Kurt A. Becher v Hauptzollamt Emden (154/73)

I —Facts and procedure

II —Observations presented before the Court

Becher asserts that Article 103, on which Regulation No 974/71 is based, docs not empower the Council to enact a regulation since in that Article mention is only made, in paragraph (2), of ‘deciding’ and, in paragraph (3), of ‘directives’. Becher leaves aside examination of all other considerations since the issues of law raised in this case ‘have already been the subject of various orders for reference’.In respect of the first question on the validity of Regulation No 974/71, the Commission refers to its statements in the aforementioned Cases 5/73, 9/73 and 10/73.As to the second question, the Commission emphasizes the inaccuracy of Becher's argument, which is based on the principle that the reference ‘prices’ specified in Article 2 (1) in relation to importation from third countries can only be c.i.f. prices. Only one conclusion can be drawn from the above provision, namely that the percentage is applied to prices which, while taking account of practical requirements, are closest to reality, in other words closest to actual import prices. Bases of calculation can be conceived which are different from that of the c.i.f. price. In fact, from March 1973 the Commission has instead based its assessment of compensatory amounts on the intervention price; the excessive amounts so obtained have been corrected by a corresponding modification of levies and refunds (cf. Article 5 (3) (b) of Regulation No 648/73 of the Commission of 1 March 1973 and the seventh and eighth recitals of the said Regulation, OJ L 64 of 9 March 1973, p. 1). That method was chosen for reasons of administrative expediency. Even if there is justification for basing the assessment on prices other than c.i.f. prices, there is all the more reason, in the Commission's opinion, not to require that, in a system based on c.i.f. prices, any modification of those prices should necessarily be reflected in the monetary compensation. Article 2 of Regulation No 974/71 thus leaves the Commission a ‘technical margin of discretion’. The Commission has already emphasized this point in the context of Case 5/73 (Balkan), especially when replying to the question whether that legal basis was sufficiently specific.The Commission then points out that in October 1971 the compensatory amounts were in fact calculated from c.i.f. prices. But, as these prices vary every day it was necessary to adopt a simplified method of assessment so as to avoid having to alter the compensatory amounts too often. For this purpose, the Commission calculated an average c.i.f. price, to be modified only if an appreciable change took place in respect of the price fixed previously. A variation of 10 % up or down was generally considered an appreciable change.The compensatory amount in question was based on the average c.i.f. price of 204·34 DM, the price valid for the period from 22 to 28 July 1971. From then until 22 October 1971 there was no need for any alteration as there was no appreciable change in the average c.i.f. price. The average c.i.f. price for the reference period before 22 October was 194·90 DM (and not 193·10 DM as the applicant asserts), it was thus only 4·6 % less than the aforementioned average price, so that the internal criterion of 10 % was not fulfilled.The Commission points out, moreover, that the whole system of monetary compensatory amounts rests on the principle of the flat-rate assessment and the simplification of calculations. In this connexion, it refers to Article 2 (1) and Article 3 of Regulation No 974/71.The Commission believes that, with regard to variations of the reference price, the 10 % limit should in general be adhered to in practice, since any lower figure would result in too frequent alterations.The Commission submits that, given that Regulation No 974/71 lays down no rule for the calculation of reference prices, it is free, for the purpose of implementation and in accordance with Article 6 of the said Regulation, to fix the compensatory amounts by means of the method of calculation described above. The Commission recalls with regard to this matter that the amounts are fixed according to the Management Committee procedure and that moreover it submitted a report to the Council in accordance with Article 8 (3), on the principal characteristics of that method. Finally, the Commission makes the point that this method of calculation does not have a uniformly unfavourable effect on imports.The Commission considers that, after what has been stated above, there is no point in giving a reply to the third question.As a subsidiary point, the Commission emphasizes that the ‘correct compensatory amount’ cannot be substituted for the erronenous compensatory amount. Under Article 6 of Regulation No 974/71 the Commission alone is competent to fix the compensatory amounts, and the fixing of those amounts is not, as recourse to the Management Committee procedure already shows, a simple matter of arithmetic. If one were to adopt an opposing point of view there would be a risk that national administrations would fix different compensatory amounts when the Commission's assessments proved to be substantially incorrect.The Commission considers moreover that by asking in its third question if the incorrect compensatory amount is ‘merely inoperative’ or if ‘the correct compensatory amount (should) simply be substituted for the amount fixed by the Commission’ the Finanzgericht is offering an alternative which does not seem very apt. Even if a possible error was found the compensatory amount fixed remains applicable, without prejudice to the consequences resulting for persons concerned.