156/82 · GlobalLawDB

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In Case 156/82REFERENCE to the Court under Article 177 of the EEC Treaty by the Finanzgericht [Finance Court], Hamburg, for a preliminary ruling in the proceedings pending before that court betweenSA Nicolas Corman & Fils, Brussels,andHauptzollamt [Principal Customs Office] Hamburg-Jonas,THE COURT (Fifth Chamber)composed of: J. Menens de Wilmars, President, U. Everling (President of Chamber), Lord Mackenzie Stuart, O. Due and Y. Galmot, Judges,Advocate General: G. ReischlRegistrar: J. A. Pompe, Deputy Registrargives 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 Protocol on the Statute of the Court of Justice of the EEC may be summarized as follows:

I —Facts and procedure

1.In 1975 the plaintiff in the main action, SA Nicolas Corman & Fils (hereinafter referred to as “Corman”), Brussels, bought butter from the German intervention agency pursuant to Regulation No 1259/72 of the Commission of 16 June 1972 on the disposal of butter at a reduced price to certain Community processing undertakings (Official Journal, English Special Edition 1972 (II), p. 559).Corman exported the butter to Belgium where it was processed into concentrated butter after which it was re-imported into Germany and sold.On exportation from Germany to Belgium and then on re-importation into Germany the German authorities respectively granted and levied a monetary compensatory amount equal to three-tenths of the full rate as laid down in Article 20 of the aforesaid regulation.After finding that the butter had not been used for the purposes stipulated in Article 6 of the regulation the German authorities levied, on the occasion of the re-importation from Belgium into Germany, the difference between the reduced monetary compensatory amount laid down in Article 20 of Regulation No 1259/72 and the full amount.In its judgment of 28 June 1979 in Case 217/78 Corman v Hanptzollamt Aachen-Süd [1979] ECR 2287 the Court (First Chamber) held that such a reassessment was possible under Community law.

2.Corman then asked the German authorities to grant it the difference between the reduced monetary compensatory amount laid down in Article 20 of Regulation No 1259/72 and the full amount in respect of the exportation from Germany to Belgium. When that request was rejected by the defendant in the main action, the Hauptzollamt Hamburg-Jonas, on the ground that it was out of time, Corman brought the matter before the Finanzgericht [Finance Court] Hamburg.After finding that that ground was irrelevant the Finanzgericht stayed the proceedings and referred the following question to the Court:“Regard being had to Regulation (EEC) No 1259/72, is Regulation (EEC) No 974/71 of the Council of 12 May 1971 concerning the system of monetary compensatory amounts to be interpreted as meaning that according to the general rules governing the application of monetary compensatory amounts the difference between the reduced monetary compensatory amount and the full amount is subsequently to be granted, where on the exportation of butter from storage the reduced monetary compensatory amount was paid pursuant to the first paragraph of Article 20 of Regulation (EEC) No 1259/72 but the concentrated butter produced from the butter was not used for the purpose and within the period prescribed by Regulation (EEC) No 1259/72 and after reimportation was therefore subjected to a supplementary levy equal to the difference between the reduced monetary compensatory amount and the full amount,or is the difference between the reduced monetary compensatory amount and the full amount not to be granted subsequently?”

3.Regulation No 1259/72 of the Commission established a system of standing invitation to tender for the purposes of the sale by the intervention agencies of butter at a reduced price to certain processing undertakings in the Community.According to Article 6 of that regulation tenderers must give a written undertaking to have the butter processed upon certain terms into concentrated butter and to have the latter processed only into products coming under heading 19.08 of the Common Customs Tariff (pastry, biscuits, cakes and other fine bakers' wares).Article 12 (1) of the regulation provides that tenderers must further lodge a processing deposit. According to Article 18 (2) that deposit “shall be released only for quantities in respect of which the successful tenderer has furnished to the competent authority proof that the conditions referred to in Article 6 have been met”.Article 20 of the regulation provides that the monetary compensatory amounts applicable to butter and concentrated butter for the part consisting of butter is to be three-tenths of full amount. That provision is intended according to the penultimate recital in the preamble to the regulation to take account “of the value of the products concerned”.

4.In its abovementioned judgment of 28 June 1979 the Court stated that the application in accordance with the aforesaid regulation of a reduced monetary compensatory amount does not come within the measures laid down by the regulation and intended to encourage the sale of butter from storage but within the general rules governing the system of monetary compensatory amounts, as established by the aforesaid Regulation No 974/71 of the Council of 12 May 1971. It follows, according to the Court, that the fixing of monetary compensatory amounts is based inter alia on the prices of the products in question. According to the Court it is in implementation of those rules that Article 20 of Regulation No 1259/79 makes provision for the application of a reduced monetary compensatory amount because, having regard to the restrictions on marketing to which the butter sold in accordance with the regulation is subject, its market value, and consequently its price, are proportionately reduced. Finally it declared that it is in accordance with the same principle that the German authorities reassessed the reduced compensatory amounts for the butter which was not used in accordance with the provisions of the said regulation. “In fact in so far as the importer has failed to furnish proof with the [prescribed] period that the goods have reached the destination which was made a condition of the reduction of the compensatory amounts, the goods cannot be considered as having the conventional value attributed to them on the basis of the minimum selling price referred to in Regulation No 1259/72 and they must be considered as butter sold at the normal market price. In that case the competent customs authorities are required under Regulation No 974/71 of the Council to apply the compensatory amounts laid down for butter marketed at such a price and thus to reassess the reduced compensatory amounts which were initially applied. Since that reassessment has regard to the market price of the products in question its legal basis is to be found in the general rules themselves which govern the application of monetary compensatory amounts.”

5.The Finanzgericht Hamburg, after summarizing the grounds of the aforesaid judgment of the Court of 28 June 1979, makes the following observations:“If that reasoning is used as the basis for the general proposition that in cases where the reduced monetary compensatory amounts provided for by Article 20 of Regulation (EEC) No 1259/72 later ceased to be applicable because the goods have either not been put to the required use or have not been used within the prescribed period, the general rules governing monetary compensatory amounts contained in Regulation (EEC) No 974/71 apply and the goods are to be regarded as having been marketed at the normal market price, this would mean, in so far as the export of the butter from storage is concerned, that the difference between the reduced monetary compensatory amount and the full amount corresponding to the supplementary levy on importation must subsequently be paid. Mr Advocate General Warner also drew that conclusion with regard to importation into a depreciated currency country (Opinion delivered on 3 May 1979 in Case 216/78 Beljatzky v Hauţtzollamt Aachen-Süd [1979] ECR 2285). In cases where on exportation of butter from storage a reduced monetary compensatory amount was granted and after the re-importation of concentrated butter a supplementary monetary compensatory amount was levied because the goods were not put to the prescribed use, the customs authorities have subsequently paid the difference between the reduced monetary compensatoiy amount and the full amount. In so far as the exportation of the butter from storage and the re-importation of concentrated butter are carried out by the same undertaking (as in this case) it is questionable whether different treatment depending on whether levies for the Community or reductions for the trader are at issue is permissible. If the application of the general rules governing monetary compensatory amounts on the basis of the normal market price depends on the requirements of Article 20 of Regulation (EEC) No 1259/72 not being met, that also applies to the reduced monetary compensatoiy amounts granted on exportation. Furthermore, in the light of the processing deposit which must be lodged (Articles 12 and 13 of Regulation (EEC) No 1259/72), which is intended to cover the difference between the acquisition price of the butter from storage and the normal market price of butter (cf. statement by the Commission in Case 216/78 Beljatzky v Hauptzollamt Aachen-Süd [1979] ECR 2273, at p. 2278), the supplementary payment does not seem unjustified.On the other hand, the following reservations must be made with regard to the subsequent grant of the difference between the reduced compensatory amount and the full amount: Article 20 of Regulation (EEC) No 1259/79 merely provides for the payment of a reduced monetary compensatory amount on the exportation of butter from storage intended for specified purposes. Community law makes no express provision for the grant of the full monetary compensatory amount in a case such as the present; such a grant may be contrary to the meaning and purpose of Regulation (EEC) No 1259/72. Since it was intended that Regulation (EEC) No 1259/72 should exclude any use other than that prescribed therein, the subsequent grant, of the..difference between the., reduced monetary compensatory amount and the full amount could amount to an approbation of conduct inconsistent with the prescribed use, which would be contrary to the aims of Regulation (EEC) No 1259/72.It should not be overlooked, moreover, that if a supplementary payment is made even where goods are not put to the prescribed use, this may encourage such, misuse.”

6.The order making the reference was lodged at the Court Registry on 19 May 1982.In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the EEC written observations were lodged by the plaintiff in the main action, represented by P. Wendt, Rechtsanwalt, Hamburg, by the defendant, represented by U. Willwater, Zollamtsrat, acting as Agent, and by the Commission, represented by J. Sack, a member of its Legal Department.Upon 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. The Court nevertheless asked the Commission to provide before the hearing information in writing on the practice followed by the other Member States in similar cases and to go further into the question whether the supervisory measures prescribed by Regulation No 1259/72 were in fact sufficient to make abuse unprofitable.By order dated 17 November 1982 made in pursuance of Article 95 (1) and (2) of the Rules of Procedure the Court decided to assign the case to the Fifth Chamber.

II —Written observations submitted to the Court

A —Observations of Corman

According to Corman the considerations set down by the Court in the aforesaid judgment of 28 June 1979 in relation to the content and scope of Article 20 of Regulation No 1259/72 apply similarly both to the levy and the subsequent grant where the goods are diverted from their prescribed use. The consideration that the reduction in the monetary compensatory amount pursuant to Article 20 of Regulation No 1259/72 is based on the market value of the butter as a result of the restrictions on its use means not only that there must be a subsequent levy of the amount of the difference between the reduced monetary compensatory amount and the full amount on importation into the Federal Republic of Germany but also that the said difference must subsequently be paid on exportation from the Federal Republic. The same reasoning applies to both cases: in so far as the product has not been used for the prescribed purpose it may not be regarded as having the contractual value attributed to it on the basis of the minimum selling price referred to in the regulation but must be regarded as butter sold at the normal market price.Corman observes further that the Finanzgericht is not justified in entertaining doubts about that result on the ground that Community law does not expressly provide for the subsequent grant of the full monetary compensatory amount. In that respect Corman states that in its aforesaid judgment of 28 June 1979 the Court took the view that Article 20 of Regulation No 1259/72 constitutes an exception to the general rules of Regulation No 974/71, which means that the general rules must apply if the conditions for the definitive application of the reduced monetary compensatory amount are not satisfied.According to Corman there is nothing in either Article 20 of Regulation No 1259/72 or in Regulation No 974/71 to justify the proposition that that procedure should be followed only in the case of levying a monetary compensatory amount and not in the case of granting one. What is more, Article 1 (1) of Regulation No 974/71 provides that the monetary compensatory amount must be applied uniformly independently of whether it is a question of charging or granting it.As for the misgivings of the Finanzgericht to the effect that the subsequent grant of the monetary compensatory amount may be contrary to the aim of Regulation No 1259/72 on the ground that it would amount to endorsing the diversion of goods from their prescribed destination and even subsidizing an abuse which the regulation seeks to prevent, Corman observes that it is not the objective of the said regulation to exclude the use of butter for purposes other than those specified. The sole concern, on the contrary, is to prevent butter which arrives on the normal market from still having the reduced price provided for in the case of the prescribed use. That is the aim of the provisions relating to the processing deposit.It is apparent from the views of the Commission in Joined Cases 99 and 100/76 Beste Boter and Hoche [1977] ECR 868 that it is for the purchaser of the butter to decide whether he wishes to comply with the prescribed use and thus definitively obtain the price advantage or whether, on the contrary, he wishes to use the butter for other purposes and thereby lose the price advantage.Even if the objective of Regulation No 1259/72 required that butter sold pursuant to its provisions should in no event come on to the normal market the regulation provides precise measures to that end and they do not include a reduction in the monetary compensatory amount. Thus the fourth recital in the preamble to the regulation in question states as follows:“Whereas a system of supervision should be set up to ensure that the butter is not diverted from its destination; whereas this supervision must operate from the time the butter is removed from storage until it is processed; whereas in addition to the lodging of a deposit, stock records at all stages of marketing and the incorporation of an indicator in butter intended for processing may contribute to this end”.Only in the penultimate recital (referred to at I (3) above) is there any mention of monetary compensatory amounts and then without any reference to the objective of Regulation No 1259/72.That shows that Article 20 of Regulation No 1259/72 does not come within the ambit of the rules of that regulation but within that of the rules laid down by Regulation No 974/71. Consequently the application of that provision in no way contributes towards achieving the objective of Regulation No 1259/72.Moreover, the very function of the monetary compensatory amount and its reduction prevents them from acting as such. That function is to offset price differences between Member States resulting from currency fluctuations.It is because of that function that the monetary compensatory amount is always subject to a particular price. That is also the idea behind the reduction in the monetary compensatory amount for butter from storage sold at a lower price, as is shown by the penultimate recital in the preamble to Regulation No 1259/72.Corman finally points out that the notion that the subsequent payment of the difference in the monetary compensatory amounts on export may encourage abuse is grossly mistaken.As the fourth recital in the preamble to Regulation No 1259/72 shows, it is above all the risk of loss of the processing deposit which is intended to prevent abuse. That is why from the beginning the Commission not only fixed the amount of the processing deposit to cover the difference between the minimum selling price and the market price but further included therein a safety margin of 11 to 20 units of account per 100 kg in order to make any possibility of abuse unattractive.In Regulation No 2815/72 of the Commission of 22 December 1972 amending Regulation No 1259/72 (Journal Officiel, L 297, p. 3) the Commission gave that practice legislative authority by amending Article 9 (2) to the effect that the processing deposit does not cover only the difference between the market price and the minimum selling price but that such difference is only one of the factors to be taken into account in fixing the deposit.The processing deposit is so high that its loss would adversely affect the person concerned even if the difference in the monetary compensatory amount were paid him, as is shown by the calculation produced by Corman.On the basis of those considerations Corman proposes that the question referred to the Court by the Finanzgericht should be answered as follows :“Regulation (EEC) No 974/71 must be interpreted as meaning that according to the general rules governing the application of monetary compensatory amounts the difference in relation to full monetary compensatory amount must be subsequently granted where on the exportation of butter from storage the reduced monetary compensatory amount was paid pursuant to the first paragraph of Article 20 of Regulation (EEC) No 1259/72 but the concentrated butter produced from the butter was not used for the purpose and within the period prescribed by Regulation (EEC) No 1259/72 and after re-importation was therefore subjected to a reassessment based on the difference between the reduced monetary compensatory amount and the full amount”.

B —Observations of the Hauptzollamt Hamburg-Jonas

The Hauptzollamt Hamburg-Jonas is of the opinion that the question raised by the Finanzgericht Hamburg calls for an answer in the affirmative. In its view the decision on the grant cannot be different from that in relation to the levy. In both cases the provisions to be interpreted are the same and neither Article 20 of Regulation No 1259/72 nor Article 2 of Regulation No 974/71 makes any distinction.As the Court has stated in its aforesaid judgment of 28 June 1979 the general rules governing monetary compensatory amounts of which Article 20 of Regulation No 1259/72 is also part are based on the principle that the amounts must relate to the prices of the goods in question, that is to say their market value. Therefore the monetary compensatory amounts are not reduced pursuant to Article 20 of Regulation No 1259/72 where the goods, after first being sold at a reduced price pursuant to the regulation, have not been used in conformity with the regulation and their market value is not diminished by a restriction on use. That legal consequence arises independently of whether in the particular case a monetary compensatory amount must be charged or granted.The grant of full monetary compensatory amounts does not mean approving a use contrary to the objective of Regulation No 1259/72. The provisions on monetary compensatory amounts are neutral. They relate to a particular price regardless of how that price was arrived at. The legislature's sole concern is that goods sold at a reduced price should be used as prescribed. Otherwise the price reduction must be nullified, which is done by not releasing the processing deposit.Any other penalty such as refusal of the full monetary compensatory amount for goods used otherwise than in conformity with their destination would not be compatible with the neutral machinery of adaptation to prices which is contained in the provisions on monetary compensation nor would it be compatible with the principle of legal certainty according to which a measure involving a charge must be fixed by law and therefore foreseeable. The provisions on monetary compensation contain no rules comparable to those of Article 18 (2) of Regulation No 1259/72 according to which the sanction arises independently of the question who is responsible for the use of the goods contrary to the end pursued.

C —Observations of the Commission

In the Commission's view cases of subsequent levying and granting of the difference between the reduced monetary compensatory amount and the full amount are not comparable. As regards the charging of a monetary compensatory amount, the butter sold pursuant to Regulation No 1259/72 may benefit therefrom only on condition that, having regard to the restrictions on its use, the product in fact retains the reduced value it has under the regulation until it is processed. That is what the Court said in its aforesaid judgment of 28 June 1979.A priori there is no right to the grant of a monetary compensatory amount in excess of that provided for in Article 20 of Regulation No 1259/72. If there were such a right it would in fact run counter to the object of the other provisions of the regulation which seek to ensure that the butter is not used for purposes other than those prescribed.Nor do the general rules on monetary compensatoiy amounts provide any basis for such a right. The object of the grant of monetary compensatoiy amounts is to maintain Community preference for products of Member States whose prices in national currency are higher than those of other Member States because of certain alterations in the central rates. Where Community law restricts the use of a particular agricultural product the monetary compensatory amounts to be granted in respect thereof in trade between Member States can have no aim other than to allow its sale in accordance with its restricted use in the country where prices are lower. On the other hand there is no reason for increasing the monetary compensatory amounts when the product is used in a way which gives it a greater value but which is not in accordance with its purpose, since it is precisely that use which must be excluded.There are, however, valid grounds for subsequently levying the full monetary compensatory amount where the butter is used for purposes which give it a greater value but which are not in conformity with its destination. The levying of a monetary compensatory amount is intended to increase the price of goods from a Member State where the national prices are lower to the level required to prevent the higher level of prices in the importing Member State as expressed in the national currency from being jeopardized. If at first a monetary compensatory amount is levied at a rate lower than the normal one and the product is used for purposes which are inconsistent with the prescribed use but give it a greater value, the aim of the levy of the monetary compensatory amount would not be achieved.In the Commission's view the only valid ground for taking into account the subsequent grant of the difference in relation to the full monetary compensatory amount when applying monetary compensatory amounts in the case or the use for non-prescribed purposes of butter from storage sold at a reduced price is that in the absence of the grant the butter would be charged with an amount greater than the difference between the market price and the price at which the butter was sold. The Commission admits that would be the result in cases such as the present one, where the butter, is sold by the intervention agency in a Member State where the rate of the green currency is lower than the real value of the national currency and where the butter, after remaining in a Member State where the real value of the national currency is equal to or less than the rate of the green currency, is used in the first State in a manner which is not in conformity with the prescribed use.The Commission nevertheless finds that argument unconvincing. First of all the trader concerned cannot claim an interest meriting protection in not being charged an amount higher than that corresponding to the difference between the market price and the selling price where the butter is not used for the prescribed purpose. No such restriction may be inferred from Regulation No 1259/72 since it contains provisions whose application involves charging the purchaser of the butter an amount substantially in excess of the abovementioned difference; those provisions are to be found inter alia in Articles 9 (2) and 11 (2) according to which on the one hand the processing deposit is intended to cover the difference between the market price of butter and the minimum price and on the other hand the successful tenderer is to pay the amount corresponding to his tender which is generally greater than the minimum selling price. The Commission fails to see what reason there might be in other cases for excluding the levying of that greater amount.The Commission emphasizes moreover that the person who provides the processing deposit and the person who pays or receives the monetary compensatory amount need not necessarily be the same. It could happen that an intermediary user of the butter subsequently receives the difference in relation to the full monetary compensatory amount although he is concerned neither by the loss of the processing deposit nor by the profit made on the use of the goods for a purpose other than that prescribed. That result would be quite absurd.In conclusion the Commission proposes that the Court should answer the question raised by the Finanzgericht Hamburg as follows:“Neither Regulation No 974/71 of the Council of 12 May 1971 nor Regulation No 1259/72 of the Commission of 16 June 1972 is to be understood as meaning that the difference in relation to the full monetary compensatory amount must be paid subsequently where the reduced monetary compensatory amount was paid pursuant to Article 20 of Regulation No 1259/72 on the exportation of butter from storage but the butter or concentrated butter made therefrom was not used for the purpose and within the period prescribed by the regulation. That is also the case where the product has been subject to several successive transfers from one Member State to another and, where a monetary compensatoiy amount is chargeable, the difference in relation to the full monetary compensatory amount has had to be paid subsequently.”

III —Oral procedure

At the sitting on 26 January 1983, the plaintiff in the main action, represented by P. Wendt, and the Commission, represented by J. Sack, acting as Agent, presented oral argument.The Advocate General delivered his opinion at the sitting on 9 March 1983.

Decision

1By order of 31 March 1982, which was received at the Court on 19 May 1982, the Finanzgericht [Finance Court] Hamburg referred to the Court for a preliminary ruling pursuant to Article 177 of the EEC Treaty a question on the interpretation of Regulation No 974/71 of the Council of 12 May 1971 on certain measures of conjunctural policy to be taken in agriculture following the temporary widening of the margins of fluctuation for the currencies of certain Member States (Official Journal, English Special Edition 1971 (I), p. 257) and Regulation No 1259/72 of the Commission of 16 June 1972 on the disposal of butter at a reduced price to certain Community processing undertakings (Official Journal, English Special Edition 1972 (II), p. 559).

2The question was raised in an action between the customs authorities of the Federal Republic of Germany and a Belgian undertaking which in 1973 made use of the opportunity offered by the aforesaid Regulation No 1259/72 to buy butter at a reduced price from the German intervention agency in order to process it into concentrated butter and to use it then for the manufacture of fine bakers' wares or ice-cream.

3After exporting the butter to Belgium where it was processed into concentrated butter the undertaking re-imported it into the Federal Republic of Germany.

4On export to Belgium and then upon re-importation into the Federal Republic of Germany the German customs authorities respectively granted and levied monetary compensatory amounts at the reduced rate provided for in Article 20 of Regulation No 1259/72.

5After finding that the butter had not been used for the purpose prescribed by the said regulation the German authorities, by a notice of corrective assessment, levied on the re-importation into Germany a sum equal to the difference between the reduced monetary compensatory amount and that applicable outside the system established by the Regulation No 1259/72.

6In its judgment of 28 June 1979 in Case 217/78 Corman [1979] ECR 2287 the Court held that such reassessment has its legal basis in the general rules governing the system of monetary compensatory amounts as established by the aforesaid Regulation No 974/71.

7Subsequently the undertaking alleged that the considerations set out by the Court in the aforesaid judgment applied in identical fashion both to the grant and to the levy of monetary compensatory amounts and claimed from the German authorities the grant of the difference between the reduced amount and the amount at the full rate in respect of the export from the Federal Republic of Germany to Belgium.

8The Finanzgericht Hamburg before which the undertaking brought the matter stayed the proceedings and referred the following question to the Court:“Regard being had to Regulation (EEC) No 1259/72, is Regulation (EEC) No 974/71 of the Council of 12 May 1971 concerning the system of monetary compensatory amounts to be interpreted as meaning that according to the general rules governing the application of monetary compensatory amounts the difference between the reduced monetary compensatory amount and the full amount is subsequently to be granted, where on the exportation of butter from storage the reduced monetary compensatory amount was paid pursuant to the first paragraph of Article 20 of Regulation (EEC) No 1259/72 but the concentrated butter produced from the butter was not used for the purpose and within the period prescribed by Regulation (EEC) No 1259/72 and after re-importation was therefore subjected to a supplementary levy equal to the difference between the reduced monetary compensatory amount and the full amount,or is the difference between the reduced monetaiy compensatory amount and the full amount not to be granted subsequently?”

9As the Court has already stated in its aforesaid judgment of 28 June 1979 the application, in accordance with Article 20 of Regulation No 1259/72, to butter from storage sold on the conditions specified in the regulation, of monetary compensatory amounts considerably less than those normally applied to butter does not constitute one of the measures laid down in the said regulation and intended to promote the disposal and marketing of butter from storage but forms part of the general rules governing the system of monetary compensatory amounts.

10It is clear from those rules, and in particular from Article 2 of Regulation No 974/71, that the fixing of monetary compensatoiy amounts is based inter alia on the prices of the products in question. As the penultimate recital in the preamble to Regulation No 1259/72 shows, Article 20 thereof is thus intended to adjust the monetary compensatoiy amounts on the basis of the prices of the products in question, representing their market value, which is reduced by reason of the restrictions relating to the ultimate use of the products. If those restrictions are not observed the butter has its normal market value and the reasons for a reduction of the monetaiy compensatory amounts disappears.

11In its abovementioned judgment the Court drew from the foregoing considerations the conclusion that in so far as the importer has failed to furnish proof within the prescribed periods that the goods have reached the destination which was made a condition of the reduction of the compensatory amounts, the competent customs authorities are required under Regulation No 974/71 of the Council to apply the compensatory amounts laid down for butter marketed at the normal price and thus to reassess the reduced compensatory amounts which were initially applied.

12Where the goods in question have also been exported in circumstances giving rise to the grant of reduced monetary compensatory amounts the same considerations lead to the grant of additional amounts.

13In the observations which it has lodged with the Court the Commission has nevertheless contended that such a grant would be contrary to the spirit and purpose of the other articles of Regulation No 1259/72 whose purpose is precisely to ensure that the butter is not put tó uses other than those recognized as lawful by the regulation.

14That argument cannot however be accepted. As the Court emphasized in its aforesaid judgment of 28 June 1979 the said regulation laid down specific measures in order to ensure that the butter disposed of at a reduced price is used in accordance with its purpose and that it is not freely marketed. In that respect it establishes a system of supervision entailing the provision of a processing security, to be released only on specific conditions. These, and not monetary compensatory amounts, the object of which is alien to that sought by the other provisions of the regulation, are the means which the regulation employs to avoid abuses.

15The answer to the question referred to the Court should therefore be that Regulation No 974/71 of the Council of 12 May 1971 and Regulation No 1259/72 of the Council of 16 June 1972 must be interpreted as meaning that the difference between the monetary compensatory amount at the full rate and the reduced monetary compensatory amount paid on the exportation of butter from storage pursuant to the first paragraph of Article 20 of Regulation No 1259/72 is to be granted a posteriori when the butter has not been used after re-importation for the purpose and within the period prescribed by the regulation and for that reason the balance of the monetary compensatory amount at the full rate was levied a posteriori after re-importation.

Costs

16The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the national court, the decision on costs is a matter for that court.

Operative part

On those grounds,THE COURT (Fifth Chamber),in answer to the question referred to it by the Finanzgericht Hamburg, by order of 31 March 1982, hereby rules: Regulation No 974/71 of the Council of 12 May 1971 and Regulation No 1259/72 of the Commission of 16 June 1972 must be interpreted as meaning that the difference between the monetary compensatory amount at the full rate and reduced monetary compensatory amount paid upon exportation of butter from storage pursuant to the first paragraph of Article 20 of Regulation No 1259/72 is to be granted a posteriori when the butter has not been used after re-importation for the purpose and within the period prescribed by the regulation and for that reason the balance of the monetary compensatory amount at the full rate was a posteriori levied after re-importation.

Delivered in open court in Luxembourg on 11 May 1983.