OPINION OF MR ADVOCATE-GENERAL REISCHL

DELIVERED ON 7 MAY 1974 ( 1 )

Mr President,

Members of the Court,

The questions in Case 3/74 referred to you by the Bundesverwaltungsgericht concern problems with regard to the licence system laid down in the context of the organization of agricultural markets. The main point at issue is to determine at what point in time the obligation to import incumbent upon the importer and guaranteed by the furnishing of security can be regarded as fulfilled.

The Einfuhr- und Vorratsstelle für Getreide und Futtermittel, the defendant in the main action, issued to Firma Pfützenreuter, the plaintiff, on 3 February 1967, two import licences for a total of 500000 kg of French brewing barley, valid until 31 May 1967. In guarantee of this import the plaintiff furnished security of 10000 DM. Up to 24 May 1967 the plaintiff imported 260464 kg of brewing barley. On 31 May 1967 it presented a further 250000 kg, loaded on board ship, at the customs office at Emmerich-Hafen and requested clearance for transport under customs bond to the customs office at Düsseldorf. A certificate stating that the goods had crossed the frontier was delivered and the barley was presented to the customs office at Düsseldorf; it was unloaded there on 5 June 1967 and put into free circulation.

The reason why customs clearance for free circulation was not given at the customs office at Emmerich-Hafen is that, according to the uncontested statement of the plaintiff, on 31 May 1967 the necessary papers were in the post to the latter from the customs offices at Düsseldorf and Andernach, where they had been required for the customs clearance of the other partial imports.

By two decisions of 12 June 1967 the defendant declared security in the sum of 2386·33 DM to be forfeit by reason of the fact that part of the goods had not been imported before the time limit.

The plaintiff made an unsuccessful complaint against these decisions and then brought an action before the Verwaltungsgericht of Frankfurt-on-Main. The latter upheld the claim.

The defendant appealed and the Verwaltungsgerichtshof of Hesse confirmed the judgment of the Court of first instance.

In the grounds of its judgment the court held that: since the Community legislature has given no definition of the concept of importation, the provisions of national law are decisive. According to German law importation is completed when the goods have been transferred into the economic territory of the Federal Republic of Germany. The goods in question were so transferred before the expiry of the time limit, in that the barley was presented to the customs office at Emmerich-Hafen. The security should not therefore have been declared even partially forfeit.

The defendant brought an appeal upon a point of law against this judgment to the Bundesverwaltungsgericht. It based its case above all upon the Judgment of the Court of Justice of the European Communities in Case 35/71, Schleswig-Holsteinische landwirtschaftliche Hauptgenossenschaft ("Judgment of 15 December 1971, Rec. 1971, p. 1083), wherein it is stated that the concept of importation is to be interpreted according to Community law.

In response to this argument the plaintiff maintained that that Judgment referred to the final stage of the organization of agricultural markets and was concerned with the concept of importation in the law relating to import levies and not with that relating to licences, for which other considerations are decisive.

The Bundesverwaltungsgericht referred the following questions to the Court of Justice:

1. Is the concept of importation contained in Article 7 (2) of Regulation No 102/64/EEC to be interpreted: (a) According to national law? (b) If question (a) is answered in the negative: When is an obligation to import fulfilled, where the importer has declared the imported goods with a view to their transport under customs bond?

2. Is the national court competent to recognize the existence of a case of force majeure in circumstances which are different from those listed in Article 8 (2) of Regulation No 102/64/EEC and those recognized by the Member States pursuant to Article 8 (3)? Are requests for the consideration of circumstances of force majeure subject to a time limit and if so, within what period must they be submitted?

I — As to question 1

The concept of importation is defined neither in the basic Regulation No 19 of the Council, of 4 April 1962 (OJ 1962, p. 933), on the gradual establishment of a common organization of the market in cereals, nor in the Regulation which is relevant here, that is, No 102/64/EEC of the Commission, of 28 July 1964, on import and export licences for cereals, processed cereal products, rice, broken rice and processed rice products (OJ 1964, p. 2125). The court must therefore examine whether the concept of importation is to be interpreted according to the national law at that time in force or according to Community law, as was done by Regulation No 1373/70 of the Commission of 10 July 1970 (OJ 1970, L 158). The decision on this question must be based upon the meaning and objective of the whole licence system.

According to Regulation No 102/64, which in this respect merely repeats Article 16 of Regulation No 19, the importation of cereals is dependent upon the grant of a licence which entitles but also obliges the licence holder to import the quantities of cereals stated in the licence during the period of validity of the latter. The obligation to import is guaranteed by the furnishing of security. The rules with regard to security were made, as stated in the sixth recital of Regulation No 102/64, to avoid the situation where licences (because they did not, in whole or in part, result in importation) ‘would give a mistaken view of the market situation’. In the words of the following recital the detailed rules with regard to the furnishing of security were laid down ‘in order to avoid disturbances in traditional trade patterns owing to the application by Member States of different systems’. As the Court held in the Köster Judgment (Judgment of 17 December 1970, Case 25/70, Rec. 1970, pp. 1161-1176), the competent authorities were to be enabled to make a highly accurate forecast of future imports and exports to form the basis of a suitable implementation of the intervention mechanism.

The concept of the ‘day of importation’ is important for the market forecasting made possible by the licence system, to the extent that it limits the period for which statements as to the volume of the cross-frontier trade in cereals can be made on the basis of the licences valid at any given time. Accordingly, it is unavoidable that the concept should be defined according to principles of Community law, so that the forecasts permitted by the licences should extend over the same period in all Member States. This was necessary even before the adoption of Regulation No 1373/70 of the Commission of 10 July 1970.

It need not be expressly stated that a concept is to be interpreted uniformly throughout the Community if this is apparent from the economic significance of the system (cf. Judgment of 1 February 1972 in Case 49/71 — Hagen v Einfuhr- und Vorratsstelle für Getreide und Futtermittel, Rec. 1972, p. 23).

In the Commission's view, the obligation to import is only fulfilled, according to Community law, when the goods have been put, irreversibly, into free circulation in the country of destination. The forecasting objective of the licence and security system demands that importation should signify a procedure as the result of which imported goods enter into competition with goods on the home market.

On the other hand, the plaintiff is of the opinion that the obligation to import is fulfilled when the goods have been brought into the economic territory of the importing State, where the goods are clearly not imported merely for the purpose of transit. This view corresponds with the objective of the licence and security system since any judgment of the market situation with reference to licences issued must also take account of those goods which are already in fact present in the Member State but which have not yet been cleared for free circulation. These goods influence market behaviour in a similar way as those which have been cleared for free circulation but are then held in stock, possibly for months at a time.

I must concur in the argument of the plaintiff that even goods which have not yet been cleared for free circulation can have an effect upon the home market; this is true both of goods which are undergoing transportation under customs bond and for those goods which have not yet left their country of origin or are still on the way to the importing country. Such goods can also be the object of commercial transactions in the importing country, even before importation.

However, since the Community law licence system refers to the concept of actual importation and not to an influence on the market, it is clear that the time at which the importation is effected is of decisive importance for the control which it is desired to exercise over the market. But the importation is only concluded when the goods have been cleared for free circulation and not, for instance, when they have crossed the border or when a customs application has been submitted. Only goods which have been given customs clearance have overcome the barriers to the flow of trade erected at the frontiers, as represented, for example, by sanitary controls or by checks conducted to ascertain that the goods correspond with those entered on the licence issued. We must accordingly accept that it most nearly corresponds with the objective of the licence system to understand by importation, customs clearance for free circulation, which is the crucial operation with regard to market behaviour within the State.

II — As to question 2

The second question requires the Court of Justice to give an interpretation of Article 8 of Regulation No 102/64. The Bundesverwaltungsgericht asks whether the national court is competent to recognize the existence of force majeure in circumstances which are different from those listed in Article 8 (2) and those recognized by the Member States pursuant to Article 8 (3).

I would submit that you should answer this question in the affirmative, as you did in your Judgment in Case 4/68, Schwarzwaldmilch GmbH (Judgment of 11 July 1968, Rec. 1968, p. 561) in respect of the parallel definition of Article 6 of Regulation No 136/64/EEC (OJ 1964, p. 2601). That provision from the law relating to the organization of the market in milk and milk products, in paragraphs (3) and (4) which are relevant here, corresponds — apart from minor differences — with paragraphs (2) and (3) of Article 8 of Regulation No 102/64. It is clear from the fact that the Member States may recognize further cases of force majeure pursuant to Article 8 (3) that the list of such cases contained in paragraph (2) is not exhaustive. However, even the said paragraph (3), which speaks in general terms of the ‘Member States’, does not restrict the competence of national courts to recognize as of force majeure, within the context of their juridiction, further circumstances of which neither the authors of the Regulation nor the Member States were aware.

Certain criteria for the recognition of cases of force majeure were laid down by the Court of Justice in its Judgments in Cases 11/70, Internationale Handelsgesellschaft (Judgment of 17 December 1970, Rec. 1970, pp. 1125-1139) and 25/70, Köster (Judgment of 17 December 1970, Rec. 1970, pp. 1161-1179), as well as for the special case of loss of an import licence, in its Judgment in Case 158/73, Kampffmeyer (Judgment of 30 January 1974). In compliance with these principles the Bundesverwaltungsgericht will have to decide whether in this case circumstances constituting force majeure did exist. Such circumstances may for instance consist in the fact that the time taken for conveyance by post of the papers necessary for the customs clearance of partial amounts of the imported barley was of excessive duration.

In the second sentence of the second question the Bundesverwaltungsgericht asks whether requests for the consideration of circumstances of force majeure are subject to a time limit and if so, within what period they must be submitted.

Regulation No 102/64 contains no express statement on this point. In its abovementioned Judgment in Kampffmeyer the Court of Justice decided with relation to Regulation No 1373/70 that a request for the release of security or for extension of the time limit in a case of force majeure may be submitted even after the period of validity of the licence has expired. However, the Court did not express any opinion as to whether there is any time limit which must be observed for the submission of such requests. It does however appear from the grounds of that Judgment — in that the circumstances may arise so short a time before the expiry of validity of the licence that no time remains for the submission of a request — that in principle the Court considers it necessary that the request be submitted immediately upon those circumstances arising.

The plaintiff has submitted that there is no time limit for the submission of requests. The basic principle of legal certainty requires that time limits, the failure to observe which entails a legal disability, must be expressly laid down by a legal provision.

This view may be correct in principle, although the Court of Justice — in Case 59/70, Kingdom of the Netherlands v Commission (Judgment of 6 July 1971, Rec. 1971, p. 639) — has already rightly accepted, for reasons of consistency and legal certainty, the necessity to adhere to a ‘reasonable period’ for the exercise of rights.

In our case the licence holder has a duty to exercise immediately those rights which he enjoys in the case of force majeure, this duty being inherent in the objective of the licence system: if the market forecast, which is based upon the licences, is rendered inaccurate by the fact that a case of force majeure has prevented an importation, it must immediately be ascertained, for the purposes of correcting that market forecast, whether and for how long the period of validity of the licence is to be extended or whether the importation will not take place at all. In addition, the administrative authorities must have immediate information as to the fiscal repercussions of the recognition of a case of force majeure in terms of loss of security. I share the view of the Commission that the licence holder is not obliged to decide which request to submit immediately the circumstances of force majeure become known, and that he should have a reasonable time to reflect upon the matter. But, above all, if at first he expresses the opinion, on grounds which, in his view, are sound and which are also objectively tenable, that he has fulfilled his obligation to import, he must be entitled subsequently to invoke circumstances which may constitute force majeure if the fulfilment of the obligation to import is contested. Up to what point this remains possible can only be decided according to the circumstances of each individual case.

III — The following is my opinion based upon the foregoing.

1. The time at which the obligation to import is fulfilled within the meaning of Article 7 (2) of Regulation No 102/64/EEC of the Commission is to be determined according to Community law. The titular holder of an import licence fulfils this obligation when the goods are given customs clearance for free circulation.

2. The courts of the Member States are competent to accept the existence of force majeure within the meaning of Article 8 (1) of Regulation No 102/64/ EEC even in cases other than those listed in Article 8 (2) or recognized under Article 8 (3). A request for the consideration of circumstances of force majeure must be submitted — taking into account a reasonable period for deliberation — without undue delay upon the titular holder of the licence becoming aware of those circumstances. However, a consideration of all the circumstances of a case may prompt the view that even a later request for the consideration of circumstances which might be considered as of force majeure, raised in defence against forfeiture of all or part of the security, should not be disregarded.

( 1 ) Translated from the German.