law://eu/cjeu/1973/c-178-73/hd_1_1_2_2@2026-11-13(a) The parties Van Den Avenne and Joosen point out that the acts forming the subject matter of the national proceedings were committed during the years 1965 and 1966, i.e. during the first stage. Nevertheless the national court in its questions rightly included the subsequent stages.Article 2 of Regulation No 25, referred to in the first question of the reference, already explicitly refers to the definitive stage in these terms: ‘Revenues from levies on imports from third countries shall accrue to the Community and shall be used for Community expenditure so that the budget resources of the Community comprise those revenues together with all revenues decided in accordance with the rules of the Treaty…’The programme laid down by this provision was carried out gradually during the transitional period. Thus Article 7 of Regulation No 25 already envisages for the first stage the partial transfer to the Community of levies raised, since the variable contributions are tied to the amounts of the levies raised.Accordingly one might express the first question as follows: Was the Community during the first stage directly interested in the collection of the levies to an extent where it was a party directly affected in the event of the charges being evaded? If it is difficult to be quite definite on this point, ought one then to consider the Community as a party directly affected to the extent that the net imports to the Member States concerned effectively determined the variable proportion of the contributions to the Fund and hence the transfer of the levies to the Community?According to the parties Van Den Avenne and Joosen this question ought to be answered in the affirmative. They develop their argument as follows:(a) It is clear both from the wording and from the position of Article 2 of Regulation No 25 that the Council from the beginning placed the financing of the agricultural policy within a Community perspective. Accordingly one must interpret the following provisions within this context, i.e. that of the Communities' own responsibility for the revenue and expenditure of the Fund;(b) Such an interpretation is the only one compatible with the agricultural policy as it is envisaged in the Treaty. Even during the transitional period one cannot dissociate the financing of the common agricultural policy from the aims pursued by means of this policy. Completely to dissociate the system of refunds and levies — financed during the first stage by the Member States — from the agricultural policy would have endangered the Community solution intended to surmount the sharp contrast between the Community interest (the elimination of surpluses of certain products by a system of levies and refunds) and the individual interest of Member States (the reduction of the cost of the agricultural policy) where a common agricultural policy rendered this Community solution necessary. From the beginning of the common agricultural policy the financing of this policy therefore constitutes an important element.(c) The interest of the Community in charges levied by Member States during the transitional period was so obvious that in reports to the European Parliament doubts were expressed as to the validity of Regulation No 130/66, on the grounds that these charges already constituted the Communities' own resources within the meaning of Article 201 of the Treaty, without the procedure laid down having been followed.The parties Van Den Avenne and Joosen suggest that the following reply be given to the first question:‘The provisions of Regulation No 25 of the Council of 4 April 1962 on the financing of the common agricultural policy must be interpreted as meaning that as from the coming into effect of the said Regulation the Community was capable of being a party directly injured as regards the recovery of revenue resulting from the common agricultural policy.’The Government of the Kingdom of Belgium and the Government of the Grand Duchy of Luxembourg point out that Regulation No 25, and in particular its Articles 2 and 7, do not confer upon the Community any legal interest in regard to the collection of levies during the transitional period. The proportion of levies that is paid by the Member State to the Community is in the nature of a simple contribution — the Member State's own obligation towards the Community. This characteristic was preserved at the time when the ordinary scale laid down by Article 200 of the Treaty was (partially) replaced by a coefficient better adapted to the specific factors of the common agricultural policy. During the period of transition the Fund fulfilled the function of an institution for the purposes of division and clearing. It fulfilled this task by receiving and again distributing the Member States' contributions in accordance with the rules of Regulations Nos 25 and 130/66.The levies collected during the transitional period could in any case have been transformed into the Communities' own resources — assuming that this transformation gives rise to a right to claim on the part of the Community only if the conditions provided by Article 201 (3) of the Treaty had first been complied with: i.e. a proposal by the Council, acting unanimously, consultation of the Assembly, adoption by the Member States.The Government of the French Republic, maintains that the question of division of authority as between the Community and the Member States in regard to the recovery of amounts which are the subject of fraud in the field of levies or refunds, cannot be resolved on the basis of Article 2 of Regulation No 25. This provision only provides a simple declaration of intent, at that period devoid of any legal consequence. On the other hand it appears from Article 7 of Regulation No 25 and 11 of Regulation No 130/66 that the revenue of the Fund consists ‘of financial contributions from Member States, calculated for the first part according to the scale laid down in Article 200 of the Treaty and for the second part in proportion to net imports from third countries effected by each Member State’.During this period the charges ought therefore, notwithstanding the fact that their amount was fixed at Community level, to be considered as national revenue, the amount of which is taken into consideration on the basis of proportions which varied thereafter, for the purpose of calculations the financial contribution due from each Member State to the Community. The mechanism installed by Regulation No 25 and more generally by all provisions up to 1970 in the field of financing of the common agricultural policy, in the absence of any contrary provisions, left to the States the duty of taking all measures necessary for ensuring that the Community rules were carried out.As regards the transitional period, one cannot therefore, either from the legal nature of the revenue or from any provision that, in relation to the problem before the Court, affected the sovereign powers of Member States, conclude that only the Community was responsible for putting into operation the procedures for the recovery of amounts that were the subject of fraud in the field of levies.The Commission concludes, from its description of the functioning of the system of financing of the common agricultural policy during the period from 1962 to 1967, that the ‘third country levies’ collected by each Member State constituted during the period in question the financial resources of Member States. Article 2 of Regulation No 25 ought to be interpreted as referring solely to the ‘single market stage’.The principle enshrined in this Article had to be put into operation in accordance with a procedure laid down by Article 201 of the Treaty and this only happened in 1970 by the CouncilDecision on the Communities' own resources of 21 April 1970.To enable one to reply to the question whether frauds in relation to levies had consequences upon the Member States' contributions to the Fund, the different accounting periods involved in the national proceedings must be distinguished. It is obvious that the collection of levies had no consequences upon the functioning of the Fund when a fixed global scale of division was applicable for the purpose of calculating the different Member States' contributions (from mid 1962 to mid 1967).The special scale of division based upon net imports, which was applied during the accounting periods 1963/1964 and 1964/1965, had neither the result nor the intention of transferring third country levies, collected by Member States having net imports, to the Fund. There was no correlation between the levies collected and the net imports that permitted the assessment of the incidence of the levies collected on the contributions calculated on the basis of the amount of the net imports. Under the regulations in force during the first stage, the third country levies further differed depending on the Member State concerned, to such an extent that any comparison between contributions due from the different Member States is useless.Accordingly, the levies avoided could only be of interest during the second stage, a period when the contributions of Member States were calculated as to one part in proportion to the levies collected by each Member State upon imports from third countries, and if necessary, as to another part, according to a fixed scale.As regards the refunds improperly paid during the first period, the Commission points out that in the event the Fund did not suffer any damage, since Belgium and the Grand Duchy of Luxembourg had no net export in the sectors in question. As this expenditure of the Member States was not eligible for a claim against the Fund, it could not result in expenditure on the part of the Fund.The Commission underlines that in the final result the frauds committed had consequences that were disadvantageous for the other Member States whose contributions were fixed at too high a level, since the determination of the net quantities imported by Belgium and Luxembourg — a partial basis for the calculation of contributions to the Fund — was not correct.The same conclusion applies to the second stage: the frauds committed at the time of collection of the levies or of the payment of the refunds did not as a consequence involve any damage to the Fund itself, but rather the Member States the contributions of which had to be reduced in proportion to the levies subsequently to be claimed by the Member States involved.Nevertheless these inaccuracies are covered by the balancing of accounts of the Fund, brought about by the Commission's Decisions as to the participation of the Fund during the accounting periods in question and for the subsequent notification to Member States of the balance of their account (Article 10 of the Financial Regulation on the European Agricultural Guidance and Guarantee Fund of 5 February 1964 (OJ No 599/64)). This balancing of accounts must be considered final (cf. Federal German Republic v Commission,Case 2/71, Rec. 1971, pp. 669 to 677). Besides, Article 12 of Regulation No 283/71 of the Council of 7 February 1972 (OJ L 36/1) expressly provides that Member States are not bound to repay to the Community sums wrongly paid as a result of irregularities or negligence relating to the accounting periods from 1962/1963 to 1966/1967. This situation only results in legal effects at the level of the relationship between the Community and the Member States.As regards the legal relationship between Member States and the parties involved, the above-mentioned provision contains the following limitation: ‘without prejudice to the Member States' obligation to recover sums wrongly paid …’According to the Commission the answer to the first question ought to be as follows:Even in the case where under the provisions of Regulations No 25 and 130/66 on the financing of the common agricultural policy the levies evaded and the refunds wrongly granted may have financial consequences to the prejudice of the Community, the recovery of the levies evaded and the repayment of the refunds wrongly paid are matters for the Member States.
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