JUDGMENT OF 22. 3. 1979 — CASE 134/78 DANHUBER v BUNDESANSTALT FÜR LANDWIRTSCHAFTLICHE MARKTORDNUNG

In Case 134/78 REFERENCE to the Court under Article 177 of the EEC Treaty by the Hessisches Finanzgericht (Finance Court, Hesse) (VIIth Senate) in the proceedings pending before that court between

THE COURT, composed of: H. Kutscher, President, J. Mertens de Wilmars and Lord Mackenzie Stuart (Presidents of Chambers), A. M. Donner, P. Pescatore, M. Sørensen, A. O'Keeffe, G. Bosco and A. Touffait, Judges, Advocate General: G. Reischl Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts and Issues

The facts of the case, the course of the procedure and the observations submitted under Article 20 of the Protocol on the Statute of the Court of Justice of the EEC may be summarized as follows:

I — Facts and procedure

From 1974 surpluses of beef and veal on the world market led to a sharp fall in prices on the Community market. When it appeared that the normal machinery of the market organization was clearly inadequate to attain the objectives of the common organization of the market in beef and veal set up by Regulation (EEC) No 805/68, the Commission had recourse to protective measures in the field of external trade.

To alleviate the ever-growing increase in beef and veal surpluses in the internal market, the Commission sought to restrict imports and encourage more exports of those products by its Regulation No 1090/75 of 23 April 1975 on the issue by way of protective measures of import licences for certain beef and veal products (EXIM) (Official Journal 1975, L 108, p. 1). Under that Regulation imports were allowed only in quantities equivalent to those which the imponer had previously taken off the internal market by way of exports.

At the same time the EXIM system (export and import system) was intended to replace the cash refunds normally paid on exportation. Not only could those who exported beef or veal without refund apply for an import licence for an equivalent quantity, but waiving the refund was also financially compensated for by a reduction in import levies the amount of which was too high in view of the bad situation of the market (6th Recital in the preamble to Regulation No 1090/75).

For administrative reasons the necessary licences were issued monthly according to a sort of tendering procedure. Applications had to be submitted at the beginning of each month, it being understood that the applicant was to state the amount of levy which he was prepared to pay (Article 3 (1) (b) and Article 4 (1)). Only those applications were accepted which related to a quantity of at least 10 tonnes and for which proof of export without refund was given by an accompanying certificate of the agency responsible for paying refunds. The Commission then compared the offers with the market information at its disposal, and determined the minimum rate of levy (Article 4 (3)). The Member State issued licences to applicants who had offered at least that minimum amount, and all applications proposing a lower levy were rejected (Article 4 (4)).

Applicants whose application had been rejected could subsequently submit a fresh application or choose a cash refund (Article 6 (2)).

Regulation No 1090/75 was amended several times.

When at the end of 1975 and beginning of 1976 it became possible to envisage relaxing these import restrictions, the Commission adopted Regulation No 76/76 of 16 January 1976 setting up a system linking imports with the sale of beef held by intervention agencies (Official Journal 1976, L 10, p. 21). Under that system, which replaced the EXIM procedure, import licences were issued to traders who had previously bought an equivalent quantity of intervention meat. Export no longer played any rôle at all.

Within the framework of the EXIM procedure, the last applications for import licences could be submitted up to 15 December 1975 by virtue of Article 2 of Regulation No 3170/75 of the Commission (Official Journal 1975, L 314, p. 13). They were accepted subject to a minimum levy of 42.998 units of account per 100 kilograms of beef or veal in carcase (see Article 1 of the Commission Decision of 19 December 1975 — Official Journal of 10 January 1976, L 5, p. 35).

By virtue of Article 11 (1) (b) of Regulation No 76/76, traders who had previously exported beef or veal but had not observed the time-limit were entitled to submit their applications for import licences until 2 February 1976. Those licences had to be issued to them so long as they were prepared to pay a minimum levy of 50.320 units of account per 100 kilograms fixed in advance in Article 11 (1) (a).

On 29 December 1975 Firma E. Danhuber, Munich, submitted to the Einfuhr- und Vorratsstelle für Schlachtvieh, Fleisch und Fleischerzeugnisse (Import and Storage Agency for Fat Stock, Meat and Meat Products), the German institution competent at the time, certain applications, accompanied by the required proof of exportation, for import licences for beef and veal within the framework of the EXIM arrangements.

The German institution complied with those applications by issuing on 12 February 1976 two import licences for boned or boneless beef and veal and two import licences for live domestic bovine animals, and by fixing the rate of levy applicable per 100 kilograms at DM 309.74 and DM 95.44 respectively in accordance with the transitional rules laid down in Article 11 of Regulation No 76/76. On 19 May 1976 that institution dismissed the objection (Einspruch) raised by the plaintiff against the fixing of the rate of levy.

On 18 June 1976 Danhuber commenced proceedings against this decision before the Hessisches Finanzgericht, on the grounds that it was prevented by the dilatoriness of the German authorities, in particular the Hauptzollamt (Principal Customs Office) Hamburg-Jonas, from providing within the stipulated period, that is to say by 15 December 1975, proof of exportation without refund. By being made subject to the transitional provisions laid down in Article 11 of Regualtion No 76/76, it was placed in a disadvantageous situation in relation to those exporters who were able to obtain proof of exportation without refund within the stipulated period and therefore were able to produce such proof by 15 December.

Before the national court Danhuber argued that the fixing of the rates of levy in Article 11 of Regulation No 76/76 violates the principle of non-discrimination and the principle of legal certainty, so that that provision must be regarded as being invalid in that respect.

On the other hand, the Bundesanstalt für Landwirtschaftliche Marktordnung (Federal Bureau for regulating agricultural markets) (formerly the Einfuhr- und Vorratsstelle für Schlachtvieh, Fleisch und Fleischerzeugnisse), the defendant before the national court, took the view that Article 11 of Regulation No 76/76 was directly applicable and therefore must be applied by it.

By an order of 17 May 1978, the Hessisches Finanzgericht (VIIth Senate) stayed the proceedings and asked the Court of Justice to give a preliminary ruling under Aricle 177 of the EEC Treaty on the following question:

‘Is Article 11 of Commission Regulation (EEC) No 76/76 of 16 January 1976 (Official Journal 1976, L 10, p. 21) valid?’

The order making the reference was lodged at the Court Registry on 12 June 1978.

In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the EEC written observations were submitted by the plaintiff in the main action and by the Commission of the European Communities.

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.

II — Written observations submitted under Article 20 of the Protocol on the Statute of the Court of Justice of the EEC

The plaintiff in the main action argues that inasmuch as Article 11 (1) (a) of Regulation No 76/76 fixed the rate of levy applicable per 100 kilograms of beef or veal in carcase at 50.320 units of account instead of 43 units of account, it is null and void on two grounds:

1) That provision infringes Article 190 of the EEC Treaty. The recitals in the preamble to Regulation No 76/76 (cf. the penultimate paragraph of that preamble) do not make it clear, and do not allow the Court of Justice to check, why the rate of levy was fixed at 50.320 units of account per 100 kilograms of beef or veal in carcase within the framework of the arrangements described as transitional. This absence of a statement of reasons make it appear that the fixing of the levy at that rate was arbitrary.

2) In the plaintiff's submission, having acknowledged the need to adopt provisions apt to protect from any damage applicants who through no fault of their own did not possess the certificate concerning exportation without refund, the Commission should have treated those applicants on the same footing as those who had been able to submit their application within the stipulated period, that is to say by 15 December 1975. Article 11 reinstates applicants who on that date did not have the certificate in question in statu quo ante. This means that they should be treated in all respects as if they had submitted their application within the stipulated period.

The plaintiff claims that the question asked by the national court should be answered as follows:

Article 11 (1) (a) of Commission Regulation No 76/76 is invalid inasmuch as it fixes the rate of levy applicable per 100 kilograms of beef or veal in carcase at 50.320 units of account instead of 43 units of account.

According to the Commission the provisions of Article 11 of Regulation No 76/76 do not result in any discrimination in relation to the plaintiff. Unlike traders who had submitted their applications by 15 December 1975, the plaintiff had the advantage of knowing in advance, by virtue of Article 11, the levy to be paid on the last issue of EXIM import licences which allowed all cases still pending to be settled.

By asking to pay only the minimum levy applicable in December 1975, the plaintiff is seeking to benefit from preferential treatment in relation to a large number of the traders who obtained an import licence at that time. Out of the twenty-two offers higher than the minimum amount, eight were between 42.998 and 43.032 units of account per 100 kilograms, eight between 43.137 and 44 units of account per 100 kilograms, four between 44.025 and 46.317 units of account per 100 kilograms, one was of 50.003 units of account per 100 kilograms and the highest was of 50.320 units of account per 100 kilograms. Therefore the amount of 43 units of account per 100 kilograms proposed by the plaintiff is appreciably lower than most of the amounts which the successful applicants paid in December 1975. The fact that, unlike those applicants, the plaintiff was unable to obtain in time the proof of exportation necessary for it also to submit its application in December does not suffice to justify such preferential treatment.

After considering the question of the validity of Aritcle 11 of Regulation No 76/76 also from the point of view of the protection of legitimate expectation and from the point of view of abuse of powers, the Commission concludes that the validity of the transitional arrangements laid down in that article cannot validly be called in question either on grounds of protection of legitimate expectation or in reliance upon the principle of non-discrimination or abuse of powers.

III — Oral procedure

At the hearing on 7 February 1979 the plaintiff in the main action, represented by F. Modest, Advocate at the Hamburg Bar, and the Commission of the European Communities represented by its Agent, P. Kalbe, presented oral argument.

The Advocate General delivered his opinion at the hearing on 6 March 1979.

Decision

1. By order of 17 May 1978 which was received at the Court Registry on 12 June 1978, the Hessisches Finanzgericht (VIIth Senate) asked a question, under Article 177 of the EEC Treaty, on the validity of Article 11 of Commission Regulation No 76/76 of 16 January 1976 setting up a system linking imports of beef and veal products effected by way of protective measures with the sale of beef held by the intervention agencies (Official Journal 1976, L 10, p. 21).

2. The question was raised in the context of proceedings brought before that court by the plaintiff in the main action, in which it contested the validity of Article 11 of Regulation No 76/76 in so far as that provision fixes the rate of levy to be paid on importation into the Community at 50.32 units of account per 100 kilograms of beef or veal in carcase instead of 43 units of account per 100 kilograms.

3. By Decision of 19 December 1975 (Official Journal 1976, L 5, p. 35) the Commission fixed at 42.998 units of account per 100 kilograms of beef or veal in carcase the minimum rate of levy applicable to imports for which import licences had been granted within the framework of the last ‘EXIM’ tendering procedure arranged under Regulation No 1090/75 of the Commission of 23 April 1975 on the issue by way of protective measures of import licences for certain beef and veal products (EXIM) (Official Journal 1975, L 108, p. 1). With a view to allowing operators who had not obtained import licences at the time of the last ‘EXIM’ tendering procedure to submit applications for licences, Article 11 of Commission Regulation No 76/76 authorized, as a transitional measure, under certain conditions, the granting of import licences to operators who had exported beef or veal before 16 December 1975 provided that they undertook to pay at the time of importation a rate of levy of 50.32 units of account per 100 kilograms of beef or veal in carcase.

4. The plaintiff in the main action, which alleges that it was prevented from submitting the application for import licences within the stipulated period so as to allow it to take part in the last ‘EXIM’ tendering procedure because the competent national authorities delayed supplying the required export certificates, contested before the national court the rate of levy fixed by Article 11 of Regulation No 76/76 and thus the validity of that provision.

5. It is alleged, first, that Regulation No 76/76 does not make clear the reasons for which the rate of levy was fixed by Article 11 thereof at 50.32 units of account and that the regulation in question therefore contains on this point no statement of the reasons on which it is based, as required by Article 190 of the EEC Treaty.

6. The requirements of Article 190 of the Treaty are satisfied when the said statement of reasons explains in essence the measure taken in regulations by the institutions. A statement of reasons for a regulation cannot be required to cover specifically all the often very numerous details which may be contained in such a measure. The validity of Regulation No 76/76 cannot therefore be doubted by reason of any defect in the statement of reasons since it appears, and in this case it is not contested, that the statement of reasons in the said regulation sets out as a whole the situation which led to its adoption and the general objectives which it seeks to attain.

7. It is alleged, secondly, that the Commission by fixing in the provision at issue a rate of levy higher than the minimum rate of levy fixed by its Decision of19 December 1975 discriminated against inter alios operators who through no fault of their own were unable to take pan in the last ‘EXIM’ tendering procedure.

8. Under Article 3 (3) read in conjunction with Article 4 (4) of Regulation No 1090/75 the rate of levy applicable to imports effected under the ‘EXIM’ system is the rate which the operator concerned has offered to pay in his application for an import licence provided that it is equal to or greater than the minimum rate afterwards determined by the Commission. It follows therefore from the above-mentioned provisions that the fixing of a minimum rate in no way indicated that operators to whom import licences were granted have only to pay that rate and not a higher rate. If the Commission had fixed the rate at issue, as the plaintiff in the main action claims, at the minimum level as determined in its Decision of 19 December 1975 it would have given operators who benefited by the application of the provision at issue favoured treatment in relation to those who offered at the time of the last ‘EXIM’ tendering procedure to pay a higher levy than the minimum levy. Therefore in fixing the levy at issue as it did at a rate equivalent to that of the highest offer submitted at the time of the last ‘EXIM’ tendering procedure the Commission did not act in a discriminatory manner.

9. The circumstance relied on by the plaintiff in the main action that it was prevented from taking part in the ‘EXIM’ tendering procedure through no fault of its own is not such a kind as to affect the validity of the provision at issue since it appears that the Commission in adopting that provision kept within the limits of a proper exercise of its discretion in the matter.

10. The reply must therefore be that consideration of the question raised has disclosed no factors of such a kind as to affect the validity of Article 11 of Regulation No 76/76.

Costs

11. The costs incurred by the Commission of the European Communities which submitted observations to the Court are not recoverable. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the national court, the decision on costs is a matter for that court.

On those grounds, THE COURT in answer to the questions referred to it by the Hessisches Finanzgericht hereby rules: