3.

Articles 6 and 7 of Commission Regulation No 1725/79 are central to the dispute. Those articles provide for special prior inspections to be carried out by the importing State with a view to ensuring that feedingstuffs delivered in bulk are actually used for the purposes laid down in the regulation. It is clear that, because of those inspections, aid to exporters is paid later than that paid in respect of products sold on the domestic market. It is also certain that as regards exports from the Netherlands to Belgium the delay is about one month. Nor can it be denied that this makes the aid granted in respect of imported products less favourable than that paid in respect of products sold on the domestic market. In Dankavit's opinion, that situation is illegal. By adopting those measures, it contends, the Commission has in the first place infringed Regulation No 804/68 of the Council which enabled it to enact implementing provisions. It also considers that the Commission has infringed a series of provisions of the Treaty: (a) Article 34, which prohibits the introduction of measures, including measures taken by the Community institutions, which have an effect equivalent to quantitative restrictions on exports; (b) the second paragraph of Article 40 (3) which provides that the common organization of the market is to exclude any discrimination between producers or consumers within the Community: and (c) Article 43 (3) (b), which provides that any such organization is to ensure conditions for trade within the Community similar to those existing in a national market. The Commission, the plaintiff continues, has also infringed the principle of proportionality, because the delay in paying aid in respect of exports is not necessary to attain the objectives pursued by the inspections provided for in Regulation No 1725. I shall now consider these criticisms more calosely. Article 10 of the basic regulation (No 804/68) provides that the rules governing the granting of aid for skimmed milk and skimmed-milk powder are to be adopted by the Council (see paragraph (2)), while the Commission is to adopt, after consultation with the Management Committee for Milk and Milk Products, the detailed rules for the application of the system (paragraph (3)). The Council laid down the general rules in Regulation No 986 of 15 July 1968. For its part, the Commission adopted the measures within its area of responsibility by means of the aforementioned Regulation No 1725 (which replaced Regulation No 990 of 15 May 1972). In Denkavit's view, however, the inspections provided for in that regulation (Articles 6 and 7) are not in conformity with Regulation No 804. It concedes that that regulation presupposes that it is in the Community interest for skimmed milk and skimmed-milk powder intended for use in animal feeds actually to be used for that purpose and it is for this reason that payment of the aid is conditional upon the appropriate proof being furnished. Denkavit adds, however, that it certainly docs not accept that that interest can be guaranteed by the adoption of rules contrary to the Treaty or to general principles. The measures in question are contrary, in the first place, to Article 34 of the Treaty and to the second indent of Article 22 (1) of Regulation No 804 which, confirming the provisions of that article of the Treaty, prohibits, as regards the common organization of the market in milk and milk products, any quantitative restriction or measure having equivalent effect. In fact, Articles 6 and 7 create obstacles to intra-Community trade by increasing the cost of exported goods in comparison with goods sold on the internal market. They are thus measures having equivalent effect. That argument is wide of the mark. In the first place Article 6 of Regulation No 1725 imposes the requirement of inspections as a precondition for the payment of aid in respect of all feedingstuffs in bulk, whether they are exported or marketed domestically. In other words, the Commission considered it indispensable in both cases to ensure that deliveries were made to concerns which used feedingstuffs and to make payment of the aid conditional upon the production of documents which proved that fact. There is thus only one difference between the two cases, and that is provided for in article 7 with regard to the delivery of feedingstuffs “in a Member State other than the selling Member State”. It deals with the type of document which must be produced in order to obtain the aid: document T 5 or, in trade between the Netherlands and Belgium, the Benelux 5 document. It is precisely the circulation of this document which gives rise to delays in the payment of aid, since it must be certified by the authorities of the importing country. However, such delays are justified. For objective reasons, marketing within a Member State and intra-Community exports cannot be treated in the same way. As the Agent for the Commission observed during the oral procedure, where products are sold in bulk the risk of fraud is much greater in the case of exports. Supervision is therefore more difficult. It was that difficulty, above and beyond the fact that considerable sums are granted to producers of feedingstuffs processed from milk powder, which led the Commission to prescribe prior supervision. Furthermore, the Court has already dealt with document T 5 in relation to aid for skimmed-milk powder and has recognized its essentially verificatory function in its judgment of 7 February 1979, in Case 18/76, Federal Republic of Germany v Commission ([1979] ECR 343). The Court stated that in order to prove that the goods have been placed under control in the exporting country, “The Community rules... are drawn up in terms which do not give the national authorities the option of accepting any other proof... than the formal proof” provided by “The control copy of the transit document correctly completed and stamped”. Admittedly, that case was concerned with a particularly rigorous set of rules but — the Court added — the Community provisions have a specific objective: “to exclude the possibility of double payment” (in respect of both domestic and export transactions), “and the possibility of the goods being returned to ordinary commercial channels” (paragraph 20).