II —

As to the first question on the conditions for entitlement to a refund the plaintiff is of the opinion that the concept of exportation does not presuppose that the goods must have been put into free circulation at their destination, independently of whether varying rates of refund have been fixed or not. The relevant provisions of Community law show that the term export is used therein in its normal meaning and in accordance with general usage. Thus the concept of export within the meaning of Article 9 of Regulation No 123/67 and Article 1 of Regulation No 176/67 amounts to physically leaving the geographical territory of the Community. The relevant provisions also draw a clear distinction between events which touch on the territory of the Community and events which extend to the territory of non-member countries. The concept of ‘export’ is, the plaintiff continues, used solely and exclusively in connexion with the territory of the Community, as may be seen in Article 6 (1) of Regulation No 176/67, in the third recital in the preamble to Regulation No 1041/67 and in Article 3 of that regulation. Those provisions that deal with the territory of non-member countries however, for example the ninth recital in the preamble to Regulation No 1041/67 and Article 4 (1) and Article 8 (1) of that regulation, refer not to exportation from the Community but to ‘arrival’, ‘reaching’ or ‘importation’. Even if, contrary to the plaintiff's view entitlement to refunds is made dependent not on exportation from the Community but on importation into a non-member country, that still does not mean that in every case importation into the country of destination must be taken to imply release into free circulation. On the contrary, Article 4 (1) and Article 8 (1) of Regulation No 1401/67 show that the regulation envisaged different import procedures, of which release into free circulation represents only one possibility. 1. The attempt of the plaintiff in the main action to elicit criteria for the meaning of the term exportation from the provisions cited above does not satisfy me however. In fact, as the Federal Government and the Commission rightly observe, all the provisions referred to from which the plaintiff purports to deduce that entitlement to refunds arises as soon as the goods leave the geographical territory of the Community, concern merely detailed rules for payment, which presuppose, but do not found, the existence of substantive entitlement to refunds. The above-mentioned provisions state merely that payment of the refunds may only be applied for when the goods have left the territory of the Community. None of the regulations to which reference has been made affords a clear definition of the concept of exportation underlying the relevant provisions relating to refunds. In order to determine the extent of the concept, therefore, we must return to the general purpose and aims of the rules governing refunds. In my opinion delivered on 19 May 1976 in Case 125/75 (Milch-, Fett- und Eier-Kontor GmbH v Hauptzollamt Hamburg-Jonas, [1976] 1 ECR 785) I have already made some general observations on the tenor and purpose of the rules governing refunds in the organization of the market in milk and milk products, which is comparable in this respect (Regulation (EEC) No 804/68 of the Council of 27 June 1968, Official Journal, English Special Edition 1968 (I), p. 176). The object of the system of Community refunds is to make Community agricultural products which are subject to the common price policy competitive on the markets in non-member countries and to protect their marketing potential there by making up the difference between prices on the world market and those on the Community's internal market. That is apparent as far as the present case is concerned from Article 9 of Regulation No 123/67 and the eighth recital in the preamble to the regulation, which states that the difference between prices on the world market and prices within the Community for products subject to an organization of the market shall be covered by means of a refund in order to enable those products to be exported. Community products will, however, only have equal competitive opportunities for participation in trade in the markets of non-member countries if, after being released into free circulation, they can be traded in on the markets of non-member countries in the same way as the products of those non-member countries themselves. Thus the objective of the export refunds can only be achieved if the Community products, after having been released into free circulation, do in fact form the subject of economic transactions in non-member countries. 2. Further proof that substantive entitlement to a refund arises only once the exported goods have been released into free circulation in a non-member country may be found in the way in which the refunds are calculated. It is obvious that the amount of the refund cannot, of course, depend on any abstract price, but only on prices actually obtaining on the markets, on the one hand on the Community market and on the other in international trade. That the amount at which the export refunds are fixed depends on the actual conditions prevailing on the markets of the non-member countries is clear in our case in Article 3 (2) of Regulation No 176/67, which mentions prices ruling on the markets of non-member countries, the most favourable import prices in the importing non-member countries, producer prices recorded in exporting non-member countries and free-at-Community-frontier offer prices as the relevant criteria for determining the prices on the world market. It is clear from those provisions that entitlement to a refund does not arise definitively on completion of the export formalities, but that the goods must have reached the market in a non-member country. Any other interpretation of the law would — as the Federal Government and the Commission also observe — render inconceivable a provision such as Article 4 of Regulation No 1041/67, which states that in certain cases, by reason of, inter alia, the export markets, Member States may require, as a condition for payment of the refund, proof not only that the product has left the geographical territory of the Community, but also ‘that the product in question has been imported into a third country and, where appropriate, proof of the conditions under which it was imported’. If the entitlement to a refund arose as soon as the customs export requirements were fulfilled, the Member States would be neither entitled nor able to require the above-mentioned additional proof for granting the refund. In many cases however additional proof of this kind can be required only when the goods have already been exported, because only then does some doubt as to the actual destination of the goods arise. In the light of what has been said about the tenor and purpose of the refund rules, ‘imported’ can only refer to marketing. Therefore there must be a requirement that the goods in question have been in circulation on the relevant market and have been subject to the rules of the market, on the basis of which the rate of refund was fixed, irrespective of whether the system consists of varied or uniform refunds. 3. The plaintiffs attempt to counter that result by reference to Article 8 of Regulation No 1041/67 is unsuccessful. As we have seen, under Article 6 (1) of Regulation No 176/67 and the first of Article 3 (1) of Regulation No 1041/67 proof that the goods have left the territory of the Community is sufficient as a rule where there is a uniform refund system. In this respect no special proof of importation is necessary because in normal trading practice it may be assumed that after leaving the territory of the Community the goods have at least arrived in one non-member country or other and consequently proof of importation would amount to an unnecessary burden on trade. Where the refund rates vary according to destination, however, the position is different, for in this case there is a risk of abuse. For that reason the above-mentioned Article 8 provides that where the varied refunds are provided ‘arrival in the country of destination’ must be certified by presentation of certain documents. It is obvious that the Community legislature was motivated principally by practical considerations, in order to burden trade as little as possible, in requiring only the presentation of documents which certify arrival in a country of destination. This is confirmed by the ninth recital in the preamble to Regulation No 1041/67, which says: ‘since uniform methods of proof cannot at present be laid down because of the different rules applied by importing third countries, documents should be accepted which establish beyond doubt, while interfering as little as possible with trade, that the exported goods have reached their destination’. At the same time, however, under Article 8 the competent national authorities are empowered to require ‘additional forms of proof’. The use of that term must, as I have already explained in my opinion on Case 125/75, refer to marketing. It may thus also be inferred from Article 8 that where the authorities responsible for refunds in the Member States have doubts as to whether the goods were marketed in the territory of destination they may instigate special inquiries and require additional proof that the goods have been put into free circulation. 4. It is likewise quite clear that the arrival or importation of goods in a non-member country is to be considered as equivalent to release into free circulation from Commission Regulation No 192/75 of 17 January 1975 (Official Journal L 25 of 31 January 1975, p. 1), which has replaced Regulation No 1041/67. Article 11 of that regulation, which corresponds to Article 8 of Regulation No 1041/67, states that a product shall be considered to have been imported “when the customs formalities for entry into free circulation in the third country concerned have been completed”. 5. Lastly, the Court has also ruled on the meaning of the concept of exportation in my opinion in Cases 6/71 (Rheinmühlen Düsseldorf v Einfuhr- und Vorratsstelle für Getreide und Futtermittel, judgment of 27 October 1971, [1971] 2 ECR 823) and 125/75 (Milch-, Fett- und Eier-Kontor GmbH v Hauptzollamt Hamburg-Jonas, judgment of 2 June 1976, [1976] 1 ECR 771). With reference to Article 20 (2) of Regulation No 19 of the Council of 4 April 1962 (Journal Officiel No 30 of 20 April 1962, p. 933), which contains rules corresponding to Article 9 of Regulation No 123/67, with which we are here concerned, and taking account of the purpose of the export refunds, the Court decided in Case 6/71 that the term “exports to third countries” presupposes release into free circulation in that country. In accordance with my observations on the tenor and purpose of the refund rules the statements made in that case must also be relevant in this case, irrespective of the fact that the earlier case concerned a system of varied refunds and the definition of the expression “exports to third countries”. In Case 125/75 the Court went on to declare that Article 4 (1) of Regulation No 1041/67 is a provision of general application and “applies in all cases where there is a refund, even if the refund has been varied according to the destination”. The said provision must be interpreted as meaning that where the refund is varied entitlement to a refund presupposes that the goods have been given customs clearance and put into free circulation at the destination. As we have seen this statement must, in view of the objectives of export refunds, apply equally to a system of uniform refunds. In both cases goods were forwarded through the sovereign territory of States to be put into free circulation only in another State. In both cases, the Court's decision on the question whether actual exportation had occurred within the meaning of the Community refund rules was based not on departure from the geographical territory of the Community, but on the place of origin of the goods delivered and the country in which they were finally put into free circulation. It is the same in the present case, where the goods were simply forwarded in transit through Austria and Czechoslovakia without being transhipped, prior to being put into free circulation in the German Democratic Republic. 6. The view that the criteria are importation and marketing cannot, moreover, be undermined by the plaintiffs contention that by passing on the export subsidies in the form of corresponding price reductions to the undertakings in Austria or Liechtenstein it had fulfilled the purpose of the refund rules, that is to say, to guarantee the disposal of products by means of measures favouring exports. To accept that argument would mean indeed that there would be a strong inducement to obtain refunds for goods originating in the Federal Republic of Germany and put into free circulation in the German Democratic Republic by shipping them via a non-member country. That is precisely what should be avoided, however, pursuant to the Protocol on German Internal Trade, which, as we know, expressly excludes the application of Community law to trade between the two parts of Germany. It would mean that Community law would provide refunds for exports of agricultural products from the Federal Republic of Germany into the German Democratic Republic, whereas no levy would be applied to exports from the German Democratic Republic into the Federal Republic of Germany. This would prejudice not only the equilibrium of German internal trade in the agricultural sector but also the balance of trade between the Community and the German Democratic Republic.