61974C0095
OPINION OF MR ADVOCATE-GENERAL TRABUCCHI
DELIVERED ON 12 NOVEMBER 1975 (
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Mr President
Members of the Court,
Apart from considerations of expediency, only on the basis of an express decision of the legislature would it be legally possible to make taxpayers at large carry the exchange risk which, in our time, is a normal one for undertakings operating on the international market.
This Court has already laid down that the objective of the system of monetary compensatory amounts for exports, which the Community legislature has treated as being on the same level as export refunds only as regards the method by which it is financed, is to ward off difficulties which monetary instability might create for the proper functioning of the common organizations of the markets, rather than to protect the individual interests of traders, and that in consequence, the system of compensatory amounts cannot be considered to be tantamount to a guarantee for traders against the risks inherent in variations of the rates of exchange. Although in its judgment in Case 74/74 (CNTA v Commission, [1975] ECR 549), which laid down these principles and constitutes an important precedent for the cases before us, the Court held the Community liable for some of the loss (the so-called ‘damnum emergens’) sustained by the applicant undertaking as a result of a change, made without warning and without the adoption of transitional measures, in the system of compensatory amounts, it is clear that the consequent order against the defendants was based entirely on the departure from the legitimate expectation of the applicant undertaking that the previous more advantageous system would be maintained. The Courtrecognized the existence of that expectation and the need to protect it in view of the circumstances of that case, in particular, the absence of any warning of the changes, which were adopted with immediate effect, and the total absence of transitional measures.
The main question, therefore, which is raised by the present cases is whether, in view of the way events developed, the applicants can claim, to have had an expectation, worthy of protection, that they would continue to benefit from the system prior to that established by Regulation No 1112/73 of the Council of 30 April 1973 and implemented, with effect from 4 June 1973, by Regulation No 1463/73 of the Commission of 30 May 1973 in respect of exports effected after that date in fulfilment of commitments definitively undertaken before the application or entry into force of those amending enactments.
It must be said at once that, even in terms of the above-quoted decisions of the Court, protection of an individual interest in the maintenance of an advantageous system which the legislature proceeds to alter or revoke is only exceptionally recognized, basically on grounds of natural justice. For a legitimate expectation to be recognized as having this effect it is therefore essential that, in every case, the party wishing to avail itself of it should have been able to continue working in the reasonable belief that the system on the basis of which it has transacted its business will not be subject to alteration before fulfilment of the factual conditions necessary for acquisition and actual determination of its right to compensatory amounts. Their particular function does not, of course, enable these amounts to be fixed in advance as is the case, on the other hand, with export refunds. They are determined only at the time of export on the basis of the rate of exchange prevailing between the currencies involved.
Regulation No 1112/73 substantially amended the system of compensatory amounts introduced by means of Regulation No 974/71, and, in so far as agriculture was concerned, this implemented the decision of 11 March 1973 in which the Finance Ministers of the Member States, meeting as the Council, decided to maintain, with the temporary exception, for reasons of conjunctural policy, of three States, a maximum variation of 2-25 % for the currencies of Member States. This meant the abandonment by the Member States of support for the United States dollar and, therefore, its maintenance as a reference currency in the working of Community machinery such as, in particular, the system of compensatory amounts, in international trade.
On 12 March, the Council instructed the Commission to prepare the consequential amendments necessary for the working of the machinery of the Community organization of agricultural markets. It should have been clear from then on to any prudent trader that the system of monetary compensatory amounts would not be able to continue to be based on the rate of exchange between the national currency concerned and the United States dollar. And if it was not immediately obvious to all, it ought to have become so at the latest on the following 21 March, when the Commission provided the Council with the draft regulation for the contemplated amendment of the system of compensatory amounts. There can be no doubt that the draft became known forthwith to the traders concerned.
Since the draft amendment was not the result of independent action by the Commission but was the outcome of a request from the Council, it was impossible in these circumstances for dealers, in respect of export operations which were planned to take place some months later, to have justifiably continued to feel confident in the maintenance of rules which it was known were due to be radically changed. It was indeed readily foreseeable that the Council, which had called for the new rules, would in the ordinary course of events find no difficulty in approving them. And as it was no less clear that the new arrangements were intended to ensure that the calculation of compensatory amounts was unaffected by fluctuations of the dollar against the European currencies, there was sufficient information available to traders to make them aware that, in the near future, the Community rules would no longer shield them against fluctuations due to a fall in the dollar. In these circumstances, a prudent trader should have been able to protect himself, either by choosing a currency other than the dollar for his foreign sales, or by contracting for very early delivery or, at least, by allowing for the exchange risk to which the legislative amendment of which notice had been given might, in short term, expose him as regards the commitments which he was entering into.
The undertakings were able to benefit from the previous arrangements in the case of products exported up to 4 June. Those concerned, therefore, had a reasonable period of time in which to cover themselves as soon as it ought to have been clear that a change was about to take place in the rules governing compensatory amounts.
No application for a certificate which is of relevance in the present case was submitted before 30 March 1973, when all dealers concerned were aware of the Commission's proposal of 21 March.
My view, therefore, is that this case does not, in respect of all the transactions to which the applicants refer, involve the particular condition of legitimate expectation which alone can place the
Community under an obligation to make good the losses sustained by undertakings which have entered into definitive commitments on the basis of their expectations.
However, in addition to relying on the general requirement of the protection of legitimate expectation, the applicants make the straightforward assertion that they have, in respect of compensatory amounts, a genuine acquired right which they consider to be the right to a future payment the amount of which is determined at the time of export.
This contention is however refuted by the case-law of the Court. While the judgment cited above, in Case 74/74, gave partial satisfaction to the applicant in respect of his failure to draw the monetary compensatory amounts which he had expected, this was based exclusively on the principle of protecting the expectation and not on that of respecting a right and, on this basis, the judgment recognized that compensation should be awarded for the damage suffered only to the extent strictly necessary to prevent the applicant from suffering loss. This limitation would not have been acceptable if the party concerned had been able to claim a genuine right to have applied to the calculation of the monetary compensatory amounts the rules which were in force when he had applied for or obtained an export certificate.
The distinction which the applicants in the present cases are endeavouring to draw between the discretionary arrangements, the application of which was the subject of the case quoted above, and the compulsory arrangements with which we are concerned has no bearing on the question whether traders are or are not entitled to compensatory amounts. In fact, when, under the discretionary arrangements, a State has decided to make use of the power conferred upon it under Community rules to grant monetary compensatory amounts, the position of the exporting undertaking is, as regards the application of the system of compensatory amounts, not materially. different from that in which Community law makes the payment of such amounts compulsory without need for inquiry whether the condition that the State should have declared in favour of it has been satisfied.
Alternatively, should the Court find itself unable to accept my opinion concerning all the transactions involved in the present case, I recommend that it should at least dismiss all the applications for compensation relating to products exported on the basis of certificates applied for after 30 April 1973.
In accordance with the decision, already mentioned, of the Finance Ministers of 11 March 1973, Article 1 of Regulation (EEC) No 1112/73 of the Council of 30 April 1973, which replaced Article 2 (1) of Regulation (EEC) No 974/71, lays down new machinery for fixing compensatory amounts which, in contrast to the provision made in the previous regulation, excludes from consideration the rate of exchange between the currency of the Member State concerned and the United States dollar.
At least, therefore, after publication of Regulation No 1112/73 it was clear that traders could no longer rely on continuing to receive the benefit of the previous system, which would automatically cease to be applicable with effect from the day of entry into force of the detailed rules for its application which the Commission was due to adopt in accordance with Article 6 of Regulation No 974/71. It is true that Regulation No 1112/73 did not specify the date by which the Commission was to adopt the detailed rules for its application but, since it was, concerned with an industry which was peculiarly sensitive to the currency fluctuations being registered at that time, every prudent trader must have realized that their advent could not be delayed. And since, moreover, Regulation No 1112/73 made no provision for any transitional measures, the conclusion may undoubtedly be drawn that, at the very latest after 30 April 1973, there could no longer have been any expectation in the sense claimed by the applicants. The undertakings were at liberty to build hopes on transitional measures but they would do so at their own risk.
Against this background, in terms of a legitimate expectation, it is clear that there is no justification whatever for the applications for compensation relating to products exported on the basis of certificates applied for on a date subsequent to publication of Regulation No 1112/73.
Again, as regards exports based on certificates applied for in the period between 30 March and 30 April 1973, a distinction must be drawn between applications for certificates of normal validity and those based on certificates valid for an exceptional length of time. In the first case, once all the formalities have been satisfied, the application is almost automatically followed by grant of the certificate and the right to export, subject to advance fixing of the refund, can consequently be retroactive to the date on which the certificate was applied for and to the corresponding obligation, imposed by the Community rules, to lodge the security.
In a case, on the other hand, where application is made for an export certificate for a longer period than usual, there is no guarantee that the application will be successful since it is subject to special authorization by the Commission, which enjoys a wide discretion in the matter. In such a case, a definitive obligation to effect the exportation arises only from the time when the applicant receives a favourable reply. Because of this, in the case of transactions associated with export certificates which are valid for an exceptionally long period, it must be ascertained whether certificates were received, and not simply applied for, before or after 30 April 1973. As regards transactions carried out on the basis of certificates obtained after that date, in no case is it possible (any more than, as we have seen, in the case of those based on certificates — even of normal duration — applied for after that date) to recognize an expectation worthy of protection.
My opinion, therefore, is first, that all the applications should be dismissed with costs against the applicants.
Alternatively, I recommend the rejection of the applications relating to exports effected on the basis of certificates applied for after 30 April 1973 or on the basis of certificates valid for an exceptionally long period which, although applied for before that date, were granted subsequent to it. The other applications relating to earlier periods are allowable only on the basis of compensation for consequential loss. Furthermore, as regards applications for compensation based on certificates which, although obtained at an earlier date, changed hands at a later date, evidence must be required in each case that the transfer took place in execution of specific and definitive commitments entered into before that date. Otherwise there could be no legitimate expectation on the part of the applicants.
In the case of the latter alternative it would be necessary to ask applicants who were in a position to benefit from its adoption to specify all relevant dates, the question of costs being reserved as far as they are concerned.
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