Judgment of the court of 15 décembre 1977 Firma Gebrüder Dietz v Commission of the European Communities «Monetary compensatory amounts»

In Case 126/76

THE COURT composed of: H. Kutscher, President, M. Sørensen and G. Bosco, Presidents of Chambers, A. M. Donner, J. Mertens de Wilmars, P. Pescatore and A. O'Keeffe, Judges, Advocate-General: J.-P. Warner Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts and issues

The facts and the arguments of the parties put forward during the written procedure may be summarized as follows:

I — Facts and procedure

The German undertaking Dietz, the applicant, is active in the international sugar trade. On 17 December 1971, it concluded a sales contract with the Italian undertaking Peccotta for approximately 10000 tonnes of white sugar to be delivered between January and June 1972 (in fact only 6000 tonnes was delivered).

The agreed price, Lit 15250 for 100 kilograms net weight, had been calculated in accordance with Regulation No 2635/71 of the Commission of 10 December 1971 amending the compensatory amounts in agriculture following the temporary widening of the margins of fluctuation for the currencies of certain Member States (OJ L 273, p. 1) which provided for a compensatory amount of DM 8.85 per 100 kilograms for exports from Germany to Italy.

Only at the end of December 1971 did Italy decide to make use of the authorization provided for in Article 1 (1) of Regulation (EEC) No 974/71 of the Council of 12 May 1971 on certain measures of conjunctural policy to be taken in agriculture following the temporary widening of the margins of fluctuation for the currencies of certain Member States (OJ, English Special Edition 1971 (I), p. 257) to ‘charge on imports … [and] grant on exports … compensatory amounts …’ In view of this, the Commission adopted Regulation EEC) No 2887/71 of 30 December 1971 (OJ, English Special Edition 1966 — 1972, p. 67) amending Regulation (EEC) No 1013/71 laying down detailed rules for the application of Regulation (EEC) No 974/71.

In the applicant's view, the new situation meant that the compensatory amount which it was granted in Germany on its exports to Italy was reduced by the compensatory amount applied to the goods in Italy.

It bases the calculation of the resulting damages which it has suffered on the difference between the purchase price of the 6000 tonnes in question, increased by the expenses (DM 5429829.75) and the proceeds of sale (DM 4891806.65), in other words DM 538023.10. The damage for which it requests compensation, DM 329429.40, represents the difference between the monetary compensation which it would have obtained if the system of compensatory amounts in force at the date when the contract was concluded had remained applicable (DM 649452.50) and what it in fact received (DM 320052.50). The actual loss which it suffered is equal to the difference between the purchase price of the 6000 tonnes in question and the proceeds of sale therefrom (DM 538023.10) less the monetary compensation actually received (DM 320052.50), in other words DM 217970.60.

These facts gave rise to national proceedings before the Bundesfinanzhof (Federal Finance Court). Because it was uncertain whether the latter would comply with its suggestion to refer the matter to the Court of Justice for a preliminary ruling, the applicant lodged the present application in order to take into account the period of limitation contained in Article 43 of the Protocol on the Statute of the Court of Justice.

The application, dated 23 December 1976, was entered in the Court Register on 24 December 1976.

By an application on a procedural issue registered on 7 February 1977, the Commission raised an objection of inadmissibility in accordance with Article 91 of the Rules of Procedure of the Court of Justice of the European Communities.

On 9 March 1977, the applicant submitted its observations on the application on the procedural issue.

By order of 30 March 1977, the Court reserved its decision on the objection raised by the defendant for the final judgment.

The written procedure then followed the normal course.

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

II — Conclusions of the parties

The applicant claims that the Court should:

a) Order the defendant to pay to the applicant DM 329429·40, together with 6 % interest from 1 October 1972;

b) Order the defendant to pay the costs.

It suggests that the Court should first state that the Commission must pay compensation and should leave the parties to reach agreement on the final amount of the damage, failing which the Court would decide the matter.

The Commission, in its application on a procedural issue, contends that the Court should:

a) Dismiss the application as inadmissible in accordance with the procedure laid down in Article 91 (1) of the Rules of Procedure;

b) Order the applicant to pay the costs.

The Commission, in its defence, contends that the Court should:

a) Dismiss the application as inadmissible and in any case unfounded;

b) Order the applicant to pay the costs.

It also requests, as a precaution if the Court considers the application as admissible and decides that the Commission is liable, that the Court should decide that point by means of an interlocutory judgment and should reserve the question of the amount of the damage for a later stage of the procedure.

III — Submissions and arguments of the parties

A — Admissibility

According to the applicant, the right to compensation for the damage does not result from measures adopted by the national authorities (cf. Case 46/75, I.B.C. Importazione Bestiame Carni s.r.l. v Commission of the European Communities [1976] ECR 65) but from an omission on the part of the Commission within the framework of the provisions issued in implementation of Article 6 of Regulation No 974/71.

The Commission takes the view that the application is inadmissible. It claims that it follows from the case-law of the Court that an application for damages under Article 215 may not be used for the purpose of contesting national measures adopted in application of Community provisions (cf. Case 96/71, R & V Haegeman v Commission of the European Communities [1972] ECR 1005; Joined Cases 178, 179 and 180/73, Belgian State and Grand Duchy of Luxembourg v Mertens and Others [1974] ECR 383; Case 99/74, Société des Grands Moulins des Antilles v Commission of the European Communities [1975] ECR 1531; Case 46/75, cited above, which is very close to the present case; Joined Cases 67 to 85/75, Lesieur Cotelle et Associés S.A. and Others v Commission of the European Communities [1976] ECR 391). Whenever it is provided that Community law must be applied by the Member States in the specific case to which reference is made, an individual who considers himself adversely affected by such an implementing measure must contest that measure himself (with the possibility of referring the case to the Court of Justice for a preliminary ruling as to its validity). The method of recourse provided by Article 215 may only be used in a case in which the alleged damage is due directly to the conduct of the Commission.

A particular case, that of Case 43/72, Merkur-Außenhandels-GmbH v Commission of the European Communities [1973] ECR 1055 might however be mentioned, in which the applicant was spared the ‘long journey’ through the national courts. But although in that case the independent nature of an application for damages and the question of the interest of legal protection were still determining, in the meantime the problem of the division of jurisdiction between the Member States and the Community has become determining.

In the present case, it follows from the provisions of Article 1 (1) of Regulation No 974/71 and from those of the first paragraph of Article 4 of Regulation No 2887/71 that the authorities of the Member States have power to apply the rules on monetary compensatory amounts. For an application for damages to be admissible it is necessary for all domestic methods of recourse to have been exhausted in order to avoid double compensation (cf. Joined Cases 5, 7 and 13 to 24/66, Firma E. Kampffmeyer and Others v Commission of the EEC [1967] ECR 245 and Case 30/66, Firma Kurt A. Becher v Commission of the European Communities [1967] ECR 285).

With regard to the risk of interrupting the period of limitation, the provisions of the second subparagraph of Article 43 (1) of the Protocol on the Statute of the Court of Justice must apply by analogy to an application for annulment before a national court.

A decision of the Court of Justice which is given within the context of a procedure for a preliminary ruling and which is in favour of the applicant would prompt the Community authorities to adopt legislative measures accordingly.

In Joined Cases 68 to 85/75, quoted above, the Court considered that the fact that the compensatory amounts must be fixed by the Commission did not constitute a valid reason for not referring the applicants to domestic methods of recourse.

The applicant observes that:

if the Commission had laid down special or transitional rules, they would have created a direct right for the applicant and their application by the authorities of the Member State would rather be technical in nature;

the Commission's argument amounts to granting the remedy of an application for damages only to undertakings which have directly suffered the damage caused by the Community's actions. This direct link is broken by the concrete implementing measures which the national authorities must necessarily adopt. However, in the judgments in Cases 99/74 and 46/75, cited above, the Court only declared that it had no jurisdiction in cases in which the application was in fact directed against measures adopted by the national authorities for the purpose of applying provisions of Community law. On the other hand, in all cases in which the damage originated in a measure which the Community issued or failed to adopt, regardless of whether that measure did or did not necessitate implementing measures on the part of the Member States, the Court declared that it had jurisdiction;

in a case in which the Commission properly does not adopt special or transitional rules there is under Community law a duty on Member States to adopt such rules; however it is irrelevant with regard to the purpose of the application whether, within the framework of the system which was then in force, the Member States were by virtue of their own jurisdiction authorized or even under a duty to compensate for undue hardships by means of national measures;

the procedure under Article 215 is an independent method of recourse and the idea of ‘exhausting all domestic methods of recourse’ has no basis either in the Rules of Procedure of the Court or in general principles.

In its defence, the Commission makes the following observations:

whether the implementation by the authorities of the Member States of special rules proves to be simple or complex, it remains a measure issued in implementation of Community law which might result in causing damage to the person concerned or prevent such damage from being caused;

it is possible to ask whether the delimitation of the division of powers between the Community and the Member States should not be laid down once and for all so that an application for damages lodged in cases of this type is still inadmissible.

The applicant, in its reply, claims that it is necessary first to find that there has been a wrongful omission within the context of Regulation No 974/71 before the payment by the Federal Republic of a higher amount of (monetary) refund. The view-point of the defendant, carried to its logical conclusion, would mean that Member States are entitled, on their own account and even in the absence of any Community authorization, to grant higher (monetary) refunds during the period in which the goods were exported.

In its rejoinder, the Commission replies that the applicant must assert its right to the payment of a (monetary) refund before the competent national authorities and before the national courts. During that procedure, the Court of Justice might be asked to give a preliminary ruling but an application for damages cannot replace an abstract application for a declaration that a provision of Community law the application of which an individual considers has caused him damage is invalid.

B — The substance of the case

The applicant maintains that the right to compensation for the damage suffered is based on a wrongful omission on the part of the Commission which, in breach of superior rules of Community law, did not lay down in Regulation No 2887/71 or in a supplementary regulation, special or transitional rules protecting contracts concluded before 19 December 1971.

This omission constitutes a breach of the principle of the protection of legitimate expectation (cf. Case 74/74, Comptoir National Technique Agricole (CNTA) S.A. v Commission of the European Communities [1975] ECR 533): the applicant had every reason to expect that Italy, given its monetary and economic situation, would not use the authorization granted by Article 1 of Regulation No 974/71. The fact that it is treated ‘as a quasi-third country’ in the system of monetary compensatory amounts has brought that country more advantages than disadvantages (the whole percentage of difference between the old parity of the dollar in relation to the Deutschmark and the new parity, in constant fluctuation as a result of the floating of the currency, was compensated for by a refund regardless of the development of the parity between the Deutschmark and the lira) and for that reason there was no economic need for the decision to adhere to that system.

The applicant had also expected that if the system was amended its contract would be protected by special or transitional rules. It was not able to cover itself against risks of changes. The Commission recognized this in the recitals of the preamble to Regulation No 2042/73 (‘… under the former system the risk of changes in the rate of exchange in relation to the dollar was covered by the monetary compensatory amount’). According to the case-law of the Court, the Community is liable if the Commission abolishes with immediate effect and without warning the application of compensatory amounts in a specific sector without adopting transitional measures (cf. paragraphs 41 to 43 of the Decision of the Court in Case 74/74 quoted above). However, in subsequent regulations, the Commission included exports in the transitional system. Moreover, the first regulation laying down detailed rules of application for Regulation No 974/71, Regulation No 1013/71, provided for special rules for old contracts.

The principle of equality has also been infringed. In fact, Article 4 of Regulation No 2887/71 exempts from the system of compensatory amounts existing import contracts but not export contracts. However, that system constitutes a whole, the two countreis in question belong to the Common Market, and the exporter has more need of protection than the importer who may, if need be, amend his prices. The infringement of the principle of equality is aggravated by the transitional rules laid down in subsequent regulations.

Compensation for the damage in the amount of DM 329429.40 (the calculation of which is set out above) must be granted to the applicant at least for the damage actually suffered, in other words DM 217970.60 (see also above).

The Commission, which only adopts a view-point as to whether the application is well founded in the alternative, replies that the requirements for the Community to incur liability as the result of an infringement of the principle of the legitimate expectation of interested parties are not fulfilled. In fact, the adoption of transitional or special measures constitutes a legislative measure involving a measure of economic policy so that the Commission has wide discretionary power in the matter and there can be no question in these circumstances of its incurring liability except in the case of a flagrant breach of a superior rule of law for the protection of individuals.

In the present case, first of all the conduct of the Commission was not unforeseeable in nature since it had already acted in exactly the same way when the system of compensatory amounts had been applied by the Federal Republic of Germany and the Netherlands, then by Belgium and Luxembourg. Regulation No 974/71 contains an authorization which is valid for all the Member States and which they may use at any time if the development of the monetary situation decides them to do so. With regard to the rules on the balance operation laid down in Article 2 (3) thereof for the application of the system to transactions carried out between the Member States applying compensatory amounts, it was actually put into operation before December 1971. Its application by Italy therefore in no way altered the system of compensatory amounts.

On 17 December 1971, the day before the opening of the meeting of the ‘Club of Ten’ in Washington, the applicant should have expected that the system of monetary compensatory amounts would be applied to an increased extent.

Moreover, special rules have only ever related to imports into the Member States applying a system of compensatory amounts (cf. previous Regulations Nos 1013/71 and 1871/71).

The special provision laid down in Article 4 of Regulation No 1013/71, according to which certain ‘imports’ are not subject to the application of compensatory amounts, cannot provide an argument in the present case. In fact, according to the penultimate recital in the preamble to the same regulation, ‘compensatory amounts should not be levied on goods imported’. Moreover, it is necessary to observe above all that in all the regulations fixing monetary compensatory amounts the balance operation has been carried out.

Likewise, no contracts concluded before the action which is alleged to have caused damage existed or were irrevocable. Evidence of the existence of the contract of 17 December 1971 has not been supplied. The date, accompanied by initials written beside the registration stamp from the import agency, is apparently 6 January 1972. Even if the Commission had been under a duty also to lay down special rules for export contracts there is nevertheless no reason why the delimitation of the field of application of such rules must comply with criteria which are less strict than in the case of import contracts.

In the same way it is possible to call in question the inevitable nature of the losses. The applicant could have concluded the contract in dollars and protected itself by means of forward deals in foreign currency instead of dealing in lire. The compensatory amounts should moreover not be considered as equivalent to a guarantee for traders against the risks of change in the exchange rate (cf. 74/74).

In the judgment given in Case 74/74, the Court stressed as another condition the absence of an overriding matter of public interest in the implementation of the measure in question without laying down transitional rules. This condition must be considered in relation to the legitimate expectation of interested parties. In the present case, through the effect of the rule relating to the balance laid down in Article 2 (3) of Regulation No 974/71, the amendment of the rules in force would have resulted not in the imposition of a compensatory amount on the imports from Germany into Italy but certainly in the reduction of the compensatory amount to be granted on exports from Germany to Italy.

The public interest in the implementation of the authorization granted was identical to that which led to the creation of the whole system and therefore to the interest in the maintenance of the proper functioning of the Common Market.

It is impossible to draw a contrary conclusion. from the measure of natural justice laid down by Article 4 of Regulation No 1013/71 with regard to imports in the Community, in other words a derogation in respect of old contracts. So far as imports from third countries into the Community are concerned, the imposition of compensatory amounts constituted a completely new charge, as a result of which performance of the old contracts was unexpectedly hindered. On the other hand the applicant only suffered a reduction in a benefit which it had been granted and not the imposition of a new financial charge.

With regard to the infringement of the principle of equality, the applicant obtained, just as in the past, monetary compensation when the goods were delivered in Italy even if the amount thereof had been reduced, while a fresh charge was imposed on traders importing from third countries.

With regard to the amount of the damages, the Court decided in Case 74/74 that it is impossible to claim damages greater than the amount of the losses suffered on account of the repeal of the compensatory amount.

The applicant replies that the defendants failure to act may not be described as a measure of economic policy and that it is only the exercise of the power conferred by Article 6 of Regulation No 974/71 from the legal and constitutional view-point of the protection of legitimate expectation, of the principle of equality, of good administration and of natural justice.

Although it is true that the wording of the recitals of the preamble to Regulation No 1013/71, in the same way as Article 4 thereof, does not state expressly that compensatory amounts continue to exist with regard to exports and therefore with regard to the performance of old contracts, this interpretation seems however to be a necessary corollary to the rules on old contracts. It is contrary to the spirit and the objective of the transitional rules laid down in the said Article 4 to base an argument on the provisions relating to the balance in order to make the applicant, in his capacity as an exporter, liable for the compensatory amount normally payable in the case of imports into Italy.

The contract was indeed concluded on 17 December 1971. The contract was registered with the import agency as a precautionary measure since the applicant could not deduce expressly from the regulation amending Regulation No 1013/71 that the provision relating to the balance did not apply to old export contracts.

With regard to the principle of the protection of the legitimate expectation of interested parties, the applicant claims that Italy was forced in certain respects to apply the system of compensatory amounts. Those circumstances therefore go beyond the simple acceptance of the business risk which the applicant must normally accept and against which it should be protected.

The reference to Regulation No 1013/71 is irrelevant since at the time when the system of compensatory amounts was put into force no export contract calculated and concluded on the basis of the (monetary) refunds applicable existed. The problem of interim rules was not brought before the Commission, perhaps because the provisions relating to the balance resulting from the operations did not result in a large reduction in the compensatory amounts.

The applicant shows by means of sample figures the reasons, based on commercial and financial considerations why it was appropriate to conclude the contract in lire. Thus the monetary risk and the risk of changes, which were linked to the monetary compensatory amount, were reduced to the minimum. If the sale price had been fixed in Deutschmarks it would have been possible to lose money or, on the other hand, to make money and the latter risk thus constituted speculation. The sale price was not concluded in dollars since the exchange rate for that currency continued to fall and the Italian buyer was not able to cover himself by means of forward foreign exchange deals. No bank at that time sold dollars on the forward market.

With regard to a possible overriding matter of public interest the Commission, by amending Article 4 of Regulation No 1013/71, recognized that it was not necessary to apply immediately the general system of compensatory amounts. The defendant is therefore attempting in the present case to undermine a principle which it itself has recognized.

The infringement of the principle of equality means that the foreign exchange losses must be compensated for in the same way for all the branches of the economy. The fact that one branch of the economy receives, in addition to direct subsidies, supplementary aid through the system of compensatory amounts, while the business sector to which the applicant belongs does not even receive compensation for foreign exchange losses constitutes a flagrant breach of this principle.

The Commission replies that the Court, in the judgment in Case 97/76, Merkur Außenhandel GmbH & Co. KG v Commission of the European Communities [1977] ECR 1063, accepted the classification of legislative measure of economic policy in respect of another measure also based on Article 6 of Regulation No 974/71.

With regard to Article 4 of Regulation No 1013/71, the Commission, in its defence, did not claim that it should also apply to exports but merely that the concept of imports contained in that provision did not include the transport of goods from another Member State to Italy. In the absence of rules relating to the balance, the applicant did not even receive the compensatory amount which was valid at the time when the contract was concluded and applicable to exports from the Federal Republic of Germany. It received another amount, that is, the amount applicable at the time of the exportation calculated according to the criteria laid down in Regulation No 974/71. That amount was not fixed by the Commission because, in accordance with the correct interpretation of Article 4 of Regulation No 1013/71, the balance operation was carried out at the time at which the amounts applicable were fixed.

The date-limit for the registration of the contract fixed in the regulation expired on 31 December 1971, the date on which it was published and came into force. Those rules were justified by the need to prevent with certainty the conclusion and registration of ante-dated contracts after the publication of the measures which had been adopted.

The action taken by Italy and what its motives may have been have nothing to do with the question of the non-contractual liability of the Community. In view of the fact that Regulation No 974/71 contained from the outset a flexible system of authorization for the Member States and that the Commission had not previously laid down in an identical situation (the accession of Belgium and Luxembourg) special rules for exports from one Member State to another, the application of the rules on the balance operation was foreseeable. This applies especially in the present case since the modification did not have the effect of imposing on the applicant, in the form of the imposition of a compensatory amount, a charge which did not exist for it previously but led, by the reduction in the amount to be granted, merely to the reduction in an advantage from which it benefited. The rules which the applicant complains of amounted in practice to the same guarantee as that obtained by the advance fixing of the amounts. However, that instrument did not exist for the compensatory amounts.

The limited special rules were adopted after weighing the public interest in immediate general application against the private interest of traders in not taxing, by the fresh imposition of compensatory amounts, import transactions which had already been concluded.

The applicant, represented by U. Feldmann, Advocate at the Cologne Bar, and the Commission of the European Communities, represented by its Legal Adviser G. zur Hausen, acting as Agent, presented oral argument at the hearing on 19 October 1977.

The Advocate-General delivered his opinion at the hearing on 6 December 1977.

Decision

1. The application, lodged on 23 December 1976, is for an order that the European Community should pay the sum of DM 329429.40 as compensation for the damage which the applicant claims to have suffered as the result of the application to Italy, by Regulation No 2887/71 of the Commission of 30 December 1971 (OJ English Special Edition 1966 to 1972, p. 67) of the system of monetary compensatory amounts fixed in agriculture following the temporary widening of the margins of fluctuation for the currencies of certain Member States.

2. The applicant had concluded on 17 December 1971 a sales contract with an Italian undertaking for the delivery between January and June 1972 of approximately 10000 tonnes of white sugar. It states that the price was calculated in lire taking into account the monetary compensatory amounts provided for by Regulation No 2635/71 of the Commission of 10 December 1971 (OJ L 273, p. 1) for exports from Germany into Italy. Following the decision taken by Italy to apply the system of monetary compensatory amounts, the Commission fixed in its Regulation No 2887/71 of 30 December 1971 detailed rules for the application of the monetary compensatory amounts to be imposed on imports into Italy but without laying down transitional measures in respect of old contracts. The result of these new rules with regard to the applicant was that the monetary compensatory amount which should have been granted to it in Germany on its exports to Italy was reduced by the compensatory amount applied to the goods in Italy, with the effect that it suffered a loss on those exports.

Admissibility

3. The Commission, the defendant, objects that the application is inadmissible, in that an application for damages under Articles 178 and 215 of the Treaty may not be used in order to call in question national measures relating to the application of Community provisions. For such an application to be admissible, it is necessary for all national methods of recourse to have been exhausted. The fact which gave rise to the present dispute is the refusal by the Hauptzollamt (Principal Customs Office) Hamburg-Jonas to grant the applicant the compensatory amount which it claimed on the basis of its exports to Italy. The applicant, which took the view that it was adversely affected by an implementing measure adopted by the national authorities, should have contested that measure before the national court since that course of action was, where appropriate, such as to prompt the German courts to submit to the Court of Justice under Article 177 of the Treaty the question of the validity of Regulation No 2887/71.

4. The applicant instituted proceedings in the Federal Republic of Germany but as it was uncertain whether the court would comply with its suggestion that the question should be referred to the Court of Justice for a preliminary ruling, it lodged the present application bearing in mind the period of limitation laid down in Article 43 of the Protocol on the Statute of the Court of Justice.

5. According to the applicant, the damage suffered does not result from measures adopted by the national authorities but from an omission on the part of the Commission within the context of the regulations issued in implementation of Article 6 of Regulation No 974/71. The Court has only stated that it has no jurisdiction in cases in which the application was in fact directed against measures adopted by the national authorities for the purpose of applying provisions of Community law. Even if the Court, within the context of proceedings for a preliminary ruling, considered that the rules applicable were such as to cause damage because of the absence of appropriate transitional measures, the national court would not be empowered to adopt those measures itself, with the result that a direct application to the Court on the basis of Article 215 of the Treaty would still be necessary.

6. The matter has been brought before the Court within the bounds of its jurisdiction and it is therefore under a duty to examine whether the alleged omission in the Community regulations issued in implementation of Article 6 of Regulation No 974/71 constitutes an infringement of the law such as to incur the liability of the Community.

7. The application is therefore admissible.

The substance of the case

8. The applicant claims that the application of the system of compensatory amounts to Italy by Regulation No 2887/71 caused it damage because the Commission omitted to lay down special or transitional rules protecting export contracts concluded prior to 19 December 1971. The Commission, by not protecting the legitimate expectation of individuals, thus committed a flagrant breach of a superior rule of law and incurred the liability of the Community under the second paragraph of Article 215 of the EEC Treaty. That regulation exempted from compensatory amounts imports into Italy carried out as the result of contracts which were concluded before 19 December 1971 and registered before 28 December 1971 with the authorities of the relevant Member State or which can be proved by official documents to have been concluded. On the other hand, the regulation did not provide for an exemption for exports from one Member State to another which were carried out as a result of similar contracts. The fact that Italy would adhere to the system of monetary compensatory amounts was not foreseeable at the date of the export contract, 17 December 1971, and the applicant was therefore able to enter into the contract on the basis of the legal situation in force at that time and to expect that in the unforeseeable case of the application of the system in Italy, the Commission would issue appropriate transitional provisions for the purpose of protecting the legitimate interests of exporters who were bound by contracts concluded before the date of application of the system. Moreover, the principle of equality has been infringed in that Article 4 of the regulation in question provided for an exemption for existing import contracts, but not for export contracts.

9. It was inherent in the system of monetary compensatory amounts, as follows from Article 1 of Regulation No 974/71 alone, that if Italy permitted the exchange rate of its currency to fluctuate to the extent laid down in Article 1 of that regulation, monetary compensatory amounts might become applicable in Italy. Moreover, the consequences of any extension of the system were set out in Article 2 the same regulation and were therefore foreseeable. The previous regulations of the Commission laying down detailed rules for the application of Regulation No 974/71, in other words Regulations No 1013/71 of 17 May 1971 (OJ English Special Edition 1966-1972, p. 52) and Regulation No 1871/71 of 27 August 1971 (OJ English Special Edition 1966-1972, p. 58) never laid down special rules for exports but only for imports. Therefore neither the application of the system of monetary compensatory amounts to Italy nor the absence of transitional measures protecting old export contracts infringes the principle of the protection of the legitimate expectation of interested parties. Nor did the inclusion of transitional provisions relating to old import contracts infringe the principle of equality, since the system of monetary compensatory amounts did not have identical effects on the transactions carried out by importers and on those carried out by exporters.

10. Consequently, the application must be dismissed.

Costs

11. Under Article 69 (2) of the Rules of Procedure, the unsuccessful party shall be ordered to pay the costs. The applicant has failed in its submissions. It must therefore be ordered to pay the costs.

On those grounds, THE COURT, hereby:

1 Dismisses the application.

2 Orders the applicant to bear the costs.

1 Language of the Case: German.