JUDGMENT OF 11.7.1984 — CASE 89/83 HAUPTZOLLAMT HAMBURGJONAS v DIMEX

In Case 89/83 REFERENCE to the Court of Justice under Article 177 of the EEC Treaty by the Bundesfinanzhof [Federal Finance Court] for a preliminary ruling in the proceedings pending before that court between

THE COURT (Fourth Chamber) composed of: T. Koopmans, President of Chamber, K. Bahlmann, P. Pescatore, A. O'Keeffe and G. Bosco, Judges, Advocate General: C. O. Lenz Registrar: D. Louterman, Administrator

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

A — Legislation

Pursuant to Article 17 (3) of Regulation (EEC) No 804/68 on the common organization of the market in milk and milk products (Official Journal, English Special Edition 1968 (I), p. 176), the Council adopted on 28 June 1968 Regulation (EEC) No 876/68 laying down general rules for granting export refunds on milk and milk products and criteria for fixing the amount of such refunds (Official Journal, English Special Edition 1968 (I), p. 234), Article 6 of which provides as follows:

1) The refund shall be paid upon proof:

that the products have been exported from the Community, and

that the products are of Community origin, except where the provisions of Article 7 apply.

2) Where Article 4 applies, the refund shall be paid under the conditions laid down in paragraph 1, provided it is proved that the product has reached the destination for which the refund was fixed. Exceptions may be made to this rule in accordance with the procedure referred to in paragraph 3 of this article, provided conditions are laid down which offer equivalent guarantees.

3) Additional provisions may be adopted in accordance with the procedure laid down in Article 30 of Regulation (EEC) No 804/68.

In accordance with Article 6 (3) ”additional provisions” were adopted in the form of Regulation (EEC) No 192/75 of the Commission of 17 January 1975 laying down detailed rules for the application of export refunds in respect of agricultural products (Official Journal L 25, p. 1).

Article 6 (1) of that regulation provides as follows:

In the following circumstances payment of the refund shall be conditional not only on the product's having left the geographical territory of the Community but also — save where it has perished in transit as a result of force majeure — on its having been imported into a third country and where appropriate into a specific third country:

a) where there is serious doubt as to the true destination of the product; or

b) where by reason of the difference between the rate of the refund on the exported product and the import charge applicable to the like product on the day when customs export formalities are completed it is possible that the product may be reintroduced into the Community.

In such cases the provisions of the second, third and fourth subparagraphs of Article 11 (1) shall apply.

Finally, Article 11 (1), to which Article 6 refers and which was amended by Regulation (EEC) No 2818/75 of the Commission of 30 October 1975 (Official Journal L 280, p. 31), provides as follows:

Where the rate of refund varies according to destination, payment of the refund shall, subject to the provisions of paragraph 2, be made only if the product has been imported into the third country or countries in respect of which the refund is prescribed.

A product shall be considered to have been imported when the customs formalities for entry into free circulation in the third country concerned have been completed. Proof that customs formalities have been completed shall be furnished by production of the relevant customs document, or of a copy or photocopy of such a document certified by the competent authorities.

However, if owing to circumstances beyond the control of the importer, proof of completion of customs formalities cannot be furnished, or if the proof furnished is considered insufficient in view of the particular circumstances in the country of destination, the competent authorities of Member States shall require proof that the goods have been unloaded in the country concerned. Such proof shall be deemed to have been furnished by production of one or more of the following documents :

a copy of the port document issued or endorsed in the country of destination,

a certificate issued by an official agency of a Member State in that country,

a certificate from an international control and surveillance agency approved by the Member State where the customs export formalities have been completed,

a bank document issued by an authorized bank established in the Community certifying that a transfer of funds corresponding to the export in question has been made to the credit of the exporter's account which has been opened with such agency, where a third country makes such transfer a precondition for the importation of the product,

a receipt issued by an official body of the third country, in the case of goods purchased by that country or by an official body of that country, or in the case of a food-aid transaction,

a receipt issued by an international organization, in the case of a food-aid transaction.

The Commission may, under the procedure laid down in Article 38 of Regulation No 136/66/EEC and in the corresponding articles of the other regulations on the common organization of markets, provide in certain specific cases to be determined that the proof of importation referred to in the first subparagraph be furnished by a single specified document.

In addition, the party concerned shall in all cases produce a copy or photocopy of the transport document.

B — Summary of the facts

In performance of a contract of sale concluded with the Kuwait Agriculture Company, Dimex Nahrungsmittel Imund Export GmbH & Co. KG (hereinafter referred to as “Dimex”) despatched 900 tins of Feta cheese in brine produced in the Federal Republic of Germany by lorry to Livorno for shipment on the M/S Rostock to the port of Shuwaikh in Kuwait. On arrival in Livorno some of the brine was found to have escaped from the tins. According to a letter of 2 March 1978 from the Middle East Verschiffungsagentur GmbH the damage was minimal and was confined to the packaging. After the goods were loaded the Interschiff Schiffsagentur GmbH issued bill of lading No 62 of 9 August 1976 in respect thereof. On 27 August 1976 the Rostock reached the port of Shuwaikh where it was unloaded, according to the landing certificate, between 27 September and 6 October 1976. According to the survey report drawn up by Lloyd's the goods were received by the customs authorities between 22 September and 7 October and were released on 5 October 1976. Also according to the survey report the goods were inspected in the recipient's cold-storage depot on 7 October 1976 and were found to be “dented, holed, bulged out, etc.”. The buyer was invoiced by Dimex on 10 August 1976 and paid for the goods on 1 September 1976, by means of a documentary credit which it had previously established. On 25 October 1976 Dimex received a telex message from the buyer to the effect that, as a result of an inspection carried out by the health laboratory in Kuwait, the goods had been declared unfit for human consumption and had to be destroyed or re-exported.

On Dimex's application, the Hauptzollamt Hamburg-Jonas had by notice of 20 August 1976 granted Dimex by way of advance payment a variable export refund amounting to DM 31948.02. The notice was subject to the due furnishing of proof, in accordance with Regulation No 192/75 of the Commission of 17 January 1975 as amended by Regulation No 2818/75 of 30 October 1975, that “the goods had left the geographical territory of the Community and had been imported into the country of destination”. Since it was unable to furnish the original of the control copy within three months from the date of completion of the customs formalities, Dimex requested that it be permitted to furnish proof of exportation and proof of importation into the country of destination by means of substitute documents and it enclosed with the letter of 7 April 1977 the bill of lading issued on 9 August 1976 by Interschiff Schiffsagentur GmbH, its own sales invoice of 10 August 1976, evidence of payment against documents from the bank and finally the landing certificate issued on 11 October 1976 by the General Superintendance Company. The Hauptzollamt recognized those documents as “equivalent documents” and as proof within the meaning of Articles 13 (2) and 11 (1) of Regulation No 192/75.

As a result of an inspection conducted at Dimex's premises, in the light of which the Hauptzollamt came to the conclusion that since the goods had proved to be unfit for human consumption on arrival in Kuwait they had not been cleared for entry into free circulation in that country, the Hauptzollamt by decision of 27 February 1978 demanded repayment of the export refund unduly granted. On 30 January 1979 the Hauptzollamt rejected Dimex's objection against that decision as unfounded on the basis of information provided by the Embassy of the Federal Republic of Germany in Kuwait to the effect that “if the goods are found to be defective by the health authorities and have to be either destroyed or re-exported the goods are not cleared for customs purposes, that is to say they are not allowed to enter into free circulation.”

Dimex applied to the Finanzgericht (Finance Court) for the annulment of the decision demanding repayment of 17 February 1978, upheld by the Hauptzollamt in its decision of 30 January 1979 rejecting Dimex's objection. The Finanzgericht upheld the application on the ground that Dimex had been unable to furnish the customs documents constituting proof of importation owing to circumstances beyond Dimex's control and that the landing certificate was to be treated as equivalent proof, as initially acknowledged by the Hauptzollamt itself. The fact that the goods might have been destroyed after they were unloaded in Kuwait because they were no longer fit for human consumption did not prevent payment of the export refund where proof of exportation was duly furnished in accordance with the third subparagraph af Article 11 (1) of Regulation No 192/75. In its decision the Finanzgericht accepted the argument that the proof required by Article 6 (2) of Regulation No 876/68 that the goods have reached the destination for which the refund was fixed had been furnished irrebuttably by production of the substitute document, in accordance with the third subparagraph of Article 11 (1) of Regulation No 192/75 as amended by Regulation No 2818/75. There could be no requirement that the goods must in addition have been marketed in the nonmember country.

In an appeal against that decision to the Bundesfinanzhof on a point of law, the Hauptzollamt contended that since the Finanzgericht had failed to go adequately into the facts, in particular the question whether a deterioration of the goods had not already occurred at the time of their exportation from Livorno, there was considerable doubt as to whether the requirements of Article 8 (2) of Regulation No 192/75 were already complied with at that time. Furthermore, since the purpose of export refunds was to ensure that Community products were marketed at competitive prices in nonmember countries, it was essential that the goods reached the market of destination in order to qualify for the refunds. Since proof that the goods had been put into free circulation constituted merely a rebuttable indication that they had actually been placed on the market in the country of destination, the Finanzgericht was incorrect in considering that production of the landing certificate amounted to documentary proof justifying the grant of the refund under the third subparagraph of Article 11 (1) of Regulation No 192/75. Finally, acceptance of such proof in the circumstances of the case was contrary to the very wording of the third subparagraph of Article 11 (1) of Regulation No 192/75. The phrase “circumstances beyond the control of the importer” could refer only to circumstances which might arise where, for example, legal provisions in individual nonmember countries permitted goods to enter into free circulation in that country without any specific release by the customs authorities.

Taking the view that the dispute raised questions concerning the interpretation of Community law, the Bundesfinanzhof, by order of 21 April 1983, referred to the Court of Justice under Article 177 of the EEC Treaty for a preliminary ruling on the following questions:

“1. Must the proof required by Article 6 (2) of Regulation No 876/68 in conjunction with Article 6 (1) of Regulation No 192/75 that the product has been imported into the territory of destination be regarded as having been furnished irrebuttably if the person concerned has submitted a substitute document requested by the responsible authority under the third subparagraph of Article 11 (1) of Regulation No 192/75? 2. If the first question is answered in the affirmative: is that also the case where the responsible authority has requested the production of the substitute document and it then ermerges that it was not a case in which proof of completion of the customs formalities within the meaning of the second subparagraph of Article 11 (1) of Regulation No 192/75 could not be furnished ‘owing to circumstances beyond the control of the importer’ (third subparagraph of Article 11 (1) of Regulation No 192/75)? How ought the last-mentioned words of the third subparagraph of Article 11 (1) of Regulation No 192/75 to be interpreted? 3. If the first question is answered in the negative: has a product been ‘imported’ into the territory of destination within the meaning of Article 6 (2) of Regulation No 876/68 in conjunction with Article 6 (1) of Regulation No 192/75 where a few days after unloading in that territory it has been either destroyed or re-exported? Does the answer depend on whether the product has been destroyed or re-exported before or after being cleared for entry into free circulation in that territory and whether the deterioration of the goods which was the cause of the destruction or re-exportation occurred before or after such clearance?”

C — Procedure

The order making the reference was lodged at the Court Registry on 18 May 1983.

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 Commission of the European Communities, represented by B. Jansen, a member of its Legal Department, acting as Agent; by the Hauptzollamt Hamburg-Jonas, represented by Mr Bastein, Leitender Regierungsdirektor at the Oberfinanzdirektion [Principal Revenue Office], Hamburg, and by Dimex Nahrungsmittel Im- und Export GmbH & Co. KG, represented by F. Modest, Rechtsanwalt in Hamburg.

On 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. However, it requested Dimex to provide it with a copy of the contract of sale and of the insurance contract concluded in accordance therewith. It also requested the Hauptzollamt to confirm or rebut Dimex's statement to the effect, that the goods were repackaged in Livorno.

By order of 1 February 1984, pursuant to Article 95 (1) and (2) of the Rules of Procedure, the Court decided to assign the case to the Fourth Chamber.

II — Written observations submitted to the Court

A — Observations submitted by the Commission

As regards the first question the Commission points out, in a reference to the views which it expressed earlier in Case 125/75 Milch-, Fett- und Eierkontor [1976] ECR 771, that since the purpose of the system of variable export refunds is to open or to keep open to Community exports the markets of the nonmember countries concerned, the subsidized product must be marketed in the country of destination. The proof to be furnished must therefore establish beyond all doubt that the product actually reached that market. That requirement may in general be regarded as fulfilled where the goods are released into free circulation in the country of destination since that ensures that they have access to the market of the territory of destination. Release into free circulation is, however, only an indication that the goods will reach the market of that country, and it is for that reason that the third subparagraph of Article 11 (1) of Regulation No 192/75 expressly allows the competent authorities to demand further proof, where proof of completion of customs formalities is considered insufficient in view of the particular circumstances prevailing in the country of destination. Although the third subparagraph of Article 11 (1) permits substitute documents to be provided in lieu of the customs document where proof of completion of customs formalities cannot be furnished owing to circumstances beyond the control of the importer, the sole reason for that is to avoid creating for undertakings insurmountable difficulties which might jeopardize the purpose of the abovementioned system of refunds since in many cases the required customs documents cannot be provided at all or can be provided only with excessive difficulty. Therefore proof of completion of customs formalities in the country of destination and, a fortiori, proof that the product was unloaded in that country are merely rebuttable indications that the purpose of the export refund has actually been achieved.

The Commission suggests that the Court should answer the first question in the negative which, in its view, would make it unnecessary to answer the second question.

Finally, as regards the third question, the Commission emphasizes that in view of the scope and purpose of the system of variable refunds it is important to ascertain whether or not the products reaches the market of destination. Once the goods may be regarded as placed on that market their future destination is no longer material as regards entitlement to the refunds. Accordingly, it does not matter whether the goods reach the final consumer or whether — once they are on the market — they deteriorate, are destroyed or are re-exported, provided that they are undoubtedly of merchantable quality on arrival in that market and, if they are intended for human consumption, that they comply with the public health requirements of the country of destination. It is reasonable to require the goods to comply with those requirements upon their release into free circulation in the country. Similarly, if the event which caused the deterioration in the goods occurred before they were released into free circulation, their subsequent deterioration constitutes a ground for withholding the refund since it is not in the interests of the Community to subsidize damaged goods which no longer prossess the qualities of conservation inherent in the concept of merchantable quality.

In the light of those observations, the Commission considers that the answer to the third question should be as follows:

“A product which has had to be destroyed or re-exported because it deteriorated after being unloaded in the territory of destination is not regarded as having been imported into the territory of destination for the purposes of Article 6 (2) of Regulation No 876/68 in conjunction with those of Article 6 (1) of Regulation No 192/75 unless the deterioration of the goods and the harmful event which may have caused that deterioration occurred only after the release of the product into free circulation in the territory of destination.”

B — Oberservations submitted by the Hauptzollamt

As far as the first question is concerned, the Hauptzollamt points out that in Case 125/75, cited above, the Court, which was called upon to decide the question whether proof of unloading in the country of destination was sufficient to justify payment of the variable export refund fixed for that country, interpreted Article 6 (2) of Regulation No 876/68 as meaning that where the refund is variable, the goods must have been cleared through customs and released into free circulation in the territory of destination, regard being had in particular to the fact that the refund varies in order to take account of the peculiar characteristics of each market and that it loses its purpose if the goods fail to reach the relevant market (paragraphs 5 and 6 of the decision).

Furthermore the Hauptzollamt recalls that in its judgment of 27 October 1971 in Case 6/71 Rheinmühlen [1971] ECR 823, the Court had already stated that the concept of “export to a third country”, now incorporated in Article 17 of Regulation No 804/68, presupposed at least the release of the goods into free circulation in a nonmember country, and had also observed that the kinds of evidence which could be regarded as sufficient to establish that exportation to a third country had taken place could not be exhaustively set out. The relevance of each element of proof depended on the circumstances of the individual case and in particular on the available evidence as a whole (paragraphs 8 and 9 of the decision).

In its view, if Article 6 (2) of Regulation No 876/68 requires that-the goods must reach the market of the territory of destination but the proof referred to in the second and third subparagraphs of article 11 (1) of Regulation No 192/75 is only of limited value in that regard, that proof cannot be regarded as fulfilling the conditions for the grant of a variable refund.

The use of the phrase “shall be considered” in the second subparagraph of Article 11 (1) of Regulation No 192/75 does not necessarily imply that proof of fulfilment of the conditions of entitlement to the variable refund is irrebuttably furnished by production of the substitute documents referred to in the third subparagraph. That is confirmed by Regulation No 2730/79 (Official Journal L 317, p. 1), as amended, since the second subparagraph of Article 10 (1) thereof — in spite of the reference to Article 20 (2) according to which a product is to be regarded as imported when the customs entry formalities for home use in the nonmember country concerned have been completed — allows satisfactory additional proof to be required that the product “has in fact been placed on the market in the nonmember country of import”.

Production of the proof specified in the second and third subparagraphs of Article 11 (1) of Regulation No 192/75 establishes only that the goods have completed certain stages in transit from the Community to the country of destination (for example unloading, customs clearance or delivery in the country of destination) but justifies the conclusion that the good have beem marketed only in the absence of evidence to the contrary.

In the light of those considerations the first question submitted by the Bundesfinanzhof should, in the Hauptzollamt's view, be answered in the negative.

As regards the second question the Hauptzollamt points out first that where the absence of a customs document is not attributable to circumstances beyond the control of the importer, substitute documents are inadmissible even if they have already been accepted by the competent authority in the belief that such circumstances existed. The decision to accept substitute documents is in no way discretionary. It is based on an interpretation of the relevant law and the process whereby the decision was reached can be traced by the party concerned. Since the latter is able to ascertain whether the decision to accept substitute documents is correct, it must anticipate the revocation thereof if it is incorrect. Revocation of such a decision is not in breach of the principle of the protection of legitimate expectation if, as in the present case, essential information was not brought to the attention of the competent authority when it accepted proof of unloading.

As far as the phrase “circumstances beyond the control of the importer” is concerned, its meaning is clear from the spirit and purpose to Regulation No 2818/75. Those recitals specify, in particular, that in the case of certain exports difficulties may arise in obtaining the necessary documents and that the controls against abuses should not be weakened in any essential respects by the acceptance of substitute documents. The “circumstances” in question therefore refer in the first place to cases in which the importer is unable to produce the customs document in view of the specific nature of the national importation procedure. Secondly, the - phrase in question also covers cases in which the product has been marketed but the document of importation issued by the customs authorities has, for example, disappeared for reasons for which the importer cannot be held responsible. However, it does not cover cases in which goods have not been marketed in the country of destination because in those circumstances the possibility of a fraudulent claim for an export refund cannot be ruled out.

The Hauptzollamt therefore suggests that the answer to the second question should be as follows:

“The proof required by Article 6 (2) oí Regulation No 876/68 in conjunction with Article 6 (1) of Regulation No 192/75 that the product has been imported into the country of destination is not regarded as having been furnished irrebuttable where, after recognition of the substitute document, it becomes apparent that it was not a case in which proof of completion of customs formalities within the meaning of the second subparagraph of Article 11 (1) of Regulation No 192/75 could not be furnished owing to circumstances beyond the control of the importer. The circumstances beyond the control of the importer which are referred to in the first sentence of the third subparagraph of Article 11 (1) of Regulation No 192/75 must be understood as referring not to cases in which the goods have not been marketed in the territory of destination but to those in which it has proved impossible for the importer to obtain a customs document even though he has made every effort which could in fairness have been demanded of him to do so.”

Finally, as regards the third question the Hauptzollamt refers to its observations on the first question, observing that in its view the term “imported” presupposes in any event that the goods have reached the market of the territory of destination. Since marketing is a requirement, it is not possible to answer the question whether the goods must still be regarded as having been imported where they have been destroyed or re-exported shortly after being unloaded in the territory of destination with a simple yes or no.

However, there is no doubt in its opinion that the goods have not reached the market of the territory of destination and cannot be regarded as having been imported where, as in the present case, they have been destroyed or re-exported as a result of faulty packaging or mishandling whilst in transit or immediately after unloading and the public health authorities have not released them for sale on the market of the territory of destination.

In the light of those observations, the answer to the first part of the third question should, in the Hauptzollamt's view, be as follows:

“A product is not to be regarded as having been ‘imported’ into the territory of destination for the purposes of Article 6 (2) of Regulation No 876/68 in conjunction with Article 6 (1) of Regulation No 192/75 where it has been destroyed or re-exported before reaching the market of the territory of destination and where such destruction or re-exportation is not attributable to force majeure.”

In the opinion of the Hauptzollamt it is not necessary to adopt a position on the second part of the third question since it is clear form the order making the reference that Dimex has not furnished proof that the goods were put into free circulation and imported into Kuwait although in its capacity as claimant of the variable refund it bears the burden of proof. Furthermore, prima facie evidence and the position adopted by the Embassy of the Federal Republic of Germany on 23 November 1978 create a strong presumption that the goods were not imported. The public health inspection carried out for the purposes of customs clearance precedes completion formalities. Since, as a result of that inspection, the goods were destroyed and were thus kept off the Kuwait market, the view cannot be taken that they were cleared through customs and put into free circulation.

C — Observations submitted by Dimex

Dimex prefaces its observations with a number of general remarks regarding the background to the main proceedings, entitlement to the refunds, the purpose of the refunds and the interpretation which in its opinion should be placed on the main provisions applicable.

With regard to the facts, Dimex states that when it was loaded on board ship in Livorno the feta cheese which it sold to Kuwait was in sound condition and of good and merchantable quality. That is shown by the fact that the captain of the ship made out a “clean” bill of lading. Had the feta cheese been spoiled at that time, this would have been visible externally because the gas emitted by the cheese would have caused the tins to bulge. The captain of the ship would have noticed that and would not have made out a “clean” document. The goods only became spoiled after they had left the territory of the Community, possibly during transport but probably after their arrival at the port of Kuwait, before or after customs clearance.

As regards the first two questions, Dimex considers that their purpose is in substance to ascertain in what manner and under what conditions the proof furnished by the exporter in accordance with the third subparagraph of Article 11 (1) of Regulation No 192/75 by the submission of documents other than the costums document may be rejected by the authority responsible for paying the refund. However, the wording of the questions is contradictory. The second question, submitted by the court making the reference in the event of the first question's being answered in the affirmative, makes sense only if the first question is answered in the negative.

Public interest demands that the authority responsible for granting refunds must be permitted not only to check a posteriori whether the conditions for the grant of such refunds were fulfilled, or whether owing to particular circumstances they were either not met or later ceased to be satisfied, but also subsequently to reject proof furnished to and initially accepted by it and to recover refunds already paid out; however, those powers are subject to certain restrictions deriving form the principle of legal certainty, the principle of the protection of legitimate expectation and the purpose of the refund.

The competent authority must be able to demand repayment of the refund where it provides evidence that the documents submitted were forged or untruthful or that the exporter relied on unlawful factors as in Case 125/75, cited above, and in Case 250/80 Anklagemyndigheden v Töpfer [1981] ECR 2465. It cannot, however, without breaching the principle of the protection of legitimate expectation, state a posteriori that the documents submitted to it in lieu of the customs documents, altough deemed sufficient at the time of payment of the refund, are no longer sufficient and proceed to recover the refund unless the exporter submits the customs document of the country of destination or other evidence. Similarly, where it subsequently obtains irrebuttable proof that the goods were, or were not, actually released into free circulation in the country of destination, it cannot subsequently demand production of the customs documents in the former case or, in the latter case, repayment of the refund on the ground that the goods were not placed on the market in the country of destination. In that regard, it contends that it cannot be inferred from either the purpose or the spirit of the system of refunds that payment thereof is subject to the overriding condition — even where the amount of the refund is variable — that the exported goods have been released into free circulation in good condition in the country of destination and have been put on the market there. As far as the purpose of the refund is concerned, even where the rate is variable, it is sufficient for the exported goods to have reached the country of destination and, if appropriate, to have been unloaded there after payment of the costs of transportation incurred. Although as a rule goods are presented to customs in the country of destination and released into free circulation in that country, it is possible in exceptional cases that — in the absence of any involvement of the Community exporter or even without his knowledge — the goods may not be presented to the customs authorities for release into, free circulation, as is the case here, either because they have perished or because they have simply remained in transit in the port of the country of destination with a view to their being exported, without the exporter's knowledge, to another nonmember country. A Community exporter cannot be held responsible in any such case, which always constitutes an exception to the general rule. The decisive criterion must be that the exporter has concluded a genuine contract of carriage and has performed it in full with the result that the exported goods have reached the country of destination and have been unloaded there. Those are the only factors open to subsequent rebuttal by conclusive evidence to the contrary. The subsequent dsicovery that the goods exported and unladed in the country of destination were not released into free circulation in that country for reasons beyond the exporter's control does not justify the withdrawal of the refund.

As regards the interpretation of the phrase “owing to circumstances beyond the control of the importer”, contained in the third subparagraph of Article 11 (1) of Regulation No 192/75, Dimex emphasizes first that in its view the use of the term “importer” is incorrect. The word should, as is now expressly provided for by Article 20 (4) of Commission Regulation No 2730/79 which has taken the place of Regulation No 192/75, be replaced by the term “exporter”. If that correction is made and the control of the exporter is acknowledged to be decisive, the answer to that question is straightforward because it must be acknowledged that the exporter is not in a position to compel his customer in a nonmember country to release into free circulation in the country of destination the goods delivered to him an subsequently to place the customs documents at the exporter's disposal. Furthermore, experience shows that Iranian and Arab purchasers do not respond to the exporter's requests and do not take the trouble to transmit the customs documents to those entitled to them following performance of the contract, even where those documents are in their possession. Even on the assumption that it is the control of the importer which is decisive, how can the exporter be expected to furnish proof of the importer's intention if the latter has not forwarded the customs documents to him? It must be acknowledged that the importer does not knowingly and deliberately allow goods to perish and possibly for that reason refrain from presenting them to the customs authorities; the deterioration of the goods __jnay at most be caused by negligence on his part or on the port of his associates at the time when the goods should have been presented to the customs authorities.

As regards the third question Dimex points out that its wording is directed specifically to the case where the exported goods reached the port of destination and were unloaded but perished in transit or in the country of destination and were therefore destroyed. The question seeks to ascertain whether, in those circumstances, entitlement to the refund depends on whether the deterioration of the product occurred before or after completion of customs formalities.

Dimex refers to its general observations on the purpose of the system of refunds (refunds, which are first and foremost aids to milk producers, are the inevitable and necessary consequences of the common organization of the market in milk which offers producers the guarantee that their products will be sold in the Community at a price higher than the world market price; their purpose is not to influence the domestic markets of nonmember countries by increasing or reducing the volume of supply of products exported by the Community) and contends that even the Bundesfinanzhof does not question the exporter's entitlement to a refund and his retention of that right where the goods have perished in the country of destination after presentation to customs for release into free circulation and have been destroyed. It is reasonable not to accord different treatment, as far as entitlement to refunds is concerned, to a case in which the goods have perished or have been destroyed in transit or in the geographical, territory of the State of destination before completion of customs formalities. Release into free circulation cannot in those circumstances be a criterion for determining whether or not the exporter is intitled to a refund. That is also the case where, contrary to the opinion expressed by Dimex, the conclusion must be that entitlement to a refund depends on completion of customs formalities for the exported goods with a view to their release into free circulation in the State of destination. Deterioration of the goods in transit or in the geographical territory of the State of destination, for which the exporter cannot be held responsible, constitutes an exception. The effects of such deterioration are the same as regards both the interests of the Community and those of the State of destination, regardless of whether the deterioration of the goods occurs before or after their presentation to customs in the State of destination.

Dimex therefore suggests that the answer to the third question submitted by the Bundesfinanzhof should be as follows:

Where goods lawfully loaded on a vessel by a Community exporter for shipment to a given country perish in transit or in the geographical territory of the State of destination, it is immaterial whether they perished or were destroyed before or after completion of customs formalities in the State of destination. The exporter cannot be held responsible for the event in question and in those circumstances his right to a full refund remains intact.

III — Oral procedure

At the sitting on 11 April 1984 the respondent in the main proceedings, represented by F. Modest, Rechtsanwalt, Hamburg, and the Commission, represented by B. Jansen, presented oral argument.

The Advocate General delivered his opinion at the sitting on 29 May 1984.

Decision

1. By order of 21 April 1983, received at the Court on 18 May 1983, the Bundesfinanzhof [Federal Finance Court] referred to the Court for a preliminajy ruling under Article 177 of the EEC Treaty three questions on the interpretation of Article 6 (2) of Regulation (EEC) No 876/68 of the Council of 2.8 June 1968 laying down general rules for granting export refunds on milk and milk products and criteria for fixing the amount of such refunds (Official Journal, English Special Edition 1968 (I), p. 234), in conjunction with Article 6 (1) of Regulation (EEC) No 192/75 of the' Commission of 17 January 1975 laying down detailed rules for the application of export refunds in respect of agricultural products (Official Journal 1975 L 25, p. 1).

2. The questions were raised in the course of an appeal on a point of law from a decision of the Finanzgericht [Finance Court] Hamburg annulling a decision of the Hauptzollamt [Principal Customs Office] Hamburg-Jonas of 27 February 1978, as confirmed in its decision of 30 January 1979, demanding the repayment of sums paid by way of variable refund on the export to Kuwait of a shipment of tins containing feta cheese in brine.

3. It appears from the documents before the Court that the Hauptzollamt demanded repayment of an amount corresponding to the difference between the amount of the minimum export refund in force at the time customs export formalities were completed and the amount of the variable export refund actually granted, when, after an inspection carried out at the premises of Dimex Nahrungsmittel, it learned that although the goods had.been unloaded in Kuwait they had not arrived on the market of the country of destination, since they had been declared unfit for human consumption by the Kuwait health authorities and had therefore had to be destroyed or re-exported.

4. According to the order making the reference, the main ground given by the Finanzgericht for its annulment of that decision was as follows: Since the Hauptzollamt had accepted that certain of the documents referred to in the third subparagraph of Article 11 (1) of Regulation No 192/75, in particular the landing certificate, could be produced instead of the customs document and as equivalent proof, irrebutable proof had been furnished that the goods had reached the destination for which the refund was granted. The Fmanzgericht held that it was not possible to require in addition proof that the goods had been marketed in the nonmember country.

5. It is against that background that the Bundesfinanzhof has referred the following questions to the Court:

“1. Must the proof required by Article 6 (2) of Regulation No 876/68 in conjunction with Article 6 (1) of Regulation No 192/75 that the product has been imported into the territory of destination be regarded as having been furnished irrebuttably if the person concerned has submitted a substitute document requested by the responsible authority under the third subparagraph of Article II (1) of Regulation No 192/75?

2. If the first question is answered in the affirmative: is that also the case where the responsible authority has requested the production of the substitute document and it then emerges that it was not a case in which proof of completion of the customs formalities within the meaning of the second subparagraph of Article 11 (1) of Regulation No 192/75 could not be furnished ‘owing to circumstances beyond the control ot the importer’ (third subparagraph of Article 11 (1) of Regulation No 192/75) ? How ought the last-mentioned words of the third subparagraph of Article 11 (1) of Regulation No 192/75) to be interpreted?

3. If the first question is answered in the negative: has a product been ‘imported’ into the territory of destination within the meaning of Article 6 (2) of Regulation No 876/68 in conjunction with Article 6 (1) of Regulation No 192/75 where a few days after unloading in that territory it has been either destroyed or re-exported? Does the answer depend on whether the product has been destroyed or re-exported before or atter being cleared for entry into free circulation in that territory and whether the deterioration of the goods which was the cause of the destruction or re-exportation occurred before or after such clearance?”

(a) The first question

6. In its first question, the national court asks in substance whether the proof required by Article 6 (2) of Regulation No 876/68, in conjunction with Article 6 (1) of Regulation No 192/75, that the product has been imported into the territory of destination must be regarded as having been furnished irrebuttably if the person concerned has submitted, instead of the customs document referred to in the first subparagraph of Article 11 (1) of Regulation No 192/75, one of the documents listed in the third subparagraph of Article 11 (1) and in particular the landing certificate.

7. According to the national court, the wording of the third subparagraph of Article 11 (1) of Regulation No 192/75, in conjunction with subparagraph (2) and the phrase “shall be considered” used in it, might suggest that the reply to that question should be in the affirmative. In its view, however, that provision could equally be interpreted as meaning that the documents submitted amount only to rebuttable evidence that the goods have been imported into the nonmember country.

8. It should first be noted in that regard that, as the Court pointed out in its judgment of 2 June 1976 (Case 125/75, Eier-Kontor, [1976] ECR 771) the system of variable export refunds is intended to gain and maintain access for Community exports to the markets of the nonmember countries concerned and the variation in the refund is based on the desire to take account of the particular characteristics of each import market in which the Community wishes to play a part.

9. In the abovementioned judgment and in later judgments (see in particular the judgment of 2.3.1977 in Case 44/76, Eier-Kontor, [1977] ECR 393), the Court held that if it sufficed, in order to qualify for payment of the refund at a higher rate, for the goods simply to be unloaded, without reaching the market or the territory of destination, the raison d'etre of the system of varying the refund would be disregarded.

10. That is moreover the reason why the second subparagraph of Article 11 (1) of Regulat.on No 192/75 makes payment of the variable refund subject to the completion of customs formalities for entry into free circulation in the non-member country, since the completion of those formalities is normally sufficient to ensure that the goods have actual access to the market ot the territory of destination.

11. The fact that the third subparagraph of Article 11 (1) of the reguládon permits the competent authorities to require other documents when they consider, in view of the particular circumstances in the country ot destination, that proof of completion of customs formalities is insufficient shows Tat such proof amounts only to rebuttable evidence that the objective of the variable export refunds has in fact been attained.

12. As the Commission correctly pointed out, that fact implies a fortiori that the documents such as the landing certificate and the bank document referred to in the third subparagraph of Article 11 (1) which are submitted in lieu of the customs document are themselves no more than rebuttable ev.dence since, unlike completion of customs formalities, they do not even ensure that the goods have access to the market of destination.

13. The answer to the first question must therefore be that the proof required by Article 6 (2) of Regulation No 876/68, in conjunction with Article 6 (1) ot Regulation No 192/75, that the product has been imported into the territory of destination is not furnished irrebuttably where the documents listed in the ľhird sľbparagraph of Article 11 (1) of Regulation No 192/75 are produced in place of the customs document authorizing entry into free circulation.

(b) The second question

14. Since the second question was put only in the event of the first question being answered in the affirmative, there is no need to reply to it.

(c) The third question

15. In its third question, the national court asks whether a product can be regarded as having been “imported” into the territory of destination with n hf meaning of Article 6 (2) of Regulation No 876/68 in conjunction with Article 6 (1) of Regulation No 192/75, if it was destroyed or re-exported within a few days of being unloaded in that territory. It asks further whether the answer depends on whether the product was destroyed or re-exported before or after being cleared for entry into free circulation in that territory and whether the deterioration of the goods which was the case of the destruction or re-exportation occurred before or after such clearance.

16. It follows from the considerations set out below that, in view of the objectives of the system of variable refunds, it is essential that products subsidized by such refunds should actually reach the market of destination and be marketed there.

17. Since actual access to the market of destination is generally subject to the completion of formalities for release into free circulation in the country of destination, the fact that the product is destroyed or re-exported before being released into free circulation means that it cannot, for the purpose of the payment of the variable refund, be regarded as having been imported within the meaning of Article 6 (2) of Regulation No 876/68 and Article 6 (1) of Regulation No 192/75.

18. The same is true where the destruction or re-exportation takes place after the completion, in the country of destination, of the formalities prescribed by that State as a precondition for the entry into free circulation or marketing of the product within its territory, in so far as the destruction or re-exportation of the product was the result of decisions taken by the competent authorities of the State of destination on completion of those formalities and the deterioration which was the cause of the destruction or re-exportation occurred before their completion. In that cause, too, actual access to the market of destination is not possible.

19. For those reasons, the answer to the third question must be that a product which has had to be destroyed or re-exported after being unloaded in the territory of destination cannot be regarded as having been imported within the meaning of Article 6 (2) of Regulation No 876/68, in conjunction with Article 6 (1) of Regulation No 192/75, where its destruction or its re-exportation was a result of decisions taken by the competent authorities of the State of destination on completion of the formalities prescribed by that State as a precondition for the entry into free circulation or marketing of the product within its territory and where the deterioration of the product which was the cause of its destruction or re-exportation occurred before completion of those formalities.

Costs

20. The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable. Since these proceedings are, in so far as the parties to the main proceedings 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 (Fourth Chamber), in answer to the questions submitted to it by the Bundesfinanzhof by order of 21 April 1983, hereby rules:

1 The proof required by Article 6 (2) of Regulation No 876/68, in conjunction with Article 6 (1) of Regulation No 192/75, that the product has been imported into the territory of destination is not furnished irrebuttably where the documents listed in the third subparagraph of Article 11 (1) of Regulation No 192/75 are produced in place of the customs document authorizing entry into circulation.

2 A product which has had to be destroyed or re-exported after being unloaded in the territory of destination cannot be regarded as having been imported within the meaning of Article 6 (2) of Regulation No 876/68, in conjunction with Article 6 (1) of Regulation No 192/75, where its destruction or its re-exportation was a result of decisions taken by the competent authorities of the State of destination on completion of the formalities prescribed by that State as a precondition for the entry into free circulation or marketing of the product within its territory and where the deterioration of the product which was the cause of its destruction or re-exportation occurred before completion of those formalities.