Contents
In Case 808/79REFERENCE to the Court under Article 177 of the EEC Treaty by the President of the Tribunale di Lucca for a preliminary ruling in the context of an application for the annulment and replacement of a document issued in the holder's name submitted byFratelli Pardini S.p.A.THE COURTcomposed of: H. Kutscher, President, A. O'Keeffe and A. Touffait (Presidents of Chambers), J. Mertens de Wilmars, P. Pescatore, Lord Mackenzie Stuart, G. Bosco, T. Koopmans and O. Due, Judges,Advocate General: G. ReischlRegistrar: A. Van Houttegives the following
Judgment
Facts and Issues
The facts of the case, the course of the procedure and the observations submitted under Article 20 of the Statute of the Court of Justice of the EEC may be summarized as follows:
I —Facts and written procedure
1.The plaintiff in the main proceedings, a flour-milling company by the name of Fratelli Pardini S.p.A., declares that it suffered the theft on 22 August 1979 of a series of licences or certificates, issued in its name, for the export of flour and meal issued by the competent Italian authority. Amongst the stolen documents were some which had been granted for the export of flour by way of food aid supplied by the EEC and, in addition, a certificate, fixing the refund in advance at 180 European units of account per tonne, in relation to 12500 tonnes of durum wheat meal which the plaintiff intended to produce and export. The latter certificate was issued on 14 June 1979 and its period of validity expired on 31 October 1979.Initially, Pardini approached the Italian Ministry of Foreign Trade with a view to obtaining permission to carry out those exports on the basis of new documents. The Ministry issued new licences for the exports by way of food aid, but did not issue a new certificate for the export of the aforesaid 12500 tonnes of durum wheat meal.
2.Subsequently, on 19 November 1979, Pardini initiated proceedings before the President of the Tribunale di Lucca, for the annulment of the document issued in its name, seeking the annulment and replacement of the stolen certificate.
3.Although he considered that a decision to annul the document could be adopted in accordance with the procedure laid down by the Italian Civil Code, the President or the Tribunale di Lucca stayed the proceedings and referred the following preliminary questions to the Court under Article 177 of the EEC Treaty:1. Must the first and second subparagraphs of Article 17 (7) of Regulation No 193/75 be interpreted as meaning that an exporter who has suffered the theft of an export licence or certificate, valid throughout the Community, fixing in advance the amount of the refunds, may not request and obtain a new licence or certificate or equivalent document issued by a national authority permitting him to carry out the export operations before or after the expiry of the period of validity of the stolen document, thus suffering the total loss of the refunds fixed in advance under the said document?2. In the event of an affirmative answer to the previous question, is Article 17 (7) of Regulation (EEC) No 193/75, which imposes a very severe penalty upon an exporter who, without any fault on his part, has suffered the theft of an export licence or certificate, compatible with the principle of proportionality in the light of the decisions of the Court of Justice, bearing in mind that the disputed regulation is a regulation of the Commission and not a regulation of the Council of Ministers of the EEC?”
4.Article 12 (1) of Regulation (EEC) No 2727/75 of the Council of 29 October 1975 on the common organization of the market in cereals (Official Journal L 281, p. 1, 1975) provides:“Imports into the Community or exports therefrom... shall be subject to the submission of an import or export licence which may be issued by Member States to any applicant irrespective of the place of his establishment in the Community. Widere the levy or refund is fixed in advance, the advance fixing shall be noted on the licence which serves as supporting document for such advance fixing....The import or export licence shall be valid throughout the Community.The issue of such licences shall be conditional on the lodging of a deposit guaranteeing that importation or exportation will be effected during the period of validity of the licence; the deposit shall be forfeited in whole or in part if the transaction is not effected, or is only partially effected, within that period.”Article 9 (3) of Regulation (EEC) No 193/75 of the Commission of 17 January 1975 laying down common detailed rules for the application of the system of import and export licences and advance fixing certificates for agricultural products (Official Journal L 25, p. 10, 1975), provides that:“Licences and certificates shall be drawn up at least in duplicate. The first copy, called ‘Titular Holder's Copy’ and marked ‘No 1’, shall be issued without delay to the applicant and the second, called ‘Issuing Agency's Copy’ and marked ‘No 2’, shall be retained by the issuing agency.Copy No 1 of the licence or certificate shall be submitted to the office responsible for completing :(a) in the case of an import licence or of a certificate of advance fixing of the levy, customs import formalities;(b) in the case of an export licence or of a certificate of advance fixing of the refund, the customs export formalities relating to:Exportation from the Community, or...After attribution of the quantity and endorsement by the office referred to in the preceding subparagraph, Copy No 1 of the licence or certificate shall be returned to the party concerned.”Article 17 (2) of the same regulation provides:“Release of the security shall be subject to production of proof:(a) as regards imports, of completion of customs formalities as referred to in Article 9 (3) (a) relating to the product concerned;(b) as regards exports, of completion of customs formalities as referred to in Article 9 (3) (b) relating to the product concerned; furthermore, in the case of an export from the Community... proof shall be required that the product has, within 45 days from the day of completion of customs export formalities (force majeure excepted), as the case may be either left the geographical territory of the Community... or reached its destination ”Article 17 (7) of Regulation No 193/75, which is the provision at issue in this case, is worded as follows:“Where a licence or certificate or extract therefrom is lost, issuing agencies may, exceptionally, supply the party concerned with a duplicate thereof, drawn up and endorsed in the same way as the original document and clearly marked with the word ‘Duplicate’ on each copy.Duplicates may not be submitted for purposes of carrying out import or export operations.”Article 20 (1) of that regulation provides:“Where as a result of force majeure importation or exportation cannot be effected during the period of validity of the licence or certificate, the competent agency of the issuing Member State shall decide, at the request of the titular holder, either that the obligation to import or export be cancelled, the security being released, or that the period of validity of the licence or certificate be extended for such period as may be considered necessary in view of the circumstances invoked. Such extension may be granted after the period of validity of the document has expired....
5.Regulation No 2727/75 provides for the charging of an import levy (Article 13) and the grant of export refunds (Article 16), the refunds being designed to cover the difference between Community prices and prices on the world market, which are generally lower.The levy to be charged and the refund to be granted are those applicable on the day of importation and on the day of exportation respectively (Regulation No 2727/75, Articles 15 (1) and 16 (3)).However, both the levies and the refunds applicable on the day on which application for a licence is lodged, adjusted on the basis of the threshold price which will be in force during the month of importation or exportation, are to be applied to an import or an export to be effected during the period of validity of the licence, if the applicant so requests when applying for the licence (Regulation No 2727/75, Articles 15 (2) and 16 (4). Further, the refund may be fixed by means of the tendering procedure (Article 5 of Regulation No 2746/75 of the Council of 29 October 1975 laying down general rules for granting export refunds on cereals and criteria for fixing the amount of such refunds (Official Journal L 281, p. 78, 1975).The refund is generally payable on proof being furnished that the product in respect of which customs export formalities have been completed has been exported from the Community (Article 8 of Regulation No 2746/75; Article 4 of Regulation No 192/75 of the Commission of 17 January 1975 laying down detailed rules for the application of export refunds in respect of agricultural products (Official Journal L 25, p. 1, 1975). In order to obtain that payment the trader concerned must submit a written application to the competent agency of the Member State in whose territory customs export formalities were completed. The documents relating to the payment of the refund must be submitted within the six months following the date in which customs formalities were completed, except in cases of force majeure (Regulation No 192/75, Article 13).
6.The order from the President of the Tribunale di Lucca making the reference was received at the Court Registry on 3 December 1979.In accordance with Article 20 of the Statute of the Court of Justice of the European Economic Community written observations were submitted by the plaintiff in the main proceedings, the flour miller Fratelli Pardini S.p.A., represented by G. M. Ubertazzi and M. Capelli of the Milan Bar, and by the Commission, represented by its Legal Adviser A. Wainwright, assisted by G. Berardis, a member of its Legal Department.On 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.
II —Written observations submitted to the Court
A —
1.Pardini submits that Article 17 (7) of Regulation No 193/75 relates solely to a trader who, having lost a licence or certificate, does not wish to perform the obligations arising thereunder, whilst at the same time seeking to obtain the release of the security. On the other hand, the case of a trader who wishes to carry out the transaction in spite of the loss of the licence or certificate is dealt with only in Article 20 of the régulation, and only in a general manner, no specific provision being made for that case.Pardini considers that that interpretation is confirmed by the fact that the problems created by the loss or theft of such a document may easily be avoided.In fact, it emerges from Article 3 of Regulation No 193/75 that in the event of the loss of a licence or certificate made out in the holder's name no one may use that document or transfer the rights arising thereunder to third parties without the prior intervention of the undertaking in whose name the document is made out and without the express agreement of the issuing agency.Therefore the only possibility, in this case, open to an undertaking other than the holder, wishing to commit a fraud, would be to falsify the licence or certificate by forging an application for the transfer thereof purportedly coming from the holder and the endorsement of the issuing agency recognizing the transfer of the rights. Provisions to deal with such a situation are already laid down in Articles 15 and 16 of the regulation.According to Pardini, it is unlikely that the certificate could be used twice by its titular holder: in fact, it is argued, the latter would have had to carry out a first exportation, on the basis of the original document falsely declared to be stolen, from a Member State of the Community other than Italy, applying to the competent agency of the said State for payment of the refund; then, after requesting in Italy a new document to replace the stolen one, it would have had to carry out a second exportation, this time from Italy, on the basis of the new certificate, making a fresh application to the Italian agency for payment of the refund. Thus it would have had to report the theft of a certificate, thereby causing a criminal investigation to be initiated, whilst submitting, immediately afterwards, two applications in its name to the two competent agencies for payment of the refunds, in spite of the certainty that a routine check of the registers would be sufficient to detect the fraud.Pardini emphasizes that the Commission has admitted that so far not a single case has occurred in which a licence or certificate declared lost or stolen has been used twice.It further contends, in this context, that it is possible to establish at the present stage that the licence which was stolen from it has not been used and that it can no longer be used since it expired on 31 October 1979.
2.In any event, it is argued, Article 17 (7) of Regulation No 193/75 does not deal with the case of theft. After examining in particular Articles 1256, 1257, 1780, 2016 and 2743 (3) of the Italian Civil Code, as well as Article 89 of the Legge Cambiaria [exchange control law], Gazzetta Ufficiale No 292 of 19 December 1933, and Article 69 of the Legge Assegno [law on bank cheques], Gazzetta Ufficiale No 300 of 29 December 1933, Pardini observes that Italian law makes a distinction between loss, misappropriation, including theft, and destruction, and it notes that Italian law concurs in this respect with that of the other Member States and, further, with their sources in Roman law.In its opinion, the meaning of the term “loss” occurring in Article 17 (7) of Regulation No 193/75 cannot be extended to theft. Literally, the verb “to lose” means in fact “to mislay”, even if in ordinary usage it is sometimes used in a more general sense.Further, the derogative nature of Article 17 (7) requires that that provision be construed narrowly. All the legal systems envisage the reproduction of documents and ascribe to copies of documents essentially the same effect as to the original, even if the nature of certain documents may per se impose limits upon their reproduction or preclude copies having the same value as the originals. In this regard Pardini refers to Article 212 of the Italian Code of Civil Procedure as well as to Article 162 of the Code of Criminal Procedure and Article 86 of the Legge Cambiaria. In this context the limitations upon the effects of reproduction which are laid down in the first and second subparagraphs of Article 17 (7) are in the nature of an exception or a derogation. This exceptional nature is not contradicted by the nature of the document dealt with in Article 17. In fact, the rights of Community traders are certainly not embodied in the documents to which Article 17 refers, which are merely documents attesting such rights; therefore there is no reason inherent in the document to restrict the normal effects of its reproduction.Finally, in this regard Pardini maintains that the need to construe “loss“ of the document as meaning the mislaying thereof is proved a contrario by the difficulty of accepting a different construction, taking into account the fact that a declaration that a document has been misappropriated can be regarded as credible only where the theft thereof has been reported in the normal manner.
3.As regards the validity of the disputed provision, Pardini observes in the first place that the rules on export refunds make a distinction between the administrative act of granting authorization and the document which gives it physical form, namely the certificate. It points out that the general lines of the licensing system are governed by measures of the Council and that the task of adopting implementing measures, including inter alia the rules dealing with the validity and the form of certificates, has been delegated by the Council to the Commission.In Pardini's opinion, it is impossible for implementing provisions to go so far as to determine which facts extinguish the basic rights of exporters. In this regard, it is indeed significant to note that in order to delegate to the Commission the authority to adopt provisions governing the duration of the validity of licences or certificates, it was considered necessary to do so by express terms in the regulations of the Council.It is not possible to overcome this limitation on the powers delegated by the Council to the Commission by means of rules laid down in respect of the document which is the manifestation of the right to export or in other words my means of rules dealing with export licences or certificates.
4.Pardini goes on to examine whether Article 17 (7) of Regulation No. 193/75 is in accordance with the principle of proportionality. As there is no express reference to the objectives of Article 17 (7), it declares, the only possibility is to refer to the two aims which the Commission has put forward in the context of disputes about Community law in other circumstances: the rule of good administration and the rule to the effect that abuses must be avoided.According to Pardini, the requirements of good management in relation to a system of certificates, the function of which is to ensure that the holders thereof fulfil all the conditions imposed in order to obtain the right to export, do not entail the extinction of that right in the case of persons who have lost certificates or from whom they have been stolen. In this regard it is sufficient to consider the practice common to the legal systems of the Member States, not only in the field of certificates, but also in the field of documents attesting the existence of a debt.With regard to the objective of preventing a certificate from being used twice, Pardini considers that to treat the loss and/or the theft of the certificate as entailing the extinction of the right to the refunds connected with the export document is disproportionate. The risk, of improper conduct should in fact be assessed ¡n relation to the number of cases in which abuses have actually taken place; the use of the same certificate twice has probably never occurred, and even supposing that such cases have arisen, they are negligible in number. This absence of precedents suggests, according to Pardini, that the means of deterrence provided for in domestic rules in order to prevent abuses are already perfectly adequate. If it be accepted that the Community legislature did not have confidence in the domestic rules with regard to the use of a certificate twice and that consequently it wished to provide for further means, the principle of proportionality requires that the burden imposed upon individuals should be as light as possible.In this regard Pardini claims that the aim of preventing such documents from being used twice could have been attained by means less onerous for Community traders, for example by requiring someone who applies for a duplicate of a lost or stolen certificate to lodge a security equal to the refund. However, that solution could at most be proportionate in the case of a trader who has lost the document as a result of gross negligence on his part.Finally, Pardini points out that the principle of proportionality is closely connected with the prohibition on discrimination. If the aim of Article 17 (7) is to prevent abuses, that rule, as interpreted by the Commission, itself constitutes a source of abuse to the advantage of a trader who does not wish to perform the obligations arising under the licence or certificate. In fact, it is only too easy for such a trader to declare the document lost and then rely on Article 17 (7) in order to request the release of his security.In conclusion Pardini states that if the provisions of Article 17 (7) of Regulation No 193/74 were to be interpreted in the sense given to them by the Commission, they would amount to a breach of the principle of proportionality, which would be all the more serious as it would be committed by the Commission in disregard of the regulations of the Council.
B—
1.The Commission states that the duplicate provided for by Article 17 (7) of Regulation No 193/75 constitutes a means of proof that a transaction has actually been performed and it merely assures the person concerned of the release of the security in relation to the quantities already imported or exported. But in its opinion, it cannot have the other effects produced by the original. In particular, duplicates may not be submitted, in accordance with the second subparagraph of Article 17 (7), “for purposes of carrying out import or export operations“.
2.The Commission points out that the loss of the licence or certificate does not prevent the import of any given goods: if the document issued initially can no longer be submitted the trader may at any time request a new document, which will normally be issued to him. That will enable him to carry out the import or export in exactly the same way as the original document, subject to the prior lodging of a further security. However, the amount of the levy or refund, the Commission adds, will be that in force on the day of the transaction, unless it is again fixed in advance for a further period.
3.Whilst recognizing that there exists a difference between loss and theft from a theoretical and academic point of view, the Commission considers that if the purpose of the provision in question is taken into account such a view is plainly inappropriate. In fact, if it were accepted that in the provision in question the concept of “loss” did not include that of “theft”, all losses would become thefts. That assertion cannot be answered by pointing to the deterrent effect of the penal consequences of theft, since in the type of case envisaged it would not be a third party which used the licence, but the trader himself.
4.The Commission submits that the issue of a duplicate in place of the original licence or certificate would constitute a virtually uncontrollable source of fraud, even without taking into account the cases in which such documents might be forged by third parties. In fact, the issue of a duplicate would enable a dishonest trader to carry out an import or export transaction twice over. The Commission states that for ten years there has been discussion at the Community level about the controls necessary to prevent such frauds, but that the only valid system offering sufficient guarantees is that provided for by Article 17 (7) of Regulation No 193/75.According to the Commission, the supervision recessary to ensure that a rate of levy or refund fixed in advance has not been applied twice over requires a gigantic administrative effort which the Member States have always unanimously declared impossible. As regards export refunds the checks would have to be repeated nine times because the grant thereof is centralized in the hands of a single authority in each Member State. In all the Member States the tens of thousands of files relating to levies and refunds are kept manually and the checking itself would necessarily be manual and would cover a period extending from the day on which the licence or certificate was issued to a date six months after its date of expiry, that is to say the closing date for submitting the application for payment of the refund. The charging of the import or export levy in the different Member States is either centralized in the hands of a single authority or performed by whichever customs office the person concerned applies to. Therefore in view of the number of customs offices the check would have to take place in several hundreds of different places.In order to ensure that an original licence which does not contain any advance-fixing of the levy or refund and which a trader declares lost, has not been, and will not be, used, the check would likewise have to take place in several hundreds of different customs offices.The Commission emphasizes that where it is subsequently established that a trader has imported or exported twice over the quantity to which he was entitled the economic situation cannot be redressed.Further, it is necessary to prevent any possibility of an original licence or certificate or duplicate being used in a way which would distort the statistical data to be taken into consideration in order to secure the sound and proper management of the markets.On the basis of these considerations, it seems to the Commission that the reference by the national court to the alleged disproportionality of the provisions in question is not justified.
5.With regard to the last part of the second question submitted by the court requesting the preliminary ruling, the Commission states that Regulation No 193/75 does not by any means constitute an infringement of the Council's basic regulation providing for the grant of refunds. In fact Article 17 (7) satisfies a need for effective control, which belongs to the sphere of detailed implementing rules expressly entrusted by the Council to the Commission; doubtless the Council did not want the refunds to be granted without effective safeguards against fraudulent activities. Further, there is no question of a penalty either. In fact, a penalty presupposes, on the part of an individual, unlawful conduct which automatically incurs a reduction in that person's financial assets. In this case, it is a question, on the contrary, of the specific expression of an imperative need for control which must necessarily be performed by the Commission within the framework of the powers delegated to it by the Council. The method chosen has, after various attempts, proved to be the only suitable one and it has so far enabled the system regulating imports and exports to function satisfactorily. The Commission's efforts, which will continue, to find an alternative method of control have unfortunately foundered upon harsh economic and administrative realities.Consequently, the Commission suggests that the following answers be given to the preliminary questions:1. Article 17 (7) of Regulation No 193/75 must be interpreted as meaning that it precludes the issue of a duplicate having the same value as an original import or export licence or certificate which is no longer in the possession of its titular holder and replacing the said document.2. Consideration of the provision in question has disclosed no factor of such a kind as to affect its validity.
III —Oral procedure
1.At the sitting on 24 April 1980 oral argument was presented by the Italian Government, represented by A. Marzano, Avvocato dello Stato, acting as Agent, by Fratelli Pardini, S.p.A., represented by M. U. Ubertazzi and F. Capelli of the Milan Bar, and by the Commission, represented by G. Berardis, a member of its Legal Department.
2.The Italian Government, which had not submitted written observations, expressed serious doubts at the hearing about the admissibility of the reference for a preliminary ruling, both because of a dispute on which the national court had to give a decision and because of the inappropriate nature of the proceedings pending before that court for leading to the conclusion that the questions raised needed to be dealt with as preliminary issues. In this regard, it pointed out that Pardini had obtained an interim measure from the Pretore of Lucca. According to the Italian Government, Pardini should before 30 January 1980 have asked the court before which the main proceedings are pending to declare that it was entitled to obtain a new export certificate on the same terms as the previous one, but it did not do so. Consequently, the interim measure is nugatory and so the preliminary questions submitted cannot be of any consequence except in the context of proceedings on the substance of the case.The Italian Government further observed in this context that the export certificate constitutes an administrative measure and not a document attesting the existence of a debt, the cancellation or payment of which may be authorized, that the court cannot take the place of the administrative authorities so as to issue export licences or certificates and that the right to the refund has its origin in the exportation and not in the possession of the export document.According to the Italian Government the letter and spirit of Article 17 (7) of Regulation No 193/75 leave no doubt about the necessity of precluding the possible use of duplicates for the export transaction.In its opinion the reference to the “loss” of a document should be construed as referring only to its being mislaid; and it is not possible to accept a distinction according to whether the trader does or does not intend to proceed with the exportation. Further, it has no doubt that the public interest in ensuring that the trade in goods operates properly, that obligations to import or export are performed in their interest and that controls are carried out, must prevail over the interests of the individual trader. Similarly, it considers it certain that an examination of whether the rule is reasonable must take account of the possible consequences resulting from the application of a different basic criterion and that it must not be governed by the damage alleged in each case by the trader.Finally, the Italian Government observes that the restrictive wording of the Community rule does not leave any margin of discretion. to the competent national authorities allowing them to appraise the principle laid down by the rule or a fortiori to derogate from it so that it is not possible to reproach the Italian authorities in any way or to impute any responsibility whatsoever to them. That is even more apparent, according to the Italian Government, if it is borne in mind that the Italian authorities contacted the competent Community authorities and followed the interpretation given by them.
3.In reply to a question from a member of the Court, Pardini stated that it was not the practice to insure against the loss or theft of licences or certificates and that it had not taken out insurance because it did not imagine that by losing a licence it would lose all entitlement to the refund.
4.The Advocate General delivered his opinion on 22 May 1980.
Decision
1By an order of 28 November 1979, received at the Court on 3 December 1979, the President of the Tribunale di Lucca referred to the Court a preliminary ruling under Article 177 of the EEC Treaty, two questions on the interpretation and validity of Article 17 (7) of Regulation No 193/75 of the Commission of 17 January 1975 laying down common detailed rules for the application of the system of import and export licences and advance fixing certificates for agricultural products (Official Journal L 25, p. 10). The said paragraph (7) provides that duplicates issued in the event of certificates' being lost may not be submitted for purposes of carrying out import or export operations.
2The questions arise in the context of proceedings commenced by an Italian undertaking which, declaring that it had suffered the theft of a number of documents, including an export certificate relating to 12500 tonnes of durum wheat meal with advance fixing of the refunds, is seeking the annulment and replacement of the stolen certificate in order to be able to carry out the exports under the new document requested on the same conditions as those laid down by the stolen document.
3Under Article 12 of Regulation No 2727/75 of the Council of 29 October 1975 on the common organization of the market in cereals (Official Journal L 281, p. 1), imports into the Community or exports therefrom of any of the products listed in Article 1 are subject to the submission of a licence valid throughout the Community, the issue of which is conditional on the lodging of a deposit guaranteeing that importation or exportation will be effected during the period of validity of the licence. According to the twelfth recital in the preamble to that regulation the system of issuing licences must enable the competent authorities “to follow trade movements in order to assess market trends and to apply the measures laid down in this regulation as necessary”. Further, where the levy or refund is fixed in advance, the fixing must, according to Article 12 of the regulation, be noted on the licence, which serves as supporting document for the advance fixing. It follows that advance fixing certificates may be of very great importance when the rate of the levy or refund applicable on the day of the transaction differs appreciably from the rate fixed in advance.
4Article 12 (2) provides that the period of validity of licences and other detailed rules for the application of that article shall be adopted in accordance with the procedure known as the Management Committee procedure. It is by virtue of that provision and the corresponding provisions contained in the regulations relating to other agricultural products that the Commission adopted Regulation No 193/75, to which reference has been made above, Article 17 (7) of which provides:“Where a licence or certificate or extract therefrom is lost, issuing agencies may, exceptionally, supply the party concerned with a duplicate thereof, drawn up and endorsed in the same way as the original document and clearly marked with the word ‘Duplicate’ on each copy.Duplicates may not be submitted for purposes of carrying out import or export operations”.
5Together with that disputed provision, it is necessary for the purpose of this case to quote Article 20 (1) of the same regulation which provides:“Where as a result of force majeure importation or exportation cannot be effected during the period of validity of the licence or certificate, the competent agency of the issuing Member State shall decide, at the request of the titular holder, either that the obligation to import or export be cancelled, the security being released, or that the period of validity of the licence or certificate be extended for such period as may be considered necessary in view of the circumstances invoked....Any extension of a licence or certificate shall be recorded by means of an endorsement stamped by the issuing agency on the licence or certificate and where appropriate on its extracts, and the necessary adjustments shall be made”.
6In this regard, it is also necessary to cite the judgment of 30 January 1974 in Case 158/73, Kampffineyer v Einfuhr- und Vorratsstelle für Getreide und Futtermittel [1974] ECR 101, where, in reply to preliminary questions submitted in the context of a dispute concerning the release of the security following the loss of a licence, the Court held that “the loss of an import licence constitutes a case of force majeure within the meaning of Article 18 of Regulation No 1373/70 (the provision corresponding to Article 20 of Regulation No 193/75) when such loss occurs despite the fact that the titular holder of the licence has taken all the precautions which could reasonably be expected of a prudent and diligent trader”. It is therefore settled that if the titular holder cannot perform the transaction as a result of the loss of the licence in such circumstances he may obtain the release of the security. Further, he may, in accordance with the general rules, obtain a fresh licence, where appropriate with a fresh advance fixing, but at the rate applicable on the date on which the application for the fresh licence is submitted.
The interpretation of Article 17 (7)
7The first question submitted by the court requesting a preliminary ruling is as follows:“Must the first and second subparagraphs of Article 17 (7) of Regulation No 193/75 be interpreted as meaning that an exporter who has suffered the theft of an export licence or certificate, valid throughout the Community, fixing in advance the amount of the refunds, may not request and obtain a new licence or certificate or equivalent document issued by a national authority permitting him to carry out the export operations before or after the expiry of the period of validity of the stolen document, thus suffering the total loss of the refunds fixed in advance under the said document?”
8The plaintiff in the main proceedings submits that Article 17 (7) of Regulation No 193/75 deals solely with the situation of a trader who, having lost the licence or certificate, does not wish to perform the obligations arising thereunder, whilst at the same time seeking to obtain the release of the security. But the case of a trader who wishes to perform the transaction in spite of the loss of the licence or certificate is dealt with only in Article 20 of the regulation, and only in a general manner, no specific provision being made for that case.
9The very wording of the articles in question is sufficient reason to dismiss that argument. In fact, it is clear from Article 20 that that provision does not concern the issue of a duplicate or a fresh licence capable of being submitted for the purpose of performing the transaction on the same conditions as those laid down in the stolen licence or certificate. On the contrary, the only provision concerning the issue of such documents is Article 17 (7), the second subparagraph of which expressly provides that duplicates, issued by virtue of the first subparagraph, may not be submitted for purposes of carrying out import or export operations.
10Secondly, the plaintiff in the main proceedings maintains that Article 17 (7) does not deal with cases of theft. It argues that Italian law makes a distinction between loss, misappropriation — including theft — and destruction and that, in this respect, Italian law accords with the law of the other Member States. Since all the legal systems envisage the reproduction of documents and ascribe to copies thereof essentially the same effect as that of the original document, so it is argued, Article 17 (7) is of a derogative nature and should therefore be construed narrowly. Moreover, it is argued that, with regard to control, a case of theft does not entail the same risk as a loss in the proper sense of the word, since a theft would be reported to the police and thus give rise to an investigation.
11The construction of the term “loss” in Article 17 (7) must take into account the function which that paragraph performs in the Community licensing system. Under that system, the licence or certificate must actually be submitted not only for the performance of each transaction, but also for the release of the security (Article 17 (2) and (3)). If the document is lost after the performance of the transaction, the duplicate issued by virtue of Article 17 (7), endorsed by the office where customs formalities were completed, may be used to obtain the release of the security. Similarly, in the event of a theft occurring after the transaction has been carried out, the possession of a duplicate is necessary in order to release the security. Thus there is no reason for not including that case within the scope of the first subparagraph of Article 17 (7). Whilst the issue of a duplicate which serves solely to release the security cannot lead to a licence or certificate being used twice, the situation would be quite different in the case of a duplicate capable of being used in order to carry out the transaction itself. There can be no assurance that the transaction has not already been carried out on the basis of the lost document. If the transaction has not yet been carried out, and if the period of validity has not yet expired, the lost document may in principle be produced throughout the Community for the purpose of carrying out the transaction. That is why the second subparagraph of Article 17 (7) provides that the transaction cannot be carried out on the basis of a duplicate. The problem arises in the same way in the case of a stolen licence or certificate. Therefore it is necessary to interpret the second subparagraph, in view of its purpose, as including cases of theft.
12It is thus necessary to reply to the first question that Article 17 (7) of Regulation No 193/75 must be interpreted as meaning that an exporter who has suffered the theft of an export licence or advance fixing certificate may not obtain a new licence or certificate or equivalent document permitting him to carry out the export transactions on the conditions laid down in the stolen document.
The validity of Article 17 (7)
13In the event of an affirmative answer to the first question, the national court asks the Court of Justice to give a ruling on the following question:“Is Article 17 (7) of Regulation (EEC) No 193/75, which imposes a very severe penalty upon an exporter who, without any fault on his part, has suffered the theft of an export licence or certificate, compatible with the principle of proportionality in the light of the decisions of the Court of Justice, bearing in mind that the disputed regulation is a regulation of the Commission and not a regulaion of the Council of Ministers of the EEC?”
14It must be pointed out in the first place that the provisions in question cannot be regarded as imposing a “ penalty”, in the proper sense of the term, upon a trader in the event of his licence or certificate being lost. In fact, it is necessary to appraise the consequences which the Community legislature has attached to the loss of such a document, irrespective of the cause of the loss in each individual case and regardless of the liability which the trader concerned may incur. In this regard, the national court indicates, by the very wording of its question, the two considerations which led it to question the validity of the disputed provision: the issue of proportionality and that of the possible limitations placed upon the power which the regulation confers upon the Commission.
15As regards the latter aspect, the plaintiff in the main proceedings makes a distinction between the right to carry out an import or export transaction and the document which attests that right. The former, it is argued, is governed by the regulations of the Council, whilst they in turn empower the Commission to settle questions of form and lay down detailed implementing rules in relation to the document. In this regard, it is significant to note that in order to delegate to the Commission the power to determine the period of validity of licences, it was considered necessary to do so in express terms.Therefore, it is said, the Commission is not empowered to prescribe that the loss of the document shall entail the extinction of the right.
16Article 12 (2) of Regulation No 2727/75 of the Council provides that “the period of validity of licences and other detailed rules for the application of this article shall be adopted in accordance with the procedure laid down in Article 26” (Management Committee procedure). It is clear from the wording of that provision that the Council conferred wide powers upon the Commission for the purpose of implementing the licensing system introduced by the said Article 12. In particular, it is clear that the period of validity of licences or certificates is only one example of the detailed rules which may be adopted by the Commission. Moreover, the function given to licences in Article 12 (1) does not enable a distinction to be made between the right to carry out the transaction and the document which allegedly serves only as a manifestation of that right. In principle, Article 12 (1) makes any transaction with non-member countries subject to the submission of a licence in order to enable the competent authorities constantly to follow trade movements. Moreover, where the levy or refund is fixed in advance, the same paragraph gives the licence the function of a supporting document for the advance fixing. Taking into account that essential rôle of the document itself, the control of the manner in which it is used acquires particular importance. If the disputed provision appears necessaryin order to ensure effective control, there is therefore no reason to suppose that in adopting it the Commission exceeded its powers.
17In order to determine whether the disputed provision is compatible with the principle of proportionality, it is first of all necessary to ascertain the aims of the regulations in question. As the Court has already had occasion to emphasize with regard to the system of lodging security, it is necessary for the authorities entrusted with the management of the common organization of the markets to have available precise forecasts on future imports and exports. Whilst that objective requires that the performance of the undertaking to export or import in accordance with the licences or certificates issued be ensured by appropriate means, it also makes it necessary to see that the documents are used only for the transactions covered thereby. In the case of advance fixing certificates, that need is all the more imperative since the use of such certificates twice may confer unjustified benefits upon traders and thus impose heavy financial burdens upon the Community.
18In this regard, the prohibition contained in Article 17 (7) upon carrying out the transaction on the basis of mere duplicates constitutes a measure which is both simple and effective. On the other hand, from the trader's point of view that prohibition entails the risk of losing, even through no fault of their own, the benefits attached to the original certificates.
19It is clear that the mere possibility of several documents existing simultaneously in relation to the same transaction and capable of being submitted for the purpose of carrying out that transaction requires a system of control. Whilst it is true that, as the plaintiff emphasizes, the law of each Member State lays down severe penalties for fraud, the effectiveness of those penalties depends precisely on the effectiveness of the control enabling the fraud to be detected. Moreover, the use of a document twice does not always necessarily come about as a result of a fraudulent intention, but may also be caused by a failure in the internal system of control of the company to which the licence is issued. Further, to require a company which requests a duplicate of a lost or stolen document to lodge a further security, as the plaintiff in the main proceedings proposes, would not remove the need for a check prior to the release of that security.
20As regards the methods of control, the Commission observes that in each case in which a duplicate capable of being used to carry out the transaction was issued, it would be necessaiy to carry out checks covering tens of thousands of files in almost all the Member States and extending in each case over a period from the date on which the document was issued to a date six months after its date of expiry. For ten years the Commission and the Member States have been discussing the possibility of introducing other methods of control, but have not found a system containing sufficient safeguards against the risk of a licence or certificate being used twice.
21In the circumstances it is necessary to examine the situation of traders under the rules in force. In the first place, the risk borne by them derives from the system of advance fixing, which was created in the interests of trade and which in normal cases gives traders considerable benefits. If by requesting advance fixing traders take advantage of those benefits, it is therefore just that they should bear the disadvantages which arise from the necessity, on the part of the Community, of preventing any abuse. In particular, it is reasonable to expect the titular holders of licences or certificates to take the greatest possible care of them and to insure against the risks which cannot be eliminated, to the same extent to which they insure against other commercial risks.
22For those reasons, the risk borne by traders as a result of the provision contained in Article 17 (7) of Regulation No 193/75 is not disproportionate in relation to the need for control.
23It is therefore necessary to state in reply to the second question that consideration of the provision in question has disclosed no factor of such a kind as to affect its validity.
Costs
24The costs incurred by the Government of the Italian Republic and by the Commission of the European Communities, which have submitted observations to the Court, are not recoverable; as these proceedings are, in so far as the plaintiff in the main action is concerned, in the nature of a step in the case pending before the national court, the decision on costs is a matter for that court.
Operative part
On those grounds,THE COURT,in answer to the questions submitted to it by the President of the Tribunale di Lucca by an order of 28 November 1979, hereby rules:
1.Article 17 (7) of Regulation (EEC) No 193/75 of the Commission of 17 January 1975, laying down common detailed rules for the application of the system of import and export licences and advance fixing certificates for agricultural products, must be interpreted as meaning that an exporter who has suffered the theft of an export licence or advance fixing certificate may not obtain a new licence or equivalent document permitting him to carry out the export operations on the conditions laid down in the stolen licence or certificate.
2.Consideration of the provision in question has disclosed no factor of such a kind as to effect its validity.
Delivered in open court in Luxembourg on 26 June 1980.
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