Westzucker GmbH v Einfuhr- und Vorratsstelle für Zucker (1/73)

II —Observations submitted under Article 20 of the Statute

The observations presented under Article 20 of the Protocol on the Statute of the Court of Justice of the European Communities may be summerized as follows:westzucker (the plaintiff in the main action) submits that the first question should be answered in the negative. The amendment to Article 12 of Regulation No 766/68, providing that the adjustment shall no longer be obligatory but merely optional, has weakened the legal position of individuals in relation to the administration because they no longer have a right to the increase of refunds. The application of this provision, amended as regards uncompleted transactions, has a materially retroactive effect on the legal position acquired by the individuals concerned under the former rules. Such a retroactive effect should be explicitly provided for in the wording of Regulation No 1048/71. The plaintiff refers to the Court's Judgment of 28 October in Case 16/70 (Necomout v Hoofdproduktschap voor Akkerbouwproducten, Rec. 1970, p. 921) dealing with the interpretation of Article 7, first paragraph, of Regulation No 1134/68 which stated specifically that ‘this Regulation shall apply to all transactions carried out from the date of its entry into force’. In order to avoid the unfair treatment of those who previously obtained advance fixing, the second paragraph of the said Article 7 allowed them to obtain cancellation of such advance fixing. The Court admitted that such a transitional provision was inspired ‘by essentially legal considerations relating to the effects of a change of legislation on contracts already subsisting’.Since provisions such as those of Article 7 of Regulation No 1134/68 are not found in Regulation No 1048/71/EEC, it must be concluded that the latter Regulation only applies to transactions for which export licences were issued after the date of its entry into force.One might further question whether the objectives of Regulation No 1048/71 necessitated a wide interpretation by which the Community interest required the application of the amended rules in cases where export licences were issued under the old rules. It can be seen from the recitals in the Preamble to Regulation No 1048/71 that the attainment of its objectives did not depend on its application to transactions begun under the old rules: ‘such a provision (Article 12 of Regulation No 766/68) proves to be too rigid; consequently there are grounds for amending the provisions of Article 12 to allow for an appropriate adjustment where necessary’.If the Court does not agree with the plaintiff on the reply to be given to the first question, the latter submits that the second question requires a reply in the affirmative.In the case in question the persons concerned have acquired by the issue of an export licence a legal position by which they have the right to an adjustment of the refunds fixed in advance corresponding to the movement of the intervention prices for white sugar.The principle of the protection of confidence of persons concerned can only admit of an infringement of those rights already acquired where the Community interest renders an alteration in their existing legal position indispensable. It follows from its observations on the first question that such a situation did not exist.with regard to the third question, the plaintiff in the main action makes the observation that the old wording of Regulation No 766/68/CEE does not only contain the obligation to adjust refunds, but also the criteria for putting this operation into effect. A prior decision by the Commission is consequently superfluous.The Commission begins its observations with an outline of the economic grounds for the rules in question. Given that the intervention price for white sugar is altered on the basis of changes in the economic conditions applying to its production, it is unwarranted that stocks produced or acquired before this alteration at a time when other economic conditions existed should profit by it. The amendment of the original wording of Article 12 of Regulation No 766/68 is due to the practical difficulties of application of Article 37, paragraph 2, which was originally intended to prevent the raising of the intervention price resulting in economically unjustifiable profits for operators.As to the first and second questions, the Commission maintains that it follows from the wording of Regulation No 1048/71 that from 27 May 1971 the new wording of Article 12 of Regulation No 766/68 replaced the original text. In other words from that date the new text must by applied in calculating export refunds.The Commission does not agree with the plaintiff in the main action on the question whether the new rules apply to uncompleted transactions. In the Commission's opinion there is no question in this case of any ‘indirect retroactive effect’. Such a concept applies to situations where a provision infringes the principle of the ‘protection of confidence’, by attaching to transactions, whether accomplished or in progress, consequences which differ from and are more unfavourable than those for which the person concerned had made his arrangements. The new rules must therefore apply to an already existing legal position. But the rules in question in no way affect any such legal position of the plaintiff in the main action. At the date of the entry into force of Regulation No 1048/71, Westzucker had only acquired a sole legally enforceable right before the administrative courts: that is, the right to the payment of export refunds fixed in advance in the export licences. The prospect of the plaintiff in the main action being able to profit from an adjustment of the fixed in advance refund was not yet a reality at the time Regulation No 1048/71 was adopted, but only on the entry into force of Regulation No 1061/71 on 16 June 1971 did a possible right of expectation arise with regard to an adjustment of the refund. Previously, there was only a vague prospect of additional benefit.T ne fact tnar. me export licences contained the phrase ‘Subject to Article 12 of Regulation No 766/68’ cannot further be the basis of a right of expectation to an adjustment of the refund, as the sole object of this phrase is to draw the attention of the holder to the fact that he could not consider it certain that the refund fixed in advance would not be reduced in pursuance of Article 12 of Regulation No 766/68/EEC. This interpretation is in line with the spirit of any ‘reservation’ usually found in national administrative measures.Thus, if the amendment made by Regulation No 1048/71 has affected neither an already existing right nor an expectation to the increase of the refunds fixed in advance, there cannot either be an ‘indirect (or material) retroactive effect’.This interpretation corresponds to the economic considerations outlined above. The refund must enable sugar to be exported from the Community in spite of the differences between the level of domestic prices in the Community and those on the world market. In this respect the decisive price level was the old intervention price for which the plaintiff in the main action was able to obtain the sugar. If the calculation of the refunds was made on the basis of a higher intervention price than that at which the plaintiff had actually obtained the sugar, it would have made an unjustifiable profit from the economic point of view.The first question thererore requires an affirmative reply, and the second a reply in the negative. As to the third question, the Commission observes as an alternative point that under the original system of Article 12 of Regulation No 766/68/EEC, there was no margin of assessment for the adjustment of the refund. Consequently uniformity of application could be ensured by the competent national bodies without any prior intervention on the part of the Commission.However, under the new system the Commission is given a real power of assessment. Its prior intervention is required in order to guarantee the uniform application of the rules in question.