6.

I now come to consider whether or not the legal rules applicable to the security, and in particular the rule on the basis of which the entire amount of the security is forfeit if the imported beef is not processed in due time, is contrary to the principle of proportionality and the principle of equality. In the submission of the importing undertaking the provision that the security must be forfeit in its entirety, both when the beef is processed late and when it is not processed at all, constitutes a breach of the principle that the offence and the penalty must be proportionate. In its view the delay in processing is punished with excessive severity whilst it would have been more proper and in accordance with the criterion of proportionality to draw a clear distinction between late compliance and complete failure to comply and to graduate the penalty in accordance with the significance of the delay in using the beef. The same criticism is also advanced as a breach of the principle of equality: the fact that the regulation makes provision for the forfeiture of the security in all cases without distinguishing the various cases of failure to observe the time-limit amounts to according identical treatment to situations of varying seriousness. In support of that argument Merkur relies upon the case-law of the Court of Justice, in particular the judgment of 21 June 1979 in Case 240/78, Atalanta v Produktschap voor Vee en Vlees. The point at issue in that case was whether Article 5 (2) of Commission Regulation No 1889/76 which provided for the complete forfeiture of securities furnished in order to obtain the Community aids for producers of pigmeat if such producers failed to fulfil the obligations undertaken by them in the contracts concluded with the national intervention agencies was in accordance with the principle of proportionality. The Court held that “the absolute nature” of those provisions was contrary “to the principle of proportionality in that it does not permit the penalty for which it provides to be made commensurate with the degree of failure to implement the contractual obligations or with the seriousness of the breach of those obligations” (paragraph 15 of the decision, [1979] ECR 2137 in particular at p. 2151). The plaintiff in this case claims that Article 1 of Regulation No 572/78, like Ariele 5 of the said Regulation No 1889/76, does not permit the penalty to be made commensurate with the gravity of the shortcoming and deduces from that that the article is contrary to the principle of proportionality. It must first of all be emphasized that the forfeiture of the security provided for by Regulation No 572/78 is not in the nature of a penalty but constitutes at the most a form of withdrawal of the benefit granted to importers by Regulation No 805/68 and the implementation of the general obligation to pay the levy fixed by the Common Customs Tariff. In that state of affairs there would be no justification for graduating the amount of the levy in accordance with the greater or lesser delay in processing the imported meat. The decisive element which terminates the period of suspension of the obligation to pay the levy is in fact constituted by noncompliance with one of the conditions to which the suspension itself is subject (that the imported beef should be used in the manner laid down and within the prescribed period). It is reasonable that whatever the conditions upon which a special benefit depends are not fulfilled the benefit itself should be definitively withdrawn and the obligation to make payment be revived in its entirety. If, furthermore, the reasons of an economic nature which form the basis of the special arrangements concerning the security introduced by Regulation No 572/78 are examined further confirmation is provided of the fact that it would not be reasonable to graduate the amount of the levy in accordance with the (variable) delay in processing or of the failure to process. We have in fact seen that the benefit of suspension of the levy can perform its function of ensuring that the processing industry is competitive with rival industries outside the Community only if the suspension is restricted to a short period of time. It must accordingly be found that if that benefit were extended beyond three or four months the consequences for the market in beef and veal might be the very opposite of the objectives pursued by the Commission. This finding goes to show the unreliability of the argument that the amount of the levy should be reduced when the imported meat is used late and imposed in its entirety only if the intended processing is not carried out at all. The interpretation of Article 1 of Regulation No 572/78 which appears to me to be correct and which takes account of the objectives of economic policy pursued by the Commission in controlling the market in beef and veal is confirmed by the case-law of the Court of Justice. It seems to me relevant in this connection that the judgment of 26 June 1980 in Case 808/79, Pardini, ([1980] ECR 2103) recognized that it is necessary for the authorities entrusted with the management of the common organization of the markets to have available precise forecasts on future imports and exports, and stated that traders who take advantage of the benefits of the system must also bear the disadvantages which arise from the necessity, on the part of the Community, of preventing any abuse (paragraphs 17 and 21 of the decision). That case was concerned to establish whether or not the rule contained in Regulation No 193/75 of the Commission, to the effect that an exporter from whom an export licence or advance fixing certificate has been stolen may not obtain a new licence or certificate, was justified with regard to the requirements of supervision; the Court ruled that the risk borne bytraders was proportionate to the requirements which the rule was intended to meet. In two important respects it is above all possible to discern a certain analogy between that case and the present case: first in so far as it was recognized that the Commission, in order to perform its duties relating to economic policy, must have available precise forecasts on the development of the market and, secondly, inasmuch as it was stated that the exclusion of the right of the trader to obtain a copy of the missing licence was not in breach of the principle of proportionality even though a rule of that nature is intended to operate strictly and automatically. Finally, it appears to me appropriate to emphasize that the determination of the length of the period within which the imported beef must be processed follows from a technical appraisal which the Commission is entitled to make. In the course of the procedure, and in particular during the oral procedure, the Commission has provided ample explanation of the reasons for its choice; it seems to me that when detailed explanations are provided and on the other hand there are no clear and persuasive indications to the contrary it is reasonable to have regard exclusively to the choices of economic policy adopted by the Commission. I cannot see in a situation of this kind how it is possible to deny that the suspension of the levy is appropriate for attaining the objective of economic policy for which it was provided only if it is restricted to a certain period which must not be excessively long.