236/84 · GlobalLawDB

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Judgment of the Court (Fourth Chamber)24 June 1986^noteIn Case 236/84REFERENCE to the Court under Article 177 of the EEC Treaty by the Finanzgericht [Finance Court] Düsseldorf for a preliminary ruling in the action pending before that court betweenMalt GmbHandHauptzollamt [Principal Customs Office] DüsseldorfTHE COURT (Fourth Chamber)composed of: Lord Mackenzie Stuart, President, T. Koopmans, President of Chamber, K. Bahlmann, G. Bosco and F. Schockweiler, Judges,Advocate General: J. MischoRegistrar: H. A. Rühi, Principal Administratorafter considering the observations submitted on behalf of— the plaintiff in the main proceedings, by Dr D. Ehle, Rechtsanwalt of Cologne,— the Commission of the European Communities, by Dr D. Booss, a Legal Adviser of the Commission, and B. Jansen, a member of its Legal Department, acting as Agents,after hearing the Opinion of the Advocate General delivered at the sitting on 11 March 1986,gives the following

Judgment

(The account of the facts and issues which is contained in the complete text of the judgment is not reproduced)

Decision

1By an order of 13 September 1984, which was received at the Court on 19 September 1984, the Finanzgericht Düsseldorf referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a question on the validity of a monetary compensatory amount fixed by Commission Regulation No 481/82 of 26 February 1982 for high quality fresh, chilled or frozen beef and veal, falling within subheading 02.01 A II a) 4 bb) of the Common Customs Tariff and imported under a Community tariff quota opened by Council Regulation No 3715/81 of 21 December 1981.

2That question was raised in proceedings brought by Malt GmbH, the plaintiff in the main proceedings (hereinafter referred to as ‘Malt’), against Hauptzollamt Düsseldorf, the defendant in the main proceedings.

3In April 1982, Malt imported fresh high-quality beef from Argentina and frozen high-quality beef from the United States under the quota opened by Council Regulation (EEC) No 217/81 of 20 January 1981, opening a Community tariff quota for high- quality, fresh, chilled or frozen beef and veal falling within subheading 02.01 A II a) and 02.01 A II b) of the Common Customs Tariff (Official Journal 1981, L 38, p. 1), as extended to 1982 by Council Regulation No 3715/81 of 21 December 1981 amending Regulation (EEC) No 217/81 (Official Journal 1981, L 373, p. 1). The detailed rules for the application of those import arrangements for 1982 were laid down by Commission Regulation No 3751/81 of 22 December 1981 amending Regulation (EEC) No 263/81 laying down detailed rules for the application of the import arrangements provided for by Regulations (EEC) No 217/81 and (EEC) No 218/81 in the beef and veal sector (Official Journal 1981, L 374, p. 14).

4The defendant decided to charge monetary compensatory amounts pursuant to Commission Regulation No 481/82 of 26 February 1982 amending monetary compensatory amounts (cited above), and Malt challenged that decision first by lodging an objection with the defendant and then, after its objection was rejected, by bringing an action before the Finanzgericht Düsseldorf, on the ground that goods imported under the tariff quota in question could not give rise to the charging of monetary compensatory amounts.

5The Finanzgericht Düsseldorf stated that the principles relating to the application of monetary compensatory amounts required that such amounts should be charged only where there might otherwise be disturbances in intra-Community trade and must be limited to what was strictly necessary, and went on to doubt whether those two conditions were satisfied in this case. It also adverted to the fact that imports in the beef and veal sector carried out under the general GATT tariff quota were exempt from monetary compensatory amounts by virtue of Commission Regulation No 2979/79 of 27 December 1979 amending Regulation (EEC) No 2140/79 with regard to the monetary compensatory amounts applicable to certain products of the beef and veal sector (Official Journal 1979, L 336, p. 57). It wondered whether such an exemption should not also be applied to imports under the quota for high-quality beef and veal. Taking the view that the answer to those questions, and therefore the determination of the dispute before it, depended on an interpretation of Regulation No 481/82, the Finanzgericht Düsseldorf referred the following question to the Court for a preliminary ruling:‘Is the establishment in Regulation (EEC) No 481/82 of 26 February 1982 of a monetary compensatory amount for beef and veal falling within subheading 02.01 A II a) 4 bb) of the Common Customs Tariff unlawful in so far as monetary compensatory amounts are also levied on fresh, chilled or frozen beef and veal imported under a Community tariff quota (Regulation (EEC) No 3715/81)?’.

6It is clear from the facts of the case that the question submitted by the Finanzgericht Düsseldorf relates in substance to the validity of a monetary compensatory amount fixed by Commission Regulation No 481/82 of 26 February 1982 for high-quality beef and veal falling within subheadings 02.01 A II a) and 02.01 A II b) of the Common Customs Tariff and imported under the Community tariff quota opened by Council Regulation No 217/81 of 20 January 1981, as amended by Council Regulation No 3715/81 of 21 December 1981.

7Malt takes the view that Regulation No 481/82 is unlawful in so far as it provides for the application of monetary compensatory amounts to beef and veal imported within the Community tariff quota for high-quality beef and veal. It considers that the charging of monetary compensatory amounts is at variance with Article 1 (3) 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 (cited above), as substituted for the second subparagraph of Article 1 (2) by Council Regulation No 2746/72 of 19 December 1972 (Official Journal, English Special Edition 1972, 28 to 30 December), p. 64. In the first place, it is not justified by the existence or threat of disturbances in intra-Community trade. Secondly, the charging of monetary compensatory amounts is contrary on the one hand to the principle of proportionality, in so far as it is not in this case limited to the minimum strictly necessary, and on the other to the principle that monetary compensatory amounts must not contain any additional protective component.

8With regard to the requirement that there must be a threat of disturbances in intra-Community trade, Malt takes the view that the Commission has not supplied adequate justification for the application of monetary compensatory amounts in this case. First of all, imports of the product in question were limited in volume by virtue of the Community tariff quota and subject to strict supervision. Imports under such a tariff quota are of a special nature. Secondly, producers in nonmember countries sell the beef in question at a considerably higher price than that produced in the Community. Thirdly, the imported meat, which is of an exceptionally high quality only rarely found in the Community, was subject to customs duty of 20%. That being the case there were no reasonable grounds for fearing disturbances in intra-Community trade. In fact the meat in question was sold almost exclusively to restaurants in Germany.

9As far as the principle of proportionality is concerned, Malt cites judgments of the Court laying down a requirement of strict neutrality in the calculation and application of monetary compensatory amounts. Compensatory amounts must be limited to cases where the incidence of the monetary measures of the Member States on the prices of the basic products for which intervention measures have been adopted would give rise to difficulties. In this case the Commission should have explained why it thought that the application of monetary compensatory amounts was justified by a pressing need to avoid difficulties in the system of intervention. Such a need never arose. Indeed the Court itself has expressed doubts as to whether it was necessary or appropriate to apply monetary compensatory amounts to goods imported free of import levy under a quota.

10As regards the prohibition of an additional protective component, Malt argues that the multiplicity of protective components, namely the quantitative quota, the imposition of a customs duty and the application of monetary compensatory amounts, has the effect of overcompensating for the margin between prices expressed in national currency and prices expressed in ECU. That overcompensation is to be equated with a charge having an effect equivalent to customs duties and is contrary both to the system established by Regulation No 974/71 and to Article 1 (2) of Council Regulation No 217/81. In Commission Regulation No 2979/79, the Commission itself acknowledged that it was appropriate not to apply monetary compensatory amounts in the case of products imported under Community tariff quotas for frozen beef and veal and for buffalo meat, having regard to the special nature of that trade.

11The Commission, however, takes the view that this is not a case in which the application of monetary compensatory amounts is precluded by Article 1 (3) of Regulation No 974/71 (as amended by Regulation No 2746/72). If the imports in question had not been subject to monetary compensatory amounts, it is likely that the whole amount of the quota would have been imported into the Member State with the strongest currency, namely Germany, which would have led to distortions in intra-Community trade.

12In reply to the point that imports under the Community tariff quota for frozen beef and veal opened by Regulation No 136/82 are not subject either to a levy or to a monetary compensatory amount, the Commission states that that quota was allocated between the Member States in proportion to their requirements, which limited the risk of a deflection of trade. Furthermore, the same holds for the importation of buffalo meat under the derogation granted by Regulation No 481/82 in order to preserve the traditional trade in importations of this meat into Germany. No other Member State has ever imported buffalo meat. Moreover, the quota opened by Regulation No 136/82 for 1982 is essentially the same as that which has been opened since 1962 and therefore before the introduction of the system of monetary compensatory amounts in the Community. The application of monetary compensatory amounts to that traditional tariff quota would therefore have run the risk of retaliation from other GATT countries. There was therefore no discrimination between Malt and other importers.

13Finally, the Commission states that the meat imported by Malt is not comparable with meat imported under the provisions of Regulation No 136/82, the latter being frozen beef and veal of any kind, and not fresh or chilled, whereas the former is fresh, chilled or frozen meat of high quality.

14In order to resolve that difference of views, it must be pointed out first of all that as regards trade between Member States the purpose of monetary compensatory amounts is to correct the effects of variations in unstable rates of exchange which, within a system of organization of the markets in agricultural products, based on common prices, are likely to cause disturbances in trade in such products (see judgment of 15 October 1985 in Case 125/84 Continental Irish Meat v Minister for Agriculture [1985] ECR 3441). The need to safeguard intra-Community trade requires that monetary compensatory amounts should be applied not only in intra-Community trade but also in trade with nonmember countries (judgment of 15 October 1980 in Case 4/79 Providence Agricole de la Champagne v ONĪC [1980] ECR 2823). As far as imports of agricultural products from nonmember countries are concerned, it is true that monetary compensatory amounts are not to constitute a protective component at the external frontiers of the Community and hence differ entirely from the system of levies or customs duties. Nevertheless it is equally true that monetary compensatory amounts applied to products imported from nonmember countries have the same regulatory function as those applied to Community products, namely to neutralize the harmful effect which short-term fluctuations in the rates of exchange of the currencies of the various Member States in relation to the representative rate of such currencies have on the system of single prices. In that regard it should be stated that the fixing of monetary compensatory amounts is unlawful if, in their absence, there would be no reason to fear disturbances in intra-Community trade arising from imports from nonmember countries or if the imposition of compensatory amounts includes a protective component.

15As regards the possibility of disturbances in intra-Community trade in agricultural products, this requires the evaluation of a complex economic situation which the Commission has a broad discretion in carrying out, as the Court has consistently held (see judgment of 22 January 1976 in Case 55/75 Balkan-Import-Export v Hauptzollamt Berlin-Packhof [1976] ECR 19, and judgment of 12 December 1985 in Case 208/84 Vonk's Kaas v Minister van Landbouw [1985] ECR 4025). The Commission is not obliged to decide case by case or separately for each product and exporting country whether there is a risk of disturbance but may decide that question by an evaluation of a general nature. The Court's exercise of its power of review is then limited to examining whether that evaluation contains a manifest error or constitutes a misuse of powers or whether the Commission clearly exceeded the bounds of its discretion.

16On that point it must be remembered that according to the judgments of the Court (judgment of 9 March 1978 in Case 79/77 Kühlhaus-Zentrum v Hauptzollamt Hamburg-Harburg [1978] ECR 611; judgment in Providence Agricole de la Champagne v ONIC cited above), the Commission must always ensure that the application of monetary compensatory amounts is limited to what is strictly necessary in order to neutralize the effects of currency fluctuations between the Member States, in particular in the case of products imported from nonmember countries under a quota and free of the levy. However, that limitation cannot be interpreted as meaning that the Commission may ignore the risk of deflections of trade in agricultural products within the Community when products from nonmember countries are involved. Such an interpretation would run counter to Article 1 (3) of Regulation No 974/71.

17In this instance the Community tariff quota in question was not allocated between the Member States. There were therefore grounds for fearing that imports from nonmember countries would be made exclusively in the Member States with the strongest currencies, in particular Germany. Importers carrying out the operation would then have been able to sell the products at a profit in a Member State with a weak currency by virtue of the fact that, in the event of delivery in that State, they would have received the negative monetary compensatory amounts applicable for Member States with weak currencies without in any way infringing the Community rules.

18The Commission has further indicated that according to its calculations Community producers produce annually some 50000 tonnes of high-quality beef and veal comparable to that imported under the tariff quota. In addition it has supplied statistics showing that there were imports of high-quality beef and veal covered by the tariff quota in question into most of the Member States, thus showing that there was a demand for that product almost everywhere in the Community.

19Those considerations, together with the calculations and statistics just mentioned, justify the conclusion that the placing on the Community market free of monetary compensatory amounts of 21000 tonnes of meat imported under the tariff quota might have had repercussions on that market. It was not unreasonable to suppose that traders might divert the flow of imports of the meat in question into the Community by importing it through a Member State with a strong currency, in particular Germany, which would have provoked disturbances in intra-Community trade and jeopardized the system of intervention laid down for beef and veal by Council Regulation No 805/68 of 27 June 1968 on the common organization of the market in beef and veal (Official Journal, English Special Edition 1968 (I), p. 187).

20In alleging that the monetary compensatory amounts had an additional protective effect, Malt has challenged only the application of monetary compensatory amounts to the imports at issue in this case. In view of the fact that the compensatory amounts at issue have the same regulatory function in intra-Community trade as in trade with nonmember countries, the allegation that the monetary compensatory amounts have an additional protective effect cannot be accepted.

21With regard to the contention that monetary compensatory amounts may not be applied to the quota in question because imports under the tariff quota opened by Council Regulation No 136/82 are exempt from monetary compensatory amounts by virtue of Note 2 to Part 3 of Annex I to Commission Regulation No 481/82, on account of the special nature of that trade, it must be pointed out first of all that the Court has consistently held that there exists no general principle obliging the Community, in its external relations, to accord to nonmember countries equal treatment in all respects, nor any right by virtue of which traders rely on the prohibition of discrimination where the difference of treatment between traders is an automatic consequence of the different treatment accorded to nonmember countries (judgment in Balkan-Import-Export v Hauptzollamt Berlin-Packhof cited above; judgment of 28 October 1982 in Case 52/81 Faust v Commission [1982] ECR 3745). The mere fact that the application of monetary compensatory amounts is not expressly excluded in the case of imports under Council Regulation No 217/81 although it is excluded in the case of imports of frozen beef and veal under Regulation No 136/82 and of buffalo meat under Regulation No 481/82 does not in itself constitute discrimination.

22As regards the difference between the two sets of import arrangements mentioned above, it must be stated in the first place that the quality of the categories of meat concerned in each case is not the same. The beef and veal imported under Council Regulation No 217/81 is fresh, chilled or frozen meat of high quality whose qualitative characteristics are defined by Commission Regulation No 263/81 of 21 January 1981 laying down detailed rules for the application of the import arrangements provided for by Regulations (EEC) Nos 217/81 and 218/81 in the beef and veal sector (Official Journal 1981, L 27, p. 52). By contrast, Council Regulation No 136/82 relates to frozen beef and veal and Commission Regulation No 481/82 to buffalo meat, irrespective of their qualitative characteristics. Secondly, according to information supplied to the Court by the Commission, the reasons for not applying monetary compensatory amounts to frozen beef and veal or to buffalo meat — namely the fact that the quota for frozen beef and veal was allocated between the Member States, the fact that buffalo meat has only ever been imported into Germany and the fact that the quota for frozen beef and veal was opened in 1962 long before the introduction of the system of monetary compensatory amounts — show on the one hand that there was no risk of disturbances in intra-Community trade and on the other that the charging of monetary compensatory amounts for beef and veal would probably have given rise to retaliation on the part of other countries within GATT.

23In view of the fact that discrimination consists essentially in treating differently comparable situations, Malt's complaint of discrimination is therefore unfounded in fact as regards the application of Regulations Nos 136/82 and 481/82 to beef and veal and buffalo meat imported under the two tariff quotas exempted from monetary compensatory amounts.

24That being the case, the information supplied to the Court does not support the conclusion that by taking the view that not applying monetary compensatory amounts would give rise to disturbances in the intra-Community trade in beef and veal, the Commission made a manifest error or misused its powers or clearly exceeded the bounds of its discretion, nor does it show that the application of monetary compensatory amounts is discriminatory in nature.

25It must therefore be stated in reply to the question put to the Court by the Finanzgericht Düsseldorf that examination of the question submitted for a preliminary ruling has disclosed no factor of such a kind as to affect the validity of a monetary compensatory amount fixed by Commission Regulation No 481/82 of 26 February 1982 for high-quality beef and veal falling within subheadings 02.01 A II a) and 02.01 A II b) of the Common Customs Tariff and imported under the Community tariff quota opened by Council Regulation No 217/81 of 20 January 1981, as amended by Council Regulation No 3715/81 of 21 December 1981.

Costs

26The 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 proceedings are concerned, in the nature of a step in the proceedings pending before the national court, the decision on costs is a matter for that court.

Operative part

On those grounds,THE COURT (Fourth Chamber),in answer to the question submitted to it by the Finanzgericht Düsseldorf by order of 13 September 1984, hereby rules: Examination of the question submitted for a preliminary ruling has disclosed no factor of such a kind as to affect the validity of a monetary compensatory amount fixed by Commission Regulation No 481/82 of 26 February 1982, for high-quality beef and veal falling within subheadings 02.01 A II a) and 02.01 A II b) of the Common Customs Tariff and imported under the Community tariff quota opened by Council Regulation No 217/81 of 20 January 1981, as amended by Council Regulation No 3715/81 of 21 December 1981.

Delivered in open court in Luxembourg on 24 June 1986.