Judgment;Summary — ECLI:EU:C:2024:972
Date: 2024-11-21
Language of the case: Slovak
Court formation: Fifth Chamber
Subject matter: Environment;Provisions governing the Institutions;Acts of the institutions
Procedure: Reference for a preliminary ruling
Origin: Slovakia

Translation C-370/23–1 
Case C-370/23 
Request for a preliminary ruling 
Date lodged: 
13 June 2023 
Referring court: 
Najvyšší Správny súd Slovenskej republiky (Slovakia) 
Date of the decision to refer: 
26 April 2023 
Applicant: 
Mesto Rimavská Sobota 
Defendant: 
Ministerstvo pôdohospodárstva a rozvoja vidieka Slovenskej 
republiky 
  
[…] 
[designation of the court, case number] 
DECISION 
The Najvyšší Správny súd Slovenskej republiky (Supreme Administrative Court 
of the Slovak Republic), at the hearing of the case brought by Mesto Rimavská 
Sobota (Municipality of Rimavská Sobota; applicant), established in Rimavská 
Sobota, […] [address, identification number], represented by the law firm […], 
[lawyer details], against Ministerstvo pôdohospodárstva a rozvoja vidieka 
Slovenskej republiky (Ministry of Agriculture and Rural Development of the 
Slovak Republic; defendant), established at […] [address] Bratislava, in the 
procedure for reviewing the legality of the decision of the defendant […] [case 
number] of 25 June 2019, ruling on the applicant’s appeal on a point of law 
against the judgment of the Krajský súd v Banskej Bystrici (Regional Court, 
Banská Bystrica, Slovakia) […] [case number] of 13 May 2020, 
o r d e r s: 
EN 
REQUEST FOR A PRELIMINARY RULING OF 26. 4. 2023 – CASE C-370/23 
 
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I. The Supreme Administrative Court of the Slovak Republic to stay the 
proceedings […] [indication of legal basis in national law]. 
II. Pursuant to Article 267 of the Treaty on the Functioning of the European 
Union, the Supreme Administrative Court of the Slovak Republic refers the 
following question to the Court of Justice of the European Union for a 
preliminary ruling: 
Is Article 2(b) of Regulation (EU) No 995/2010 of the European Parliament 
and of the Council of 20 October 2010 laying down the obligations of 
operators who place timber and timber products on the market to be 
interpreted as meaning that the placing on the market of timber also 
constitutes a sale for consideration of raw timber or fuel wood within the 
meaning of Annex 1 to that regulation, if, under the harvest concession 
agreement, the purchaser harvests the timber under the direction and 
supervision of the seller? 
G r o u n d s  
1 The Court of Cassation has requested a preliminary ruling from the Court of 
Justice of the European Union on the interpretation of Article 2(b) and (c) of 
Regulation (EU) No 995/2010 of the European Parliament and of the Council of 
20 October 2010 laying down the obligations of operators who place timber and 
timber products on the market (‘the Regulation’). 
I. 
The subject matter of the main proceedings and procedure before the 
national courts 
2 The defendant imposed, by decision […] [proceedings number] of 25 June 2019 
(‘the decision of the defendant’) with regard to the decision of the Slovenská 
lesnícko-drevárska inšpekcia (Slovak Forestry and Timber Inspectorate) […] 
[number] of 10 April 2019 (‘the decision of first instance’), a fine of EUR 2 000 
on the applicant pursuant to Paragraph 17(5)(b) of Zákon č. 113/2018 Z. z. o 
uvádzaní dreva a výrobkov z dreva na vnútorný trh a o zmene a doplnení zákona 
č. 280/2017 Z. z. o poskytovaní podpory a dotácie v pôdohospodárstve a rozvoji 
vidieka a o zmene zákona č. 292/2014 Z. z. o príspevku poskytovanom z 
európskych štrukturálnych a investičných fondov a o zmene a doplnení niektorých 
zákonov v znení neskorších predpisov (Law No. 113/2018 on the placing of 
timber and timber products on the internal market and amending and 
supplementing Law No. 280/2017 on the provision of support and subsidies to 
agriculture and rural development and amending Law No. 292/2014 on subsidies 
provided from European structural and investment funds and amending and 
supplementing certain laws) as amended (‘the Timber Law’) for committing 
another administrative offence pursuant to Paragraph 17(1)(c) of the Timber Law, 
for failing, as an operator, to apply the due diligence regime pursuant to 
MESTO RIMAVSKÁ SOBOTA 
 
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Paragraph 4(1), (2) and (3) of the Timber Law. The applicant was also ordered to 
take remedial action. 
3 The defendant maintains that the applicant, as a municipality, is a legal person 
within the meaning of Paragraph 1(1) of Zákon č. 369/1990 Zb. o obecnom 
zriadení (Law No 369/1990 on municipal administration) as amended, which 
independently manages its own property and its own revenue under the conditions 
set out in that law. It is not, therefore, an organisation that was not set up for the 
purpose of carrying on economic activity or which is unable to do so. 
4 While agreeing with the authority of first instance, the defendant brought, as 
evidence, till receipt records which showed that the applicant had sold the wood 
for use as fuel wood to private individuals by direct sale […]. The till receipt 
records referred to the ‘permit for independent timber production’ and ‘L4 43 
Proof of the origin of the wood’ forms, which specify the type of timber – fuel 
wood – and the corresponding volume. The defendant argued that, since it was a 
first sale of fuel wood, it was irrelevant who ultimately harvested the wood. It 
believes that, to the extent that the object of the applicant’s trade is timber/fuel 
wood, who harvests the goods sold as such, and whether the sale is of recently 
harvested timber or of standing timber – albeit with the right to subsequent 
harvesting – is irrelevant to the possibility of classifying the applicant as an 
operator. 
5 The defendant also raised the fact that the administrative file also contains a 
public tender notice for the ‘sale of standing timber’ and a copy of the sales 
contract […] [number], which the applicant signed on […] [date] with […] […] 
[name of buyer], the buyer, whereas in Article II(1), it says that the subject of the 
contract is the obligation of the seller (the applicant) to ‘sell wood mass’, while 
Article II(2) obliges the seller to allow the buyer to ‘harvest wood’. Further 
provisions of the contract show that, after harvesting, the wood mass was to be 
‘measured out’ in the presence of the applicant’s staff, which means that even 
after harvesting the timber, the applicant had carried out further operations related 
to selling and placing timber on the market. The subject of the contract was wood 
in the rough. Here again, the defendant took the view that it was immaterial who 
harvested the timber, provided that the object of sale was timber alone. It believes 
that the applicant’s status is therefore that of operator. 
6 Since, as an operator, the applicant had not performed the required due diligence, 
the defendant asserted that the applicant had committed an administrative offence 
under Paragraph 17(1)(c) of the Timber Act and imposed a fine on it. 
7 The applicant lodged an administrative appeal against the decision of the 
defendant, in which it submitted that, as it was selling standing timber together 
with the right to harvest it, it did not have operator status. At the same time, it 
expressed the view that it had never distributed timber or timber products or used 
them in the course of its business activities. The applicant therefore believes that it 
was not an operator, nor was it subject to the obligations laid down in Article 4(1), 
REQUEST FOR A PRELIMINARY RULING OF 26. 4. 2023 – CASE C-370/23 
 
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(2) and (3) of the Timber Law, and it could not therefore be penalised for failing 
to comply with those obligations. The applicant referred to Scenario 10a of 
Commission Notice C(2016) of 12 June 1 2016, containing examples of situations 
in which an enterprise/person would be considered an operator: 
‘Forest owner Z sells to company A the right to harvest standing trees on Z’s 
land, for distribution or use through A’s own business. 
> Company A becomes an operator when it harvests the timber for distribution 
or use in its own business.’ 
8 In judgment […] [procedure number] of 13 May 2020 (‘the contested judgment’), 
the Krajský súd v Banskej Bystrici (District Court, Banská Bystrica) (‘the 
Administrative Court’) dismissed the applicant’s administrative appeal. The 
Administrative Court considered it essential to determine whether the applicant 
has the status of an operator, which, pursuant to Article 4(2) of the Regulation, 
would require it to apply due diligence within the meaning of Article 6 of the 
Regulation. In view of the fact that, in the cases determined by the administration, 
the object of the sale was timber, the Administrative Court held that, from the 
point of view of classifying the applicant as an operator, it was irrelevant whether 
the timber sold was standing timber (and therefore harvested by the purchaser) or 
whether it was sold only after harvesting. In any event, the timber was being 
placed on the market for the first time, that is to say, it was supplied by some 
means and, irrespective of the selling technique used, for distribution or use in the 
context of commercial activity. In that regard, the object of sale was timber for use 
as fuel wood within the meaning of Annex 1 to the Regulation. 
9 According to the Administrative Court, Scenario 10a of the Commission Notice 
C(2016) is only a recommendation and cannot be applied in the territory of the 
Slovak Republic as it does not conform to any national legislation. Indeed, in the 
sales model chosen by the applicant, the buyer does not have even the basic 
documents for establishing and applying a system of due diligence in a 
meaningful way, as it is not registered as a forest manager in the relevant register 
in accordance with the Forestry Law. Transferring responsibility for applying the 
system of due diligence to the purchaser would therefore undermine the objective 
of the Regulation and of the Forestry Law. If the applicant had actually sold the 
right to harvest standing timber, the purchaser would have had to become a forest 
manager and would have been obliged to keep forestry and related records. This, 
however, was not the case. 
10 The applicant lodged an appeal in cassation against the contested judgment. The 
applicant takes the view that its chosen method of selling standing timber, where 
the purchaser does the harvesting, does not fall within the concept of ‘placing on 
the market’ within the meaning of Article 2(b) of the Regulation, and that it was 
therefore not an ‘operator’ within the meaning of Article 2(c) of the Regulation. 
 
1 Translator’s note: refers to Commission Notice of 12 February 2016, C(2016) 755 final. 
MESTO RIMAVSKÁ SOBOTA 
 
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At the same time, the applicant again cited Scenario 10a of Commission Notice 
C(2016), which it believed applied in its case and according to which the applicant 
should not be classified as an operator. 
11 At the same time, the applicant repeatedly requested that the Court of Cassation 
stay the proceedings in cassation and submit a request for a preliminary ruling on 
the interpretation of Article 2(c) of the Regulation to the Court of Justice of the 
European Union, as the dispute concerns the interpretation of the Regulation. 
12 The defendant took a position on the applicant’s appeal in cassation, essentially 
upholding the arguments presented in its decision. It pointed out that the operators 
who purchased timber from the applicant did not have even basic documents 
allowing a system of due diligence to be established and implemented. Only the 
applicant, as a forest manager (as it had not transferred harvesting rights to a third 
party), has at its disposal and maintains the specific records required by Zákon č. 
326/2005 Z. z. o lesoch (Law No. 326/2005 on Forestry) as amended (‘the 
Forestry Law’) and is a registered forest manager in accordance with that Law, 
which enables it to access the documents needed to implement a system of due 
diligence. If the right to harvest standing timber had indeed been sold, as is 
apparent from the applicant’s statement, the purchaser would have become the 
forest manager with all the rights and obligations pertaining thereto, which is not 
the case here. The defendant contends that the Court of Cassation should dismiss 
the applicant’s action as unfounded. 
II. 
EU law 
13 Under Article 2(b) and (c) of the Regulation: 
(b) ‘placing on the market’ means the supply by any means, irrespective of the 
selling technique used, of timber or timber products for the first time on the 
internal market for distribution or use in the course of a commercial activity, 
whether in return for payment or free of charge. It also includes the supply by 
means of distance communication as defined in Directive 97/7/EC of the 
European Parliament and of the Council of 20 May 1997 on the protection of 
consumers in respect of distance contracts. The supply on the internal market of 
timber products derived from timber or timber products already placed on the 
internal market shall not constitute ‘placing on the market’; 
(c) ‘operator’ means any natural or legal person that places timber or timber 
products on the market; […] 
14 According to Article 4(2) of the Regulation: ‘Operators shall exercise due 
diligence when placing timber or timber products on the market. To that end, they 
shall use a framework of procedures and measures, hereinafter referred to as a 
‘due diligence system’, as set out in Article 6.’ 
REQUEST FOR A PRELIMINARY RULING OF 26. 4. 2023 – CASE C-370/23 
 
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15 Under Article 19(1) of the Regulation ‘The Member States shall lay down the 
rules on penalties applicable to infringements of the provisions of this Regulation 
and shall take all measures necessary to ensure that they are implemented.’ 
III. 
National law 
16 Under Paragraph 1(1)(a) of the Timber Law: ‘The rights and obligations of 
operators placing timber and timber products on the internal market shall be 
governed by law.’ 
17 Under Paragraph 4(1), (2) and (3) of the Timber Law: 
‘1) An operator who places timber and timber products on the internal market 
shall apply a due diligence system; this shall not apply when it places on the 
internal market timber and timber products subject to a licensing system. The due 
diligence system shall be established in paper or electronic form before timber 
and timber products are placed on the internal market. 
2) Operators are required to apply and evaluate the due diligence system on a 
regular basis, save where the system has been set up by a monitoring authority. 
3) An operator who places on the internal market timber and products harvested 
from trees or bushes in the territory of the Slovak Republic and who is the owner, 
administrator or forest manager in forest areas, an administrator in accordance 
with specific provisions, a person authorised to harvest timber or remove timber 
in accordance with specific provisions, a person authorised to fell trees and 
bushes or a person who places timber and timber products on the internal market, 
shall include in the due diligence system information, documents and records in 
accordance with separate regulations, as well as information on the method of 
harvesting timber, the handling of timber and timber products, the transport and 
marketing of timber and timber products and related documents.’ 
18 According to Paragraph 17(1)(c) of the Timber Law, in the version in force until 
31 December 2019: 
‘An operator commits another administrative offence if it […] fails to establish a 
system of due diligence or fails to adequately apply such a system and fails to 
submit it to the assessment provided for in Paragraph 4(1), (2), (3), or (5) […].’ 
19 Under Paragraph 17(5)(b) of the Timber Law, in the version in force until 
31 December 2019: 
‘The supervisory authority shall impose a fine of between EUR 2 000 and 
EUR 10 000 if another administrative offence is committed in accordance with 
[…] Paragraph 1(b), (c) or (d).’ 
MESTO RIMAVSKÁ SOBOTA 
 
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IV. 
The reasoning for the question referred for a preliminary ruling 
20 Taking the administrative file and the judicial file as a basis, the Court of 
Cassation finds that the dispute in the present case concerns a penalty mechanism 
which was adopted by the national legislature on the basis of the powers conferred 
by Article 19(1) of the Regulation. This is a penalty procedure for breach of the 
obligations under Article 4(2) of the Regulation which the applicant was required 
to fulfil as an operator within the meaning of Article 2(b) and (c) of the 
Regulation. In the administrative court proceedings and in the cassation 
proceedings, the applicant essentially raised the issue of whether the method of 
selling timber it chose can be classified as placing on the market the meaning of 
Article 2(b) of the Regulation and, consequently, whether it is in fact an operator 
within the meaning of Article 2(c) that is subject to the obligations of Article 4(2) 
of the Regulation, and the associated mechanism for penalties pursuant 
Article 19(1) of the Regulation in conjunction with Paragraph 17(5)(b) of the 
Timber Law. 
21 On the basis of administrative and judicial files, the court of cassation has 
established that the applicant, as a municipality, is a regional or local authority 
which is an autonomous legal person that has assets at its disposal (including 
timber). In the context of such disposal, the applicant chose a model in which it 
sold timber to natural and legal persons against payment. In that regard, it acted in 
a way in which it sold timber or timber mass of specified volumes to natural and 
legal persons through contracts or by direct sales, whereby it did not harvest the 
timber itself, but left the harvesting of the timber to the purchaser (either by itself 
or with the assistance of third parties). It is apparent from further contractual 
provisions, as well as from the applicant's submissions in both the administrative 
and judicial proceedings, that the harvesting of the timber sold to the buyers took 
place in such a way that authorised employees of the applicant (the seller) 
designated specific trees to be felled by the buyers. Alternatively, they would 
designate the area to be felled and the felling would take place under the 
seller/applicant's supervision. 
22 The defendant considered that the method of dealing with timber chosen by the 
applicant constituted placing timber on the market within the meaning of 
Article 2(b) of the Regulation and, in its view, the applicant should, as an operator 
within the meaning of Article 2(c), have complied with its obligations under 
Article 4(2) of the Regulation. The defendant found it decisive in the present case 
that the applicant did not transfer the right to harvest and manage timber on a 
particular site to the buyers in accordance with national law, but sold only the 
timber mass directly, while leaving the harvesting of the timber to the buyer. 
According to the defendant, if the applicant had transferred the right to harvest 
timber from a particular area to the buyers, the buyers would have become forest 
managers, subject to registration under the Forestry Act (national legislation), and 
they would only have had sufficient information available to apply due diligence 
REQUEST FOR A PRELIMINARY RULING OF 26. 4. 2023 – CASE C-370/23 
 
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if they had enjoyed this status. According to the defendant, if a particular volume 
of timber is sold, it is immaterial, for the purposes of Article 2(b) of the 
Regulation, who has harvested the wood, as the operator would be person who 
sold the timber and thus placed it on the market. 
23 The applicant disputes this position, arguing that the method of selling the timber 
which it chose consists essentially in the fact that, although the volume of timber 
was specified in the contract, it was selling the right to harvest standing timber 
and was therefore not selling harvested wood. Referring to scenario 10a of 
Commission Notice C (2016) of 12 June 2 2016 (paragraph [7] above), the 
applicant submits that this selling arrangement means that it is not itself placing 
the timber on the market within the meaning of Article 2(b) of the Regulation and 
is therefore not an operator within the meaning of Article 2(c) of the Regulation. 
Only buyers who harvested the timber sold would have that status. 
24 In the light of the foregoing, the court of cassation considers this to be a dispute 
about the interpretation of EU law, more specifically Article 2(b) and (c) of the 
Regulation. The court of cassation is also of the opinion that the interpretation of 
the concepts of ‘operator’ or ‘placing [timber] on the market’ within the meaning 
of Article 2(b) and (c) of the Regulation is autonomous and independent of the 
provisions of national law or of the assumptions made therein about who should 
have the status of operator. […] [repetition of the question referred]. 
25 When examining the present case, the court of cassation did not find any decision 
of the Court of Justice of the European Union which might relate to the questions 
referred for preliminary ruling or to Article 2(b) and (c) of the Regulation and was 
unable to find a clear answer to the questions referred from the wording of 
Article 2(b) and (c). Since the questions at issue concern the interpretation of EU 
law, the court of cassation considers that the Court of Justice of the European 
Union has jurisdiction to answer them. 
26 From the perspective of the interpretation of Article 2(b) and (c) of the 
Regulation, the court of cassation draws attention in particular to the function and 
objective of the Regulation, which is to combat illegal logging and the marketing 
on the internal market of products made from illegally harvested timber 
(recitals 1, 3, 15 of the Regulation). In the opinion of the court of cassation, the 
issue in the present case is placing reasonable limits on the interpretation of 
Article 2(b) and (c) of the Regulation so that, on the one hand, the objective and 
spirit of the Regulation and the obligations arising under the system of due 
diligence cannot be circumvented by targeted selection of the way in which timber 
is marketed (sale of timber), while on the other hand, avoiding the excessive 
interpretation of the concept of operator in commercial relations to entities for 
whom this is not necessary in the light of the objectives of the Regulation. 
V. 
 
2See footnote 1. 
MESTO RIMAVSKÁ SOBOTA 
 
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[…] 
27 […] 
28 […] 
29 […] 
30 The Order was adopted by the chamber of the Najvyši správný súd Slovenskej 
republiky (Supreme Administrative Court of the Slovak Republic) by a majority 
of 3:0. 
[…] [suspension of the proceedings, result of the vote of the chamber of the court, 
information on legal remedies] 
Bratislava, 26 April 2023 
[…] [names of judges]