6/77 · GlobalLawDB

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In Case 6/77Reference to the Court under Article 177 of the EEC Treaty by the College van Beroep voor het Bedrijfsleven for a preliminary ruling in the action pending before that court between:BESLOTEN VENNOOTSCHAP MET BEPERKTE AANSPRAKELIJKHEID N.G.J. SCHOUTEN B. V., Giessen,anaHOOFDPRODUKTSCHAP VOOR AKKERBOUWPRODUKTEN, The Hague,THE COURTcomposed of: H. Kutscher, President, A. M. Donner and P. Pescatore (Presidents of Chambers), J. Mertens de Wilmars, M. Sørensen, Lord Mackenzie Stuart, A. O'Keeffe, G. Bosco and A. Touffait, Judges,Advocate General: J.-P. WarnerRegistrar: A. Van Houttegives the following

Judgment

Facts and issues

The facts, procedure and written 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 written procedure

1.Regulation No 120/67/EEC of the Council (OJ, English Special Edition 1967, p. 33) as amended, at the time of the facts of the main action set out below, by Regulation No 1346/73 (OJ 1973, L 141, p. 8), makes imports into the Community or exports therefrom of any of the products listed in Article 1 (a), (b) or (c) subject to the submission of an import or export certificate^note the issue of which is conditional on the lodging of a deposit guaranteeing that importation or exportation is effected during the period of validity of the licence (Article 12).Moreover, under Article 13 (1) of the regulation:‘A levy equal for each product to the threshold price less the cif price shall be charged on imports of the products listed in Article 1 (a), (b) and (c).’Article Article 1 (a) of that regulation refers to maize which comes under tariff heading 10.05.

2.The levy to be charged is that applicable on the day of importation (Article 15 (1)), but traders may have the levy payable by them fixed in advance. Under Article 15 (2), as amended by Regulation (EEC) No 2429/72 of the Council (OJ, English Special Edition 1972 (November) p. 48):‘However, for the products referred to in Article 1 (a) and (b) the levy applicable on the day on which the application for the certificate is lodged, adjusted on the basis of the threshold price valid in the month of importation, shall be applied, if the party concerned so requests at the same time as the application for the certificate is made …, to imports effected during the period of validity of the certificate. In this case a premium, fixed at the same time as the levy, shall be added to the levy.’The general rules of this system were fixed by the Council in Regulation No 140/67/EEC (OJ, English Special Edition 1967, p. 91). This regulation essentially contains rules concerning the ‘premium’ .Under Articles 2 and 4 thereof:Article 2‘When, for one of the products listed in Article 1 (a) and (b) of Regulation No 120/67/EEC, the cif price is higher than the cif forward delivery price for the same product, the rate of the premium shall, subject to the provisions set out below, be equal to the difference between the two prices’.Article 4‘If the cif price is equal to the cif forward delivery price or exceeds the latter by not more than 0.125 units of account per metric ton, the premium shall be equal to 0 units of account.’The detailed rules for the application of the system in force at the time of the facts of the main action set out below are those fixed by Regulation (EEC) No 2637/70 of the Commission (OJ, English Special Edition 1970 (III), p. 932).

3.Besloten Vennootschap met Beperkte Aansprakelijkheid N. G. J. Schouten B. V. (hereinafter referred to as ‘Schouten’) imported in August 1974 several consignments of maize accompanied by certificates fixing the amount of the levy in advance.On the basis of those certificates and having regard to the above-mentioned provisions, the Hoofdproduktschap voor Akkerbouwprodukten (Central Board for Agricultural Products, hereinafter referred to as the ‘H.v.A.’) calculated the levy applicable by first adjusting the levy in force on the day on which the application for the certificate was lodged on the basis of the threshold price valid in the month of importation and then adding to that levy the premium laid down in Article 2 of Regulation No 140/67.Schouten objected that such a calculation was not correct for, following a proper interpretation of the provisions applicable, it was necessary first to apply the premium to the levy in force on the day on which the application for the certificate was lodged and then to adjust that levy to the threshold price applicable in the month of importation.The objection raised to that effect by Schouten in its letters of 8 October 1974 and 20 August 1976 was dismissed by the H.v.A. by letter of 1 September 1976 and the case was brought before the College van Beroep voor het Bedrijfsleven (an administrative court for economic matters) by an application lodged on 1 October 1976.The college van Beroep voor het Bedrijfsleven, having regard to the arguments put forward by the parties, which were based principally on the interpretation of the abovementioned provisions, considered that it was necessary for the purpose of giving judgment in the case to refer the following question to the Court of Justice for a preliminary ruling:‘Must Article 15 (2) of Regulation No 120/67/EEC of the Council be interpreted to mean that a variation of the threshold price in force in the month of importation from the threshold price in force on the day on which the application for the certificate is lodged results in a corresponding adjustment of the levy in force on that day, that is to say, of the levy fixed as increased by the premium, or in a corresponding adjustment of the levy alone, so that the premium, regardless of the nature and size of the variation from the threshold price, is always chargeable in full?’It therefore decided, by order of 11 January 1977, to stay the proceedings and refer that question to the Court of Justice under Article 177 of the EEC Treaty.

4.A copy of the order for reference was received at the Court of Justice on 12 January 1977.Schouten, represented by Messrs L. A. E. Briët and H. H. Kronenberg, and the Commission of the European Communities, represented by its Legal Adviser, J. H. J. Bourgeois, submitted written observations in accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the EEC.Having heard the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without instituting a preparatory inquiry.

II —Written observations submitted pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC

1.Schouten points out that the interpretation of Article 15 (2) of Regulation No 120/67 put forward by the agricultural intervention agency in question and by the Commission advocates a method of calculation which is not permissible and leads to importations at a price higher than the threshold price. Either the wording of that article permits an interpretation which is in accordance with the aims laid down by the Treaty, the common organization of the market and Regulation No 120/67, or the article is not applicable because it is contrary to those aims.The purpose of the rules on Community levies is to prevent cereals imported from third countries upsetting the equilibrium of the Community market. In such a system, the variable charge which the levy involves is restricted merely to covering the threshold price. The sole aim of the very introduction of the premium is to ensure that no cereal is imported at a price lower than the threshold price.Article 15 (2) of Regulation No 120/67 is based on those principles. It follows from that provision, in particular from the words ‘at the same time’, that the levy and the premium may not be fixed independently of one another. The method to be followed is that which consists in first adjusting, by the premium, the levy applicable on the day on which the application for the certificate is lodged and then correcting that amount on the basis of the threshold price valid in the month of importation. The opposite method, proposed by the Commission and the intervention agency, which consists in first calculating the levy on the basis of the threshold price valid in the month of importation and then adding the premium to that levy, does not take into account the wording and the aim of the abovementioned provision. Moreover, since, according to that method, the correcting factor of the premium only comes in at the second stage and since, therefore, the levy adjusted to the threshold price valid in the month of importation is not the definitive one, it is impossible to understand why, in the opinion of the intervention agency in question, this notional levy can never be less than zero and why it is therefore impossible to determine negative values in its case.Schouten, which produces in support of its argument a memorandum from the Koninklijke Vereniging Het Comité van Graanhandelaren (Royal Society, the Committee of Corn Merchants), concludes that Article 15 (2) of Regulation No 120/67 must be interpreted as meaning that:‘A variation in the threshold price applicable in the month during which the importation into the Community was made from the threshold price applicable on the day on which the application for the certificate was lodged gives rise to a corresponding adjustment of the levy applicable on that day, that is to say of the levy which has been fixed as increased by a premium.’

2.The Commission of the European Communities, after recalling the essential features of the levy system established by Regulation No 120/67, observes that according to Article 15 (2) of that regulation, the advance fixing of the levy involves an adjustment of the levy valid at the date on which the application was lodged on the basis of two variables, that is:— variations in the threshold price,— ‘premiums’, which are linked to the fluctuations in world market prices.The variations in the threshold price result first from the application of the monthly increases referred to in Article 6 (1) of Regulation No 120/67. They are, moreover, due to the variations which are generally undergone by threshold prices during the transition from one marketing year to the other. In addition, the levy applicable at the date on which the application is lodged (that is, the threshold price valid at that date less the cif price at that date) is increased or reduced as the case may be on the basis of those variations affecting the threshold price valid in the month of importation.The premiums compensate for fluctuations in world market prices by covering the differences between the cif price valid on the day on which the application for the import or export certificate is lodged and the cif forward delivery price, where the latter is lower (Article 2 of Regulation No 140/67). If the cif price valid on the day on which the application for the certificate is lodged is equal to the cif forward delivery price or exceeds the latter by not more than 0.125 units of account per metric ton, the premium is equal to 0 units of account (Article 4 of Regulation No 140/67).As long as the levy applicable on the day on which the application for the certificate is lodged is higher than the variations in the threshold price, the calculation of the levy fixed in advance does not raise any difficulties: whether the levy is first adjusted to the threshold price valid in the month of importation and the ‘premium’ is then added or whether the latter is first added and the levy is afterwards adjusted, the levy to be charged is the same in both cases.On the other hand, when the variations in the threshold price are higher than the levy applicable on the day on which the application for the certificate is lodged, the result varies according to whether one or the other method is used. The levy to be charged is higher if the levy applicable on the day on which the application is lodged is first adjusted on the basis of the threshold price valid in the month of importation and the ‘premium’ is then added to the amount which results from that adjustment (first method); on the other hand, it is lower if the ‘premium’ is first added to the levy applicable on the day on which the application is lodged and that amount is then adjusted on the basis of the threshold price valid in the month of importation (second method).Under Article 15 (2) of Regulation No 120/67, the first of these methods must be applied. This follows from the very wording of that provision, which provides for two distinct operations to be carried out in a well-defined order: first, the adjustment of the levy on the basis of the threshold price, and then the addition to the levy thus calculated of a premium which, since it is ‘fixed at the same time as the levy’, is precisely the result of a distinct operation.This method fits perfectly into the reasoning followed when the system of advance fixing was adopted. The Community legislature adopted as its starting point the levy in force on the day on which the application for the certificate was lodged. In so doing, it took into account however the fact that the price level to be attained, and therefore to be protected on the date of importation is not indicated by the threshold price in force on the day on which the application for the certificate is lodged but by that in force on the date of importation: for this reason, it was decided to adjust the levy to the threshold price valid during the month of importation.Once this adjustment had been made, the problem arose on the other hand whether it was necessary to add a correcting factor to the amount thus obtained in cases in which the cif price is, during the month of importation, less than the cif price ‘fixed in advance’, that is, less than the cif price used for the calculation of the levy fixed in advance. In such cases, in fact, the levy fixed in advance is inadequate because it is too low. The ‘premium’ is precisely a correcting factor designed for this purpose: it should increase the levy to be applied.Such a method is also more in accordance with the very system of advance fixing in which a distinction is made between the levy properly so-called and the premium. The application of another method, such as that suggested by Schouten, does not take into account that distinction: in such cases, the adjustment of the levy to the (lower) threshold price may be of negative value which, although it does not lead to an import subsidy, means however a reduction in or cancellation of the premium. Nor does the system of premiums, as laid down in Regulation No 140/67, include negative values for premiums either except where the levy fixed in advance must be increased or remain unaltered (Article 4); there is no question of any negative premium which would enable the levy fixed in advance to be reduced in cases in which the cif price is lower than the cif forward delivery price.Although the method laid down in Article 15 (2) of Regulation No 120/67 leads, in cases such as the present, to a levy which is higher than the difference between the threshold price in force in the month of importation and the cif forward delivery price, as determined for that month, nevertheless the Commission cannot merely because of that fact depart from the wording of Article 15 (2), which is clear in itself.First, the calculation made on the basis of the cif forward delivery price valid for the month of importation does not guarantee that that importation will always be made in practice at the threshold price, since the cif price only reflects the trend of the market in futures and other factors may give rise to importations at a price lower than the threshold price. Secondly, it is necessary to remember that advance fixing is not obligatory but is a system which an importer may or may not use according to his own judgment: if in certain cases that system does not seem to him to be favourable, he has an alternative, that is, the system of the ‘daily’ levy.The Commission proposes that the question referred to the Court should be answered as follows:‘Under the provisions of Article 15 (2) of Regulation No 120/67, a variation in the threshold price valid in the month of importation leads to an adjustment of the levy fixed in advance alone and in no way affects the premium referred to in those provisions.’

III —Oral procedure

Schouten and the Commission of the European Communities presented oral argument at the hearing on 25 May 1977.The Advocate General delivered his opinion at the hearing on 15 June 1977.

Decision

1By order of 11 January 1977, which reached the Court on 12 January 1977, the College van Beroep voor het Bedrijfsleven referred to the Court under Article 177 of the EEC Treaty a question on the interpretation of Article 15 (2) of Regulation No 120/67 of the Council of 13 June 1967 on the common organization of the market in cereals (OJ, English Special Edition 1967, p. 33).

2The national court asks the Court of Justice whether ‘Article 15 (2) of Regulation No 120/67/EEC of the Council must be interpreted to mean that a variation of the threshold price in force in the month of importation from the threshold price in force on the day on which the application for the certificate is lodged results in a corresponding adjustment of the levy in force on that day, that is to say, of the levy fixed as increased by the premium, or in a corresponding adjustment of the levy alone, so that the premium, regardless of the nature and size of the variation from the threshold price, is always chargeable in full’.

3This question has arisen in the context of a dispute between a Netherlands maize importer and the Hoofdproduktschap voor Akkerbouwprodukten concerning the calculation of the levy fixed in advance, referred to in Article 15 (2) of Regulation No 120/67, for maize imported into the Netherlands in August 1974 on the basis of import certificates fixing the levy in advance.

4Unter the abovementioned Article 15 (2), as amended by Regulation (EEC) No 2429/72 of the Council of 21 November 1972 (OJ, English Special Edition 1972 (November), p. 48), for certain products, including maize, the ‘levy applicable on the day on which the application for the certificate is lodged, adjusted on the basis of the threshold price valid in the month of importation, shall be applied, if the party concerned so requests at the same time as the application for the certificate is made (the requests to be made not later than 13.00 hours), to imports effected during the period of validity of the certificate. In this case a premium, fixed at the same time as the levy, shall be added to the levy’.

5The file shows that in the present case the national collection agency interpreted that provision as meaning that the levy applicable on the day on which the application for the certificate is lodged must first be adjusted on the basis of the threshold price valid on the date of importation and then increased by the unadjusted amount of the premium introduced by Regulation No 140/67 of the Council (OJ, English Special Edition 1967, p. 91).

6Since the calculation of the amount of the levy according to those rules produced a negative value, the collection agency brought that amount to 0 units of account and added the premium thereto.

7The plaintiff in the main action contested the validity of that calculation by claiming that, according to the correct interpretation of Article 15 (2) of Regulation No 120/67, the levy applicable on the day on which the application for the certificate is lodged must, before being adjusted on the basis of the threshold price valid in the month of importation, first be increased by the amount of the premium laid down by the abovementioned Regulation No 140/67.

8Article 15 (2) of Regulation No 120/67 is one of the fundamental rules on the Community system of levies and must be interpreted not only in the light of its wording but also of the principles governing the operation of that system and of its objectives within the context of the common agricultural policy.

9The Community levy, which is primarily intended to protect and stabilize the Community market, in particular by preventing price fluctuations on the world market from affecting prices within the Community, involves the imposition of a charge which, as results from the eleventh recital of the preamble to Regulation No 120/67, makes it possible to ‘cover the difference between prices ruling outside and within the Community’.

10For this purpose, the first subparagraph of Article 13 (1) of that regulation specifies that, for the products in question, the levy charged is ‘equal for each product to the threshold price less the cif price’.

11In order to guarantee this protection in the case of advance fixing of the levy, Article 15 (2) of the same regulation provides for the application of a premium fixed for each importation on the basis of the variations in the cif price, while observing the principle laid down in the first recital of the preamble to Regulation No 140/67 of the Council according to which ‘the common threshold price is the Community market's sole protection’.

12In view of its objective and the function which it fulfils within the system of levies, it is therefore impossible for the correcting factor of the premium to be applied so as to increase the levy fixed in advance beyond what is necessary to cover the difference between the prices ruling outside and within the Community.

13In a case such as that referred to by the order for reference, the application of that correcting factor after the levy has been adjusted on the basis of the threshold price valid in the month of importation leads to an increased charge, which is unjustified having regard to the objectives of the levy, and to importations at a level higher than the threshold price, which is incompatible with the principles of the common agricultural policy.

14On the other hand, such results are avoided if the premium is applied before the levy is adjusted on the basis of the threshold price valid in the month of importation.

15It follows moreover from Regulation No 140/67 that the fixing of a premium is linked solely to the variations in the cif price and does not take into account any variations in the threshold price.

16In fact, it is added to the levy, subject to Article 4 of that regulation, as soon as the cif forward delivery price is less than the cif price applicable on the day on which the levy is fixed in advance even if, in the absence of variations in the threshold price, the levy must not be adjusted within the meaning of Article 15 (2) of Regulation No 120/67.

17It follows, therefore, from the conditions relating to the application of the premium that the levy to which it is added is not the levy which has been adjusted but the levy calculated on the day on which the application for the certificate was lodged.

18Moreover, the wording of the above-mention Article 15 (2) does not necessitate a contrary conclusion.

19In providing that ‘a premium fixed at the same time as the levy shall be added to the levy’, the second sentence of that provision in fact implies that the levy as increased by the premium is the levy which is fixed on the day on which the application for the certificate is lodged and not the adjusted levy.

20The words ‘in this case’ which appear in that sentence obviously refer to the case in which the levy is fixed in advance and not to that of the adjustment which only occurs if certain conditions relating to the threshold price are fulfilled.

21For those reasons, it is necessary to reply that Article 15 (2) of Regulation No 120/67/EEC of the Council must be interpreted as meaning that a variation in the threshold price valid in the month of importation into the Community leads to an adjustment of the levy applicable on the day on which the application for the certificate is lodged, as increased by the amount of the premium.

Costs

22The costs incurred by the Commission of the European Communities, which submitted observations to the Court, are not recoverable.

23Since the procedure is, so far as the parties to the main action are concerned, in the nature of a step in the proceedings before the national court, it is for that court to make an order as to costs.

Operative part

On those grounds,THE COURTin answer to the question referred to it by the College van Beroep voor het Bedrijfsleven by order of 11 January 1977 hereby rules: Article 15 (2) of Regulation No 120/67/EEC of the Council must be interpreted as meaning that a variation in the threshold price valid in the month of importation into the Community leads to an adjustment of the levy applicable on the day on which the application for the certificate is lodged, as increased by the amount of the premium.

Delivered in open court in Luxembourg on 6 July 1977.