Report for the Hearing in Case C-319/90
I — Facts and procedure
1. Title I, Articles 7, 10, 11, 12a, 14, 14a and 15 of Council Regulation (EEC) No 337/79 of 5 February 1979 on the common organization of the market in wine (Official Journal 1979 L 54, p. 1) as amended, replaced by Council Regulation (EEC) No 822/87 of 16 March 1987 (Official Journal 1987 L 84, p. 1), establishes a series of voluntary support measures for the wine market which consists essentially of aid for storage or re-storage of wines and the distillation of wines.
2. Articles 1 to 5 of Commission Regulation (EEC) No 2102/84 of 13 July 1984 on harvest, production and stock declarations relating to wine-sector products (Official Journal 1984 L 194, p. 1) lay down detailed rules regarding the declarations to be made by traders. The first subparagraph of Article 4(1) of Regulation No 2102/84 requires traden to declare each year to the competent authorities of the Member States the stocks of concentrated grape must and wine held by them. Article 5(3) provides that the declarations are to be made not later than 7 September in respect of quantities held on 31 August. According to Article 8(2), a summary of the declarations provided for is to be communicated by the Member States to the Commission before 30 November.
3. Article 10a(l) of Regulation (EEC) No 2102/84, as amended by Commission Regulation (EEC) No 2459/84 of 20 August 1984 (Official Journal 1984 L 231, p. 5), provides that Where the declaration is incomplete or incorrect, traden will, pursuant to Article 10a(2), be excluded from intervention measures only if the details in question are essential.
‘Persons required to submit harvest production or stock declarations who do not submit such declarations by the dates specified in Article 5 ... shall not qualify for the benefit of the measures provided for by Articles 7, 10, 11, 12a, 14, 14a and 15 of Regulation (EEC) No 337/79’.
4. Otto Pressler Weingut-Weingroßkellerei GmbH & Co KG (hereinafter referred to as ‘Otto Pressier’) had 23028 litres of table wine distilled for it in the winegrowing year 1986/87 on the basis of a distillation declaration approved on 9 June 1987 by the Bundesamt für Ernährung und Forstwirtschaft (hereinafter referred to as ‘Bundesamt’). During a check primarily concerned with the submission of the harven and production declarations, the Bundesamt noted that the stock declaration had not been submitted before 7 September but only on 11 September 1986 and therefore refused to grant the aid requested.
5. The objection raised by Ono Pressler against that decision was dismissed by the Bundesamt on 4 January 1988. Otto Pressler then brought an action before the Verwaltungsgericht Frankfurt am Main (Administrative Court, Frankfurt am Main).
6. The Verwaltungsgericht entertains doubts as to the validity of Article 10a of Regulation No 2102/84 with regard to the principle of proportionality. It considers that all negative legal consequences for a trader, including exclusion from advantages under the organization of the market, flowing from the nonobservance of his obligations constitute a penalty. Non-compliance with the time-limit for submission of the declarations does not jeopardize the very objective of the common organization of the market and cannot therefore be considered a serious breach of the rules or a breach of a principal obligation. Since it represents an autonomous obligation applying to all wine producers or stockists, irrespective of whether they subsequently ask for aid for distillation, the declaration also cannot be regarded as a ‘secondary ’obligation. Even if that obligation were to be considered secondary, the penalty would far exceed the seriousness of the breach.
7. Accordingly, the Verwaltungsgericht, by order of 8 October 1990, stayed the proceedings and, pursuant to Article 177 of the EEC Treaty, referred the following question to the Court of Justice of the European Communities for a preliminary ruling:
‘Is Article 10a of Commission Regulation (EEC) No 2102/84 of 13 July 1984 on harvest, production and stock declarations relating to wine-sector products, as amended by Article 1 of Commission Regulation (EEC) No 2459/84 of 20 August 1984, valid?’
8. The Verwaltungsgericht's order was received at the Court Registry on 22 October 1990.
9. Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were submitted on 1 February 1991 by the Bundesamt, represented by Ursula Holzhauser, Regierungsrätin, and by the Commission of the European Communities, represented by Ulrich Wölker, of the Commission's Legal Service, acting as Agent.
10. 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.
11. By decision of 19 June 1991, pursuant to Article 95(1) and (2) of the Rules of Procedure, the Court assigned the case to the Sixth Chamber.
II — Written observations submitted to the Court
1. The Bundesamt, the defendant in the main proceedings, shares the Verwaltungsgericht's doubts as to the validity of Article 10a of Reguládon No 2102/84. There does indeed exist a link between the voluntary participation in a measure within the context of the common organization of the market in wine and the submission of declarations in that those declarations allow the Commission to gauge the sute of the market. To ensure that intervention measures are effective, it is also necessary to set time-limits for the submission of declarations. Exceeding those time-limits has less serious consequences than non-fulfilment of one of the main obligations relating to distillation and it therefore only constitutes a breach of a secondary obligation. In conformity with the Court's judgment in Case C-118/89 Ungenfelser [1990] ECR I-2637, it must be recognized that the objective of submitting sufficient information to the Commission can be achieved even when the time-limit for the submission of declarations has been slighdy exceeded. Furthermore, Article 2 of Commission Regulation (EEC) No 3024/86 of 1 October 1986 (Official Journal 1986 L 281, p. 8), laying down, for the 1986/87 wine year, detailed implementing rules for distillation as provided for in Article 11 of Regulation (EEC) No 337/79 (Official Journal 1986 L 281, p. 8), establishes a system for the approval of delivery contracts or declarations before the submission of the production declaration. The present case concerns a belated stock declaration, the content of which is not of any significance for a specific distillation measure. It should also be noted that Article 10a(2) of Regulation No 2102/84 does not provide for the automatic exclusion of traders from voluntary measures where, although the declarations are incomplete or incorrect, the missing information is not essential to the application of the measure in question. The Bundesamt therefore concludes that automatic and total exclusion from all the voluntary measures should be regarded as too severe a penalty and hence that Article 10a of Regulation No 2102/84 is contrary to the principle of proportionality.
2. The Commission points out that Article 10a of Regulation No 2102/84 should not be regarded as a penalty. The Court, in its judgment in Case C-217/88 Commission v federal Republic of Germany [1990] ECR I-2879, considered that a similar provision, namely Article 6(1) of Regulation No 337/79, which excludes producers from various voluntary measures if they fail to fulfil the obligation to deliver the table wine for compulsory distillation, does not constitute a penalty but merely sets out a condition for eligibility for certain intervention measures provided for by the regulation. There is a penalty, within the meaning of the case-law, only where a measure detrimentally affects an existing legal position or at least a legitimate expectation. The majority of cases in which the Court has applied the principle of proportionality concerned the recovery of a security and the payment or recovery of aid. Other cases were concerned with conditions for entitlemeni to aid which have to be fulfilled after the trader has already taken steps directly forming part of the operation which that aid seeks to encourage, such as the conclusion of contracts or the processing of prod uns. In those cases, even where the claimant could not claim a right to aid, he could at least rely on a legitimate expectation. In the present case the provision in question merely excludes a claimant from an economically advantageous measure not yet implemented at the time of the breach of the obligation to submit the declaration. The system for intervention in the wine sector includes, in addition to obligatory measures, voluntary measures which are set in train when the conditions demand it. Stock declarations are essential to the system inasmuch as they enable the Commission to establish before 10 December a forward estimate. On the basis of this estimate and of production and harvest dau submitted by the Member States before 15 February, the Commission decides, before 28 February, whether obligatory distillation and support distillation should be introduced. The preventive distillation in question in the main proceedings is closely linked to those obligatory measures in that it mitigates their consequences. The correct functioning of the system requires that the declarations be submitted within the time-limit. The choice of 7 September for the stock declarations held by the traders is justified by the need to obtain reliable information at a date as close as possible to 31 August, when the wine year ends, and also to give the national authorities enough time to collect, process and transmit the declarations before 30 November. Since Article 10a of Regulation No 2102/84 does not constitute a penalty, the criteria customarily applied to measures in the agricultural sector which have disadvantageous economic consequences for the parties concerned should be applied (judgment of the Court in Case C-331/88 R v FEDESA [1990] ECR I-4023). In view of the wide discretion which Articles 40 and 43 of the Treaty confer upon the Community legislature in the context of the Common Agricultural Policy, there is no breach of the principle of proportionality unless the measure is manifestly inappropriate in relation to the objective pursued. In this case the measure is both appropriate and equitable. The parues concerned are only denied access to measures whose implementation they have made difficult or even jeopardized by not complying with the time-limits for submission of declarations. The provision in question is also equitable in that the negative consequences imposed on the parties concerned are limited as to both the benefit withheld and time. The Commission therefore proposes to answer that
‘Consideration of the question raised has disclosed no factor of such a kind as to affect the validity of Article 10a of Regulation (EEC) No 2102/84, as amended by Regulation (EEC) No 2459/84.’
F. A. Schockweiler
Judge-Rapporteur
1 Language of the case: Iulian.