 June 1973, to cover the exchange risk. Between 30 April and 4 June there existed a theoretical risk of a rise in the value of the dollar to the extent that it might have exceeded the old parity, thus making it possible for there to be a compensatory amount. As from 4 June on the other hand, the fluctuation in the dollar could no longer have the slightest influence on the calculation of the compensatory amount.

At that time the only risk to which traders were subject if they sold their dollars forward and there was later a rise in the dollar, was that of losing a profit.

The Council emphasizes that more than two thirds of the applications for export certificates were lodged on 30 March or 2 April and the other third between 2 and 22 May. The certificates issued on the applications of 30 March were only notified by ONIC around or as from 20 and 25 April. It is only as from these dates that rights could have arisen. Before then the applicants had no certainty of obtaining a certificate which would assure them of a delivery date beyond 31 May. This period from 20 to 25 April is a very advanced date in the preparatory stage of Regulation No 1112/73.

On the basis of the normal period of validity of the certificates issued on the applications lodged in March, the Commission fixed the date for the entry into force of Regulation No 1112/73 as Monday, 4 June. No other transitional measure was necessary for certificates of normal duration.

Thereafter transitional measures were adopted in order to provide for the case of applicants who obtained certificates with an exceptional period of validity.

In any event it must not be forgotten that the Community authorities had warned the interested parties that the public interest was at stake and that transitional measures were in existence; no Community liability could therefore arise: cf. Case 74/74 CNTA v Commission ([1975] ECR 533).

Legitimate expectation to which traders can lay claim must not blind them.

In any event, having acquired their certificates from the Compagnie Continentale France in June/July 1973, after the appearance of Regulation No 1463/73 the applicants in Cases 95 to 97/74 cannot pretend to have been surprised by that regulation.

As regards the certificates applied for in May with a normal period of validity until the end of July, the dates of application, that is to say from 2 to 22 May, are dates subsequent to the entry into force of Regulation No 1112/73. In the Council's opinion the implementing regulation was to be expected any day.

Finally, the Council claims that in fact the Community on 12 March cut itself adrift from the US dollar and that it was this action which in itself resulted in Regulation No 1112/73. If the applicants suffered damage, it is due to the fact that as from 12 May the dollar had progressively fallen in value and the applicants had on their own statements remained completely unconcerned. The Community is not bound to guarantee its citizens against the variations in every currency and to impose on its tax-payers the burden of monetary risks.

5. The transitional system

The applicants complain that the Commission did not adopt adequate transitional measures.

In the view of the applicants in Cases 95 to 97/74 the transitional measures do not alter the fact that damage was suffered. The Community's liability is incurred by the breach in the principle of equality of all before charges resulting from the common monetary policy.

In the view of the Compagnie Continentale France the contents of the transitional measures and the conditions under which they were applied demonstrate their defective and irrational nature. The exporters of agricultural products who obtained certificates after 4 June, the date when the new system came into force, had their monetary compensation assured by means of refunds which henceforth incorporated the compensation for fluctuations in the dollar. As against this, under the former system the applicants were given advance fixing or their refunds, that is to say of the refunds the amount of which does not take into account the fluctuations in the dollar.

Furthermore, the regulation on transitional measures with a view to applying the new system of calculating amounts ought to have been published contemporaneously with the entry into force of this new system. But the publication on 27 June 1973 precluded any forecast as to the transitional system of compensation.

In the view of the Compagnie Algerienne de Meunerie the transitional measures, which ought normally to have been decided upon before the entry into force of the new system and to have been applied at the same time as the latter were only taken belatedly, that is to say some two months later.

Through the Commission's default, cereal exporters remained until 28 July 1973 in a state of uncertainty as to the transitional measures which were going to be taken with a view to applying the new system of compensatory amounts.

So long as the former system of compensatory monetary amounts covering cereal exporters against exchange risks in relation to the dollar remained applicable and the interested parties were not aware of the date on which it would cease to apply, a cereal exporter, for the reasons already indicated, could do nothing to protect himself against fluctuations of the dollar.

Regulation No 2042/73 does not take into account the fact that the belated publication of Regulations Nos 1463/73 and 1469/73 of 30 May 1973 in the Official Journal of 4 June 1973 had by any reckoning prevented exporters of cereals from taking any measure to cover the exchange risks to which they were subject, not only until 3 June but until at the very least 5 June 1973.

A substantial inequality was created between exporters who had completed export certificates before 4 June 1973, according as at 4 June 1973 these exporters had or had not as yet effected all the exports to which they had committed themselves in completing these certificates; here is a case of infringement of the rule of the equality of individuals before the public services.

The Comptoir Commercial Andre et Cie relies substantially on the same arguments as the applicant in Case 15/75.

In so far as the applicant's complaint against the Council relates to the existence of alleged defects in the transitional system, the Council considers that their application is directed to the wrong quarter. This complaint is inadmissible in so far as the Council is concerned.

The Commission, considering that the applicant's real complaint relates to the absence of an adequate transitional system, replies that the transitional system of Regulation No 2042/73 was a purely equitable measure which the Commission was free to adopt or not to adopt. Whilst this regulation may result in traders suffering damage, bearing in mind the course taken by the dollar, this does not mean that such damage can be attributed to the Community. In a case of advance fixing, the traders were in a somewhat uncomfortable situation so that it was therefore justified and equitable to adopt a transitional measure in their favour.

The Commission's power in equity and without legal obligation to adopt such transitional measures arises under Article 6 of Regulation No 974/71 which, within the framework of the Management Committee procedure, confers wide powers on the Commission which may involve other derogations from regulations relating to the common agricultural policy.

If one proceeds on the assumption that until 4 June 1973 there existed some uncertainty as to the method of calculation, then that uncertainty was removed, at any rate as from that date. The continuation as a transitional measure of the monetary amount applicable on 3 June 1973 was equivalent to taking into consideration the dollar exchange rate as it had moved until that date. On the other hand it seemed to the Commission that to extend this exchange guarantee to fluctuations in the dollar subsequent to that date would go beyond considerations of equity, all the more so since it was impossible to know how the dollar rate would continue to move. After 4 June 1973 therefore it was up to exporters to cover themselves against the exchange risk inherent in the future movement of the dollar by, for instance, selling forward those dollars which they expected to receive from the other parties to their contracts.

Besides, given the fact that nothing in the regulations which entered into force on 30 April 1973 gave reason to suppose that there would be any transitional measure in respect of old contracts, the applicants had no valid ground for awaiting such measures without taking precautions.

The interested quarters ought to have been aware of the fact that the Commission showed little enthusiasm for taking transitional measures. In fact, the delay which occurred in adopting Regulation No 2042/73 was largely due to the Commission's considerable hesitation whether to take this course. The Commission's experience in connexion with other transitional measures had been discouraging. The possibilities thus made available to the trade had in fact been abused and in particular, fictitious contracts had been submitted to the competent national administrations so as to benefit from the more favourable transitional system. This experience had led the Commission to be careful before adopting such measures. The fact that an exporter has obtained an advance fixing for, say, 30 March 1973, in no way implies that he has already concluded his contract at that date. He might perfectly well have concluded it at a later date and thus already have taken into account the new method of calculation of the monetary amounts.

Besides, the setting up of a transitional system such as that envisaged by the applicants would have involved extremely complicated administrative machinery out of all proportion to the objective sought.

Even assuming that the transitional system set up by the Commission was not entirely satisfactory or that it had been possible to take wider transitional measures on the lines desired by the applicants, the Commission's view is that still nothing approaching a really serious and flagrant infringement would have occurred. Even if the principle of liability in the absence of illegality were accepted, here too the damage complained of must still be the consequence of a sufficiently flagrant violation of a superior rule of law. The situation in the present case is far removed from one in which the legislature has infringed the principle of equality of public charges by causing the applicants any particular and serious damage.

The effective discontinuance of compensatory monetary amounts occurred after a delay of more than a month from the publication of Regulation No 1112/73 which clearly allowed the effect on the French market to be anticipated. The difference as compared with the situation in the CNTA case (above referred to) is therefore clear. Besides, the discontinuance occurred after numerous warnings.

The Commission is not obliged to take measures which re-establish the legal position of parties as if the change in legislation had not taken place. The fact that these measures were adopted after some delay caused no damage to the applicants. These measures at least included some compensation for that part of the losses which the exporters had been unable to avoid by measures to cover the exchange risks. The transitional measures also may afford compensation (cf. the CNTA case, above referred to).

6. The damage

In the applicant's view the damage in respect of which they expect to be compensated consists of the difference between the compensatory amount which they in fact received under Regulation No 2042/73 and the compensatory amount which they would have received if the method of calculation of compensatory amounts in force at the date when the export certificates were obtained had been kept in force during the whole period of validity of these certificates. By offering such a method of calculation the applicants thus oppose a possible interlocutory judgment which bears merely on the question of liability.

The Council and the Commission do not at the present stage of the proceedings desire to go into an assessment of the damage since in their view the Court ought first to decide the question of possible liability on the part of the Community. Nevertheless the Council and the Commission doubt the reality of the losses allegedly suffered by the applicants. The Commission considers that in the event of the Court's rejecting the argument based on the violation of vested rights, the applicants would then have to demonstrate how their real losses are made up.

Oral arguments were heard on 9 October 1975.

The Advocate-General delivered his opinion on 12 November 1975.

Law

1. These six applications ask that the Community be ordered to pay various sums by way of compensation for the damage caused to the applicants by the application of the new method of calculation of compensatory amounts introduced by Regulation No 1112/73 of the Council (OJ 1973, L 114, p. 4) in respect of exports for which export certificates had previously been granted.

2. Even though the damage arising from the application of this new method was lessened by the transitional measures adopted by the Commission in its Regulation No 2042/73 (OJ 1973, No 207, p. 34) these are claimed not to have been sufficient wholly to counter its effect.

Admissibility

3. Without expressly raising an objection of inadmissibility the Commission criticizes the applications in Cases 95 to 98/74 in relation to Article 37 (4) of the Rules of Procedure in that there are not annexed thereto the contracts and certificates relating to the exports on which the applicants rely in order to establish that they became entitled to have the compensatory amounts calculated by one particular method or that they acted in expectation of this method's continuing to be applied.

4. The alleged irregularities were not only such as to embarrass the defendants in the preparation of their defence but were moreover only rectified, without any valid explanation, after the written procedure had been closed and some days before the oral procedure was opened.

5. Whilst it is not possible at the present stage of the proceedings for the Court to arrive at a decision on the amount of the damage it can nevertheless deal with the preliminary matter of possible liability on the part of the Community.

6. In Cases 95 to 97/74 and 100/75, and partly in Case 98/74, the export certificates had been obtained by third parties before the change in the system of compensatory amounts or before the date of its application but the extracts of the said certificates were only forwarded to the applicants at a later date.

7. The Council raises a specific objection of inadmissibility against these applications on the ground that the right to compensation under Article 215 is not transferable so that the title on which the applicants rely is wholly defective.

8. The applicants in Cases 95 to 97/74 and 100/75 refer to the contracts which they entered into before the change occurred or before it took effect and under the provisions of which they were obliged to accept the obligations arising from the certificates.

9. Since Community law allows the transfer of extracts of certificates, the applicants must be enabled to show that they come within the category of parties who have acquired rights and whose expectation deserves protection.

10. Whilst the fact that the applicants received certain extracts by way of transfer from third parties may be of importance in relation to the substance, it cannot affect the admissibility of the application.

Substance

11. In the first place the applicants point out that the application of the new method of calculation of compensatory amounts to exports which they had earlier committed themselves to undertake adversely affected the rights which they acquired by the grant of export certificates comprising advance fixing of the amount of the export refund.

12. Whilst admitting that compensatory amounts cannot be fixed in advance they consider that the method of calculation thereof in force at the time of completion of the export certificates must continue throughout the period of validity of such certificates in respect of all exports effected on the basis thereof.

13. No provision in Regulation No 974/71 confers on exporters a right to the continuance of a particular method of calculation of compensatory amounts.

14. Under Article 1 of that regulation the right to benefit from a compensatory amount or the obligation to pay it only arise by the export's taking place and only as from the time when it takes place.

15. Any submission based on a violation of vested rights must therefore be rejected.

16. The applicants further argue that the application of the new method of calculation of compensatory amounts affected the confidence which they were entitled to put in the continuance of the former system.

17. It is appropriate in the first place to recall the purpose and the development of the system of compensatory amounts.

18. The system of the Community unit of account expressed by reference to a certain weight of gold originally allowed the fixing of single prices for the whole Community, thanks to the fixed relationships between the Community currencies.

19. The financial occurrences in 1971, characterized by the de facto abandonment of the international rules relating to margins of fluctuation of rates of exchange, led the Council to institute a system which allowed the Member States if necessary to levy compensatory amounts on imports and to grant them on exports, both in trade with the other Member States and in trade with third countries.

20. This system was intended to neutralize the effect of the monetary measures on the prices of certain basic agricultural products in respect of which intervention prices had been laid down and thus to avoid a diversion of trade.

21. The provisional nature of the system of compensatory amounts is emphasized by Regulation No 974/71 of the Council, Article 8 (2) of which provides that it ‘shall cease to be applicable as soon as all the Member States concerned again apply the international rules on margins of exchange rate fluctuation…’.

22. Contrary to what is argued by the applicants, this provision, which has the purpose of setting an automatic final date to the regulation, leaves unaffected the duty of the Community institutions to modify the system whenever this appears necessary in order to ensure that it performs its corrective function.

23. Were it otherwise, the application of the system of compensatory amounts might itself become a source of distortion.

24. Indeed after the system, had been modified on several occasions and had in fact become part of normal practice in all the original Member States, the Council, by Regulation No 2746/72, made it compulsory in law and as regards the financing thereof made it part of the common agricultural policy.

25. Notwithstanding the changes, the method of calculation remained the same in 1971 and 1972 and is the result of the application to the prices of the agricultural products in question of a percentage representing the difference in terms of the United States dollar between the official parity of the national currency and its true parity.

26. In this indirect way the Council sought to take into account the fact that a significant proportion of the dealings was expressed in dollars.

27. For as long as the rate of exchange of the United States dollar was taken into consideration for the purpose of calculating compensatory amounts the system in fact ensured a measure of protection against the risk of devaluation of the dollar where the contract was expressed in that currency.

28. Since notwithstanding the devaluation of the United States dollar in February 1973, the pressure on that currency in the early part of the year continued, the Council decided in the course of its meeting on 11 and 12 March 1973 that on the one hand the central, banks of the Member States should cease to support the dollar and on the other hand that the currencies of six of the Member States should float vis-à-vis other currencies whilst keeping to certain margins of fluctuation as between themselves.

29. Consequently, following upon the Council's request of 12 March 1973, the Commission on 21 March 1973 proposed to the Council that reference to the dollar should be abandoned and replaced as regards the six Member States whose currencies were floating together, by reference to central rates and, in respect of the three other Member States, by reference to representative rates established on the basis of the rates found to exist on the market during a given reference period.

30. The possibility of the adoption by the Council of the Commission's proposal of 21 March, which had been expected since 12 March and immediately became known in interested quarters, both through the press and through their regular contacts with the Commission, became more likely day by day, all the more so since the Council's decision of 12 March involved a daily change in the rates of exchange as between the currencies of the Member States and the dollar.

31. This proposal was adopted by the Council in its Regulation No 1112/73 of 30 April 1973, which was published on the same day and entered into force on 1 May 1973.

32. Under the provisions of Article 3 of Regulation No 1112/73 the regulation applied ‘from the date on which the detailed rules required for its application … enter into force’.

33. Having adopted the implementing regulations on 30 May 1973 the Commission did not publish them in the Official Journal until 4 June 1973, on which date they entered into force.

34. In order to examine in this context the transactions involved in the different applications it is necessary to make a distinction according to whether the export contracts were entered into before or after the publication of Regulation No 1112/73.

Contracts entered into after 30 April 1973

35. Those applicants who entered into export contracts after 30 April 1973 could not have been unaware of Regulation No 1112/73 and the new method of calculating compensatory amounts.

36. Nothing in that Regulation justifies the assumption that in the implementing procedures there would be any transitional measure whatsoever in respect of contracts entered into before the date of application of the new method of calculating the amounts.

37. Since the applicants were free to take all such precautions as they thought fit in drawing up their sale contracts they cannot claim to have committed themselves in reliance on the former method of calculation continuing in respect of the exports contemplated.

The contracts entered into before 30 April 1973

The contract of 23 March 1973

38. The applicant in Case 15/75 concluded an export contract on 23 March 1973, the very day on which the Council received the Commission's proposal.

39. The contract was concluded with the Polish undertaking Rollimpex for the sale to the latter of 35000 metric tons of European barley at a price expressed in dollars.

40. The applicant explains that it could have carried out the sale by supplying either barley produced in the Community or barley produced in European states which were not members of the Community.

41. In the latter case it would have purchased the barley for dollars whilst in the first case it would have purchased at the common price but would ultimately have benefited from an export refund and a compensatory amount.

42. Since the applicant reserved for itself in the contract an option as to the source from which the barley was to come, it cannot argue that it entered into an obligation in reliance on the existence of a compensatory amount, still less on the continuance in force of the former method of calculation of the latter.

43. In opting on 30 March 1973 in favour of the export of Community barley, by applying for a certificate of exceptional duration with advance fixing of the amount of the refund, the applicant, as a prudent exporter made a commercial choice based on the state of the market with all the risks inherent in such a choice.

44. Amongst the risks which could be foreseen on 30 March or at the latest on 20 April, this being the date of the issue of the certificate and a date on which it could still have withdrawn its application, there was the probability of a change in the method of calculating the compensatory amounts.

45. Even if it was not certain that the change suggested by the Commission would be adopted by the Council, it ought on those dates at least to have been clear to an experienced trader that the introduction of a new method of calculation was imminent.

46. The applicant cannot therefore invoke a legitimate expectation of the continuance of the former method of calculation.

The contracts of 28 and 29 March

47. By contract dated 28 March 1973 concluded in Moscow between a Soviet importer and a French exporter, the Groupement d'Intérêts Economiques France Céréales, the latter undertook to sell 300000 metric tons, increased on the following day to 500000 metric tons, of French barley at a price expressed in dollars.

48. The applicants in Cases 95 to 98/74 explained that this contract was negotiated by the French government as a ‘prestige contract’ leaving the exporter with only a reduced profit margin but having the purpose of opening a new market to the French cereal trade.

49. After the conclusion of the contract the French government invited several French merchants to execute the contract and, according to the applicant in Case 98/74, imposed it on the applicants.

50. The applicants and several other merchants set up in April 1973 a ‘common account’ with a view to executing the same.

51. Nevertheless, the document which was produced in this connexion is not dated and, moreover, the applicant in Case 96/74 is not included therein.

52. In any event, by 29 March the Commission's proposal had already been discussed by the Council and the change in the basic system of calculation of compensatory amounts was foreseeable, taking into account the circumstances already set forth.

53. Accordingly, it cannot be argued that the French agent who at that date negotiated the contract of 29 March 1973 did so in reliance on the continuance of the former method of calculation of compensatory amounts.

54. The fact that the contract was concluded on 29 March 1973 in relation to a quantity of 500000 metric tons, on a long term basis and expressed in dollars, at a time when the central banks of the Member states were no longer obliged to intervene in order to support that currency in fact involved a considerable commercial risk.

55. In view of all these factors it cannot be argued that the applicants could at a time when they entered into the bargain have had a legitimate expectation of the continuance of the former system.

56. In these circumstances the applications must be rejected.

Costs

57. Under Article 69 (2) of the Rules of Procedure the unsuccessful party shall be ordered to pay the costs.

58. The applicants have failed in their submissions.

59. They must therefore be ordered to pay the costs.

THE COURT hereby:

(1) Dismisses the applications;

(2) Orders the applicants to pay the costs.

1 Language of the case: French.