SA Nicolas Corman & Fils v Hauptzollamt Hambourg-Jonas (156/82)

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”.