CELEX: 61978CJ0260
Inward processing
Monetary compensatory amounts

1 BY AN ORDER OF 6 OCTOBER 1978 , WHICH WAS RECEIVED AT THE COURT OF JUSTICE ON 13 DECEMBER 1978 , THE FINANZGERICHT MUNSTER SUBMITTED , UNDER ARTICLE 177 OF THE EEC TREATY , THE FOLLOWING QUESTIONS FOR A PRELIMINARY RULING :
' ' 1 . ON 8 SEPTEMBER 1975 WAS IT IN PRINCIPLE COMPATIBLE WITH COMMUNITY LAW , AND IN PARTICULAR WITH THE PROVISIONS OF REGULATION ( EEC ) NO 974/71 OF THE COUNCIL OF 12 MAY 1971 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1971 ( I ), P . 257 ) AND REGULATION ( EEC ) NO 1380/75 OF THE COMMISSION OF 29 MAY 1975 ( OFFICIAL JOURNAL , L 139 , P . 37 ) THAT A MEMBER STATE OF THE COMMUNITY AS ORIGINALLY CONSTITUTED , IN INTRA-COMMUNITY TRADE AND ON THE BASIS OF ITS NATIONAL LAW CONCERNING INWARD PROCESSING ARRANGEMENTS ( IN THE PRESENT CASE , ARTICLE 47 ET SEQ . OF THE ZOLLGESETZ ( CUSTOMS LAW ) OF THE FEDERAL REPUBLIC OF GERMANY OF 1961 IN CONJUNCTION WITH ARTICLE 2 ( 1 ) OF THE ABSCHOPFUNGSERHEBUNGSGESETZ ( LAW RELATING TO THE IMPOSITION OF LEVIES ) OF 1962 ), SHOULD EXEMPT FROM PAYMENT OF THE MONETARY COMPENSATORY AMOUNT GOODS WHICH HAD BEEN IN FREE CIRCULATION IN ANOTHER MEMBER STATE AND ON WHICH MONETARY COMPENSATORY AMOUNTS ARE TO BE LEVIED ON IMPORT UNDER COMMUNITY LAW , SUBJECT TO THE CONDITION THAT THE GOODS WERE NOT TO BE PUT INTO FREE CIRCULATION IN THE IMPORTING STATE BUT WERE TO BE PROCESSED UNDER THE SURVEILLANCE OF THE CUSTOMS AND RE-EXPORTED AS CONSTITUENT PARTS OF OTHER GOODS TO THE COUNTRY OF ORIGIN OR TO ANOTHER MEMBER STATE?
2 . IN THE EVENT OF QUESTION 1 BEING ANSWERED IN THE AFFIRMATIVE : WAS THE EXEMPTION FROM THE LEVYING OF THE MONETARY COMPENSATORY AMOUNT ALSO COMPATIBLE WITH COMMUNITY LAW WHERE NATIONAL LAW ( IN THIS CASE , ARTICLE 47 ( 2 ) OF THE GERMAN CUSTOMS LAW ) MADE IT DEPENDENT UPON A PRIOR ASSESSMENT BY THE CUSTOMS AUTHORITY OF THE RELIABILITY OF THE PROCESSOR?
3 . IN THE EVENT OF QUESTIONS 1 AND 2 BEING ANSWERED IN THE AFFIRMATIVE : WAS THE EXEMPTION FROM THE LEVYING OF THE MONETARY COMPENSATORY AMOUNT ALSO COMPATIBLE WITH COMMUNITY LAW WHERE NATIONAL LAW ( IN THE PRESENT CASE , ARTICLE 48 ( 2 ) OF THE GERMAN CUSTOMS LAW ) MADE IT DEPENDENT UPON A PRIOR BALANCING BY THE CUSTOMS AUTHORITIES OF THE INTERESTS OF THE PROCESSOR AGAINST THE INTERESTS OF THE DOMESTIC MANUFACTURER IN THE COUNTRY OF IMPORTATION?
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2 THOSE QUESTIONS WERE SUBMITTED IN THE COURSE OF AN ACTION BETWEEN THE GERMAN CUSTOMS AUTHORITIES AND A GERMAN UNDERTAKING CONCERNING THE REFUSAL BY THE FORMER TO APPLY INWARD PROCESSING ARRANGEMENTS TO CERTAIN QUANTITIES OF SUGAR IMPORTED FROM FRANCE FOR USE IN THE MANUFACTURE OF SOUPS INTENDED FOR EXPORT TO FRANCE AND BELGIUM . THE APPLICATION OF INWARD PROCESSING ARRANGEMENTS HAD BEEN REQUESTED IN ORDER TO OBTAIN EXEMPTION FOR THE IMPORTED SUGAR FROM MONETARY COMPENSATORY AMOUNTS ON IMPORTATION IN VIEW OF THE FACT THAT THE FINISHED PRODUCT DID NOT BENEFIT FROM THE GRANT OF MONETARY COMPENSATION ON EXPORTATION .
3 IN ORDER TO REPLY TO THE QUESTION SUBMITTED IT IS NECESSARY FIRST OF ALL TO CONSIDER THE PROVISIONS OF REGULATION ( EEC ) NO 1380/75 OF THE COMMISSION OF 29 MAY 1975 LAYING DOWN DETAILED RULES FOR THE APPLICATION OF MONETARY COMPENSATORY AMOUNTS ( OFFICIAL JOURNAL 1975 , L 139 , P . 37 ) WHICH , PURSUANT TO ARTICLE 21 THEREOF , ENTERED INTO FORCE ON 1 JUNE 1975 .
4 TITLE II ( ARTICLE 6 ) OF THAT REGULATION LAYS DOWN DETAILED RULES FOR THE APPLICATION OF MONETARY COMPENSATORY AMOUNTS IN TRADE WITH THIRD COUNTRIES AND TITLE III ( ARTICLES 7 TO 15 ) LAYS DOWN DETAILED RULES FOR THEIR APPLICATION IN INTRA-COMMUNITY TRADE . WHILST ARTICLE 6 PROVIDES THAT THE PROVISIONS CONCERNING THE CHARGING OF CUSTOMS DUTIES SHALL APPLY TO MONETARY COMPENSATORY AMOUNTS , THERE IS NO PROVISION OF THAT NATURE IN TITLE III . ONLY CERTAIN SPECIFIC CUSTOMS PROVISIONS ARE APPLICABLE TO INTRA-COMMUNITY TRADE AND THE RULES RELATING TO INWARD PROCESSING ARRANGEMENTS ARE NOT AMONGST THEM .
5 THIS INTERPRETATION OF THE WORDING OF THE PROVISIONS IS IN ACCORDANCE WITH THE INTENTION UNDERLYING THEM . THE REPRESENTATIVE OF THE COMMISSION EXPLAINED IN THE COURSE OF THE PROCEDURE BEFORE THE COURT THAT , AFTER THE ACHIEVEMENT OF THE CUSTOMS UNION HAD REMOVED THE JUSTIFICATION FOR INWARD PROCESSING ARRANGEMENTS IN INTRA-COMMUNITY TRADE , THE COMMISSION WISHED TO ENSURE THAT THE ARRANGEMENTS WERE NOT RE-ESTABLISHED WHEN THE SYSTEM OF MONETARY COMPENSATORY AMOUNTS WAS INTRODUCED . FURTHERMORE , IT IS CLEAR FROM ARTICLE 2 OF COUNCIL DIRECTIVE NO 69/73 OF 4 MARCH 1969 ON THE HARMONIZATION OF PROVISIONS LAID DOWN BY LAW , REGULATION OR ADMINISTRATIVE ACTION IN RESPECT OF INWARD PROCESSING ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1969 ( I ), P . 75 THAT THOSE ARRANGEMENTS DO NOT APPLY TO GOODS WHICH ARE IN FREE CIRCULATION WITHIN THE MEMBER STATES . IT WOULD THUS HAVE BEEN NECESSARY TO ENACT SPECIFIC PROVISIONS IF IT HAD BEEN INTENDED TO RE-INTRODUCE THE ARRANGEMENTS IN THE CONTEXT OF THE SYSTEM OF MONETARY COMPENSATION .
6 THE COMMISSION ALSO POINTED OUT THAT THERE IS NO REAL ECONOMIC NECESSITY TO EXEMPT THE IMPORTER FROM MONETARY COMPENSATORY AMOUNTS IN CIRCUMSTANCES SUCH AS THOSE IN THE PRESENT CASE SINCE THE COMMISSION , AS A MATTER OF POLICY , ALSO APPLIES THE MONETARY COMPENSATION ARRANGEMENTS TO DERIVED PRODUCTS WHERE THE PROPORTION OF RAW MATERIALS COVERED BY THAT SYSTEM EXCEEDS A REASONABLE LEVEL .
7 IN THOSE CIRCUMSTANCES THE REPLY TO THE FIRST QUESTION REFERRED TO THE COURT SHOULD BE THAT THE PROVISIONS OF REGULATION NO 1380/75 OF THE COMMISSION OF 29 MAY 1975 LAYING DOWN DETAILED RULES FOR THE APPLICATION OF MONETARY COMPENSATORY AMOUNTS MUST BE INTERPRETED AS MEANING THAT A MEMBER STATE MAY NOT APPLY ITS NATIONAL RULES IN THE MATTER OF INWARD PROCESSING TRAFFIC SO AS TO EXEMPT FROM MONETARY COMPENSATION , IN INTRA-COMMUNITY TRADE , GOODS IMPORTED FROM ANOTHER MEMBER STATE IN WHICH THEY ARE IN FREE CIRCULATION .
8 IN VIEW OF THAT ANSWER TO THE FIRST QUESTION IT IS UNNECESSARY TO REPLY TO THE SECOND AND THIRD QUESTIONS .
Decision on costs
COSTS
9 THE COSTS INCURRED BY THE COMMISSION OF THE EUROPEAN COMMUNITIES , WHICH HAS SUBMITTED OBSERVATIONS TO THE COURT , ARE NOT RECOVERABLE ; SINCE 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 AS TO COSTS IS A MATTER FOR THAT COURT .
Operative part
ON THOSE GROUNDS ,
THE COURT ( SECOND CHAMBER ),
IN ANSWER TO THE QUESTIONS SUBMITTED TO IT BY THE FINANZGERICHT MUNSTER BY AN ORDER OF 6 OCTOBER 1978 , HEREBY RULES :
THE PROVISIONS OF REGULATION NO 1380/75 OF THE COMMISSION OF 29 MAY 1975 LAYING DOWN DETAILED RULES FOR THE APPLICATION OF MONETARY COMPENSATORY AMOUNTS MUST BE INTERPRETED AS MEANING THAT A MEMBER STATE MAY NOT APPLY ITS NATIONAL RULES IN THE MATTER OF INWARD PROCESSING TRAFFIC SO AS TO EXEMPT FROM MONETARY COMPENSATION , IN INTRA-COMMUNITY TRADE , GOODS IMPORTED FROM ANOTHER MEMBER STATE IN WHICH THEY ARE IN FREE CIRCULATION .