4.

The key to the solution of the problem under consideration lies in the assessment of the penalty laid down by Article 3 of Regulation No 499/76 in the light of the principle of proportionality, according to which any burden placed on those affected by Community rules must lie within the limits necessary for obtaining the objective sought and require the least possible sacrifice on the part of those concerned. It is scarcely necessary to note this is now a settled principle of Community law (from the case-law of this Court it is sufficient to cite the judgments of 13 July 1962 in Case 19/61, Mannesmann [1962] ECR 357, of 17 December 1970 in Case 25/70, Einfuhr- und Vorratsstelle für Getreide [1970] ECR 1161, of 24 October 1973 in Case 5/73, Balkan-Import-Export [1973] ECR 1091, of 13 November 1973 in Joined Cases 63 to 69/70, Werhahn [1973] ECR 1229, of 11 May 1977 in Joined Cases 99 and 100/76, De Beste Boter and Hoche [1977] ECR 861 and of 5 July 1977 in Case 114/76, Bela-Mühle [1977] ECR 1211). I would draw particular attention to the judgment of 11 May 1977 in Joined Cases 99 and 100/76, because that case concerned the problem of a deposit in an agricultural matter in relation to observance of the principle of proportionality, where it was decided that the limit of what was appropriate and necessary to attain the objective desired was not exceeded in view of the fact that in that case forfeiture of the deposit could not be regarded ‘as in the nature of a penalty for not fulfilling an independent obligation’ (paragraph 11 of the Decision). Since we are here attempting to establish the proportion between the means (the system of licences) and the end, it is clearly necessary to start by identifying the end sought by that system. I have already had occasion to cite the sixth recital of the preamble to Regulation No 193/75 of the Commission of 17 January 1975, according to which the security is ‘calculated to guarantee that the obligation to import or export will be fulfilled during the period of … validity [of the licences]’; that statement is all the more important in that Regulation No 193/75 was intended to ‘consolidate’ the existing rules in the matter of import and export licences from the time of Regulation No 1373/70 of the Commission of 10 July 1970 (cf. the second recital of the preamble to Regulation No 193/75). For its part, this Court has already held, precisely with reference to Regulation No 1373/70, that ‘the system of lodging security is designed to ensure that imports or exports … are effected’. There can therefore be no doubt as to the purpose of the system of securities, in connexion with the system of impon and export licences; the logical and legal consequence of this is the legality of forfeiture of the security in the event of the intended transaction's not being effected. Evidently, however, failure to fulfil the obligation voluntarily entered into to import or export within a given period is one thing; failure to furnish, within the period laid down by Regulation No 499/76, the documentary proof of importation or exportation is quite another. To extend to the second failure the penalty laid down for the first, that is to say forfeiture of the security, involves the use of the means relating to the system of securities for something other than its original purpose; it involves (to use the words of the said judgment of 11 May 1977) regarding forfeiture of the deposit as being in the nature of a penalty for not fulfilling an independant obligation. Two comments should be made in this connexion. In the first place, if the failure to furnish proof is due to the fact that the intended transaction has not been effected, it is that latter circumstance which determines the forfeiture of the security; a rule such as that of Article 3 of Regulation No 499/76 is therefore justified only if it is desired that failure to furnish proof should be penalized per se, independently of whether importation (or exportation) has been effected or not. In the second place, prior to the adoption of Regulation No 499/76, the system of securities had been in force for a long time, and naturally failure to fulfil the obligation to export or import was penalized by forfeiture of the security, while the impossiblity of recovering the security until proof that the transaction had been effected was furnished prompted undertakings to furnish such proof without undue delay. The real innovation introduced by the said regulation is that an individual who has fulfilled the obligation entered into, but has allowed the ‘administrative’ time-limit fixed for the submission of documentary proof to pass without taking any action also loses his security. So severe a penalty in relation to a purely formal omission, which is much less serious than that of failure to fulfil the obligation which the security is intended to guarantee, appears to me to be excessive and I do not believe that it can be justified with reference to the inconvenience caused to the administrative authorities by having to keep open a file rather than closing it definitively six months after the expiry of the validity of the licence. The Commission states that is is apprehensive of the difficulties which might be caused in the functioning of its departments by allowing traders to furnish the requisite proof for release of a security at any moment. But this statement can be countered above all by consideration that it is in the interests of any undertaking to secure the release of the security as soon as possible, even where that security has been given merely in the form of a bank guarantee since, in general, there is no reason for thinking that banks offer their clients services without requiring some form of consideration in return. Furthermore, I would note that between allowing proof of completed transactions to be furnished without any time-limit and the draconian rule of Article 3 of Regulation No 499/76 there is an intermediate solution: to lay down, as has been done, an administrative time-limit for the furnishing of proof; and to sanction noncompliance therewith by a penalty for default proportional to the delay (and therefore increasing with the extent of the delay, but on the basis of a reasonably lenient point of departure). In that way undertakings would have a further reason for observing the period, and the administration would be compensated for the inconvenience caused by any delay. The fact that it is clearly possible to achieve the desired aim by the adoption of measures which are considerably less onerous for those concerned persuades me that the measure in question is contrary to the principle of proportionality and therefore invalid.