61970C0016
OPINION OF MR ADVOCATE-GENERAL ROEMER
DELIVERED ON 13 OCTOBER 1970 (
1
)
Mr President,
Members of the Court,
The two references for preliminary rulings (Cases 16/70 and 17/70) which were debated during the same hearing on 16 September 1970 and on which I must today deliver an opinion relate to the interpretation of Regulation No 1134/68 (OJ Special Edition 1968 [II] p. 396) adopted by the Council on 30 July 1968 within the framework of the common agricultural policy. In order properly to understand the problems to which it gives rise the following observations may be of assistance.
As we know from other cases, the essential characteristic of the common organizations of the agricultural markets is the regulation of prices. The common prices are expressed therein in units of account the value of which was fixed by Regulation No 129 of the Council of 23 October 1962. In relation between individuals and the national administrations entrusted with the implementation of the regulations relating to the agricultural markets such prices together with other elements (levies, refunds and the prices on world market) are generally converted into national currency in accordance with the official parities and only amounts expressed in national currenly appear in official documents. Other cases have brought to our notice that in various situations sums which must be paid to or by individuals (levies and refunds) may be fixed in advance and in this connexion the periods of time applicable are of variable length (here I refer to what appears in the Commission's statement at pages 5, 6 and 7 of the French version). It is self-evident that when such sums are thus fixed in advance, as very often happens, a subsequent alteration either to the value of the unit of account or to the parity of the currency of the Member States or of third countries may involve disturbances if transactions are nevertheless carried out on the basis of the advance fixings. In fact the amounts expressed in national currency are not always adjusted in terms of those fluctuations which amounts to saying that they no longer correspond to the ratio previously established between the parity of the national currency and the value of the unit of account. In providing that the Member States are to apply the principle of nominalism, the Commission showed that this was so in the present case and that it consequently imperilled a principle essential to the Common Market: the principle of the uniformity of price relationships.
In order to obviate these problems the Council adapted Regulation No 653/68 of 30 May 1968 (OJ Special Edition 1968 [1], p. 121) and Regulation No 1134/68. The former relates to alterations to the value of the unit of account within the framework of the common agricultural policy and to measures for the adjustment of the various agricultural prices together with the amounts referred to in Article 1 of Regulation No 129. Regulation No 1134 was adopted in implementation of Article 6 of Regulation No 653 paragraph 1 (c) of which provides that ‘The Council, acting … on a proposal from the Commission shall adopt … rules to be applied where there is an alteration in the relationship between the parity of a Member State's currency and the value of the unit of account with respect to amounts fixed in units of account and expressed in national currency’. This implementing provision lays down the methods for recalculating and adjusting certain amounts which are calculated in terms of the prices prevailing on the international markets (including certain amounts fixed, such as those for levies and refunds) if there is an alteration in the parity of the currencies (of Member States or of third countries), an alteration to the value of the unit of account or an adjustment of agricultural prices. Furthermore, in order to protect those persons who have obtained an advance fixing for certain transactions and who, after the alteration, would have been obliged to effect on altered conditions transactions still to be carried out, the various provisions of the regulation (Articles 1, 2 and 4) provide that such persons may by application to ‘the competent authority within thirty days of the entry into force of the measures fixing the recalculated amounts, obtain cancellation of the advance fixing and of the relevant document or certificate’. This provision entered into force on 4 August 1968. There is, however, another vital point: under Article 7 of the regulation the system in question is to apply to all transactions ‘carried out from the date of its entry into force’. This amounts to saying that in order to exclude all risk of disturbances the Community legislature has extended the scope of the regulation to advance fixings previously requested when the provision in question was not yet in force and when the persons concerned who had obtained them could not have expected an alteration of the amounts or cancellation of their certificates. Since it affected existing legal relationships, such an extension of scope clearly required that transitional arrangements be made in order that the persons concerned might take into account the new risk and, if they so desired, protect themselves against it. This was also laid clown by Article 7 which provides as follows: ‘However, any person who before that date has obtained advance fixing or concluded an agreement with an intervention agency for a transaction still to be carried out after that date may, by written application which must reach the competent authority within thirty days of the entry into force of this regulation, obtain cancellation of the advance fixing and of the relevant document or certificate, or cancellation of the agreement’.
This provision on which the Court is asked to give a ruling in the present case.
You are aware of the points at issue arising from that interpretation. The Hoofdproduktschap voor Akkerbouwprodukten (the Netherlands agency under public law with administrative duties in the economic sphere and having in particular various powers within the framework of the organizations of the agricultural markets) notified the plaintiffs in the main actions of the new provisions through a circular letter giving the date on which that system would enter into force. This circular letter reached the plaintiffs on 28 August 1968 and furthermore stated that according to the interpretation of the Minister for Agriculture and Fisheries, with which the Hoofdproduktschap agreed, there were four conditions for the application of Article 7 of Regulation No 1134/68. Two of them require the consideration of the Court today: first, that in accordance with which the cancellation may relate only to amounts not yet imported or exported when the application was lodged and secondly, that in accordance with which between 3 August and the day of lodging the application no import or export might be made within the framework of the fixing in question. In fact, the provisions thus notified are important to the plaintiffs because of the fact that before the entry into force of those provisions they had requested and obtained advance fixing of export refunds and that, since they had not yet entirely exhausted the certificates obtained for this purpose, it was still possible to use them after the entry into force of the regulation. More precisely (in the case of the plaintiff in Case 16/70 the question turns on the advance fixing of a refund which was obtained on 29 April 1968 and was valid until 31 March 1969 for exports of malt, 1520 metric tonnes of which remained to be exported on 4 August 1968. In April and May 1968 the applicant in Case 17/70 obtained the advance fixing of various refunds relating to the export of products manufactured from barley and oats. The certificates relating to those exports were valid until 31 August 1968 and 30 September 1968 respectively. The decision making the reference (page 16 of the original Dutch text) states the quantities covered by those certificates still outstanding on 4 August 1968. If it is conceded that the conditions notified by the Hoofdproduktschap to the plaintiffs are relevant, there is no doubt that it was impossible for them to benefit from the option to cancel laid down in Article 7 of Regulation No 1134/68 since in fact it has carried out further exports after 4 August 1968 on the basis of the certificates issued before that date. (Full details of this point also are contained in the decision making the reference). On 2 September 1968, however, after receiving the circular letter the plaintiffs approached the Produktschap voor Granen, Zaden en Peulvruchten (that is to say, the Netherlands agency empowered to implement the provisions in question) for the cancellation of their certificates in so far as they were not yet entirely used at 4 August 1968. Likewise, on 2 September 1968 they made an additional protest to the Hoofdproduktschap against the tenor of the circular letter, declaring that they considered it to be incompatible with Regulation No 1134/68 of the Council, at least with regard to the two abovementioned conditions. Both their claims were rejected. We are aware that by decisions of 9 and 17 September the Produktschap voor Granen, Zaden en Peulvruchten, far from rejecting the argument contained in the Hoofdproduktschap's circular letter, dismissed the applications for cancellation in so far as the certificates in questions had been used after 4 August 1968 and before lodging the applications. This decided the undertakings concerned to apply on 7 October 1968 to the College van Beroep voor het Bedrijfsleven (the appropriate Netherlands court for settling disputes relating to economic legislation to which public agencies are parties). The object of those actions is to obtain the annulment of the circular letter in dispute together with the decisions rejecting their applications for the cancellation of the certificates, to obtain a ruling that those applications should be granted and, at least with regard to the plaintiff in the main action in Case 16/70, to obtain damages for the injury suffered. The College van Beroep declared first of all that the submissions .made to it were inadmissible in so far as they related to the Hoofdproduktschap's circular letter. In addition, since it considered that the plaintiffs' claims could only be appraised on the basis of an interpretation of Community law (in this case Article 7 of Regulation No 1134/68) and that it is a court of final instance, the College van Beroep suspended proceedings and, by a decision of 10 April 1970 requested the Court under Article 177 of the EEC Treaty to give a preliminary ruling on the following questions:
(1)
Does the correct interpretation of the second paragraph of Article 7 of Regulation No 1134/68 of the Council of the European Communities imply that the cancellation provided for in this provision refers exclusively to the entire quota still remaining on 4 August 1968 to which the advance fixing relates?
(2)
If the reply to Question (1) is in the affirmative, is cancellation also available if, between 4 August 1968 and the dates of lodging the application for cancellation, the quota to which the advance fixing relates has been entirely or partially imported or exported, or is it only possible if no import or export has been effected within the framework of the said fixing between 4 August 1968 and the date of lodging the application for cancellation?
(3)
If the reply to Question (1) is in the negative, does the correct interpretation of the second paragraph of Article 7 imply that cancellation of the advance fixing is permissible with regard to the balance of the quota outstanding at the date of lodging the application or cancellation or for a part thereof, even if part of the quota to which the advance fixing relates was imported or exported between 4 August 1968 and the date of lodging the application for cancellation?
(4)
if the reply to question (1) is in the negative, must the second paragraph of Article 7 be taken to mean that it is also possible to cancel the advance fixing with regard to one or more import or export transactions which were effected between 4 August 1968 and the date of lodging the application for cancellation?
Such are the questions on which I shall endeavour to give my opinion, on the basis of the written observations submitted by the plaintiff in the main action in Case 16/70, the two defendants, the Commission and the Netherlands Government and on the basis of the oral arguments presented at the hearing by the parties to the main actions and by the Commission.
1.
With regard to the first question, whether the cancellation provided for in the second paragraph of Article 7 of Regulation No 1134/68 may only relate to the entire quota for which the advance fixing was granted and which is still outstanding on 4 August 1968, the plaintiffs in the main action and the Commission consider that a negative reply must be given whilst the defendants in the main actions and the Netherlands Government advocate an affirmative reply.
In broaching this problem, which is moreover inseparable from Questions (3) and (4), one argument may certainly be dismissed from the outset: this is the argument which the plaintiffs base on the administrative practice followed in other Member States. If, in fact, this argument is of no assistance to them, it is not only because it was not fully clarified in the main proceedings but principally because it is impossible to rely on the weight of examples in interpreting legal provisions and consequently, although reference to a prevailing administrative practice may have a certain value, it constitutes at the most indication.
As is always important in matters of interpretation, let us begin by considering the wording of the provision in question and see what indications may be derived from it. The defendants in the main actions and the Netherlands Government emphasize in particular that the wording of the second paragraph of Article 7 concerns a transaction still to be carried out after that date (that is to say, after 4 August 1968) and for which an advance fixing has been obtained and that the provision mentions the cancellation of the advance fixing and of the relevant document or certificate. They observe that it is drafted in the same way as the analogous provisions inserted in Article 1 (2), Article 2 (2) and the second subparagraph of Article 4 (1) of Regulation No 1134/68: in those provisions also the word ‘transaction’ appears only in the singular. They consequently assert that it seems logical to consider that the obligation to export arising from an advance fixing, which still remains on 4 August 1968, forms an entity and does not relate to the various export procedures to be completed within the context of that obligation. They add furthermore that the wording of Article 4 (1) (a) supports this view since with regard to the date of fixing the amounts in question reference is made to a transaction and moreover there is added the expression ‘part of a transaction’ which does not appear in Article 7. Indeed a certain logic cannot be denied those deductions for, as the defendants in the main actions emphasize, there is no longer any doubt that the expression ‘transaction’ appearing in Article 7 cannot refer to the export contract concluded with a customer, as it plainly does not relate in any way to the granting of the certificate. This is clear from the definition of the time for carrying out the transaction appearing in Article 6 of Regulation No 1134/68 which only considers the point when the obligation to export arises under the rules of public law and does not take into account the fulfilment of the obligations as they arise from the contract. Nevertheless, like the Commission, one cannot consider that the argument thus put forward is absolutely conclusive. First of all, it is certainly impossible literally to accumulate the sentences in which the cancellation of the certificate occurs and to consider this as forming an entity. This is recognized by the defendants in the main actions and the Netherlands Government themselves since in this connexion they only take into consideration the part of a transaction still to be carried out after 4 August 1968 and consequently divide the transaction, at least in this respect. Secondly I think that strictly speaking the definition which Article 6 gives for the word ‘transaction’ indicates that it necessarily relates to each of the stages of exportation since it is the completion of each of those stages which constitutes the occurrence of the event ‘on which the amount involved in the transaction becomes due and payable’. But as soon as it is recognized that this is indeed the case (and I consider that the wording of the provision in question does not leave the slightest doubt in this respect), one has no more difficulty than the Commission in also explaining why the word ‘transaction’ is only employed in the singular in Article 7. In any event I consider that it seems probable that the use of the singular originates in the need to use a general term encompassing all the acts listed in the annex to Regulation No 1134/68. In fact the draftsman of Article 7 might equally well have employed the following wording: ‘for an importation or an exportation still to be carried out after that date’, a formula which shows more clearly that it is dealing solely with the importation or exportation considered in isolation and that it does not relate to the obligation to import or to export considered as a whole. In addition, two very simple reasons also indicate that the second paragraph of Article 7 must indeed be understood in the way that I have just explained: first the meaning which the word ‘transaction’ bears in current usage, and secondly, the fact that the general, rule in administrative and commercial practice is that amounts entered on the certificate and those involved in the transaction do not generally coincide, in other words a certificate, far from being exhausted after a single transaction, is usually issued for a large number of transactions and in order to carry them out the amount entered on the certificate may be broken down if so desired. On the basis of a reasonable interpretation of the wording employed in the various provisions of Regulation No 1134/68, I am thus induced to favour the Commission's view or at any rate to state that it is indeed difficult to find a convincing reason for the interpretation advocated by the defendants and the Netherlands Government.
This is moreover why the latter rely on other considerations to which in my view they attach much greater importance. They refer again to the option to cancel worded similar terms in Articles 1, 2 and 4 of Regulation No 1134/68; they investigate the recitals in the preamble to the regulation for the reasons which decided the legislature to provide such an option and relate those reasons to Article 7 which is in question in the present case. In this connexion the following passage in the recitals is of particular significance to them: ‘such an adjustment must not prejudice persons who have obtained an advance fixing … and … they should therefore be allowed to cancel that fixing’. The defendants in the main action and the Netherlands Government deduce from this passage that the legislature was guided above all by the desire to avoid prejudicial effects. On the basis of this view they maintain the following line of argument: when an occurrence envisaged by the regulation in question arises, that is to say, an alteration of parities followed by the adjustment of the amounts of the levies and refunds and when it is possible immediately to estimate what the results will be, if the person concerned, instead of instantly applying for the total cancellation of the certificates not yet exhausted, carried out various further transactions and does not subsequently indicate an intention to avail himself of his option to cancel the certificates, this attitude shows that in fact the alteration of the amounts has not prejudiced him and if he endeavours to obtain cancellation it is for other reasons, for example, in order to obtain a benefit if the amount of refunds at the prevailing rate should be adjusted to his advantage. Such an action cannot be tolerated as it is not in accordance with the objectives of the law. The defendants supported by the Netherlands Government, claim that if this holds good within the framework of Articles 1, 2 and 4 it must also be so in the case of Article 7, which amounts to saying that if the conditions laid down are fulfilled the person concerned may not begin by using the outstanding certificates for a certain period before applying for their cancellation. This line of argument incontestibly carries weight but in the end it will be seen that it too is irrelevant. The first objection which can be made against it is that even within the framework of Articles 1, 2 and 4 that is to say within the framework of the option to apply for cancellation following the alteration in parities, it does not: seem completely correct. In fact it is by no means certain that if, on the adjustment of the amounts of the levies and refunds the person concerned did not immediately request the complete cancellation of the certificates fixed in advance but still outstanding, he has not been prejudiced in any way by such adjustment. It may also happen that, by not having applied for an immediate cancellation and having carried out various transactions on the basis of the new conditions, the person concerned is less prejudiced than he would have been if he had obtained an immediate cancellation, in other words contrary to the view of the Netherlands Government, even if the adjustment of the amounts of the levies and refunds fixed in advance is clearly unfavourable to the persons concerned, it is not inconceivable from an economic point of view that they should delay availing themselves of the option to apply for cancellation. There is, however, another basic finding which I must make and indeed it is more important than the foregoing: this is that, both with regard to the role played by the option to cancel and to the reasons which led the Community legislature to make provision for them, it must be wrong to identify Article 7 with Articles 1, 2 and 4. No doubt one may consider, as the defendants in the main actions and the Netherlands Government rightly do, that the aim of the provisions inserted in Articles 1, 2 and 4, which henceforth are permanent features of the arrangements for advance fixing of which the persons concerned were aware when they obtained the certificate, is to protect such persons against prejudicial effects presenting a real and current threat or to contain such prejudicial effects within certain limits: but it is undoubtedly incorrect to speak also of'prejudicial effect with regard to Article 7. What was envisaged in this case was that a new role made applicable to existing legal situations might give rise to a risk not previously existing (the risk of being obliged to accept on the alteration of parities the adjustment of amounts fixed in advance or the cancellation of the certificates in question). In order to be able to deal with this the persons concerned were given the option to apply for the cancellation of certificates issued before the entry into force of Regulation No 1134/68. This amounts to saying that the essential characteristic of Article 7 is that it constitutes a transitional provision which may be applied only to the case with regard to which legal reasons induced the legislature to establish it. In deducing this characteristic we have thereby discovered the factor which is conclusive for the definition of the scope of Article 7. I consequently arrive at the following decisive finding: by reason of the protective nature of such a provision which alone justifies the serious and unforeseeable effect on pre-existing legal relationships, the only conceivable interpretation is a wide one and not the narrow interpretation advocated by the Netherlands Government. It is also clear that this wide interpretation necessarily leads me to assert that the cancellation may relate to the entire quota still remaining at 4 August 1968 on the advance fixing certificate as also to the part of that quota.
This is the sole interpretation of the second paragraph of Article 7 of Regulation No 1134/68 which can be correct, as is indicated moreover by the following very important considerations. In fact the option to apply for the cancellation of a certificate breaks a fundamental rule relating to the issue of the certificates: that in accordance with which the person concerned is bound to carry out the transaction contemplated which the legislature has even ensured by providing for a deposit. Exceptions of this nature must be applied as restrictively as possible as this is the sole means of limiting the disturbances which they may involve in the functioning of the common organizations of the agricultural markets. It consequently appears that from the point of view of the common organizations of the markets as well, when the wording of the provision allows it, as is the case in the second paragraph of Article 7, such cancellation of certificates is permissible only if their interpretation is as restricted as possible.
I should finally like to observe that this is the only interpretation which provides a reasonable explanation for the length of the period of time provided by the second paragraph of Article 7. If it were considered that the sole option open to the persons concerned was either to refrain from applying for cancellation or to obtain the cancellation of the advance fixings for the entire amount still outstanding on 4 August 1968, a much shorter period would have sufficed to make this choice.
All these considerations, both on the basis of the letter and the spirit of the second paragraph of Article 7 of Regulation No 1134/68, consequently lead me to conclude that the first question must be given a negative reply; in other words to concur with the plaintiffs in the main actions and with the Commission in asserting that the cancellation obtained on the basis of Article 7 need not necessarily relate to the entire quantity still outstanding on 4 August 1968 to which the advance fixing relates.
2.
Since the second question was only put should the first receive an affirmative reply, the result of my examination ipso facto allows me to dispense with consideration of the problems which it raises.
3.
With regard to the third question whereby the College van Beroep requests the Court to rule whether an application may be made for cancellation of the advance fixing with regard to the quota still outstanding at the date of lodging the application for cancellation no matter what amounts have been imported or exported on the basis of the advance fixing between 4 August 1968 and the date of lodging the application, the Court will have no difficulty in resolving it if it adopts the reply which I suggest should be given to the first question. With regard to the third question the finding is in fact unavoidable that, if the persons concerned use an export certificate with an advance fixing after the entry into force of Regulation No 1134/68, this nevertheless does not preclude them from lodging an application for cancellation with regard to the remaining quantities. If this were not so the sole alternative with which they would in principle be faced would be either an immediate renunciation of any export for a certain period (more precisely, until the issue of new certificates) which, as we have seen, might involve disadvantageous commercial consequences, or not to make use of the option to apply for cancellation provided in the second paragraph of Article 7, which would mean that they were unable to take adequate precautions against the new risk to which Regulation No 1134/68 gives rise. There is no doubt, as I have shown above, that it would be difficult to reconcile this situation with the protective role which it was intended should be played by the transitional arrangements established by the second paragraph of Article 7. I wish to observe in addition that the persons concerned often do not control the date of customs clearance, that is to say, the date on which the goods are released from the customs. Consequently the carrying out of a transaction and the use of a certificate might occur after the entry into force of Regulation No 1134/68 although the holder of the certificate was unaware in advance of the date of export. There is a final consideration militating in favour of the interpretation which I put forward: this is that there is sometimes delay in the distribution of the Official Journal and consequently publication of the regulations in all the official languages at times takes place only after their entry into force. Moreover, according to the declarations of the plaintiffs in the main actions, this was so in the case of Regulation No 1134/68. It is clear that this constitutes yet another reason indicating why the certificates with advance fixings were used after 4 August 1968 without knowledge of the existence of Regulation No 1134/68. It is furthermore impossible to maintain that the use of such certificates is necessarily to be regarded as a renunciation of the option to apply for cancellation under the second paragraph of Article 7.
All these considerations consequently show that, as the plaintiffs in the main actions and the Commission have advocated, an affirmative answer must indeed be given to the third question.
4.
Finally, by its fourth question the College van Beroep also asks the Court to rule whether the option to apply for annulment under the second paragraph of Article 7 may be extended to exportations already effected, if in other words the cancellation may have retroactive effect, or if on the contrary it may only relate to amounts outstanding at the date of lodging the application. In this connexion the plaintiffs in the main action are alone in claiming that the provisions in question must be widely interpreted, which is to their advantage, although in the course of the hearing before the College van Beroep they declared themselves ready to concede that cancellation might possibly apply only to exportations not yet effected thereby conforming to the view maintained in all the other observations which have been submitted to you.
The reply to this point does not seem to me difficult.
Once again it is the Commission which has provided the decisive arguments. Those arguments are based essentially on the notion that since it constitutes a retroactive measure the cancellation of advance fixings relating to exports already properly effected and which exhaust the quantities entered on the certificates, is of an exceptional nature. The Commission declares that if the Community legislature had intended to make provision for this power it would have done so clearly and expressly and the regulation would consequently have contained unambiguous provisions on the documents for regularization which would have been necessary in such a case. Since the regulation has no provision of this nature it is clear that we can only conclude that the legislature did not intend it to have so wide a scope. Furthermore (and this is another point which the Commission has noted) we must not lose sight of the fact that implementation of the obligation to export which is concomitant with obtaining the certificates constitutes an essential element in the common organizations of the markets. Respect for the rule alone will avoid disturbing the system the proper functioning of which requires that a comprehensive view must always be taken of the developments of the market. It then appears that, although exceptions to the rule (such as the cancellation of certificates) may be contemplated, this is so only if they are contained within the strictest possible bounds. In relation to the present case this principle precludes the retroactive application of the cancellation to exports already effected.
Taking account of those considerations the reply to the fourth questions is likewise beyond all doubt.
5.
Summary
Here then are the replies called for by the questions which have been put to the Court by the College van Beroep voor het Bedrijfsleven:
(a)
The option to cancel provided for in the second paragraph of Article 7 of Regulation No 1134/68 does not necessarily relate to the entire quota still outstanding on 4 August 1968 to which a certificate of advance fixing relates;
(b)
Cancellation of the advance fixing may be obtained under the second paragraph of Article 7 of Regulation No 1134/68 amounts still outstanding at the date of lodging the application, whether such quantities were exported or imported on the basis of such fixing between 4 August 1968 and the day of lodging the application for cancellation;
(c)
On the other hand the advance fixing may not be cancelled with regard to import transactions effected between 4 August 1968 and the day of lodging the application for cancellation.
As is normal, it is unnecessary for me to express an opinion as to costs since it is for the court making the request to give a ruling on this point.
(
1
)	Translated from the French version.