B —

Does it follow that the Community regulation is complete and ‘perfect’? It would be an exaggeration to claim that it is and it is obvious that at least on some points, as for instance the formalities to be complied with by the importer in order to qualify for exemption from payment of the Community levy, it must be supplemented. Similarly, although the question is more controversial, the exclusion from the benefit of these provisions of those who have already been convicted by the competent court of infringing the rules governing the trade in goods intended for processing, which is provided for in the laws of certain of the Member States, might, in my opinion, be justified, first by the essential need to deal with fraud which I emphasized earlier and secondly by a teleological interpretation of the Community regulation. However, the application of Article 55 of the German Customs Code to the transactions covered by the Community regulations produces quite different effects. 1. Instead of merely ensuring a correct and reasonable application of the Community regulations it restricts their scope in one Member State. Whereas in the other five Member States, the importer (at least the importer without previous convictions) may be eligible for the suspension of the levy if he enters into the undertakings required and lodges the deposit, in Germany he must also meet another condition: he must enjoy the trust of the German customs authorities. The present case enables us to see to what extent this condition restricts the scope of the Community regulations. I stated earlier that Fleischkontor had been cleared of any suspicion of fraud. However, it appears that this verdict in no way deters the German customs from continuing to regard it as not “trustworthy” since, during the proceedings, the competent German authorities maintained that even if the issue were one of a misunderstanding arising out of the erroneous production by a secretary or junior employee of a bona fide invoice, this fact was sufficient to justify the firm's being regarded as untrustworthy. 2. It is clear that the application of Article 55 of the German Customs Code to the transactions covered by the Community regulations leads to results which are contrary to the aims of the authors of those regulations. These authors wished the guarantee of the transaction's being properly carried out to be provided solely by a deposit system. However, according to the explanations which we have been given, the German customs authorities in some way classify importers into three categories according to the degree of trust which they inspire: One of these categories is made up of those who might be described as “good” importers, that is those to whom, as a general rule, the customs authorities grant the authorizations requested, without any formality or security. At the other extreme there are those who could be described as “bad” importers, whose requests for authorizations are turned down out of hand and whose only recourse is the hope—a very feeble one as I shall shortly explain—that a court will support them some years later. Between these two, there is an intermediate category comprising those who might be called “doubtfuls”, to whom the authority issues the authorizations sought but makes them conditional upon the lodging of a deposit, as it is undecided about the degree of trust to be accorded to them. You can see how difficult it is to reconcile this system with that laid down in the Community regulation. Those whom I have described as “good” importers are obliged to lodge a deposit in accordance with the Community provisions, although under German law they would have been exempt from this; this is, however, of no great consequence. On the other hand, those whom I have described as “doubtfuls” would be required to lodge two deposits to guarantee the same obligation to do the processing: first, like all importers, a deposit under the Community regulation and then a second because the German authorities were not sure of the degree of trust to be accorded to them. These examples show to what extent the application of Article 55 of the German Customs Code to the transactions covered by the Community regulations exceeds in both its object and effects the measures necessary to ensure the correct implementation of these regulations and almost succeeds in changing their character. Lastly, it must be observed that the provisions of national law which it is sought to apply in this case appear to be contrary to the fundamental principles of Community law. You have been told that the present provisions in Article 55 of the German Customs Code derive from a law of 1939 which gave the Minister for Finance of the Reich the power to authorize the German customs to issue the necessary authorizations in respect of trade in products intended for processing only to those importers whom the authorities considered to be “trustworthy”. This was, therefore, a provision linked to the requirements of a self-sufficient economy which was well on the way to becoming a war economy. One might have thought that it would disappear with the establishment of the Common Market. Not only did it continue in being but, when the German courts tried to control the authorities' exercise of this wholly extraordinary prerogative, a law was passed providing specifically that in this field the authorities enjoyed a discretionary power (Ermessensbegriff). As the Finanzgericht emphasizes in its order making the reference this specific provision, which was made by a law of 1961, virtually eliminated any possibility of review by the courts, which until then had sought to carry out this review within the framework of their powers under German public law in relation to indefinite legal concepts (unbestimmter Rechtsbegriff). The Agent for the German Government is a specialist too well versed in Community law not to have seen how little this whole system is consistent with the general principles of that law. In Court, therefore, he staged a sort of strategic withdrawal saying: ‘Do not interpret the Community regulations in such a way as to condemn the requirement of trust laid down in Article 55 of the German Customs Code: say only that the establishment of the German Market invalidated the provision in Article 55 which provides that the authorities have a discretionary power of assessment in this matter’. However, in my opinion, this discretionary power is only one of the reasons for the incompatibility which exists between the principles of Community law and the provisions of Article 55 of the German Customs Code. The real reason for this incompatibility is to be found in the fact that, through the operation of this provision, the application of a Community regulation does not depend on objective requirements, but on a subjective appraisal made by a national authority. However, the principle of such a subjective appraisal is contrary to several fundamental rules of Community law. It is contrary, first, to a rule which has been confirmed on many occasions in your case-law and to which I referred earlier: that Community law must be equally enforceable in all the Member States and that Community regulations must be applied uniformly in all those States (cf. for example, your judgments in Costa of 15 July 1964, Salgoil of 19 December 1968, Böllmann of 18 February 1970 and Krohn of 18 June 1970 or, more recently still, in Bakels of 8 December last). Secondly, it is contrary to the rule which prohibits Member States from restricting, for example, by the imposition of a requirement which depends upon the subjective judgment of a national authority, the rights conferred on private persons by Community regulations which, like those concerning the trade in products intended for processing, have direct effect. This rule is specifically referred to in the last paragraph of Article 20 of Regulation No 805/68 which you have been asked to interpret. Let me add that even if one has, as I have that full confidence in the German customs authorities which they merit, one cannot help thinking that, in spite of all the efforts at objectivity on the part of the officials required to form this judgment, one as subjective as that made by the authorities regarding the degree of trust to be accorded to an importer certainly contains the seeds of discrimination. This is so because although the imported meat must be processed in the importing country the importer concerned is not necessarily a national of that country, but may be a foreigner. It is quite clear that any customs administration, however impartial it may be, will naturally tend to recognize as trustworthy the national importers who are known to it more readily than foreign importers of whom it may have little or no knowedge.