39/84 · GlobalLawDB

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Judgment of the Court3 July 1985^noteIn Case 39/84REFERENCE to the Court under Article 177 of the EEC Treaty by the Finanzgericht [Finance Court] Hamburg for a preliminary ruling in the action pending before that court betweenMaizena GmbH, Hamburg, and OthersandHauptzollamt [Principal Customs Office] Hamburg-JonasTHE COURTcomposed of:G. Bosco, President of Chamber, acting as President, O. Due and C. Kakouris, (Presidents of Chambers), P. Pescatore, T. Koopmans, U. Everling, K. Bahlmann, Y. Galmot and R. Joliét, Judges,Advocate General: C. O. LenzRegistrar: P. Heimafter considering the observations submitted on behalf of:the plaintiffs in the main action, represented by Dr Harald Schwartz,the Commission of the European Communities, represented by Dr Bernhard Jansen, Legal Adviser, and Christine Berardis-Kayser, a member of its Legal Department, acting as Agents,after hearing the Opinion of the Advocate General delivered at the sitting on 28 February 1985,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 dated 6 January 1984, which was received at the Court on 14 February 1984, the Finanzgericht [Finance Court] Hamburg referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty two questions on the validity of Commission Regulation No 3013/80 of 21 November 1980 amending Regulation No 2140/79 as regards certain monetary compensatory amounts and Regulation No 2803/80 as regards certain export refunds in the cereals sector (Official Journal 1980, L 312, p. 12) in so far as it fixes the monetary compensatory amounts applicable to certain products processed from maize, and on the consequences which would arise from the invalidity of that regulation.

2The questions arose in the course of an action before the Finanzgericht between Maizena GmbH and other undertakings, forming a consortium known as ‘Maizena Export’ (hereinafter referred to as ‘Maizena’), on the one hand, and the Hauptzollamt [Principal Customs Office] Hamburg-Jonas on the other.

3Maizena, which manufactures products processed from maize in the Federal Republic of Germany, applied, in respect of various quantities of such products exported or admitted for inward processing and therefore entitled to a refund between 24 November and 8 December 1980, for monetary compensatory amounts which were granted to it by the Hauptzollamt Hamburg-Jonas in accordance with Regulation No 3013/80.

4Maizena considered that it was entitled to monetary compensatory amounts higher than those calculated on the basis of Regulation No 3013/80 and lodged an unsuccessful objection against the decisions by which they were granted. It then brought an action before the Finanzgericht Hamburg, which decided to stay the proceedings and refer to the Court for a preliminary ruling the following questions:(1) Is Commission Regulation (EEC) No 3013/80 of 21 November 1980 invalid in so far as it fixes the monetary compensatory amounts for the following products, listed in the corresponding headings of the Common Customs Tariff, only at the levels set out hereunder?— 11.08 I at DM 50.69— 17.02 B I (a) at DM 66.13— 17.02 B II (b) at DM 50.69— 23.03 A I at DM 67.14— 11.02 G II at DM 11.33(2) Should Question 1 be answered in the affirmative, what are the consequences of such invalidity?’

5As regards the first question, Maizena observes that the system of monetary compensatory amounts, which was created to safeguard the functioning of the intervention system in spite of the widening of the margins of fluctuation for the exchange rates and to ensure normal movement of prices, can serve that purpose only if it is arranged on a neutral and balanced basis. To that end, Article 1 (1) of Regulation No 974/71 of the Council, which introduced monetary compensatory amounts, lays down the principle that the monetary compensatory amounts charged on imports of certain products must be equal to the monetary compensatory amounts granted on exports of those products. That principle can only be complied with and upheld if the monetary compensatory amount fixed for a basic product and the amounts applicable to products processed from that product are also equal.

6According to Maizena, Regulation No 710/79 of the Commission of 9 April 1979 (Official Journal 1979, L 90, p. 1) provided for an absolute balance between the monetary compensatory amount applicable to maize and the sum of the monetary compensatory amounts fixed for the various products obtained from maize by means of a specific manufacturing process. However, that balance was upset, first by Regulation No 746/79 of the Commission of 11 April 1979 (Official Journal 1979, L 95, p. 3) and subsequently by Regulation No 3013/80, which both reduced the monetary compensatory amounts fixed for products processed from maize. Regulation No 3013/80 is therefore incompatible with the system of monetary compensatory amounts, which is based on the principle of the strict neutrality of compensatory amounts, and also infringes Articles 3 (f), 40 (3) and 43 of the Treaty in so far as it distorts competition and places processors established in countries with strong currencies at a disadvantage compared with their competitors established in countries with weak currencies. On the exportation of processed products, the first receive monetary compensatory amounts the sum of which is lower than the monetary compensatory amount which they had to pay on the importation of the basic product, whereas in the same situation the second pay monetary compensatory amounts the sum of which is lower than the monetary compensatory amount granted to them on the importation of the basic product.

7The Commission does not deny that the system of monetary compensatory amounts requires that any disparity between the monetary compensatory amount applicable to a basic product and the total monetary compensatory amounts applicable to the various derived products obtained from a specific manufacturing process should be avoided as far as possible. It was precisely in order to meet that requirement that the Commission adopted Regulation No 3013/80, which reduced the monetary compensatory amounts applicable toproducts processed from maize in order to attain a greater balance between the sum of the monetary compensatory amounts fixed for products obtained from a specific manufacturing process and the monetary compensatory amount fixed for the basic product.

8The Commission acknowledges that the monetary compensatory amounts applicable to products and secondary products obtained from processing maize into starch or glucose were fixed by Regulation No 3013/80 in such a way that they were in general slightly lower than the monetary compensatory amount fixed for the basic product, but it argues that that cannot make the regulation invalid, essentially because in this case the disparity, DM 3.60 or 5.9%, is negligible.

9That argument is based on the rulings given by the Court on 15 October 1980 (Case 4/79 Providence agricole de la Champagne v ONIC [1980] ECR 2823; Case 109/79 Maïseries de Beauce v ONIC [1980] ECR 2883; and Case 145/79 Roquette frères v French Customs Administration [1980] ECR 2917), in which the Court stated that a system for the calculation of the monetary compensatory amounts on products processed from maize which results in establishing, for the various products obtained by processing a given quantity of maize in a specific manufacturing process, monetary compensatory amounts the sum of which is a figure ‘clearly in excess’ of the monetary compensatory amount fixed for that given quantity of maize constitutes an infringement of the basic regulation, Regulation No 974/71 of the Council of 12 May 1971, and Article 43 (3) of the Treaty. It follows from those rulings that only a fairly substantial difference between the monetary compensatory amount for the basic product and the total monetary compensatory amounts for the processed products and secondary products should be regarded as relevant.

10Maizena claims that the disparity in this case, which the Commission concedes to be 5.9%, is in fact much higher owing to the fact that there is virtually no market for certain processed products, in particular maize germ and gluten falling under tariff subheadings 11.02 G II and 23.03 A I of the Common Customs Tariff respectively.

11The Commission points out that in Cases 4/79, 108/79 and 145/79 it actually put forward the argument that in reality there was no noticeable difference between all the monetary compensatory amounts applicable in France on the exportation of products processed from maize and the monetary compensatory amount applicable on the importation of the basic product, since there was virtually no market for germ and gluten and the monetary compensatory amounts fixed for those secondary products were therefore of only theoretical significance. The Court, however, did not accept that argument. The Commission argues that it must therefore be assumed that there is a market for those secondary products, as is in any event demonstrated by the statistics.

12On that point, it should be noted that the statistics produced by the Commission at the Court's request indeed show that there is a trade in germ and gluten, though not of an order to cover the entire production of those products, and part of that trade consists of intra-Community trade. Thus the monetary compensatory amount fixed for those secondary products is not purely theoretical but is applicable in practice. Moreover, monetary compensatory amounts must be fixed for germ and gluten, since to fail to do so would encourage their exportation by traders established in countries with weak currencies and would thus distort trade.

13It is therefore necessary in this case to determine whether the monetary compensatory amount fixed for maize can be regarded as clearly in excess of the sum of the monetary compensatory amounts granted in respect of the various products processed from maize, where there is a disparity of 5.9%.

14At issue in Cases 4/79 and 109/79 were the three successive regulations fixing monetary compensatory amounts, namely Regulation No 1910/76 of 30 July 1976 (Official Jouraal 1976, L 208, p. 1), Regulation No 2466/76 of 8 October 1976 (Official Journal 1976, L 280, p. 1) and Regulation No 938/77 of 29 April 1977 (Official Journal 1977, L 110, p. 6).

15Under Regulation No 1910/76, so far as the manufacturing process for the production of maize groats and meal is concerned, the sum of the monetary compensatory amounts applicable in France to processed products obtained from 1.8 tonnes of maize amounted to FF 100.81, whereas the monetary compensatory amount applicable to the same quantity of maize was FF 71.67. There was therefore a difference of about 30%.

16Under Regulation No 2466/76, for the same production process the total of the monetary compensatory amounts applicable in France to products processed from maize amounted to FF 201.75 and exceeded by about 30% the monetary compensatory amount fixed for the basic product, which for 1.8 tonnes was FF 143.35.

17Regulation No 938/77 fixed monetary compensatory amounts totalling FF 280.21 for processed products, whereas the monetary compensatory amount for the basic product was FF 199.09 for 1.8 tonnes. There was therefore likewise a disparity of about 30%.

18In Case 145/79, which concerned the process for the production of starch, the monetary compensatory amount of FF 101.99 per tonne for the basic product compared with a total of FF 115.83 for the sum of the monetary compensatory amounts for the processed products. However, account must be taken of the fact that the disparity of FF 13.84, or about 12%, was distorted by the method of fixing the monetary compensatory amount for starch which had been calculated on the basis of the intervention price for maize without deducting the production refund for starch. If, on the other hand, the refund referred to is subtracted from the intervention price for maize, in accordance with the Court's ruling in that case, the monetary compensatory amount fixed for starch, and the disparity set out above, increase.

19In the light of those considerations, it is plain that the disparity established in this case is clearly lower than the disparities which were at issue in the cases cited above.

20That finding cannot be altered by the argument put forward by Maizena to the effect that the damage suffered by traders established in countries with hard currencies is in reality much higher because they are affected by a ‘negative’ disparity, whilst producers established in countries with weak currencies in turn benefit from a ‘positive’ disparity of similar proportion on the exportation of products processed from maize. If that argument were accepted, the disparity concerned in the judgment cited above would also be considerably increased, so that the relationship between it and the disparity established in this case would not be affected.

21In addition to the considerations drawn from the cases cited above, it should be stated that according to Article 4 (2) of Regulation No 974/71: ‘No compensatory amount shall be fixed for products for which the amount calculated in accordance with Article 2 is negligible in relation to their average value’. If it is unnecessary to fix monetary compensatory amounts where such amounts are negligible in relation to the average value of the products concerned, it is equally unnecessary to require the monetary compensatory amounts to be adjusted so as to remove a disparity such as that concerned here, which represents a negligible proportion of the monetary compensatory amounts themselves and a fortiori must therefore be negligible in relation to the value of the goods.

22Lastly, it should be noted that, as the Commission pointed out in its observations, some disparity is often inevitable, because one and the same secondary product can sometimes be obtained from different manufacturing processes, resulting in the manufacture of products and secondary products to which different monetary compensatory amounts apply. It follows that it is impossible, from an administrative point of view, to fix different monetary compensatory amounts for such a secondary product according to the manufacturing process by which it is obtained, in order to ensure that in each process the monetary compensatory amount for the basic product is identical to the sum of the monetary compensatory amounts for the processed products and secondary products.

23It follows from the considerations set out above that, where there is a disparity of 5.9%, the monetary compensatory amount fixed for maize by Regulation No 3013/80 cannot be regarded as clearly in excess of the sum of the monetary compensatory amounts fixed for the various products obtained by processing maize in a specific manufacturing process.

24It must therefore be concluded that consideration of the first question asked has disclosed no factor of such a kind as to affect the validity of Regulation No 3013/80.

25As the second question was asked only if the first question was answered in the affirmative, no answer is required.

Costs

26The costs incurred by the Commission of the European Communities, which submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main proceedings are concerned, 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,in answer to the questions referred to it by the Finanzgericht Hamburg by order of 6 January 1984, hereby rules: Consideration of the first question asked has disclosed no factor of such a kind as to affect the validity of Commission Regulation No 3013/80 of 21 November 1980.

Delivered in open court in Luxembourg on 3 July 1985.