OPINION OF ADVOCATE GENERAL

LÉGER

delivered on 23 February 2006 1( )

Case C-353/04

Nowaco Germany

v

Hauptzollamt Hamburg-Jonas

(Reference for a preliminary ruling from the Bundesfinanzhof (Germany))

(Export refunds – Regulation (EEC) No 3665/87 – Conditions for grant – Fair marketable quality – Poultrymeat – Application of the marketing standards for poultrymeat in the Community – Regulation (EEC) No 2913/92 – Margins of tolerance for the number of defective products – Rules on the size of the samples to be taken in order to verify compliance with those tolerance levels – Infringement – Consequences)

1. The present reference for a preliminary ruling arises from a dispute relating to the export refunds payable on the export of two batches of frozen chickens. In connection with that export the customs authorities of the Member State concerned took a sample and a reserve sample, examination of which revealed the presence of broken and protruding bones.

2. The Bundesfinanzhof (Federal Finance Court, Germany) enquires of the Court of Justice whether the provisions governing the marketing of such products within the Community are applicable for the purposes of establishing whether the chickens in question were of fair marketable quality and accordingly qualified for export refunds.

3. In the event that the answer to that first question is in the affirmative, the Bundesfinanzhof also wishes to ascertain what the consequences should be of the fact that both the samples taken or only one of them revealed the presence of defective products whilst the number of samples did not allow verification of whether the defects exceeded the tolerance margins applicable in the context of marketing those products in the Community.

I – Legal framework

A – Provisions relating to the grant of export refunds

4. The purpose of export refunds is to make up the difference between the prices of the product in question on the world market and the highest prices of that product in the Community. They are funded from the Community budget, specifically from the European Agricultural Guidance and Guarantee Fund (EAGGF).

5. At the time of the facts in the main proceedings, the export refund system was defined by Commission Regulation (EEC) No 3665/87. ( ) That regulation sets out in Chapter I, ‘Entitlement to refund’ of Title II on ‘Exports to non-member countries’ the provisions providing the basis for entitlement to refunds. Article 13 of the regulation, which forms part of Chapter I, provides:

‘No refund shall be granted on products which are not of sound and fair marketable quality, or on products intended for human consumption whose characteristics or condition exclude or substantially impair their use for that purpose.’

6. Subsequently to the facts in the main proceedings, Regulation No 3665/87 was repealed and replaced by Commission Regulation (EC) No 800/1999. ( ) Article 21(1) of the latter regulation reads as follows:

‘No refund shall be granted on products which are not of sound and fair marketable quality on the date on which the export declaration is accepted.

Products shall be deemed to meet the requirement laid down in the first subparagraph if they can be marketed on the Community’s territory in normal conditions under the description appearing in the refund application and if, where such products are intended for human consumption, their use for that purpose is not excluded or substantially impaired by reason of their characteristics or condition.

The conformity of the products with the requirements laid down in the first subparagraph shall be examined in accordance with the standards or practices in force in the Community.

…’

7. In SEPA, ( ) the Court held that Article 21, in so far as it provides that products satisfy the requirement of being of sound and fair marketable quality ‘if they can be marketed on the Community’s territory in normal conditions’, does not amend, but on the contrary confirms, the legal position established by Article 13 of Regulation No 3665/87. ( )

B – The rules applying to the marketing of poultrymeat in the Community

8. Council Regulation (EEC) No 1906/90 ( ) lays down the general rules applicable to the marketing of poultrymeat in the Community. Poultrymeat, within the meaning of that regulation, is poultrymeat suitable for human consumption. ( )

9. That regulation provides, in particular, that poultrymeat is to be graded as either class A or class B according to the conformation and appearance of the carcases or cuts.

10. The regulation also indicates, in the first indent of Article 1(3), that it does not apply to poultrymeat for export from the Community.

11. Commission Regulation (EEC) No 1538/91 sets out the detailed rules for the application of Regulation No 1906/90. ( )

12. According to Article 6 of Regulation No 1538/91, in order to be graded into class A or B, poultry carcases and cuts must meet a number of minimum quality requirements. They must be intact, taking into account the presentation, clean and free of any foreign matter, dirt or blood, free of any foreign smell, free of visible bloodstains except those which are small and unobtrusive, and free of severe contusions. They must also be free of protruding broken bones. ( )

13. However, where the poultrymeat is sold in batches, that is to say, in quantities of the same type, the same class and from the same slaughterhouse or cutting plant, ( ) there are margins of tolerance in respect of the requirements set out in Article 6. Those margins are set out in Article 7 of Regulation No 1538/91 which stipulates:

‘1. Decisions arising from failure to comply with Articles 1, 2 and 6 may only be taken for the whole of the batch which has been checked in accordance with the provisions of this Article.

…

3. A sample consisting of the following numbers of individual products as defined in Article 1 shall be drawn at random from each batch to be inspected in slaughterhouses, cutting plants, wholesale and retail warehouses or in the case of imports from third countries at the time of customs clearance.

…’

14. The table appearing in Article 7(3) indicates the required size of the sample based on batch size. Accordingly, for a batch of between 100 and 500 units, the number of units to be taken is 30. The number is 50 for a batch of between 501 and 3 200 units and 80 where the batch contains more than 3 200 units.

15. The table also establishes the tolerable number of defective units depending on the sample size. For a batch of between 100 and 500 units, of the 30 units taken the tolerable number of defective units is 5 of the total number, including 2 units not complying with the requirements of Article 6(1) of Regulation No 1538/91. For a batch of between 501 and 3 200 units, of the 50 units taken the tolerable number of defective units is 7 of the total, including 3 not complying with the Article 6 requirements. For a batch of more than 3 200 units, of the 80 units taken the tolerable number of defective units is 10 of the total, including 4 not complying with the Article 6 requirements.

16. By virtue of Article 7(5) of that regulation, those tolerance margins are doubled where the batch is of class B poultrymeat.

17. Article 7(6) provides that, where the checked batch is not compliant, the supervising agency is to prohibit its marketing or, if the batch comes from a third country, its import, until such time as proof has been forthcoming that it has become compliant with Articles 1 and 6.

C – Rules on monitoring

18. The referring court refers to Council Regulation (EEC) No 2913/92 ( ) which governs all trade between, on the one hand, Member States of the Community and, on the other, Member States and third countries. The Customs Code therefore applies to exports from the Community to a third country.

19. It establishes, in Articles 70 and 71, a legal fiction according to which the results of an examination of part of the goods are deemed to apply to all the goods. Those articles read as follows:

‘Article 70

1. Where only part of the goods covered by a declaration are examined, the results of the partial examination shall be taken to apply to all the goods covered by that declaration.

However, the declarant may request a further examination of the goods if he considers that the results of the partial examination are not valid as regards the remainder of the goods declared.

2. For the purposes of paragraph 1, where a declaration form covers two or more items, the particulars relating to each item shall be deemed to constitute a separate declaration.

Article 71

1. The results of verifying the declaration shall be used for the purposes of applying the provisions governing the customs procedure under which the goods are placed.

2. Where the declaration is not verified, the provisions referred to in paragraph 1 shall be applied on the basis of the particulars contained in the declaration.’

20. Community law also contains specific provisions on the monitoring, at the time of export, of agricultural products which receive export refunds. The overall framework of those provisions is laid down in Council Regulation (EEC) No 386/90. ( ) That regulation provides that Member States are to carry out a physical check of goods at the time of completion of customs export formalities and before grant of the authorisation for export, on the basis of the documents submitted in support of the export declaration. ( ) That physical check must take the form of spot checks conducted frequently and without prior warning. ( )

21. The detailed rules for application of those physical checks of products liable to qualify for export refunds are governed by Commission Regulation (EC) No 2221/95. ( )

22. Article 5 of that regulation provides:

‘1. For the purposes of Article 2(a) of Regulation (EEC) No 386/90, “physical check” shall mean verification that the export declaration, including documents submitted in support thereof, and the goods correspond as regards quantity, nature and characteristics.

Where the situation described in the Annex arises, the methods indicated therein shall be applied.

The customs office of export must be mindful of the provisions of Article 13 of Regulation (EEC) No 3665/87.

…’

II – The facts in the main proceedings

23. Nowaco Germany (‘Nowaco’) declared for export two consignments of frozen chickens exported in December 1997 and February 1998, consisting of 2 647 and 2 750 boxes. For each consignment, the competent German inspection authority took a sample for examination and a reserve sample. Examination of the two samples relating to the December 1997 consignment revealed the presence of broken and protruding bones. As regards the February 1998 consignment, only the first sample displayed protruding broken bones in the left wing, whilst the second sample did not contain defects.

24. The Hauptzollamt (Principal Customs Office) found that no export refunds were payable on either consignment.

25. In Nowaco’s appeal against that decision, the Finanzgericht (Finance Court) held that the applicant was entitled to half the export refunds for the February 1998 consignment and dismissed the appeal in respect of the remainder.

26. That court therefore found that the goods could not be treated as being of sound and fair marketable quality if they did not comply with the standards laid down in Regulation No 1538/91 on the marketing of poultry within the Community. However, it held that Nowaco was entitled to half the export refunds on the February 1998 consignment on the grounds that, in accordance with the legal fiction in Article 70 of the Customs Code, the consignment had to be deemed to consist as to 50% of products of sound and fair marketable quality.

27. Nowaco and the Hauptzollamt have appealed against that judgment on points of law. Nowaco asserts that it is entitled to full export refunds on both the December 1997 consignment of frozen chickens and the February 1998 consignment. The Hauptzollamt, for its part, claims that the benefit is only due in respect of the February 1998 consignment and only as to 48.1%, on the basis of the relative weights of the first sample, which revealed protruding broken bones, and the second sample, which did not contain defects.

III – The questions referred for a preliminary ruling

28. The Bundesfinanzhof decided to stay the proceedings and referred the following questions to the Court:

‘(1) For the purposes of establishing whether a product in respect of which recovery of export refund is sought is of [sound and] fair marketable quality, does Commission Regulation (EEC) No 1538/91 of 5 June 1991 introducing detailed rules for implementing Council Regulation (EEC) No 1906/90 on certain marketing standards for poultry apply?

(2) In the event that the reply to Question 1 is in the affirmative:

(a) Does Article 70 of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code apply where it is necessary to determine whether a product in respect of which an export refund is sought is of [sound and fair] marketable quality?

(b) Does the legal fiction relating to uniform quality in the first subparagraph of Article 70(1) of Regulation (EEC) No 2913/92 also apply if only one random sample of the goods has been examined, where the pertinent Community provisions permit defects in the goods up to a certain limit and accordingly require and expressly prescribe examination of a specific number of samples to establish whether that limit has been observed?

(3) In the event that the replies to Questions 2(a) and (b) are also in the affirmative:

What is the effect of the aforementioned legal fiction relating to uniform quality where several samples are taken from export consignments that were declared as a single unit and examination of part of those samples reveals that they are of fair marketable quality, while examination of another part of those samples reveals that they are not?’

IV – Analysis

A – The first question referred for a preliminary ruling

29. By its first question referred for a preliminary ruling, the Bundesfinanzhof is in essence enquiring whether Article 13 of Regulation No 3665/87 should be interpreted to the effect that, in order to be recognised as being of fair marketable quality within the meaning of that provision and as conferring entitlement to export refunds, poultrymeat must satisfy the quality requirements and be within the tolerance margins established in Articles 6 and 7 of Regulation No 1538/91.

30. The Bundesfinanzhof states in its order for reference that it is raising the foregoing question because, on the one hand, Regulation No 1538/91 lays down the detailed rules for application of Regulation No 1906/90 and the latter expressly provides that it does not apply to exports of poultrymeat from the Community. On the other hand, in the version applicable in the present case, the Bundesfinanzhof submits, Regulation No 1538/91 only permits margins of tolerance for the purpose of satisfying the requirements set out in Article 6 of the regulation in respect of ‘pre-packages’, and not for frozen chickens which are not pre-packaged.

31. In the light of the Court’s approach in SEPA, I am of the view that the answer to the first question referred for a preliminary ruling should be in the affirmative.

32. In that judgment, the Court held that Article 13 of Regulation No 3665/87 had to be interpreted as meaning that, in order to be treated as being of ‘sound and fair marketable quality’ and therefore to qualify for export refunds, a product exported from the Community to a non-member country must be capable of being marketed in the territory of the Community in normal conditions. ( ) The Court found that beef in respect of which marketing in the Community for human consumption was subject to a number of restrictions, in particular that it could only be sold on the local market, could not be regarded as being of fair marketable quality within the meaning of Article 13. ( )

33. SEPA, therefore, suggests that in order to be regarded as being of fair marketable quality within the meaning of Article 13 of Regulation No 3665/87, a product must meet the quality requirements governing its marketing in the Community for human consumption.

34. Since, at the time of the facts in the main proceedings, the marketing of poultrymeat in the Community for human consumption was subject to the quality requirements established by Regulation No 1538/91, those requirements are therefore relevant in determining whether the export of a batch of poultrymeat to a non-member country qualifies for refunds.

35. In the light of the interpretation upheld in SEPA, Article 1(3) of Regulation No 1906/90, according to which that regulation does not apply to exports from the Community, should not, I suggest, be construed as precluding that view. The correct reading of that provision is that exports of poultrymeat from the Community are not subject to all the generally applicable rules relating to the marketing of that product in the Community, laid down by Regulation No 1906/90, and relating to the classification of the product into two categories and to specific labelling requirements.

36. Article 1(3), which refers only to Regulation No 1906/90, should not be applied by extension to the quality requirements of Regulation No 1538/91. The latter requirements are, therefore, relevant for the purposes of ascertaining whether the poultrymeat on which export refunds are claimed is of fair marketable quality within the meaning of Article 13 of Regulation No 3665/87.

37. According to Article 6 of Regulation No 1538/91, in order to qualify for inclusion in class A or B and, therefore, to be marketed for human consumption within the Community, poultry carcases and cuts must meet a number of quality requirements and, in particular, must be free of protruding broken bones. However, the existence of such breakages is not a fundamental defect which would unconditionally prevent the marketing of the carcase or cut in question in the Community.

38. Indeed, the Community legislature has stipulated in Article 7 of that regulation that the presence, in a batch of poultrymeat, of products presenting broken bones is not a bar to the marketing of that batch if the number of defective products does not exceed a ceiling set depending on the size of the batch in question and the class involved. Accordingly, for a batch of between 100 and 500 units, the tolerable number of units displaying protruding broken bones must not be more than 2 units, out of a sample of 30 units, for a class A batch, or 4 units for a class B batch. For a batch of between 501 and 3 200 units, the tolerable number of units displaying such breakages must not exceed 3 units for a class A batch or 6 units for a class B batch, out of a sample of 50 units. For a batch of more than 3 200 units, the tolerable number of units not complying with the requirements of Article 6(1) of Regulation No 1538/91 must not exceed 4 units for a class A or 8 units for a class B batch, out of a sample of 80 units.

39. Furthermore, Article 7(1) of Regulation No 1538/91 establishes that any decision arising from failure to comply with the quality requirements set out in Article 6 of the same regulation may only be made in respect of the whole of a batch checked in accordance with Article 7. A batch of poultrymeat can therefore only be subject to a ban on marketing in the Community if a sample has been taken consisting of a number of units satisfying the requirements of Article 7 and if the number of defective products in that sample has been found to exceed the tolerance margins to which that article refers.

40. Accordingly, within the Community, there is no restriction on the marketing of a batch of poultrymeat containing products displaying protruding broken bones where their number does not exceed the margin of tolerance established by Regulation No 1538/91 as a proportion of the sample which that regulation prescribes.

41. In the light of the Court’s approach in SEPA, such batches, which can therefore be marketed in normal conditions in the Community, must be regarded as being of fair marketable quality within the meaning of Article 13 of Regulation No 3665/87 and as qualifying for export refunds. In other words, in order to ascertain whether a batch of poultrymeat should be regarded as being of fair marketable quality within the meaning of that provision, the authorities of the exporting Member State must have reference to the quality requirements set out in Article 6 of Regulation No 1538/91 and the tolerance margins in Article 7 of the same regulation.

42. I fail to find, in the rules for the grant of export refunds, any grounds for discounting those tolerance thresholds and making the grant of the Community aid in question subject to stricter conditions than those for the marketing of the products throughout the Community.

43. Moreover, since, as the Commission points out in its written observations, the amount of the export refunds was the same for poultrymeat in class A as for that belonging to class B, that distinction should in my view be disregarded in the context of the grant of export refunds. It is therefore only necessary, to my mind, in order for the export of a batch of poultrymeat to qualify for the refunds, that any defects are within the tolerance margins stipulated for class B products. Indeed, such products, which meet those minimum requirements, are capable of moving freely throughout Community territory in normal conditions.

44. The referring court further wonders whether the tolerance margins in Article 7 of Regulation No 1538/91 apply since, in its view, they were established in relation to pre-packages and since the situation before the Court does not involve pre-packaged meat, that is to say, meat intended for ultimate consumers.

45. Whilst the referring court’s interpretation, according to which the tolerance margins set out in Regulation No 1538/91 relate to pre-packages, should be found to be correct, I also share that court’s view that those tolerance thresholds should likewise apply by analogy to products which are not pre-packaged.

46. It emerges from the definition in Article 2(4) of Regulation No 1906/90 that pre-packaged meat is that presented in compliance with Article 1(3)(b) of Council Directive 79/112/EEC. ( ) According to that subparagraph, a pre-packaged foodstuff is an item for presentation as such for sale to the ultimate consumer and mass caterers. In consequence, if those margins of tolerance are established where the product is intended for the consumers most deserving of protection, it seems to make sense that they should also apply where the same product is for sale to intermediaries.

47. Having regard for all those factors, I propose that the response to the first question referred for a preliminary ruling should be that Article 13 of Regulation No 3665/87 must be interpreted as meaning that, in order to be recognised as being of fair marketable quality in accordance with that provision and to qualify for export refunds, poultrymeat must satisfy the quality standards and be within the tolerance margins laid down in Articles 6 and 7 of Regulation No 1538/91.

B – Question 2(a)

48. By Question 2(a), the Bundesfinanzhof enquires whether the legal fiction of uniform quality contained in the first subparagraph of Article 70(1) of the Customs Code is intended to apply where it is necessary to establish whether goods for which an export refund has been sought are to be regarded as being of fair marketable quality.

49. As already indicated, that provision stipulates that the results of examination of part only of the goods declared as a single unit are deemed to apply to all the goods to which the declaration relates.

50. I submit that the response to Question 2(a) should likewise be in the affirmative. According to Article 1, the Customs Code applies to trade between the Community and non-member countries and, as is confirmed by the eighth recital in the preamble to Regulation No 2221/95 which lays down detailed rules for physical checks on agricultural products qualifying for export refunds, the Code specifically includes those products where they qualify for such refunds.

51. The fact – which, according to the referring court, prompted it to refer the present question for a preliminary ruling – that the exporter does not have to provide information as to the fair marketable quality of the relevant products in the export declaration which serves as a basis for their physical inspection is not such as to lead me to answer otherwise.

52. As the Court has recently explained in Fleisch-Winter, ( ) the sound and fair marketable quality of the product exported is a prerequisite for the grant of export refunds and an exporter, by declaring goods in the context of a procedure for that Community aid, implies that the goods do indeed satisfy that requirement. ( )

53. The purpose of physical checks on exported products is therefore not solely to verify that they coincide with the description in the export declaration. They also aim to determine whether the products are of sound and fair marketable quality, as Regulation No 2221/95 expressly confirms, in the third subparagraph of Article 5(1), which provides that the customs office of export must ensure compliance with Article 13 of Regulation No 3665/87.

54. The legal fiction in Article 70 of the Customs Code therefore is indeed intended to apply where the issue is one of determining whether the goods in question are of fair marketable quality. That conclusion reflects the twofold purpose of the Community customs regulations which seek on the one hand to ensure that the grant of aids to export is confined to products conforming to the quality requirements set by Community rules and, on the other, to ensure quick and efficient procedures. Achievement of that latter objective would be jeopardised if, in order to ascertain whether the goods in question are in fact of fair marketable quality, the customs office of the exporting Member State had to examine the entirety of a batch declared as a single unit.

55. I accordingly propose that the reply to Question 2(a) must be that the legal fiction of uniform quality provided for in the first subparagraph of Article 70(1) of the Customs Code is intended to apply where it is necessary to establish whether goods for which an export refund has been sought are to be regarded as being of fair marketable quality within the meaning of Article 13 of Regulation No 3665/87.

C – Question 2(b)

56. By Question 2(b), the Bundesfinanzhof is asking, in essence, if the legal fiction of uniform quality provided for in the first subparagraph of Article 70(1) of the Customs Code applies where the Community provisions in force set a margin of tolerance in respect of the number of defective products and where the number of units drawn as a sample in the physical check of the products for export is lower than the minimum number of units set by those provisions for the purposes of determining compliance with the tolerance margin.

57. The Bundesfinanzhof states that it has referred this question because the customs authorities did not, in respect of either of the two consignments in issue, take a sufficient number of units to determine whether the number of products displaying protruding broken bones exceeded the tolerance margin established in Article 7 of Regulation No 1538/91.

58. My view is that, in such a situation, the legal fiction described in the first subparagraph of Article 70(1) of the Customs Code cannot apply.

59. It has been seen that, in order to assess whether the poultrymeat for which an export refund has been sought must be regarded as being of fair marketable quality within the meaning of Article 13 of Regulation No 3665/87, the authorities of the exporting Member State must be mindful both of the quality requirements set out in Article 6 of Regulation No 1538/91 and of the tolerance margins in Article 7 of that regulation. Those tolerance margins are defined on the basis of batch and sample size.

60. It has emerged, in the context of analysing how to respond to the first question referred, that, in order for poultrymeat to be regarded as being of fair marketable quality and as qualifying for export refunds, the tolerable number of carcases or cuts displaying protruding broken bones must not exceed, in a batch of between 100 and 500 units, 4 units out of a sample of 30 units, in a batch of between 501 and 3 200 units, 6 units out of a sample of 50 units or, in a batch of more than 3 200 units, 8 units out of a sample of 80.

61. Ascertaining compliance with those tolerance margins therefore means that the customs authorities of the exporting Member State, when carrying out the physical check of the products for export, must take as a sample a number of units satisfying the requirements of Article 7 of Regulation No 1538/91. Application of the legal fiction of uniform quality in the first subparagraph of Article 70(1) of the Customs Code in order to ascertain if the poultrymeat for export to a third country is indeed of fair marketable quality presupposes, therefore, that the sample taken in the physical check complies with the requirements of Article 7 of Regulation No 1538/91, that is to say, that it consists of 30, 50 or 80 units, depending on whether the batch checked comprises between 100 and 500, from 501 to 3 200 or more than 3 200 units respectively.

62. I accordingly propose that the Court should reply to Question 2(b) that the legal fiction of uniform quality in the first subparagraph of Article 70(1) of the Customs Code does not apply where the applicable Community provisions establish a margin of tolerance for the number of defective products and where the number of units taken as a sample in the physical check of the products for export is lower than the minimum number of units prescribed by those provisions for the purposes of determining compliance with that tolerance margin.

D – The third question referred for a preliminary ruling

63. The Bundesfinanzhof enquires, in the event that the answers to Questions 2(a) and (b) are also in the affirmative, as to the effect of the fiction of uniform quality where several samples are drawn from exports declared as a single unit and examination of one part of the samples reveals that they are of fair marketable quality, whilst examination of another part reveals that they are not.

64. Although the referring court has raised the question only in the event of an affirmative reply to Questions 2(a) and (b), Question 3 is to my mind necessary in order to give judgment in the main proceedings even if, as I propose above, the Court replies in the negative to Question 2(b). I therefore invite the Court to respond to Question 3 referred for a preliminary ruling.

65. In the light of the circumstances of the main proceedings, I also suggest that the Court should not confine its analysis of that question to situations in which the physical checking of the samples taken produced contradictory results, as occurred with the February 1998 consignment. I propose to construe Question 3 as seeking to ascertain what conclusions the customs authorities of the exporting Member State should draw when the number of units taken in the physical check of the products for export is lower than the number set by the applicable Community legislation for the purposes of determining compliance with the tolerance margins which that legislation lays down and where examination of those units reveals that some or all of them were not compliant with it.

66. In the present case, in the light of the results of examination of the samples taken from the December 1997 and February 1998 consignments of frozen chickens, the Finanzgericht found that no export refund was payable on the December 1997 consignment because both samples taken had revealed the presence of protruding broken bones, and that half the entitlement was payable on the February 1998 consignment since only one of the two samples showed defective products.

67. Before the Bundesfinanzhof, the Hauptzollamt applied for confirmation of that decision as regards the December 1997 consignment and, in respect of the February 1998 consignment, that the export refunds should be granted as to 48.1%, that is to say, in proportion to the relative weights of the sample which was free of defects and of the other sample, which contained protruding broken bones.

68. In common with the referring court, I posit that those outcomes cannot succeed, either as regards the December 1997 consignment or that of February 1998, solely on the basis of the results of examination of the samples taken.

69. It has emerged that, whenever the samples taken do not include a number of units satisfying the stipulations of Article 7 of Regulation No 1538/91, the fiction of uniform quality in the first subparagraph of Article 70(1) of the Customs Code cannot apply. The results of examination of the samples taken in the present case therefore cannot be extended to all the products covered by the declaration covering each consignment.

70. In order to ascertain the consequences, in the instant case, of the results of examination of those samples, the starting point, in my view, should be Article 13 of Regulation No 3665/87, according to which no refund is granted where the products are not of sound and fair marketable quality.

71. In the light of that requirement, the mere fact that, in the present case, the samples were taken in breach of the requirements of Article 7 of Regulation No 1538/91 is not in my submission sufficient to entitle the exporter to payment of the refunds in question. The circumstance that examination of those samples disclosed the presence of defective products is a factor which casts doubt on whether those exported products complied with the requirements in Article 13 of Regulation No 3665/87.

72. Since there is no common rule governing that situation and since, according to Article 10 EC, it is for the Member States to ensure implementation of Community rules within their territory, in particular in the context of the common agricultural policy, ( ) it falls to the national authorities, which include the courts, to examine, on the basis of the rules of their internal law, whether, in the consignment in question, the number of defective products is within the tolerance margins established by the applicable law. There should therefore be a possibility that the customs authorities of the exporting State be authorised to prove, by means other than the samples taken in breach of the requirements of the applicable Community rules, that the number of defective products exceeds the tolerance margins which those rules prescribe.

73. However, if it is not possible to furnish such evidence, I take the view that the exporter should not, ultimately, be deprived of export refunds on the basis of samples which do not enable verification of whether the tolerance margins set by the applicable Community rules have been exceeded. Nor, in my submission, is the approach in Derudder ( ) applicable to a situation such as that now before the Court.

74. In that ruling, the Court addressed a situation in which a customs declarant was challenging a demand for payment issued against it by the customs authorities of a Member State in respect of the import of rice into the Community on the grounds, amongst others, that the samples of goods taken by those authorities were not representative. ( ) The case turned on whether the Community rules should be interpreted as meaning that it is permissible for a customs declarant or his representative, who was present when a sample was taken by the customs authorities of imported goods and who did not dispute the representativeness of that sample, to challenge that representativeness when requested by those authorities to pay additional import duties following analysis of that sample.

75. The Court held that a customs declarant or his representative is entitled, in circumstances such as those before it, to challenge the representativeness of the sample. Nevertheless, the Court placed limits on the right to do so. It held that the sample could be challenged only provided the goods concerned had not been released or, if they had been released, only if they had not been altered in any way whatsoever, which was for that declarant to prove. ( )

76. It follows that, if neither of those conditions is satisfied, the declarant must bear the consequences of the fact that analysis of the sample taken reveals that the goods in the sample did not coincide with those it described in the declaration.

77. That approach cannot in my view be transposed to a situation where the applicable Community rules expressly provide for margins of tolerance for the number of defective products and exactly establish the requisite size of the sample to be taken in the physical check of the goods in question in order to ascertain whether defective products exceed those margins. In such circumstances, I believe it is reasonable to rely on the premiss that it is for the relevant customs authorities to know the applicable Community law and to ensure that it is implemented. That view finds confirmation in the third subparagraph of Article 5(1) of Regulation No 2221/95 which provides, as has been seen, that the customs office of the exporting Member State must ensure compliance with Article 13 of Regulation No 3665/87.

78. In order to verify compliance with those margins of tolerance, the customs authorities must therefore take a sample meeting the requirements of the Community rules applicable to the marketing of poultrymeat, that is to say, consisting of 30, 50 or 80 units depending on the number of units in the batch exported. To allow those authorities to be content with taking a number of units lower than that set would significantly detract from the effectiveness of the physical checking of the goods exported, since the probability of finding defective products increases with the number of units taken. A physical check of that nature, confined to examination of a lower number of units than that set, could therefore lead to the grant of refunds on batches not satisfying the prescribed quality requirements.

79. Similarly, to concede, in the present situation, that the December 1997 and February 1998 consignments are not of fair marketable quality, solely on the basis of samples taken in breach of the rules in Article 7 of Regulation No 1538/91, would have the effect of allowing the national authorities to disregard those rules and to deprive traders of rights which the Community legislature intended to confer on them.

80. That reasoning does not, I submit, conflict with the recent approach of the Court in Fleisch-Winter. In that case, the main proceedings concerned a claim for refunds on the export to a third country of batches of beef in respect of which an investigation, by the customs department of the exporting State, had shown that they might have originated in the United Kingdom and therefore be subject to a ban on exports from that Member State, issued in the context of combating bovine spongiform encephalopathy.

81. It was necessary to determine whether Article 13 of Regulation No 3665/87 must be interpreted as requiring the exporter, for the purpose of the payment of refunds, to show that the product exported does not originate from a Member State from which exports are banned, in circumstances in which the national administration has evidence that the product is subject to an export ban. The Court found that, where the national administration has such evidence, the burden of showing that the product in question originates in a Member State not subject to an export ban is on the exporter. ( )

82. It therefore falls to the exporter, in the event of doubt as to the origin of the goods, to demonstrate that they do not come from a Member State subject to a ban on exports to other States. I would however note that, in order to reach that conclusion, the Court stated that the origin of the product in question is a legal feature not capable of verification by the physical check which the customs authorities have to carry out pursuant to Regulation No 386/90 and Article 5 of Regulation No 2221/95. ( )

83. That distinction which the Court draws between the origin of the product and other features which are amenable to verification by physical inspection suggests that the approach used in relation to origin cannot be applied to those other features. I conclude from the foregoing that the approach used in Fleisch-Winter is not applicable to a situation where the doubt is as to compliance with the quality requirements of Article 6 of Regulation No 1538/91, in particular with the requirement that poultry carcases and cuts must be free of protruding broken bones.

84. In the light of the foregoing, I propose that the Court should respond as follows to the third question referred for a preliminary ruling: where examination of the samples taken in the physical check of products declared as a single unit shows the presence of products not compliant with the applicable Community legislation but where the number of units taken as a sample is lower than the number of units set for the purposes of verifying compliance with the tolerance margins which that legislation lays down, it is for the national authorities to examine, on the basis of the rules of their internal law, whether, in the consignment in question, the number of defective products is within those tolerance margins. However, if no evidence is forthcoming that those tolerance margins have been exceeded, the exporter must not be deprived of export refunds.

V – Conclusion

85. In the light of those considerations, I propose that the responses to the questions referred for a preliminary ruling by the Bundesfinanzhof should be as follows:

(1) Article 13 of Commission Regulation (EEC) No 3665/87 of 27 November 1987 laying down common detailed rules for the application of the system of export refunds on agricultural products must be interpreted as meaning that, in order to be recognised as being of fair marketable quality in accordance with that provision and to qualify for export refunds, poultrymeat must meet the quality standards and be within the tolerance margins established in Articles 6 and 7 of Commission Regulation (EEC) No 1538/91 of 5 June 1991 introducing detailed rules for implementing Council Regulation (EEC) No 1906/90 on certain marketing standards for poultry, as most recently amended by Commission Regulation (EC) No 1000/96 of 4 June 1996.

(2) The legal fiction of uniform quality provided for in the first subparagraph of Article 70(1) of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code is intended to apply where it is necessary to determine whether a product in respect of which recovery of export duty is sought is of fair marketable quality within the meaning of Article 13 of Regulation No 3665/87.

(3) That fiction does not apply where the applicable Community provisions establish a margin of tolerance for the number of defective products and where the number of units taken as a sample in the physical check of products for export is lower than the minimum number of units prescribed by those provisions for the purposes of determining compliance with that margin of tolerance.

(4) Where examination of the samples taken in the physical check of products declared as a single unit shows the presence of products not compliant with the applicable Community legislation but where the number of units taken as a sample is lower than the number of units set for the purposes of verifying compliance with the tolerance margins which that legislation lays down, it is for the national authorities to examine, on the basis of the rules of their internal law, whether, in the consignment in question, the number of defective products is within those tolerance margins. However, if no evidence is forthcoming that those tolerance margins have been exceeded, the exporter must not be deprived of export refunds.