Case C-240/01: Action brought on 21 June 2001 by the Commission of the European Communities against the Federal Republic of Germany
Date: 2001-09-01
Institutions: Court of Justice
Subjects: European Commission, Germany, action for failure to fulfil an obligation, excise duty, heating, mineral oil

C 245/6

EN

Official Journal of the European Communities

1.9.2001

The applicant claims that the Court should:

1.

annul Article 5(5) of Commission Regulation (EC)
No 690/2001 of 3 April 2001 on special market support
measures in the beef sector (1), in so far as that provision
requires the Member State concerned to finance 30 % of
the meat purchase referred to in that
the cost of
regulation;

2.

order the Commission to pay the costs.

Pleas in law and main arguments

— The Commission had no power to order a compulsory co-
financing in the context of an implementing regulation.
Article 5(5) of the contested regulation does not serve to
‘implement’ a corresponding general provision of the
basic regulation, allowing co-financing in principle.
Rather, it represents a clear departure from the provisions
of Council Regulations Nos 1254/1999 and 1258/1999,
which assume 100 % financing from the Community
budget. The question of the financing of a specific support
measure in the agricultural sector necessarily forms part
of the essential features of the subject-matter of the
legislation, which must be governed in the basic Council
regulation. That is especially so since all the decisive
questions on the financing of the common agricultural
policy — including the Community beef market — are
dealt with by Council Regulation No 1258/1999 (or
Council Regulation No 1883/78, as the case may be).

in

to

the

recital

preamble

— Infringement of the financial provisions of the Treaty. By
virtue of the system of the common organisation of the
market in beef and the prohibition of State aid laid down
by Article 87(1) EC, expressly confirmed in the thirty-
third
Regulation
No 1254/1999, the support measures provided for by
the contested regulation constitute, despite the partial
financing by national budgetary resources, Community
aid and therefore ‘expenditure of the Community’ within
the meaning of the first paragraph of Article 268 EC. In
accordance with that latter provision, ‘all items of revenue
and expenditure of the Community [...] shall be included
in estimates to be drawn up for each financial year and
shall be shown in the budget’. The use of the adjective ‘all’
(revenue and expenditure)
in the first paragraph of
Article 268 EC establishes the principle of the complete-
ness/unity of the budget, which is a basic condition for a
political weighting of revenue and expenditure in the
budget procedure and democratic
the
execution of the budget. That basic principle is not
complied with where Community expenditure is (par-
tially) financed on the basis of an imperative regulation
of secondary law from sources that are not part of the

control of

in

the

first

provision

paragraph

budgetary plan. For the same reason, the co-financing
regulation in dispute amounts to a circumvention of the
of
budgetary
Article 269 EC. Moreover, the capping of own resources
in accordance with Articles 269 and 270 EC would not
constitute an effective limit on Community expenditure
if the Commission had the power to order Community
expenditure without it being totally financed by the
Community budget. By acting in that way, the procedure
laid down in the second paragraph of Article 269 EC,
requiring not only a unanimous decision of the Council
(after consultation with the Parliament) but also a ratifi-
cation of that decision by the Parliaments of the Member
States, could easily be circumvented.

— Infringement of Article 253 EC. Reference to the limited
nature of budgetary resources does not explain either
justification the Commission purports to
with what
modify the principle of
financing of support
measures in the beef sector by the Community budget by
establishing compulsory co-financing, or why basis for
allocation of 70 % — 30 % was necessary.

total

The applicant suggests that, in so far as it allows the action,
the Court should maintain the effects of the regulation in order
to protect the position of the operators concerned.

(1) OJ L 95, 5.4.2001, p. 8.

Action brought on 21 June 2001 by the Commission of
the European Communities against the Federal Republic
of Germany

(Case C-240/01)

(2001/C 245/12)

An action against the Federal Republic of Germany was
brought before the Court of Justice of the European Communi-
ties on 21 June 2001 by the Commission of the European
Communities, represented by Enrico Traversa, Legal Adviser,
and Kilian Gross, a member of the Legal Service, with an
address for service in Luxembourg.

1.9.2001

EN

Official Journal of the European Communities

C 245/7

The Commission claims that the Court should:

1.

declare that by applying Paragraph 4(1) Nr. 2(b) of the
Mineralölsteuergesetz (law on the taxation of mineral
oils) the Federal Republic of Germany has failed to fulfil
its obligations under Council Directive 92/81/EEC of
19 October 1992 on the harmonisation of the structures
of excise duties on mineral oils (1) inasmuch as it fails to
charge excise duty on all mineral oils intended to be used
for heating;

2.

order the Federal Republic of Germany to pay the costs.

Pleas in law and main arguments

The action concerns the rule laid down in Paragraph 4(1)
Nr. 2(b) of the German Mineralölsteuergesetz, and in particular
the interpretation given to it in the Decree of the Bundesminis-
ter der Finanzen (Federal Minister of Finances) of 2 February
1998 (III A 1 — V 0355 — 10/97). Under that decree,
‘combustion’ was to be understood as meaning only the
intentional use of the thermal value of a material, i.e. the total
or partial combustion of mineral oil for the production of heat
to be transmitted wholly or partially to another material. That
other material, to which heat is transmitted, must thereby
acquire the character of a new carrier of energy or heat. The
use of the new heat carrier as a means of heating justifies the
conclusion that the mineral oil used to produce that heat
carrier has been heated. In accordance with that interpretation,
there is no ‘heating’ where the material receiving the energy
from the combustion is itself subjected to heat with a view to
the manufacture of a product and it thereby loses its material
characteristics. The same must therefore apply where the
flame comes into direct contact with the material to be
worked/transformed or destroyed. Nor can there be ‘combus-
tion’ where a pilot light is maintained with mineral oil in order
to burn harmful gas emissions or where mineral oil is mixed
in a combustion chamber with emissions that are to be
destroyed and is completely consumed.

According to the Commission, that interpretation infringes
Article 2(2) of Directive 92/81. The words used in that
provision, namely ‘intended for use ... as heating fuel’ must be
interpreted independently and in the light of Community law.
The wording, purpose and system of the directive support the
interpretation that ‘combustion’ must be interpreted in broad
terms and that any consumption of mineral oil for heating
must be regarded as a combustion. In particular, it appears to
be irrelevant whether the heat produced is used indirectly by
means of a heat carrier for the warming of an object, or
directly, in order to initiate or continue a chemical or industrial
process.

(1) OJ L 316, 31.10.1992, p. 12.

Reference for a preliminary ruling from the Conseil
d’E´ tat, Judicial Section, by decision of that court of 28 May
2001 in the case of National Farmers’ Union against the
General Secretariat of the French Government

(Case C-241/0l)

(2001/C 245/13)

Reference has been made to the Court of Justice of the
European Communities by decision of the Conseil d’E´ tat
(French Council of State) Judicial Section, of 28 May 2001,
received at
for a
preliminary ruling in the case of National Farmers’ Union
against the General Secretariat of the French Government on
the following questions:

the Court Registry on 22 June 2001,

(1) whether, having regard to the legislative nature of Com-
mission Decision 98/692/EC of 25 November 1998 (1)
and Commission Decision 99/514/EC of 23 July 1999 (2),
and notwithstanding the expiry of the time limit for
challenging them, a Member State may validly invoke
significant changes in the factual or legal circumstances
occurring after the expiry of that time-limit, where the
changes in question are such as to cast doubt on the
decisions’ validity;

(2) whether, at the date of the decisions taken by the French
authorities, the abovementioned Commission decisions
were valid, having regard to the precautionary principle
laid down in Article 174 of the Treaty establishing the
European Community;

(3) whether a Member State may draw from the provisions
of Article 30 EC (formerly Article 36 of the EC Treaty)
the power to prohibit imports of agricultural products
and live animals, inasmuch as Directives 89/662/EEC (3)
and 90/425/EEC (4) cannot be regarded as harmonising
the measures needed in order to attain the specific
objective of protecting the health and life of humans
provided for by that article.

(1) Commission Decision 98/692/EC of 25 November 1998
amending Decision 98/256/EC as regards certain emergency
measures to protect against bovine spongiform encephalopathy
(OJ L 328 of 4.12.1998, p. 28).

(2) Commission Decision 1999/514/EC of 23 July 1999 setting the
date on which dispatch from the United Kingdom of bovine
products under the date-based export scheme may commence by
virtue of Article 6(5) of Council Decision 98/256/EC (OJ L 195 of
28.7.1999, p. 42).

(3) Council Directive 89/662/EEC of 11 December 1989 concerning
veterinary checks in intra-Community trade with a view to the
completion of the internal market (OJ L 395 of 30.12.1989,
p. 13).

(4) Council Directive 90/425/EEC of 26 June 1990 concerning
veterinary and zootechnical checks applicable in intra- Com-
munity trade in certain live animals and products with a view to
the completion of the internal market (OJ L 224 of 18.8.1990,
p. 29).