WRITTEN QUESTION E-2766/98

by Giacomo Santini (PPE) to the Commission

(10 September 1998)

Subject: Application of a surcharge ('sovrapprezzo') to imports of Community sugar

In its judgment of 21 May 1980, in Case 73/79, the Court of Justice of the European Communities ruled that Italy had infringed Article 95 of the EC Treaty by imposing a surcharge on imports of Community sugar, a provision introduced by the Interministerial Prices Committee (CIP No 3661 of 22 June 1968). The surcharge was deemed to discriminate between importers and domestic producers thereby entailing an unacceptable distortion of the principle of free competition. The surcharge was ruled illegal in that it constituted a charge which, "although levied at the same rate on sugar produced in Italy and sugar from other Member States, does not constitute a uniform imposition on those products".

Will the Commission say:

1. whether it still considers the surcharge levied by the Italian state under provision CIP 3661 of 22 June 1968 to be illegal?

2. whether the surcharge paid by Italian importers should be refunded since it was illegally levied and could not be reclaimed?

3. whether the body concerned (the Sugar Equalisation Fund) can, if necessary, ask importers to pay any difference between the surcharge paid and the amount of aid legally granted by the Italian state?

4. whether the state may determine the amount of direct or indirect aid granted to industry independently and without supervision by any other authorities?

5. whether the Sugar Equalisation Fund can, by means of retrospective application of the law, request a refund of the illegally levied tax if this has already been repaid to the importer?

6. whether importers will be subject to the burden of proof requiring them to show that the surcharge has not been passed on to other operators in order to secure the right to reimbursement as provided for in law 429/90?

7. whether the illegal nature of the surcharge can be deemed to be offset by the fact that it has been transferred to the consumer?

Will the Commission call on the Italian Government to annul/repeal Article 29(2) and (7) of law 128/90?

Answer given by Mr Monti on behalf of the Commission

(9 November 1998)

1. The Commission can only refer to the principles set out by the Court of Justice in its judgment of 21 May 1980, which stated that insofar as the "sovrapprezzo" imposed a heavier burden on sugar imposed from other Member States than on sugar produced in Italy, it was a charge incompatible with Article 95 of the EC Treaty. However, according to the Commission's information, Italy changed its method of financing the sugar sector in 1981 to comply with the Court's judgment.

2. According to the Court of Justice's rulings on this issue, Member States are, as a rule, obliged to refund taxes collected in violation of Community law. Such refund applications must meet the conditions laid down by the relevant national law as to their form and substance; however, these rules must be no less favourable than those governing similar domestic actions (the equivalence principle) and must not render virtually impossible or excessively difficult the exercise of rights conferred by Community law (the effectiveness principle)(1).

3. The Honourable Member's question is not clear; the Commission cannot give an answer.

4. The Honourable Member does not explain what he means by "direct or indirect aid". As far as aid to the Italian sugar industry is concerned, the Commission is only aware of the aid which Italy is authorised to grant under Article 46 of Council Regulation (EEC) 1785/81 of 30 June 1981, on the common organisation of the markets in the sugar sector.(2) That aid was approved by the Council in April 1995, and is due to be gradually phased out by the 2000/2001 marketing year.

Italy must of course comply with Article 46, part of which states: "Pursuant to Articles 92, 93 and 94 of the Treaty, the Commission shall assess in particular whether such aid is consistent with the restructuring plans."

5. In accordance with Court case-law on the recovery of undue payments, if the trader obtained a refund of the undue tax, the cost of which was borne by the trader, then the issue of repayment no longer arises as such.

6. With regard to the burden of proving whether or not the cost of a tax imposed contrary to Community law was passed on, the case-law of the Court suggests that it is for the national court, which is at liberty to evaluate the evidence in each case, to determine whether the charge was passed on in whole or in part. The Court has, nonetheless, stated that with regard to indirect taxes it is not acceptable to assume that any charge was passed on and to require the taxpayer to prove the contrary.(3)

7. As the Court has stated,(4) there is an exception to the principle of reimbursement of taxes, charges and duties levied in breach of Community law where it is established that the person required to pay such charges has actually passed them on to other persons.

The Commission would inform the Honourable Member that with regard to the Italian authorities' interpretation of Article 29 of law 428/90, the Court has been asked in the "Dilexport" case (Case C-343/96) which is currently pending, for a ruling as to whether a measure whereby a person requesting repayment is presumed to have passed the tax on (unless he or she can prove the contrary) is compatible with Community law. The Commission, for its part, has begun an infringement procedure under Article 169 of the EC Treaty, considering that Article 29(2) and (7) of law 428/90, as interpreted by the Italian authorities, is incompatible with Community rules on the recovery of undue payments.

(1) Judgment of 15 September 1998, in Case C-231/96, Edilizia Industriale Siderurgica Srl (Edis) v Ministero delle Finanze.

(2) OJ L 177, 1.7.1981.

(3) Cases C-192 to 218/95, ("Comateb"), [1997] ECR I-165.

(4) See especially Case C-199/82, Amministrazione delle Finanze dello Stato v SpA San Giorgio, [1983] ECR 3595.