2(a) The plaintiff company Raiffeisen Hauptgenossenschaft recalls in the first place the legal and factual circumstances which led to the initiation of preceedings before the national coun and explains that the reference to the Court of Justice in the joined cases under consideration should be seen against the background of a large number of disputes brought since 1977 before the Verwaltungsgericht Frankfurt am Main and the Hessischer Verwaltungsgerichtshof. According to this plaintiff, those preceedings were all concerned with demands for the repayment of premiums granted in respect of the denaturing of wheat carried out at the end of the 1960s and the beginning of the 1970s. The relevant German authorities have in certain cases recognized that the complaints lodged by the plaintiff are justified and have revoked their demands for the repayment of the premium. The Hessischer Verwaltungsgerichtshof for its part has resolved some of the issues of law raised in the questions referred to the Court. The judgment delivered by that Vewaltungsgerichtshof was the subject of an appeal on a point of law to the Bundesverwaltungsgericht [Federal Administrative Court].The plaintiffs observations subsequently focus on examining the questions raised by the Verwaltungsgericht Frankfurt am Main.(b) As a preliminary remark, the plaintiff points out that the Court has laid down, in particular in Joined Cases 119 and 126/79 Lippische Hauptgenossenschaft v Bahn [1980] ECR 1863 and 265/78 Ferwerda v Produktschap voor Vee en Vlees [1980] ECR 617, that disputes on the repayment of sums collected on behalf of the Community are governed by national law by virtue of Article 8 of Regulation No 729/70 of the Council of 21 April 1970 on the financing of the common agricultural policy. However, the Court of Justice has held that there are two restrictions on the applicability in principle of national law to those disputes : first, there must be no difference in the application of Community law according to whether the disputes have arisen as a result of the application of Community law or are, on the contrary, similar but exclusively national in character; secondly, the effect of applying national law must not be to render impossible in practice the exercise of rights conferred by Community law.Since the answers to the questions submitted by the national court are based on principles of the case-law of the Court of Justice, it is necessary to distinguish those which are applicable in areas covered by national law from those which are governed by Community law.(c) In examining the first question which deals with the binding nature of the standard method set out in Annex I to Regulation No 1403/69 of the Commission, the plaintiff in the main action points out that rules have been adopted under Community law in respect of the method of denaturing only in order to specify, in Article 2 of Regulation No 172/67 of the Council, that the methods employed for denaturing must ensure that the cereals are rendered unsuitable for human consumption. In keeping with that approach, referred to in the third paragraph of Article 1 of Regulation No 1403/69 of the Commission, the standard method laid down in Annex I to that regulation constitutes only a model which in no way excludes any other method which the intervention agencies of the Member States are entitled to authorize.If the one standard method originally laid down by the provisions of Regulation No 1403/69, that is to say denaturing by colouring, is not used for denaturing cereals but, as in the present case, another process is employed, involving the addition of fish oil or cod-liver oil. the only question is whether, in accordance with the aforementioned provisions of Article 2 of Regulation No 172/67 the denatured cereals can no longer be used for human consumption and whether the process selected offers, for the achievement of that purpose, a guarantee that the means employed are at least as reliable as the standard method, that is to say denaturing by colouring.Thus, compliance with the standard method provided for in Annex I to Regulation No 1403/69 of the Commission is obviously not a precondition for the grant of the premium since that method is concerned only with colouring by the use of Patented Blue V.(d) As regards the second question which relates to the validity of audits carried out ex post facto and, according to the plaintiff, to the evidence admitted in connection with demands for the repayment of premiums, the plaintiff submits as follows.The case-law of the Court establishes that by virtue of Article 8 of Regulation No 729/70 of the Council, the question of the recover of Community aids unduly granted is in principle governed by national law subject to the two conditions set by the plaintiff in the remark prefacing its answer to the questions.The general principles of evidence in German law compel the court to give judgment on the basis of its unfettered opinion, formed in the course of the entire proceedings. However, since the case-law of the Court of Justice requires that the application of national provisions shall not render impossible in practice the exercise of rights conferred by Community law, the national court is also obliged to observe the rules of Community law relating to the method of denaturing. In the present case, it is apparent from the layout of the provisions in question as well as from the wording of Article 5 of Regulation No 1403/69 that the intention of the Community legislature is to bring the principal weight of the controls to bear on inspections of operations on the spot.The importance of supervision on the spot whilst denaturing operations are in progress has moreover been recognized by the Court in Case 819/79 of 14 January 1981 [1981] ECR 21 concerning the conditions for granting premiums in respect of the denaturing of skimmedmilk powder governed by Regulation No 990/72 of the Commission of 15 May 1972 (Official Journal, English Special Edition 1972 (II), p. 428). That regulation provides for a system of controls which is “essentially identical” to the system provided for by Regulation No 1403/69. The Court's solution is therefore applicable to the present case.Consequently, even if national law confers on the national court a discretion in relation to the evidence produced before it, the court must none the less acknowledge the dominant role of the system of proof established by Community law, that is to say inspections on the spot.The opposite solution would jeopardize the uniform application of Community law by making the grant and retention of premiums paid thereunder subject to divergent systems of proof according to the Member States in which undertakings in comparable situations operate.The plaintiff observes in that connection that although under Community law the Member States may adopt measures of control other than those prescribed by Community law, the latter nowhere makes provision for a system of control on the basis of ex post facto audits of accounting records.The results of the checks carried out by the Member States on their own initiative cannot therefore have the same importance for a national court as the results of the controls prescribed by the Community legislature as being necessary for the implementation of a measure which it has enacted itself.For that reason the plaintiff takes the view that the answer to the second question submitted by the national court should be that the significance to be ascribed to an audit carried out subsequently to the completion of a denaturing operation is a question of evidence which must be decided in accordance with national law. However, since Community law provides solely for an inspection of the denaturing operations which is to be carried out on the premises by the intervention agency, the results of that check must take precedence over other controls unilaterally prescribed by the Member States.(e) In reply to the third question concerning the discretion conferred by German law on the intervention agency where it proposes to demand repayment of Community aids unduly granted, the plaintiff cites the actual terms in which Article 8 (1) of Regulation No 729/70 of the Council is couched. It is possible to state on the basis of that provision that, in that area, Community law refers back to the law of the Member States.Thus Community law leaves the matter to the national laws of the Member States and contains no provisions relating to the conditions for repayment of aids unduly granted; similarly, it in no way provides that an aid unduly granted must necessarily, notwithstanding the applicable national provisions safeguarding the principles of legal certainty or the protection of legitimate expectation, be repaid.The relevant provisions of German law to which Community law refers in the matter of the recovery of sums unduly paid require the Federal Office in this case to comply with the procedure for the withdrawal of illegal administrative measures provided for by the first sentence of paragraph 48 (1) of the Verwaltungsverfahrensgesetz of 25 May 1976. In particular, that provision lays down that the Federal Office may withdraw a decision granting premiums only after examining all the factual circumstances of the case and exercising the discretion which devolves upon it by virtue of the general principles of German administrative law consolidated by the Law of 1976.The Federal Office may evade that procedure only if its implementation were to conflict with one of the two restrictions arising from the case-law of the Court on the application of the provisions of national law. In the opinion of the plaintiff in the main action, however, that is not the case.To begin with, the application of Article 48 of the Law of 25 May 1976 to the present dispute complies with the obligation defined by the Court that no distinction must be drawn between disputes under Community law and similar ones under national law. It is apparent from the decisions of the German administrative courts (in particular, the judgment of the Hessischer Verwaliungsgerichtshof of 9 March 1981) that disputes resulting from the application of the German regulations of 1968 and 1971 relating to premiums for the denaturing of cereals are governed by the same administrative procedure, provided for bv Article 48 of the Law of 25 May 1976.Secondly, the application of German administrative law to a dispute between an undertaking and the Federal Office is not such as to “render impossible in practice the exercise of rights conferred by Community law”. The second condition defined by the Court in its decided cases has therefore been satisfied.The main objective of the Community rules on the denaturing of wheat is to ensure that the denatured cereals are withdrawn from the market in foodstuffs fit for human consumption. Once that objective is achieved, the problem of the repayment of the premium is of secondary importance. The plaintiff in the main action points out that the first sentence of Article 8 (2) of Regulation No 729/70 of the Council makes clear that it was by no means the intention of the Community legislature to recover in all cases the full amount of aids unduly granted in consequence of irregularities or negligence. According to that provision, the Community is to bear the financial consequences of irregularities or negligence “with the exception of the consequences of irregularities or negligence attributable to administrative authorities or other bodies of the Member States” (first sentence of Article 8 (2) of Regulation No 729/72).The fact that the intervention agency exercises a discretion before the adoption of any decision to withdraw the measure granting the premiums cannot therefore render impossible the implementation of Community rules.The application of the principle of the exercise of discretion, as defined and imposed on administrative authorities by German law, has as its purpose to compel the administrative authority called upon to amend or to revoke a measure, to adapt the decision which it intends to adopt to each individual case, by taking all the circumstances into account following a comparative examination of all the interests involved: those of the State in the withdrawal of the contested measure on the one hand and those of the citizen in the protection of his expectation that the legal situation resulting from the measure will continue to exist on the other. With that end in view, the authority exercising a discretion must respect the fundamental rights embodied in the Constitution and the principles of equality, proportionality and the protection of legitimate expectation.The citizen is afforded similar guarantees by the other national legal systems of the Community. A study in comparative law carried out by the plaintiff in the main action shows that the principles of the protection of the citizen's legitimate expectation and the exercise of a certain discretion by an administrative authority when it proposes to amend or withdraw an administrative measure exist, though the forms which they take may sometimes differ, in British, French, Italian and Netherlands administrative law.Thus, the application of German administrative law is in conformity with the general principles of the other Member States and does not conflict with the principles of Community law.In that connection, the Court of Justice has recognized in a large number of decisions (Case 95/75 Effem v Hauptzollamt Lüneburg [1976] ECR 361; Case 29/75 Kaußof v Commission [1976] ECR 431; Case 122/78 Buitoni v Forma [1979] ECR 677 and Case 240/78 Atalanta v Produktschap voor Vee en Vlees [1979] ECR 2137) that Community law takes into account the principles which guided the legislature of the Federal Republic of Germany when it drafted the Law of 25 May 1976, namely those of legal certainty, the protection of legitimate expectation and proportionality. In particular, the Court, in its aforesaid judgment in Joined Cases 119 and 126/79 recognized that “Community law does not restrict the freedom of the national authorities competent in the matter to apply, when recovering benefits which have been mistakenly granted under Community rules and in the absence of any specific rule concerning limitation periods, such limitation periods as may be drawn from the application of general principles recognized in the law of the country concerned”.In the present case, the German administrative authority is entitled to take into account, in order to determine whether it is necessary to demand repayment of the premiums paid, the fact that the objective of denaturing has been achieved and that a long period has elapsed between the date on which it had to decide on the obligation as to repayment and the date on which the premiums were granted, regard being had to the results of inspections which were moreover positive and failed to reveal any irregularities on the part of the recipient of the premiums.The plaintiff in the main action therefore concludes that the answer to the third question should be that when the national administration withdraws measures by which it granted denaturing premiums, it is to act in accordance with its national law. The Federal intervention agency was required, in the present case, to exercise the discretion which devolves upon it under German administrative law and take into account the principles of legal certainty, proportionality and the protection of legitimate expectation.
Source: EUR-Lex, © European Union, 1998-2026. Reuse authorised under Decision 2011/833/EU.