Judgment — ECLI:EU:C:2002:440
Date: 2002-07-11
Language of the case: German
Court formation: Fifth Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Agriculture and Fisheries;Monetary measures in the field of agriculture
Concepts: Export refunds
Procedure: Reference for a preliminary ruling
Origin: Germany

summary form. 63. The plaintiff begins by pointing out that export refunds are not a benefit reserved for the exporter which the latter seeks of his own accord. The export refund returns to the exporter the sum which - by paying the purchase price of the refund goods - he has laid out to finance the agricultural price support system. To this extent, for the exporter, having to claim an export refund actually represents a financial loss. 64. The plaintiff also notes that refund products have to be declared in accordance with customs procedures. The declaration involves uncertainties since, in particular, the exporter has to make legal judgments. At the same time, the Court's decisions in customs cases have recognised that the exporter will have fulfilled his obligation to lodge a valid customs declaration even if, in good faith, he has furnished the customs administration with incorrect or incomplete information, provided that he could not reasonably have known or procured any other. (24) 65. The plaintiff believes that from this it can be deduced that the penalty specified in Article 11(1) is neither appropriate nor necessary to achieve the intended purpose, that is to say, the protection of the Community's financial interests. Recovery of the export refund would be sufficient. Moreover, the rule does not take into account the fact that the obligation to lodge a materially correct declaration is not absolute. Alternatively, with respect to necessity the exporter argues that it can be gathered from Regulation No 2988/85 that the financial interests of the Community would be adequately protected by sanctions based on fault, especially as national sanctions are also available. 66. In addition, with respect to reasonableness, the plaintiff points out that a penalty under Article 11(1) can be imposed irrespective of whether any damage has been caused or whether the exporter could have avoided the error. The plaintiff would also deduce an infringement of the principle of non-discrimination from the failure to differentiate between blameless and negligent - and hence culpable - behaviour. 67. From all this the plaintiff concludes that the penalty is incompatible with the principles of proportionality and non-discrimination. 68. The Commission, on the other hand, considers that the mere repayment of the export refund in the event of an irregularity would not be a sufficient deterrent. It notes that the level of the penalty is calculated in terms of the relief wrongly granted to the exporter. Finally, it recalls the broad discretion enjoyed by the Community legislature in matters concerning the common agricultural policy. In its opinion, in the case at issue there can be no question of the rule being obviously inappropriate or of the limits being obviously overstepped. 2. Analysis 69. According to settled case-law, in order to establish, in particular in the sector of the common organisation of the agricultural markets, whether a provision of Community law complies with the principle of proportionality, it is necessary to ascertain whether the penalty exceeds what is appropriate and necessary to attain the objective pursued by the rules which have been breached. (25) 70. More particularly, it is necessary to ascertain whether the penalty laid down by the provision in question to achieve the aim in view corresponds with the importance of that aim and whether the disadvantages caused are not disproportionate to the aims pursued. (26) Appropriateness of the penalty rule 71. With respect to the appropriateness of the penalty rule in question it should first be recalled that the Community legislature is allowed a large measure of discretion in deciding what means to use to attain its objective. On the subject of compliance with the principle of proportionality, the Court has stated that in matters concerning the common agricultural policy the Community legislature has a discretion power which corresponds to the political responsibilities imposed by Articles 40 (now Article 34 EU) and 43 of the EC Treaty. Consequently, the legality of a measure adopted in this sphere can be affected only if the measure is manifestly inappropriate having regard to the objective which the competent institution intends to pursue. (27) 72. The protection of the Community's financial interests (28) is a legitimate objective which the Commission is pursuing by applying the penalty rule in question. The imposition of a financial penalty for submitting an incorrect refund application is an appropriate means not only of deterring the applicant from making intentionally false statements but also of encouraging him to exercise the utmost care. 73. The plaintiff has not succeeded in showing a manifest error of judgment on the part of the Commission in its choice of penalty in relation to the intended purpose of protecting the financial interests of the Community. Necessity of the penalty rule 74. In ascertaining necessity, the crux of the matter is whether the aim pursued could not equally well have been achieved by adopting a milder measure with the same effect. 75. The plaintiff is in any case wrong in assuming that the mere recovery of refunds unduly granted would be sufficient. Admittedly, the plaintiff is correct in pointing out that export refunds cannot be compared with direct aid, as it is the farmer - and not the exporter - who in the last analysis receives the benefit of them. However, this does not mean that the recovery of an export refund would have the same deterrent effect as the penalty rule in question. Firstly, the recovery of an unduly granted export refund does not mean that no refund will be paid at all; if this were so, then in the case of an incorrectly made out refund application recovery would often have a more drastic effect than the penalty rule itself. Secondly, it should be noted that, as the Commission rightly points out, recovery fails to exert a deterrent effect inasmuch as it is limited to reducing the amount of the refund to the amount due. Finally, although in the event of recovery the exporter may lose interest because of the pre-financing effect, it may be assumed that this loss will be less than the potential gain from an inflated refund application that passes undetected, so that the mere possibility of losing interest is unlikely to deter anyone from lodging an incorrect application. 76. The reference to Article 5 of Regulation No 2988/95 is also mistaken. As already explained, (29) it cannot be deduced from this provision that the Community's financial interests can be adequately protected by sanctions based on fault. 77. Nor is the penalty rule in question made any less necessary by the fact that it does not address the damage actually caused. In fact, the aim of the sanction is to deter rather than to punish financial injury. It is therefore only logical that reference should be made solely to the threat to the Community's financial interests. 78. Thus, it appears that the penalty rule at issue is also necessary to attain the objective pursued. Reasonableness of the penalty rule 79. It remains to determine whether the penalty rule accurately reflects the importance of the abovementioned protective purpose and whether the disadvantages caused are proportionate to the aims pursued. (30) 80. In general, the Community financial interests to be protected may be jeopardised by incorrect export refund applications regardless of whether or not the applicant is personally at fault. It therefore seems appropriate to seek to protect the Community's financial interests by stipulating strict liability. Accordingly, at first glance, it seems not unreasonable not to distinguish between inadvertent and negligent error. 81. With regard to the main proceedings, it is obvious that, in principle, the Community's financial interests are equally jeopardised by actions not attributable to the exporter and the resulting incorrectness of his refund application regardless of whether the goods in question were manufactured by the exporter himself or by a supplier. 82. The distinction between intent and other cases in terms of the legal consequences (level of the penalty) seems to be objectively justified, in view of the correspondingly different sense of justice of the exporter in these two cases. From this it follows immediately that an infringement of the principle of non-discrimination can be ruled out. 83. Nor, in a case such as that considered in the main proceedings, is the validity of the penalty rule called into question by the fact that the conditions of application of the penalty are relaxed, inasmuch as the requirement of fault and proof of fault is waived. The effective protection of the Community's financial interests may demand a lightening of the burden of proof extending even to the waiver of the requirement of fault. 84. Doubts as to the reasonableness of the penalty rule in question could only arise if it were so framed as no longer to be compatible with the basic concept of strict liability. In particular, this would be the case if the penalty had also to be imposed where the exporter could no longer reasonably be held responsible for the jeopardising of the Community's financial interests. 85. In this connection, the plaintiff is doubtless right to point out that in the case of an incorrect refund application the imposition of a penalty not based on fault leads to the obligation to lodge a correct declaration being formulated objectively, although the declaration involves various uncertainties beyond the exporter's control. (31) 86. This aspect is reflected in the Opinion of Advocate General Léger in Oelmühle und Schmidt Söhne, albeit in connection with the recovery of unduly granted subsidies under national law: (32) ... in balancing against each other the interests involved, which is tantamount to assessing compliance with the principle of effectiveness of Community law, it would seem, to say the least, unfair to impose on the bona fide recipient alone the burden of something akin to strict liability, even though he, in accordance with the established system, has passed on to his suppliers the aid received without benefit from it directly, and without having been able to check the origin of the goods in question, which determines whether the aid was properly granted... and later: Likewise, it is first and foremost for the national authorities responsible for ensuring, by means of appropriate checks, that the product in respect of which the aid is granted conforms to the Community requirements, so as to make certain that Community aid is not paid for products which do not qualify for it, to decide on the controls necessary for that purpose. 87. In the case of the recovery of unduly paid subsidies under national law it is, however, mainly a question of the beneficiary's grounds of defence, such as loss of enrichment or good faith, which are assessed in the light of his legal position. In export refund law, account should be taken of the fact that the exporter himself does not personally benefit when he passes on the refund to the manufacturer by paying a price in excess of the world market price. On the other hand, this consideration has no bearing on the imposition of a sanction in the case of an incorrect export refund application. 88. It should be borne in mind that a sanction of the kind in question would be unreasonable if it had also to be imposed where the refund applicant was not responsible for the threat to the Community's financial interests. (33) This, however, would certainly not be the case if - as in the present instance - he had voluntarily, within the context of his economic activity, used a third party to manufacture the goods at issue. The fact that the inaccuracy of the data in the refund application could not be established or could be established only by means of checks at the undertaking in which the goods were manufactured would then be inmaterial. 89. In the light of the above, it may be concluded in answer to the first question that the validity of the first indent of the third subparagraph of Article 11(1) of Regulation No 3665/87 as amended by Regulation No 2945/94 is not impaired by the fact that it provides for a penalty even where, through no fault of his own, an exporter has applied for an export refund exceeding that applicable. V - Second question: interpretation of the concept of force majeure 90. The second question, which presupposes that the penalty rule is valid, mainly turns on whether force majeure may be assumed where the refund applicant could not establish that his data were false or could do so only by means of checks on the premises of a third party. A - Arguments of the parties 91. According to the plaintiff, the situation in which it found itself was one of force majeure within the meaning of the case-law of the Court, that is to say that the circumstances were abnormal, unforeseeable and outside its control and, moreover, their consequences could not have been avoided even by exercising all due care. In the present case, the false information in the refund application was based on inaccurate data supplied by the manufacturer, a company with a good reputation in Germany. The addition of vegetable fat to the cheese spread by one of the manufacturer's production line managers had been unusual and totally unexpected. It could not have been detected by the usual checks, which the exporter himself had, in fact, carried out. 92. The plaintiff was aware that, in accordance with the customary interpretation of force majeure, an economic operator is responsible for the negligence of his contractual partner. However, it took the view that in accordance with the judgments of the Court in Steff-Houlberg and Oelmühle Hamburg, an exporter may rely on manufacturer's data whose accuracy he himself is unable to verify and should not be required to check the manufacturing process himself. Admittedly, these decisions concerned the recovery of Community subsidies under national law, but there was no reason why the same principles should not be applied to the sanctions laid down under the export refund system, which was entirely governed by Community law, nor why an unidentifiable and unverifiable error on the part of the supplier should not correspond to the concept of force majeure. 93. According to the plaintiff, only a broad interpretation of the concept of force majeure in the first indent of the third subparagraph of Article 11(1) of the Regulation can dispel the doubts hanging over that provision as a consequence of the principles of criminal law inherent in the notion of the rule of law. Such an interpretation would not only take the fault principle into account, albeit in a limited form, but would also tend to bring the special penalty rule in the first subparagraph of Article 11(1) of Regulation No 3665/87 into harmony with the general rule on administrative penalties in Article 5(1) of Regulation No 2988/95. Force majeure within the meaning of the provision at issue would then obtain if the exporter could show that he had acted as a responsible businessman. This would be the case where he had provided (objectively) false information in good faith because he had no reason to doubt the accuracy of the information received from his supplier. 94. The Commission shares the view of the Bundesfinanzhof, according to which false information provided in good faith by the exporter on the basis of inaccurate data supplied by the manufacturer cannot constitute a case of force majeure as defined in the case-law of the Court even if the exporter could not establish that it was false or could do so only by means of checks at the undertaking where the goods were manufactured. The decisions of the Court of Justice cited by the national court could not lead to any other conclusion since the situations envisaged were not comparable. B - Analysis 95. According to the first indent of the third subparagraph of Article 11(1) of Regulation No 3665/87, the sanction in question does not apply in the case of force majeure. As the Court has already established in Kampffmeyer, (34) the concept of force majeure does not have exactly the same scope in different areas of the law and in its various spheres of application, so that its precise meaning must be determined by reference to the legal context within which it is intended to operate. 96. The Court has consistently held that the concept of force majeure in the sphere of agricultural regulations must be construed as referring to abnormal and unforeseeable circumstances beyond the control of the trader concerned, whose consequences could not have been avoided in spite of the exercise of all due care. (35) 97. In applying this definition, in its settled case-law the Court has also accepted that force majeure does not obtain where non-compliance with a necessary condition can be traced back to non-performance by the other party to the contract. In Theodorakis, (36) the purchaser failed to take delivery of the goods sold for export, with the result that the goods were not exported during the period of validity of the export licence. The Court described this as an ordinary commercial risk inherent in commercial transactions. It was for the holder of the licence, who is fully at liberty to select such trading partners as his interests in that respect may dictate, to take the appropriate precautions either by including the requisite clauses in the contract in question or by effecting appropriate insurance. (37) Thus, in the view of the Court, the criterion of unforeseeability had not been met. In Boterlux (38) it was likewise held that the argument based on force majeure must fail because fraudulent re-importation into the Community was foreseeable. 98. In the present case, it is clear from the order for reference that the exporter had no knowledge of the true composition of the product and could have acquired such knowledge only by means of checks at the undertaking at which the goods were manufactured which, in the view of the Bundesfinanzhof, he could not, or at least could not be expected to, carry out. 99. However, in the light of the abovementioned judgments, these facts should be seen as indicating that, although the behaviour of the refund applicant's trading partner may have been unusual, at any rate it could not have been entirely ruled out and was foreseeable inasmuch as it represented the materialisation of a normal business risk. Viewed from this standpoint, the argument in favour of assuming force majeure must be rejected. 100. This conclusion is unaffected by the case-law which the plaintiff has cited. Admittedly, in Oelmühle und Schmidt Söhne (39) the Court ruled that Community law does not in principle preclude a national rule from allowing non-recovery of Community aid unduly paid, particularly if, inter alia, the recipient demonstrably acted in good faith. In this connection, the Court pointed out that ... if a trader draws up and submits a declaration with a view to obtaining a subsidy, the mere fact of having drawn up that document cannot deprive him of the right to plead his good faith when the declaration is based exclusively on information which was provided by third parties. It is, however, for the national court to consider whether certain factors should not, in the circumstances, have caused the trader to check the accuracy of this information. (40) 101. In Steff-Houlberg, (41) the Court reaffirmed its view that Community law does not preclude a national rule from allowing non-recovery of Community aid unduly paid based, inter alia, on the good faith of the recipient. On that occasion, the Court expressly stated that ...if an exporter draws up and submits a declaration with a view to obtaining export refunds, the mere fact of having prepared that document cannot deprive him of the right to plead his good faith when the declaration is based exclusively on information which was provided by the other party to a contract and the accuracy of which he was unable to establish. (42) 102. With respect to the scope of these two judgments, it should first be noted that they concern the national recovery of subsidies unduly paid. Before ruling on the question of good faith, the Court noted that there is no Community provision governing the recovery of refunds paid on the basis of documents subsequently shown to be inaccurate. (43) 103. Concerning the applicability of the Boterlux decision, according to which the error (44) of a third party constitutes an ordinary commercial risk for the aid recipient, the Court held that when a balance must be struck between the interests of the Community and those of the trader, the national court must take into account the fact that fault on the part of the third party with whom the recipient of the aid has entered into a contract concerns more closely the sphere of the recipient of the aid than that of the Community. (45) Accordingly, contrary to the view expressed by the plaintiff, it may not be assumed that in the judgments cited the Court's intention was to pave the way for a broadening of the concept of force majeure, in so far as the inaccuracy of the exporter's information can be attributed to an error on the part of his trading partner. 104. The answer to the second question referred for a preliminary ruling must therefore be that the first indent of the third subparagraph of Article 11(1) of Regulation No 3665/87 cannot be interpreted as meaning that false information provided in good faith by the refund applicant on the basis of inaccurate data supplied by the manufacturer constitutes in principle a case of force majeure where the applicant could not establish that it was false or could do so only by means of checks at the undertaking where the goods were manufactured. VI - Conclusion 105. In the light of the above, it is proposed that the questions referred for a preliminary ruling by the Bundesfinanzhof be answered as follows: (1) The validity of the first indent of the third subparagraph of Article 11(1) of Regulation (EEC) No 3665/87 as amended by Regulation (EC) No 2945/94 is not impaired by the fact that it lays down a penalty even where, through no fault of his own, an exporter has applied for an export refund exceeding that applicable. (2) False information provided in good faith by the refund applicant on the basis of inaccurate data supplied by the manufacturer does not in principle constitute a case of force majeure within the meaning of the first indent of the third subparagraph of Article 11(1) of Regulation No 3665/87 where the applicant could not establish that it was false or could do so only by means of checks at the undertaking where the goods were manufactured. 1: - Original language: German. 2: - OJ 1987 L 351, p. 1. 3: - OJ 1994 L 310, p. 57. 4: - OJ 1995 L 312, p. 1. 5: - Commission Regulation (EC) No 1222/94 of 30 May 1994 laying down common detailed rules for the application of the system of granting export refunds on certain agricultural products exported in the form of goods not covered by Annex II to the Treaty, and the criteria for fixing the amount of such refunds (OJ 1994 L 136, p. 5). 6: - Cases 109/86 Theodorakis [1987] ECR 4319 and C-347/93 Boterlux [1994] ECR I-3933). 7: - Boterlux, cited in footnote 6, and Case 296/86 McNicholl and Others [1988] ECR 1491. 8: - Case C-366/95 Steff-Houlberg Export and Others [1998] ECR I-2661 and Case C-298/96 Oelmühle und Schmidt Söhne [1998] ECR I-4767. 9: - See judgment in Case 288/85 Plange Kraftfutterwerke [1987] ECR 611, paragraphs 14 ff. 10: - See judgment in Case 203/80 Casati [1981] ECR 2595, paragraph 27. 11: - Opinion in Case C-240/90 Germany v Commission [1992] ECR I-5383, paragraph 11. 12: - French: infliger ... une sanction, English: to sanction, Spanish: sancionar, Italian: applicare ... una sancione, Dutch: een sanctie op te leggen. 13: - Opinion in Case C-356/97 Molkereigenossenschaft Wiedergeltingen [2000] ECR I-5461, paragraph 49. This idea is developed in footnote 33: In the few cases in which the Court of Justice has been requested to express a view on the question of the penal nature of Community sanctions, it has never proposed a positive definition but has confined itself to ruling out the penal nature of the sanction at issue. 14: - See, in particular, the fourth subparagraph of Article 11(1) of Regulation No 3665/87 as amended by Regulation No 2945/94. 15: - ECHR, Öztürk judgment of 21 February 1984, Series A No 73, p. 9, paragraph 50 with reference to the judgment in Engel and Others of 8 June 1976, Series A No 22, pp. 34-35, paragraph 82. 16: - See paragraphs 16 and 31 ff. above. 17: - Judgments in Cases 137/85 Maizena [1987] ECR 4587, paragraph 13 and C-240/90 (cited in footnote 11, paragraph 25 ff.). 18: - In characterising a regulation as a criminal sanction the ECHR also distinguishes between provisions that cover all citizens equally and those that apply only to a given group with a particular status. See ECHR, Bendenoun judgment of 24 February 1994, Series A No 284, paragraph 47. 19: - With reference to the judgment of the Court of Justice in Case 137/85 (cited in footnote 17, paragraph 13). 20: - Judgment in Case 137/85 (cited in footnote 19, paragraph 13). See also the Opinion of Advocate General Léger in Case C-63/00 Schilling and Nehring [2002] ECR I-4483, paragraphs 40 ff. 21: - See footnote 15 above. 22: - ECHR, Bendenoun judgment of 24 February 1994 (cited in footnote 18). 23: - ECHR, Salabiaku judgment of 7 October 1988, Series A, No 141A, paragraph 28. 24: - Judgment in Case 378/87 Top Hit Holzvertrieb [1989] ECR 1359. 25: - See the judgment in Case C-356/97 (cited in footnote 13, paragraph 35), which refers to the judgments in Cases C-118/89 Lingenfelser [1990] ECR I-2637, paragraph 12; 319/90 Pressler [1992] ECR I-203, paragraph 12; and C-354/95 National Farmers' Union and Others [1997] ECR I-4559, paragraph 49. 26: - Cited in footnote 25, paragraph 36 and referring to the judgments in Case C-8/89 Zardi and Others [1990] ECR I-2515, paragraph 10; Pressler, cited in footnote 25, paragraph 12; and Joined Cases C-133/93, C-300/93 and C-362/93 Crispoltoni and Others [1994] ECR I-4863, paragraph 41. 27: - Judgments in Cases 265/87 Schräder [1989] ECR 2237, paragraph 22; C-331/88 Fedesa and Others [1990] ECR I-4023, paragraphs 13 and 14; and C-180/96 United Kingdom v Commission [1998] ECR I-2265, paragraph 97. 28: - See the first recital of Regulation No 2945/94. 29: - See paragraphs 53 ff. above. 30: - It remains, however, an open question whether the exporter's freedom to conduct a business under Article 16 of the Charter of Fundamental Rights (OJ 2000 C 364, p. 1) is affected, since the events in the main proceedings took place before it was proclaimed. 31: - See paragraph 64 above. 32: - Opinion of Advocate General Léger in Case C-298/96 (cited in footnote 8), paragraph 44. 33: - With respect to such cases it should be noted that any doubt as to the reasonableness of the penalty rule in question could be countered by a broad interpretation of the concept of force majeure in the first indent of the third subparagraph of Article 11(1) of Regulation No 3665/87. 34: - Judgment of 30 January 1974 in Case 158/73 [1974] ECR 101. 35: - Judgment of 9 August 1994 in Case C-347/93 (cited in footnote 6, paragraph 34) which refers to Case C-12/92 Huygen and Others [1993] ECR I-6381, paragraph 31. See also the judgment of 27 October 1987 in Case 109/86 (cited in footnote 6, paragraph 7): ... whilst that concept [of force majeure] does not presuppose absolute impossibility, it nevertheless requires the non-performance of the act in question to be due to circumstances beyond the control of the person claiming force majeure which are abnormal and unforeseeable and of which the consequences could not have been avoided despite the exercise of all due care. 36: - Cited in footnote 6. 37: - Loc. cit., paragraph 8. 38: - Cited in footnote 6, paragraph 35. 39: - Cited in footnote 8. 40: - Loc. cit., paragraph 30. 41: - Judgment of 12 May 1998 in Case C-366/95 (cited in footnote 8). 42: - Loc. cit., paragraph 22. 43: - The regulation in question (Regulation No 2945/94) did not apply ratione temporis. See the judgment cited in footnote 41, paragraph 22. 44: - In Boterlux, it was a question of fraudulent behaviour by a third party. If this constitutes an ordinary commercial risk, then, a fortiori, so does a mere error. 45: - Loc. cit., paragraph 28.