2.

In the first part of the question, which concerns the extent of the legal obligations of the recipient of a denaturing premium, the court making the reference expresses doubts as to whether actual use of the denatured sugar as animal feed constitutes a prerequisite for the grant of a denaturing premium. In its view, which is shared by the plaintiff in the main action, that possibility is excluded principally by the fact that Articles 14 and 21 of Regulation No 100/72 of the Commission, which list the conditions of entitlement to the denaturing premium, do not refer to the duty to ensure use for the designated purpose. Where an obligation is imposed on traders, however, the requirement of legal certainty requires that the wording of the provisions be unequivocal. It is in any event only fair for unclear and ambiguous legal provisions to be interpreted against the Community or the State which is responsible for implementing such provisions. That argument must certainly be endorsed inasmuch as the wording of the provisions in question alone does not in fact indicate that ensuring that the sugar is put to its intended use constitutes an unconditional prerequisite for the grant of the premium. On closer examination of the provisions in question, however, it will be found that they are not intended to lay down definitive conditions for the grant of a premium, their purpose being merely to define more closely the conditions governing payment of the premium. (a) The regulation in question shows that traders must be in possession of a denaturing premium certificate in order to qualify for payment of a denaturing premium. The issue of such a certificate confers, pursuant to the general provision contained in Article 14 (1) (a), the right to payment of the premiums after denaturing. In order to ensure that the quantity of sugar indicated in the certificate is also actually withdrawn from the market subparagraph (b) of the regulation, which constitutes, as it were, the reverse side of the coin, provides that the certificate entails the obligation to denature the sugar under the conditions laid down in the certificate, but nothing is said as to the other conditions which must be satisfied in order for the recipient ultimately to become eligible for the premium. Similarly, by virtue of Article 18 (3) of the regulation, the required deposit is released as soon as the sugar has been denatured under those conditions. Article 21 (2) (a) of the regulation then ensures that the denaturing takes place in the proper fashion, as regards the establishment and the process concerned, by making payment conditional upon the sugar's being denatured under supervision in an approved establishment and by one of the processes listed in the annex. Even Article 24 of the regulation, as its wording shows, is concerned merely with a detail as to the time when payment is to be made inasmuch as it provides that the premium is to be paid at the earliest after proof is furnished that the sugar has been denatured in the proper fashion and at the latest at the end of the month following production of such proof. Since those provisions are thus concerned merely with the detailed procedures for payment, which are clearly so designed as to fix the time of payment of the premium as soon as possible after completion of the denaturing process in order to avoid any greater costs for the denaturing undertakings, the legislature had no compelling reason in this context to mention any duty to ensure that correct use be made of the product. Hence the absence of a provision to that effect does not justify the inference that the legislature wished to exclude such a requirement. Since the time of payment is governed by the regulation itself there is also no justification, contrary to the view of the court making the reference and the plaintiff in the main action, for the assumption that the payment constitutes an unlawful advance within the meaning of Article 24 (2) of the regulation. On the contrary, the sense and purpose of that provision, as shown by both its position and the twelfth recital in the preamble to the regulation, is to prevent premiums from being paid before denaturing has been completed in the proper manner. (b) Since the provisions themselves do not provide any indication as to whether use of the denatured sugar for a purpose other than that intended extinguishes any justification for granting the premium, it remains to be considered whether the answer to the question what are the legal conditions governing the grant of the premium may not be inferred from other provisions or from the general context of the regulations on denaturing The first provision to be looked at in this context is Article 19 (1) of the Commission regulation, which provides: “The Member States shall appoint competent agencies to supervise denaturing and to ensure that the denatured sugar is only used for animal feeds.” The first part of that provision concerns supervision of denaturing in accordance with the relevant provisions which, as we have seen, is the prerequisite for payment of the denaturing premium. In the second part the Member States are further empowered and required to ensure that the product is used for its intended purpose. The introduction of such supervision, to be carried out after the denaturing, is proof of the fact that, apart from ensuring that denaturing was carried out correctly, in other words, that the sugar was withdrawn from the food sector, the essential concern of the Community legislature was that it should be put to its intended use. Furthermore, as was also pointed out, and rightly so, by the Commission and the intervention agency, there is no sense in having supervision unless the negative findings resulting from it have at least some consequences. There is no need for me to explain in detail why simply checking the use, when no consequence is attached to abuse, would not guarantee that the sugar was put to its intended use. That interpretation, based on the wording alone, is supported, moreover, by the preamble to the Commission's regulation. Thus in the sixth recital in the preamble it is stated that only sugar “intended for animal feed” is eligible for a denaturing premium One cannot interpret that, as the plaintiff in the main action seeks to do, as meaning that it is sufficient for the recipient of the premium to give sufficient indication of the intended use. Were one to be content with that requirement the door would be wide open to abuse. In order to guarantee that the sugar really is used for animal feed the Commission stipulates in the seventh recital in the preamble that “Member States must take all necessary measures to ensure that it is used for” that purpose. That the grant of the denaturing premium is only justified in the eyes of Community law if, after denaturing, the sugar is actually used for animal feed, becomes abundantly clear on examination of the Commission's implementing regulation in the light of Regulation (EEC) No 2049/69 of the Council of 17 October 1969 laying down general rules on the denaturing of sugar for animal feed (Official Journal, English Special Edition 1969(11) p. 441). According to the first sentence of Article 1 (2) of the Council regulation “sugar in respect of which a denaturing premium has been granted shall be used only for animal feed”. The court making the reference and the plaintiff in the main action consider the provision to be merely a rule which lays a duty upon the Commission, and which is not linked to the provision of any specific penalties, as is indicated by the words “shall ... only” and by the second sentence, which states that “the denaturing method used shall be determined with this end in view”. They consider that if, however, denaturing is not sufficient to ensure proper compliance with the rule whereby the Council laid a duty upon the Commission, the traders ought not to be held responsible for this. The first point about that submission is that although the use of the words “shall ... only” indicates primarily a prohibition, as the court making the reference rightly states, it also serves to stipulate that in order to qualify for a premium the denatured sugar must not be used for any pupose other than animal feed or, in other words, that that is the use to which it must be put. Moreover, the question whether the provision is to be considered as a rule imposing a duty or merely laying down a procedural requirement need not, in my opinion, be examined since its wording is in any case sufficiently clear and compelling to yield an unequivocal interpretation of the implementing regulation of the Commission discussed above. The same conclusion is to be derived from the sense and purpose of the rules governing denaturing premiums as revealed, in particular, in the preamble to the Council regulation. The plaintiff in the main action is in error here in considering that the purpose of the regulation is primarily to relieve congestion on the sugar market, and that the policy of subsidizing denaturing “for animal feed” is of minor importance. That is contradicted not only by the passages of the provisions referred to above but also by the fact that both in the Council regulation and in the Commission regulation the recitals in the preamble relating to the use of the sugar always precede the recitals dealing with the relief of congestion on the sugar market. Thus the second recital in the preamble to the Council regulation provides, before there has been any mention of ways of selling sugar surpluses: “... to prevent a premium being paid in respect of sugar not used for feed, there should be provisions to ensure that it is used for the purpose intended and that denatured sugar which has benefited from a premium can be used for animal feed only; ... it might be desirable to specif)- that the denatured sugar should be used as feed for certain types of animal”. That the denaturing premium is part of the policy of providing subsidies in order to enable sugar to compete as animal feed and as an additive to animal feed against other animal feeds may also be deduced indirectly from the basis of calculation referred to in Article 3 of the Council regulation which provides inter alia that the criteria for determining the amount of the premium are to be based on the foreseeable market price for animal feedingstuffs with which the denatured sugar will have to compete and the relative nutritive value of denatured sugar and competing animal feedingstuffs. Such an aim — reducing the price by paying sugar manufacturers a premium — would be frustrated, however, if cheaper sugar destined for animal feed could be used, with corresponding profits for the traders concerned, to satisfy different needs which otherwise could be satisfied only by sugar not reduced in price by the grant of premiums. The final argument is that, were the sole purpose of the regulations to relieve congestion on the sugar market the provisions regarding supervision of the use of denatured sugar for animal feed would be pointless. As the Commission and the intervention agency both maintain, it must therefore be assumed that the denaturing premium was designed to relieve congestion on the market in sugar intended for human consumption by diverting some of that sugar for use as animal feed. But there can be a lawful subsidizing of sugar, that is to say, in conformity with that aim, only if the sugar in respect of which a subsidy is granted is actually used for the intended purpose. It is that sense and purpose of the rules which must ultimately, I think, — were the wording considered abiguous — convince the informed observer that the premium is payable only subject to the denatured sugar's being used for its intended purpose. That means that, conversely, on a reasonable construction of the whole body of rules on the subject, if other use was made of the sugar there should no longer be any justification for payment of the premium and it should be repaid. (c) That conclusion is not invalidated, as the court making the reference and the plaintiff in the main action believe, by any legal comparison, according to system, between the denaturing provisions at issue here and the provisions contained in other regulations. In the first place, those regulations (I have in mind the reference to Commission Regulation (EEC) No 1687/76 of 30 June 1976 laying down common detailed rules for verifying the use and/or destination of products from intervention (Official Journal L 190, of 14 July 1976, p. 1)) have a different content, and in the second place it is clear that the Community legislature has in the meantime come to the conclusion that scrupulous supervision of the goods is necessary to prevent abuse, as, for instance, is apparent from Commission Regulation (EEC) No 649/78 of 31 March 1978 on the sale at reduced prices of intervention butter for direct consumption as concentrated butter. (d) The interpretation advanced here corresponds to the view adopted by the Member States in which denaturing took place to any appreciable degree during the years in question (according to statements made by the Commission these were, apart from the Federal Republic of Germany, France, Belgium and the Netherlands), as reflected in the measures in force in those countries for supervising the use to which the sugar was finally put, that using the denatured sugar for the purpose intended was a prerequisite for the lawful grant of the denaturing premium. Last but not least it is clear that the plaintiff in the main action, as is shown in the contractual clause quoted at the beginning of this opinion, attributed the same meaning to the denaturing rules, inasmuch as it expressly drew the attention of the buyer of the goods to the fact that proof might have to be produced that the sugar had been used for the intended purpose.