Commission of the European Communities v Federal Republic of Germany (303/84)

Contents

Judgment of the Court20 March 1986^noteIn Case 303/84Commission of the European Communities, represented by Götz zur Hausen, a member of its Legal Department, acting as Agent, with an address for service in Luxembourg at the office of Manfred Beschel, a member of its Legal Department, Jean Monnet Building, Kirchberg,vFederal Republic of Germany, represented by Martin Seidel, acting as Agent, assisted by Professor Jürgen Schwarze, with ąn address for service in Luxembourg at its Embassy, 20-22 avenue Émile-Reuter,THE COURTcomposed of: Lord Mackenzie Stuart, President, U. Everling and R. Joliét (Presidents of Chambers), G. Bosco, Y. Galmot, C. Kakouris and T. F. O'Higgins, Judges,Advocate General: G. F. ManciniRegistrar: H. A. Rühl, Principal Administratorafter hearing the Opinion of the Advocate General delivered at the sitting on 20 February 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 application lodged at the Court Registry on 21 December 1984, the Commission of the European Communities brought an action under Article 169 of the EEC Treaty for a declaration that, by failing to determine within the prescribed period certain sugar production levies, by failing to credit those amounts to the account of the Commission and by refusing to pay interest on those arrears in due time, the Federal Republic of Germany had failed to fulfil its obligations under the EEC Treaty.

2Production levies on sugar constitute own resources of the Community by virtue of subparagraph (a) of the first paragraph of Article 2 of Council Decision No 70/243/ECSC, EEC, Euratom of 21 April 1970 on the replacement of financial contributions from Member States by the Communities' own resources (Official Journal, English Special Edition 1970 (I), p. 224).

3By virtue of Article 5 (1) (b) of Regulation (EEC) No 700/73 of the Commission of 12 March 1973 laying down certain detailed rules for the application of the quota system for sugar (Official Journal 1973, L 67, p. 12), the Member States are to collect from each sugar manufacturer the amount of the production levy in respect of a certain part of his production before 15 January of the following marketing year.

4The responsibility for collecting the levy from sugar producers is on the Member States. By virtue of Article 5 (3) of Regulation No 700/73, they determine the amount to be paid by each sugar manufacturer not later than 15 days before the date referred to in the previous paragraph, that is to say before 31 December of the year in question.

5Council Regulation (EEC, Euratom, ECSC) No 2891/77 of 19 December 1977, implementing the aforementioned decision of 21 April 1970 (Official Journal 1977, L 336, p. 1), lays down detailed rules and time-limits for determining the levy and crediting the amounts due to the Commission's account, as follows:Article 2 provides that ‘an entitlement shall be deemed to be established as soon as the corresponding claim has been duly determined by the appropriate department or agency of the Member State’.Article 9 (1) provides that: ‘The amount of own resources established shall be credited by each Member State to the account opened for this purpose in the name of the Commission with its Treasury or with the body it has appointed.’Article 10 (1) provides that: ‘The entry referred to in Article 9 (1) shall be made at the latest by the twentieth day of the second month following the month during which the entitlement was established.’Finally, Article 11 lays down the sanction in the event of noncompliance with the time-limit:‘Any delay in making the entry in the account referred to in Article 9(1) shall give rise to the payment of interest by the Member State concerned at a rate equal to the highest rate of discount ruling in the Member States on the due date... ’

6This action arises out of the collection of levies in the Federal Republic of Germany in respect of sugar production during the 1980-1981 sugar year. It is common ground first that the levy should have been determined under the aforementioned rules before 31 December 1981 and that it was not determined until 1 February 1982, at the sum of DM 465728.20, and secondly that that amount was not credited to the Commission's account until 20 April 1982.

7The Commission considered that the sum should have been credited to its account before 22 February 1982. That date was fixed by taking 31 December 1981, the time-limit for determining the amount to be paid, as the starting point and applying, from that date, the period provided for in Article 10 (1) of Regulation No 2891/77 and the provision for the calculation of set periods provided for in Regulation (EEC, Euratom) No 1181/71 of the Council of 3 June 1971 determining the rules applicable to periods, dates and time-limits (Official Journal, English Special Edition 1971 (II), p. 354). The Commission concluded that the sum was credited to its account 57 days' late and requested the Federal Republic of Germany to pay the interest provided for in Article 11 of Regulation No 2891/77, amounting to some DM 15 000.

8The Federal Republic of Germany refused to pay the interest and maintained that it had credited the amount of the levy by the due date if the date on which the amount was actually determined was taken as the starting point for calculating the due date. Consequently, Article 10 of Regulation No 2891/77 had, in its view, been complied with and the payment of interest for the delay in making the entry in the account, provided for in Article 11 of the regulation, could not be required where the actual amount to be paid was not determined within the period laid down.

9On 17 April 1984, at the end of the preliminary procedure, the Commission delivered a reasoned opinion under the first paragraph of Article 169 charging the Federal Republic of Germany with failure to fulfil its obligations on three counts : failure to determine in due time certain sugar production levies, failure to credit the relevant amounts to the Commission's account in due time, and refusal to pay the interest due on those amounts in accordance with Article 11 of Regulation No 2891/77. The purpose of this action is to obtain a declaration that in those respects the Federal Republic of Germany has failed to fulfil its obligations.

The delay in determining the sugar production levies and in crediting the corresponding amounts to the Commission's account

10The Federal Republic of Germany has raised two objections of inadmissibility against the first two allegations. In the first place it observes that it has expressly admitted that the amounts in question were not determined in due time and that it does not dispute that the amounts were not credited to the Commission's account within the time-limit if the set period provided for in Article 10 of Regulation No 2891/77 is calculated by reference to the date by which the amounts should have been determined rather than by reference to the date on which they were actually determined. It emphasizes that it will ensure that the time-limits are not exceeded in the future. Nevertheless, it contends that the Commission cannot bring proceedings under Article 169 of the EEC Treaty on the basis of a substantive infringement of Community law, such as failure to comply with a time-limit, where ex hypothesis the infringement came into being automatically when the time-limit expired and the Member State is no longer in a position to terminate its infringement. The procedure provided for in Article 169 cannot be used in cases where the Member State concerned cannot possibly regularize the position within the period laid down by the reasoned opinion. Consequently, in the German Government's view, the action must be confined to an examination of the Commission's third submission.

11It must be stated, as was rightly emphasized by the Commission, that a Member State cannot exculpate itself for failing to fulfil its obligations merely by acknowledging the existence of that failure. Moreover, without there being any need to examine the second objection of inadmissibility raised by the Federal Republic of Germany, it must be observed that, in this case, there is an inseparable link in the legal provisions described above between the obligation to determine the amounts in question, to credit them to the Commission's account within the period laid down and to pay interest in the event of delay as provided for in Article 11 of Regulation No 2891/77. In any event, therefore, it is indispensable, when considering the submission regarding the failure to pay interest in respect of the delays, to give a ruling on the submissions that the Federal Republic of Germany acted belatedly both in determining the amounts in question and in crediting them to the Commission's account.

12In that respect, it follows from Article 5 of Regulation No 700/73, in conjunction with Article 2 of Regulation No 2891/77, that the Member States are bound to determine the amounts payable by sugar manufacturers in respect of production levies before 31 December 1981. It is not disputed in this case that the amounts were not determined until 1 February 1982. Accordingly, the Commission's first submission is established.

13In addition, it follows from Article 5 of Regulation No 700/73, in conjunction with Article 10 (1) of Regulation No 2891/77 and with Regulation No 1182/71, that the Federal Republic of Germany was under an obligation to credit the amounts so determined to the Commission's account by 22 February 1982 at the latest. It is not disputed that that did not take place until 20 April 1982, that is to say 57 days after the due date. It follows that the Commission's second charge is also established.

The refusal to pay the interest on arrears provided for in Article 11 of Regulation No 2891/77

14Article 11 provides as follows: ‘Any delay in making the entry in the account referred to in Article 9(1) shall give rise to the payment of interest by the Member State concerned at a rate equal to the highest rate of discount ruling in the Member State on the due date... ’.

15Essentially, the Commission considers that in this case that provision, viewed in the light of all the aforementioned legal provisions, imposes an obligation on the Federal Republic of Germany to pay interest on arrears since the amounts in question were not credited to the Commission's account by the due date. That is also the conclusion that must be drawn if the obligations to determine the Communities' own resources at the proper time and to put them at the disposal of the Communities are to have full effect.

16The Federal Republic of Germany takes the opposite view. It relies on the wording of Regulation No 2891/77, on the objective and scheme of the provisions in question, on the manner in which they came to be adopted and, finally, on an analysis of the domestic law of certain Member States. In its view Article 11 of Regulation No 2891/77 imposes an obligation to pay interest only where a Member State exceeds the period provided for by Article 10 (1) of the regulation, within which, after the amounts payable have been determined, the Member State must credit those amounts to the Commission's account, and not in a case where there is a delay in the preliminary step of determining the amounts in question. Since the law relating to the budget and the financing of the European Communities is strictly governed by legal provisions, a sanction such as the requirement to pay interest on arrears cannot be implied as against the clear provisions of the law to be applied; such a sanction can be provided for only by unequivocal legislation.

17It should be observed, in the first place, that the wording of Article 11 of Regulation No 2891/77 shows that interest is payable in respect of ‘any delay’ in crediting the amounts to the Commission's account. It follows that, regardless of the reason for the delay in making the entry in the Commission's account, interest is payable without any distinction being called for according to whether the delay was caused by failure to determine the relevant amounts by the due date or by failure to comply with the time-limit laid down in Article 10 (1) of Regulation No 2891/77.

18Secondly, it is clear from the foregoing that in this case the amounts at issue should have been credited to the Commission's account by 22 February 1982 at the latest, that that time-limit was not complied with and that the amounts were not credited until 20 April 1982.

19In those circumstances it must be held that, contrary to the contentions of the Federal Republic of Germany, Article 11 of Regulation No 2891/77 imposes an obligation in this case on the Federal Republic of Germany to pay the interest specified therein. The Commission's third submission has therefore also been established.

20It must therefore be declared that, by failing to determine within the prescribed period certain sugar production levies for the 1980-1981 sugar year, by failing to credit the corrresponding amounts to the account of the Commission within the prescribed period and by refusing to pay interest on those arrears, the Federal Republic of Germany has failed to fulfil its obligations under the EEC Treaty.

Costs

21Under Article 69 (2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs. Since the defendant has failed in its submissions, it must be ordered to pay the costs.

Operative part

On those grounds,THE COURThereby:

(1).Declares that, by failing to determine within the prescribed period certain sugar production levies for the 1980-1981 sugar year, by failing to credit the corresponding amounts to the account of the Commission within the prescribed period and by refusing to pay interest on those arrears, the Federal Republic of Germany has failed to fulfil its obligations under the EEC Treaty;

(2).Orders the Federal Republic of Germany to pay the costs.

Delivered in open court in Luxembourg on 20 March 1986.