61978C0122
OPINION OF MR ADVOCATE GENERAL CAPOTORTI
DELIVERED ON 30 JANUARY 1979 (
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Mr President,
Members of the Court,
1.
It is well known that in the context of the common organization of agricultural markets the importation and exportation of products subject to a single-price system take place on the basis of the relevant licences, having a fixed period of validity, the issue of which is conditional upon the giving of a security. The essential function of that security is to guarantee fulfilment of the obligation to import or export during the period of validity of the licence, as is stated in the sixth recital of the preamble to Regulation (EEC) No 193/75 of the Commission of 17 January 1975. According to Article 17 (2) of that regulation release of the security is subject to production of proof of completion of the customs import or export formalities. Article 3 of Commission Regulation (EEC) No 499/76 of 5 March 1976 added a further paragraph to Article 18 of Regulation No 193/75, providing that where the proof referred to in Article 17 has not been furnished within the six months following the expiry of the licence, the security shall be forfeit save in case of force majeure. The third recital of the preamble to that regulation states that that provision was introduced ‘for administrative reasons’.
In November 1976 the French company Buitoni obtained, subject to the provision of security, import licences for tomato concentrates coming from Third countries. It then imported the goods within the period of validity of the licences. However, through an oversight on the part of its adminstrative department, proof of importation was supplied to the competent French intervention agency some five weeks following the expiry of the said period. The French intervenion agency, although not contesting the regularity of the import transactions effected by Buitoni, decided that the delay in furnishing the proof prevented it from granting the request that the security provided by the said company be released. In consequence it declared that security to be forfeit.
Buitoni took action against that decision before the Tribunal Administratif, Paris, claiming the invalidity of the said Article 3 of Commission Regulation No 499/76. That court, by judgment of 22 March 1978, referred to the Court of Justice a request for a ruling, under Article 177 of the EEC Treaty, on ‘the validity and interpretation’ of the above-mentioned article.
The full extent of that request for a preliminary ruling can be understood only by reference to the submissions which the company concerned put forward in bringing its action before the Tribunal Administratif, Paris, since the grounds of the latter's judgment refer expressly to the difficulty of replying ‘to the submissions put forward in the application’.
According to the arguments put forward by Buitoni, therefore, Regulation No 499/76 provided for a penalty which neither the Commission nor the Council was empowered to lay down. Forfeiture of the security might indeed be considered a logical and adequate measure in the case of a failure to fulfil the obligation which the security is intended to guarantee, but it is a quite different form of penalty if inflicted in circumstances such as those of the case in point, punishment being in respect of delay in furnishing certain documents, and not failure to fulfil the obligation to import the goods within the period laid down.
Furthermore, the plaintiff in the main action maintained that it is contrary to the principle of proportionality to punish in the same manner failure to fulfil an obligation and mere delay in furnishing proof of its fulfilment. The said Regulation No 193/75 took account of the principle of proportionality in providing (at Article 18 (2) and (3)) for the partial release of the security in proportion to the quantities actually imported or exported, to those who only partially fulfil their obligations. It is therefore said to be unacceptable that a trader who has fully discharged the obligation to import — albeit omitting to furnish proof thereof in good time — should suffer a penalty which is more severe than that inflicted in the event of partial failure to fulfil the same obligation. The principle of equality of treatment is also said to be disregarded.
Finally, the plaintiff in the main action maintained that Article 3 of Regulation No 499/76 is contrary to the purpose and spirit of the Community system of securities. If it is the case that the objective of that system is to induce traders to fulfil their obligation to import or export it is said to be completely unjustified to extend the forfeiture of the security to cases in which that obligation has been fulfilled.
2.
Such, therefore, are the considerations on which the national court based its request to the Court of Justice to give a preliminary ruling on the validity of Article 3 of Regulation No 499/76. However, in formulating its request the Tribunal Administratif, Paris, also mentioned the interpretation of the said article; this point should be settled immediately in order to clear the field of a false problem.
The plaintiff in the main action believes that if the contested provision is judged to be valid the possibility will remain of giving it a ‘liberal’ or ‘just’ interpretation, so as to enable it to recover the security which it has paid. In fact the said plaintiff was not able to indicate what meaning could be given, in that case, to the said Article 3 in the light of the criterion of natural justice relied upon; it would really like that article to be applied to its situation with great latitude, to the extent of classifying as a case of force majeure its internal administrative disorder during the holiday period. The reply may simply be made that the national court, and not the Court of Justice, is competent to apply the Community rule in question to the actual case in point; the problem of interpretation can be approached here only in general terms. If, therefore, it is thought that the court making the reference intended to request the interpretation of the words ‘save in case of force majeure’, which appear in the text of the said Article 3, it may equally simply be replied that the concept of force majeure refers to abnormal circumstances beyond the control of the individual, who may rely upon force majeure in order to avoid an obligation or negate his own liability (cf. judgments of 1 July 1968 in Case 4/68, Schwarzwaldmilch [1968] ECR 377; of 17 December 1970 in Case 11/70, Internationale Handelsgesellschafi [1970] ECR 1125; of 30 January 1974 in Case 158/73, Kampffmeyer [1974] ECR 101; of 15 May 1974 in Case 186/73, Norddeutsches Vieh- und Fleischkontor [1974] ECR 533; of 28 May 1974 in Case 3/74, Einfuhr- und Vorratsstelle für Getreide und Futtermittel [1974] ECR 589 and of 20 February 1975 in Case 64/74, Reich [1975] ECR 261). It seems to me, however, that an internal malfunction within a commercial company during the summer holiday period cannot be deemed to be a case of force majeure. If, finally, the doubts of the national court relate to the determination of the supposed margin which Article 3 might leave to the discretionary assessment, on the basis of natural justice, of the national administration or the national courts, the reply can only be in the negative; no such margin of discretion is imparted by that article.
3.
I shall now turn to the problem of the validity of the provision under examination, summarizing the arguments of the Commission. In its written observations the latter defended the legality of Article 3 of Regulation No 499/76, its main contention being that that provision became necessary in order to achieve two objectives: to align the various administrative practices in the Member States in relation to the conditions and time-limits for the release of securities and to establish a term for the final closure of each individual file.
Subsequently, during the oral procedure, the Commission adduced a third point, scarcely mentioned in its written observations, emphasizing the informatory function which has evolved from the import and export licence system. It alleged that that system should, inter alia, enable the Commission to follow developments on the market with precision; the fixing for the whole Community of a single period within which operations relating to the transactions guaranteed by the security must be completed is said to guarantee the proper implementation of that function. The Commission maintained that it is only through the production of proof by importers and exporters that the national and Community bodies are able to obtain precise information regarding the number of transactions completed on the basis of the licences. The severity of the penalty for those who do not furnish that proof within the period specified may be justified, according to the Commission, with reference to the importance of the Community interest in the implementation of the informatory function. Indeed, when proof is not furnished the Commission is led to believe that the transactions to which specified licences related have not taken place; this falsifies its knowledge of economic reality.
As regards the first point — the desirability of aligning administrative practices within the Member States relating to the release of securities — the Commission merely stated that certain national administrations had shown more rigour than others, but cited no precedent during the period prior to the adoption of the provision in dispute for the forfeiture of security at the order of a Member State for mere delay in furnishing proof. Furthermore, the rigorous solution adopted in Article 3 of Regulation No 499/76 was not the necessary outcome of the requirement of aligning national procedures.
In fact, as appeared during the oral procedure, the second point in the Commission's argument carried a great deal more weight than the first in the context of its defence. I am referring to the administrative necessity of closing files remaining open within a certain period; and I would remind the Court that the third recital in the preamble to the said regulation justifies the rule in Article 3 by reference to ‘administrative reasons’.
There can be no doubt that it is a reasonable practical requirement for any administration that matters dealt with by that administration should not be left pending indefinitely. Buitoni has not contested the legitimacy of that requirement, nor therefore the legitimacy of the fixing of an administrative time-limit for the furnishing of proof of each import or export. Nor has the length of the period fixed by the said Regulation No 499/76 been put in doubt; the Commission has remarked with justification that a period of six months is reasonable. It is equally reasonable that the period should represent a merely administrative time-limit rather than a time-bar, as the Commission has also emphasized: the practical consequence is that proof of completed transactions may be produced even after the expiry of the period. But none of this in any way affects the separate assessment of the penalty applied to those who do not observe the period: the decisive question in the case with which we are concerned is the reasonableness of the penalty, not that of the administrative time-limit.
Finally, with regard to the informatory function, which the Commission attributes to the licence system, it cannot be said that knowledge of the market situation depends upon the furnishing in good time of proof of completion of import or export transactions relating to goods subject to the requirement of a licence. The information supplied by the Commission in reply to questions put to it during the hearing confirm that the customs authorities of the Member States keep the Commission informed of all imports and exports of the various categories and types of goods. Such information is exhaustive as regards the quantities of goods involved and enables the Commission to form an impression of market trends and of the flow of trade. What it does not permit is the identification of those undertakings which have fulfilled the obligation to import or export which is inherent in the licence system at issue. The informatory function therefore appears to be limited to the transmission of the documents necessary to distinguish, in the context of the general movement of goods of which the Commission already obtains information from the national customs offices, transactions effected on the basis of import or export licences and, in particular, to identify those undertakings which have fulfilled the obligations connected with those licences. Having said that, I am of the opinion that so secondary and limited an informatory function is not of sufficient importance to justify the heavy penalty of forfeiture of the security in the case of delay in the submission of licences. I think it should be stated that if the Commission had from the beginning envisaged a strict connexion between the informatory function, the obligation to furnish documentary evidence of the completion of transactions within a given period and the penalties relating thereto, that connexion should have been evident from the statement of reasons for the contested regulation, which is in fact silent on that matter.
4.
The key to the solution of the problem under consideration lies in the assessment of the penalty laid down by Article 3 of Regulation No 499/76 in the light of the principle of proportionality, according to which any burden placed on those affected by Community rules must lie within the limits necessary for obtaining the objective sought and require the least possible sacrifice on the part of those concerned. It is scarcely necessary to note this is now a settled principle of Community law (from the case-law of this Court it is sufficient to cite the judgments of 13 July 1962 in Case 19/61, Mannesmann [1962] ECR 357, of 17 December 1970 in Case 25/70, Einfuhr- und Vorratsstelle für Getreide [1970] ECR 1161, of 24 October 1973 in Case 5/73, Balkan-Import-Export [1973] ECR 1091, of 13 November 1973 in Joined Cases 63 to 69/70, Werhahn [1973] ECR 1229, of 11 May 1977 in Joined Cases 99 and 100/76, De Beste Boter and Hoche [1977] ECR 861 and of 5 July 1977 in Case 114/76, Bela-Mühle [1977] ECR 1211). I would draw particular attention to the judgment of 11 May 1977 in Joined Cases 99 and 100/76, because that case concerned the problem of a deposit in an agricultural matter in relation to observance of the principle of proportionality, where it was decided that the limit of what was appropriate and necessary to attain the objective desired was not exceeded in view of the fact that in that case forfeiture of the deposit could not be regarded ‘as in the nature of a penalty for not fulfilling an independent obligation’ (paragraph 11 of the Decision).
Since we are here attempting to establish the proportion between the means (the system of licences) and the end, it is clearly necessary to start by identifying the end sought by that system. I have already had occasion to cite the sixth recital of the preamble to Regulation No 193/75 of the Commission of 17 January 1975, according to which the security is ‘calculated to guarantee that the obligation to import or export will be fulfilled during the period of … validity [of the licences]’; that statement is all the more important in that Regulation No 193/75 was intended to ‘consolidate’ the existing rules in the matter of import and export licences from the time of Regulation No 1373/70 of the Commission of 10 July 1970 (cf. the second recital of the preamble to Regulation No 193/75). For its part, this Court has already held, precisely with reference to Regulation No 1373/70, that ‘the system of lodging security is designed to ensure that imports or exports … are effected’. There can therefore be no doubt as to the purpose of the system of securities, in connexion with the system of impon and export licences; the logical and legal consequence of this is the legality of forfeiture of the security in the event of the intended transaction's not being effected.
Evidently, however, failure to fulfil the obligation voluntarily entered into to import or export within a given period is one thing; failure to furnish, within the period laid down by Regulation No 499/76, the documentary proof of importation or exportation is quite another. To extend to the second failure the penalty laid down for the first, that is to say forfeiture of the security, involves the use of the means relating to the system of securities for something other than its original purpose; it involves (to use the words of the said judgment of 11 May 1977) regarding forfeiture of the deposit as being in the nature of a penalty for not fulfilling an independant obligation. Two comments should be made in this connexion.
In the first place, if the failure to furnish proof is due to the fact that the intended transaction has not been effected, it is that latter circumstance which determines the forfeiture of the security; a rule such as that of Article 3 of Regulation No 499/76 is therefore justified only if it is desired that failure to furnish proof should be penalized per se, independently of whether importation (or exportation) has been effected or not. In the second place, prior to the adoption of Regulation No 499/76, the system of securities had been in force for a long time, and naturally failure to fulfil the obligation to export or import was penalized by forfeiture of the security, while the impossiblity of recovering the security until proof that the transaction had been effected was furnished prompted undertakings to furnish such proof without undue delay. The real innovation introduced by the said regulation is that an individual who has fulfilled the obligation entered into, but has allowed the ‘administrative’ time-limit fixed for the submission of documentary proof to pass without taking any action also loses his security.
So severe a penalty in relation to a purely formal omission, which is much less serious than that of failure to fulfil the obligation which the security is intended to guarantee, appears to me to be excessive and I do not believe that it can be justified with reference to the inconvenience caused to the administrative authorities by having to keep open a file rather than closing it definitively six months after the expiry of the validity of the licence.
The Commission states that is is apprehensive of the difficulties which might be caused in the functioning of its departments by allowing traders to furnish the requisite proof for release of a security at any moment. But this statement can be countered above all by consideration that it is in the interests of any undertaking to secure the release of the security as soon as possible, even where that security has been given merely in the form of a bank guarantee since, in general, there is no reason for thinking that banks offer their clients services without requiring some form of consideration in return. Furthermore, I would note that between allowing proof of completed transactions to be furnished without any time-limit and the draconian rule of Article 3 of Regulation No 499/76 there is an intermediate solution: to lay down, as has been done, an administrative time-limit for the furnishing of proof; and to sanction noncompliance therewith by a penalty for default proportional to the delay (and therefore increasing with the extent of the delay, but on the basis of a reasonably lenient point of departure). In that way undertakings would have a further reason for observing the period, and the administration would be compensated for the inconvenience caused by any delay.
The fact that it is clearly possible to achieve the desired aim by the adoption of measures which are considerably less onerous for those concerned persuades me that the measure in question is contrary to the principle of proportionality and therefore invalid.
5.
For the above reasons it is my opinion that the Court of Justice should reply to the question referred to it by the Tribunal Administratif, Paris, by judgment of 22 February 1978, by ruling that Article 3 of Commission Regulation No 499/76 of 5 March 1976 is invalid.
(
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)	Translated Írom the Italian.