OPINION OF MR ADVOCATE-GENERAL ROEMER

DELIVERED ON 13 JULY 1972 ( 1 )

Mr President,

Members of the Court,

Like other common organizations of the market, the common organization of the market in poultrymeat, established by Regulation No 123/67 of the Council of 13 June 1967 (OJ, English Special Edition, 1967, p. 63) contains a system of levies to be applied to imports from third countries in the interests of protecting intra-Community production. In this connexion the ‘sluice-gate price’ referred to in Article 7 of the said regulation plays a decisive part. It is composed ‘of an amount equal to the price on the world market for the quantity of feed grain, varied according to kind of poultry, which is required for the production in third countries of one kilogramme of slaughtered poultry’, and ‘a standard amount representing other feeding costs and overhead costs of production and marketing, varied according to kind of poultry’. Under Article 4 of Regulation No 123/67, the levy on slaughtered poultry shall be calculated according to ‘the difference between prices within the Community and on the world market for the quantity of feed grain, varied according to kind of poultry, which is required for the production in the Community of one kilogramme of slaughtered poultry’. There is in addition to this one ‘component equal to 7 % of the average of the sluicegate prices ruling for the four quarters preceding 1 May of each year’.

Article 8 of Regulation No 123/67 provides that ‘Where the free-at-frontier offer price for a product falls below the sluicegate price, the levy on that product shall be increased by an additional amount equal to the difference between the sluicegate price and the free-at-frontier offer price’. However, under Article 8(2) ‘the levy shall not be increased by this additional amount as regards third countries which are prepared and in a position to guarantee that the price for imports into the Community of products originating in and coming from their territory will not be lower than the sluice-gate price for the product in question and that any deflection of trade will he avoided’

Under Article 4 of Regulation No 163/67 of the Commission of 26 June 1967 (OJ, English Special Edition 1967, p. 125) on fixing the additional amount for imports of poultry-farming products from third countries, third countries to which the provisions of Article 8(2) of Regulation No 123/67/EEC apply shall be determined in accordance with the procedure laid down in Article 17 of Regulation No 123/67 (that is to say the so-called Management Committee Procedure). This was also done with regard to Poland by means of Regulation No 565/68 of the Commission of 24 April 1968 (OJ, English Special Edition 1968 (I), p. 110) on the non-fixing of an additional amount for slaughtered fowls, ducks and geese imported from Poland. Furthermore the recitals of the preamble to the regulation read: ‘Whereas, by letter dated 24 April 1968, the Government of the Polish People's Republic stated that it was prepared to give such guarantee’ (that is, the guarantee that the actual price for imports into the Community of products originating in and coming from its territory would not be lower than the sluice-gate price and that any deflection of trade would be avoided) ‘for exports to the Community of slaughtered fowls, ducks and geese: whereas it will ensure that such exports are made only by the State foreign trade agency Animex; whereas it will ensure also that deliveries of the abovementioned products are not made at free-at-Community-frontier prices lower than the sluice-gate prices valid on the day of customs clearance; whereas, to that end it will see to it in particular that the State foreign trade agency Animex does not take any action which might indirectly bring about prices lower than the sluice-gate prices, such as taking over marketing or transport costs, granting reductions, resorting to linked transactions or any other action having similar effect’. Accordingly, Article 1 of Regulation No 565/68 provides: ‘The levies fixed in accordance with Article 4 of Regulation No 123/67/EEC shall not be increased by the additional amount in respect of imports of the following products falling within subheading No ex 02.02 of the Common Customs Tariff originating in and coming from the Polish People's Republic: … (d) Slaughtered ducks, whole, plucked, bled, not drawn or gutted, with heads and feet, known as “85 % ducks”; (e) Slaughtered ducks, whole, plucked and drawn, without heads and feet, with or without hearts, livers and gizzards, known as “70 % ducks”’.

These provisions are important to the plaintiff in the main action, a commercial undertaking having its registered office in Munich. In the period from 8 November 1968 to 17 January 1969 it obtained customs clearance from the customs office at Schirnding-Bahnhof for a certain quantity of slaughtered ducks. In this connexion Poland was given in the customs declarations as the country of production, origin and purchase of the ducks and the consignor was given as the State foreign trade agency Animex in Warsaw. The declarations were supported by official Polish veterinary attestations and inspection certificates together with invoices drawn upon on Animex forms. Initially, on the basis of the declarations made and the supporting documents the customs office only levied, apart from the turnover tax in respect of imports, the usual levy for ducks originating in and coming from Poland. After an examination had been carried out by the customs auditing department (the findings of which are set out in a report dated 11 November 1969 annexed to one of the procedural documents) the customs office however subsequently reached the view that the goods did not originate in and come from Poland. The ducks in question were in fact sold and delivered by the Polish State foreign trade agency Animex to an Austrian undertaking and afterwards re-sold by the latter undertaking to the plaintiff. Consequently Austria must be considered as the country from which they came and an additional payment in accordance with Article 8 of Regulation No 123/67 must be claimed.

Nevertheless the Brunner undertaking did not concur with this. It lodged a protest against the decision of the customs office claiming the additional payment and when this was unsuccessful it appealed to the Finanzgericht München. In support of its application the undertaking stated that it had bought the imported ducks from the State foreign trade agency Animex through the agency of a Swiss undertaking to whom it had been referred by the Austrian undertaking; on the contrary no sale took place between the Austrian undertaking and the plaintiff. This can be demonstrated inter alia by reference to the fact that the purchase price was transferred to the account of a Zurich bank which was given in the delivery invoices and bore the name Animex, Warsaw. The fact that the imported goods come from Poland cannot therefore be contested by the reference to the transit through Austria. The defendant customs office on the other hand considers that this statement is irrelevant. It takes the view that the plaintiff has not proved that it made the purchase from Animex through the agency of a Swiss undertaking. On the contrary, it is clear from a telex from Animex that the State foreign trade agency sold the goods in question to an Austrian undertaking and not to the plaintiff. Furthermore it may be concluded from the recitals in the preamble to Regulation No 565/68 that only through delivery comes into consideration and that the Polish Government gave a price guarantee only in respect of such consignments. The additional payment was however rightly levied since the consignment entered the Federal Republic from Austria.

In view of this dispute in which the interpretation of the expression ‘and coming from’ used in Regulation No 565/68 is of great importance the Finanzgericht, by an order of 2 March 1972, stayed the proceedings and requested a preliminary ruling on the following questions:

‘(a) Are the words “and coming from” appearing in Article 1 of Regulation No 565/68 of the Commission of 24 April 1968 on the non-fixing of an additional amount for slaughtered fowls, ducks and geese imported from Poland (OJ, English Special Edition 1968 (I), p. 110) must be interpreted as meaning that the relevant products satisfy this criterion only if they have not remained in a transit country and if they have not formed the subject-matter there of legal measures on grounds other than of their transportation, or,

(b) Do they also satisfy this criterion, (aa) if they were sold and delivered to a trader established in a third country and subsequently resold and consigned to a purchaser established in a Member State without undergoing processing, or, if the answer is in the negative, (bb) if they were originally sold and delivered to a trader established in a third country and then consigned by that trader who rejected them on the ground of late delivery to a purchaser established in a Member State without undergoing processing.’

I shall now express my views on these questions after I have taken cognizance of the observations submitted by the plaintiff in the main action, the Netherlands Government, the Italian Government and the Commission of the European Communities.

1. The expression ‘and coming from’ which is to be interpreted is not defined in Community law, as shown by the quotations from the relevant regulations. Nevertheless it may be established immediately (all those concerned are agreed on this) that it can by no means be interpreted on the basis of national law and that it must rather contain a uniform Community concept. This can be said because there is no clear reference, express or implied, to national law (see the judgments in Cases 49/71 and 50/71). This is clear in view of the possible divergence in the scope of corresponding national concepts stemming from different legal systems but is also obvious because the legal consequences (that an additional amount is not levied) following from the expression in question must be applied uniformly in the Community or they will result in disruptive deflections of trade.

2. The introductory description of the essential characteristics of the common organization of the market in poultrymeat furthermore threw into relief the importance of the levy system for the protection of intra-Community production. Viewed in this light, the fact that the additional amount is not levied represents an infringement of a general rule. When one considers the expression ‘and coming from’ used in this context it must be borne in mind that it relates to the condition for the application of a derogative provision. This fact together with the wording generally employed in this connexion (and also in the recitals of the preamble to the regulation) undoubtedly justify the assumption that a strict definition should be given, that is to say, to act so as to guarantee the greatest possible certainty for those Community interests referred to in the general rules. it must also be brone in mind that the rules must be applied by the customs authorities, that is, in a procedure involving special rules and requirements. Consequently the related concepts must be understood in a way which enables swift practical administration on the basis of simple and reliable findings. It must however appear unacceptable for the customs authorities to be required to carry out difficult checks in this connexion, for example the investigation of the fine details of commercial relationships between several parties who are involved in a foreign trading transaction. The foregoing constitutes a statement of the essential guidelines to be kept in view in endeavouring to interpret the wording in question.

3. A further and more detailed examination must be based on the facts which emerge with regard to the purpose, subject-matter and general scheme of the rules relating to the additional levy, the instances of exemption from it and the particular interests which exist in this connexion. As we have seen, the aim of the additional levy is to prevent disturbances of the common market by a fall in import prices. Consequently the levying thereof can only be waived when it is established that the actual offer price of an import consignment is not lower than the sluice-gate price. This may be deduced clearly from the recitals of the preamble to Regulation No 565/68 in which express reference is made to a corresponding guarantee by third countries that a specific price level will be maintained with regard to imports into the Community. In these circumstances it is clear that the mention by the Commission of ‘coming from’ refers in principle to the requirement of direct delivery because this is the only way in which effective supervision of the price guarantee can be ensured. Naturally this is not to be understood in the sense that other countries must not be concerned, in other words, that transit is prohibited (in fact it is plain that in commercial transactions with Poland the overland route necessarily involving transit through third countries is of considerable importance). To remain in accordance with the abovementioned principles this must however be direct transportation of such a nature that goods despatched from Poland to a destination in the Community are not subject during transit through third countries to any delays, transactions or legal measures other than those closely connected with the transportation and caused by its particular circumstances. In accordance with the view of the Commission the land from which the goods come must thus be regarded as that from which they were sent into the Community, in which they were first consigned to the Community and from which — in cases of transit through other States — the consignment was first dispatched to a destination in the Community. In fact this definition not only fulfils the requirement of enabling the customs authorities to carry out simple and reliable checks (which in the case of the suggested wording is possible with the help of shipping and transport documents). It is also of interest, thought not of decisive importance, that the criteria described call to mind definitions in another area of Community law, for example the definitions of the country from which goods come or are dispatched within the framework of Community transit (memorandum accompanying forms T1 and T2; Committee on Community Transit, Information Memorandum No 9936/3/70 of 2 June 1970 of Directorate-General II of the Commission, heading 35) or the wording of the draft regulation of the Council on the statistics for the external trade of the Community and trade between the Member States (Statistical Office of the European Communities, Document No 2250/70, Article 13). It should finally be noted that national practice with regard to customs and foreign trade is also based on corresponding criteria. ( 2 ) Furthermore, if it is considered advisable — as the Commission has suggested — to elicit additional evidence from the business transaction connected with the importation it may be said in addition that in view of the fact that the exemption from the additional levy was linked to the promise of the Polish Government (as appears from the recitals of the preamble to Regulation No 565/68) to ensure ‘that such exports are made only by the State foreign trade agency Animex’, that delivery through Animex thus forms an essential part of the price guarantee, goods can only be considered as ‘coming from Poland’ if Animex sells and delivers goods from Poland on behalf of the Polish People's Republic to purchasers in the Community direct from the territory of the former and if the goods delivered in third countries have not formed the subject-matter of transactions other than those relating to their transportation into the Community. This corresponds to the principle in accordance with which maintenance of the price guaranteed is subject to strict requirements and in fact this is the best means of ensuring that the guaranteed prices are not reduced. On the other hand there is no guarantee that the promise made by the Polish Government will be observed if, as described in the second part of the question, the relevant goods are first of all sold and delivered into a third country and from there resold and reconsigned to a purchaser established in a Member State. In this connexion one has only to think of the possibility of varying agreements as to prices and to recall that in the recitals of the preamble to Regulation No 565/68 itself it is stated that ‘action which might indirectly bring about prices lower than the sluice-gate prices, such as taking over marketing or transport costs, granting reductions, resorting to linked transactions or any other action having similar effect’. It can thus be established, as all the parties agree, that the second part of the question referred must certainly be answered in the negative. In interpreting the expression ‘coming from’ it is necessary in principle to confine oneself to the criteria indicated under the keywords ‘direct delivery’ and ‘direct sale’.

4. To the question further referred by the court making the reference, whether products also fulfil the condition ‘and coming from’ if they ‘were originally sold and delivered to a trader established in a third country and then consigned by that trader who rejected them on the ground of late delivery to a purchaser established in a Member State without undergoing processing’, the initial reply must that the question does not appear to have been expressed with sufficient clarity. As the Court is aware, the plaintiff in the main action considers in this connexion that it must be accepted that the refusal to take delivery occurred before customs clearance for placing the goods in free circulation was obtained and that the State foreign trade agency Animex itself resold the goods immediately thereafter. The plaintiff is further of the view that in such circumstances, even in a case where customs clearance for placing goods in free circulation in a third State has already been obtained, it might likewise be recognized automatically that, in view of the fact that Animex itself acted as seller, the goods in question come from Poland within the meaning of Regulation No 565/68. In view of the information provided by the plaintiff one might indeed be tempted to concur in the view that even in such a case the condition of ‘coming from Poland’ is fulfilled in that, when Animex resells the goods immediately, it itself, as a party to the agreement, ensures that the price guarantee mentioned in Regulation No 565/68 is honoured. Nevertheless the facts in the main action and the contents of the file indicate how problematic such an assumption would be. It would entail burdening the customs authorities with the investigation of the circumstances of the refusal to take delivery and whether the goods were sent from Austria on account of and on the instructions of Animex. However, complicated examinations of conflicting facts and commercial relationships of this nature clearly have no place in normal customs procedure. Furthermore, it is also clear that in such a case, in particular when goods are resold in a third country only after customs clearance for placing goods into free circulation has been obtained, the necessary certainty with regard to the application of the price guarantee would be lacking. However in applying the derogative rules which now concern us, as I have said, in the interest of the protection of Community production and to avoid distortions of the common market strict criteria are required which certainly cannot be renounced. Therefore it is necessary to adhere to and emphasize what was stated regarding the explanation in principle of the expression ‘coming from’, that is, that the third part of the question gives no grounds for modifying the criteria previously established.

5. Finally, I suggest that the request for a preliminary ruling made by the Finanzgericht München should be answered as follows: The country from which products come within the meaning of Regulation No 565/68 is the country from which they are dispatched and consigned directly to the Community. If products pass through the territory of third countries after leaving the sender country and before reaching the Community they must be considered as directly consigned if they do not undergo any delay there, business or legal transactions other than those having a close connexion with their transportation and which neither interrupt that transportation nor alter the destination of the product.

( 1 ) Translated from the German.

( 2 ) See for example, with regard to French law, Semini, Legislation et Réglementation des Douanes, published by Delmas et Cie 1967, Part 3; with regard to German law the implementing provisions relating to the import list contained in the Annex to paragraph 10 of the Außenwirtschaftsgesetz (Law on Foreign Trade); with regard to Italian law Article 40 of the introductory provisions of the Tariffa Doganale; with regard to Netherlands law, the remarks contained in the statement submitted by the Netherlands Government.