CELEX: 62001CC0230
Language: en
Date: 2003-02-13
Title: Opinion of Mr Advocate General Geelhoed delivered on 13 February 2003. # Intervention Board for Agricultural Produce v Penycoed Farming Partnership. # Reference for a preliminary ruling: Court of Appeal (England & Wales) (Civil Division) - United Kingdom. # Regulation (EEC) No 3950/92 - Additional levy in the milk and milk products sector - Deliveries by a producer to a purchaser - Payment of levy - Recovery from the producer. # Case C-230/01.

OPINION OF ADVOCATE GENERALGEELHOED delivered on 13 February 2003  (1)
         Case C-230/01 Intervention Board for Agricultural ProducevPenycoed Farming Partnership(Reference for a preliminary ruling from the Court of Appeal (England and Wales) (Civil Division))
            ((Regulation (EEC) No 3950/92 – Additional levy in the milk and milk products sector – Deliveries by a producer to a purchaser – Purchaser's failure to pay the levy – Recovery from the producer))
            
      
         
        I ─ Introduction
      
       1.  In this case the Court of Appeal (England and Wales) (Civil Division) has referred three questions on the interpretation of
      Council Regulation (EEC) No 3950/92 
      
         			(2)
         		 of 28 December 1992 establishing an additional levy in the milk and milk products sector and Commission Regulation (EEC)
      No 536/93 of 9 March 1993 laying down detailed rules on the application of the additional levy on milk and milk products. 
      
         			(3)
         		
       2.  The questions relate to the recovery of the additional levy.  The referring court seeks to ascertain whether there are circumstances
      in which the competent national body is entitled to recover directly from a milk producer itself levy owed in respect of deliveries
      made by it to a purchaser.  Under the applicable Community rules it is the purchaser ─ and not the producer ─ who is obliged
      to pay.
      
       3.  The background to this case lies in factual circumstances in which a scheme has been set up in which there is no recourse
      against the purchaser of milk.  The parties involved intend thereby to create a situation in which no additional levy is payable
      on the production of milk without a corresponding milk quota.
       II ─ Legal framework
       
      
      
      A ─
       Community law
      
       4.  The rules governing the additional levy on cow's milk were introduced on 1 April 1984 by Council Regulation (EEC) No 856/84
      of 31 March 1984 amending Regulation (EEC) No 804/68 
      
         			(4)
         		 on the common organisation of the market in milk and milk products. 
      
         			(5)
         		  The objective of the levy, as provided in Article 5c of amended Regulation No 804/68, is  
      to curb the increase in milk production while at the same time permitting the structural developments and adjustments required,
      having regard to the diversity of the situations among individual Member States, regions and collection areas in the Community.  Under the regulation, every milk producer who fulfilled certain conditions was allocated a milk quota. 
      
         			(6)
         		  Council Regulation (EEC) No 857/84 of 31 March 1984 adopting general rules for the application of the levy referred to in
      Article 5c of Regulation (EEC) No 804/68 in the milk and milk products sector 
      
         			(7)
         		 laid down further rules. 
      
         			(8)
         		
       5.  That system, which was intended to be temporary, was maintained in force until 1 April 2000 by Regulation No 3950/92. 
      
         			(9)
         		  The provisions for the implementation of that regulation were laid down in Regulation No 536/93. 
      
       6.  Under Article 1 of Regulation No 3950/92, the additional levy is to be  
      payable by producers of cow's milk and apply to  
      quantities of milk or milk equivalent delivered to a purchaser or sold directly for consumption during the 12-month period
      in question in excess of a quantity to be determined.  The levy shall be 115% of the target price for milk.
      
       7.  Article 2(2) of Regulation No 3950/92 concerns deliveries:  
       ... before a date and in accordance with detailed rules to be laid down, the purchaser liable for the levy shall pay to the
      competent body of the Member State the amount payable, which he shall deduct from the price of milk paid to producers who
      owe the levy or, failing this, collect by any appropriate means.Whereas a purchaser replaces in whole or in part one or more purchasers, the individual reference quantities available to
      producers shall be taken into account for the remainder of the twelve-month period in progress, less quantities already delivered
      and account being taken of their fat content.  The same provisions shall apply where a producer transfers from one purchaser
      to another.Where quantities delivered by a producer exceed his reference quantity, the purchaser shall be authorised, by way of an advance
      on the levy payable, in accordance with detailed rules laid down by the Member State, to deduct an amount from the price of
      the milk in respect of any delivery by that producer in excess of his reference quantity.
      
       8.  Article 2(3) concerns direct sales.  In that case  
      the producer shall pay the levy payable to the competent body of the Member State before a date and in accordance with rules
      to be laid down.
      
       9.  Article 9(e) of Regulation No 3950/92 gives a definition of the term  
      purchaser.  It reads:  
       an undertaking or grouping which purchases milk or other milk products from a producer:
      
      
      ─
          to treat or process them,However, any group of purchasers in the same geographical area which carries out administrative and accounting operations
         necessary for the payment of the levy on behalf of its members shall be regarded as a purchaser.  ...
        to treat or process them,
      
      
      ─
       to sell them to one or more undertakings treating or processing milk or other milk products. 
       However, any group of purchasers in the same geographical area which carries out administrative and accounting operations
      necessary for the payment of the levy on behalf of its members shall be regarded as a purchaser.  ...
      
      
       10.  The role of the purchaser is explained in the eighth recital in the preamble to Regulation No 3950/92, which reads:  
      Whereas, in order to avoid, as in the past, long delays between collection and payment of the levy, which are incompatible
      with the scheme's objective, provision should be made for the purchaser, who seems in the best position to carry out the necessary
      operations, to be liable for the levy, and for him to be given the means to collect the levy from the producers who owe it.
      
       11.  The detailed rules of application relating to payment of the levy are laid down in Regulation No 536/93.   Article 3 sets
      out rules for delivery to the purchaser, Article 4 for delivery direct to the consumer.  Article 5(2) requires Member States
      to take any additional measures  
      necessary to ensure payment of levies due to the Community within the time-limit laid down.  Those include ─ pursuant to Article 7(1) of Regulation No 536/93 ─  
      all the verification measures necessary to ensure payment of the levy on quantities of milk and milk equivalent marketed in
      excess of any of the quantities referred to in Article 3 of Regulation (EEC) No 3950/92.  
       To that end: (a) all purchasers operating in the territory of a Member State must be approved by that Member State. ...(b) producers shall be required to ensure that purchasers to whom they deliver are approved.  
      
      
      
      B ─
       National legislation
      
       12.  The relevant national provisions giving effect to the EC regulation and concerning the additional levy are laid down in the
      Dairy Produce Quota Regulations 1997. 
      
         			(10)
         		
       13.  Regulation 2 gives a definition of the term  
      purchaser.  This is the purchaser as referred to in Article 9 of Regulation No 3950/92, who is approved by the Intervention Board for
      Agricultural Produce 
      
         			(11)
         		 as laid down in Article 7(1) of Regulation No 536/93.  The Intervention Board is the competent body in the United Kingdom
      as referred to in Articles 2(2) and (3) of Regulation No 3950/92.  
      
       14.  Regulation 20 provides that any amount payable in respect of the levy which has remained unpaid on 1 September in any year
      may be recovered, together with interest, by the Intervention Board.  For the purposes of the third paragraph of Article 2(2)
      of Regulation No 3950/92 ─ the situation where the quantity of milk delivered by the producer to the purchaser exceeds the
      producer's quota ─, the purchaser is authorised immediately to deduct an amount corresponding to the quantity in excess of
      the quota.
       III ─ Facts and procedure
      
       15.  The main proceedings concern a dispute between, on the one hand, the Intervention Board and, on the other, Penycoed Farming
      Partnership, 
      
         			(12)
         		 a partnership between Jonathan Williams and Ian Parker.
      
       16.  By writ of 28 January 1999, the Intervention Board brought before the High Court of Justice, Queen's Bench Division, a claim
      against Penycoed for GBP 561 872.42, being levy due from the defendant for the 1997/98 milk year, together with interest.  In
      its statement of claim of 6 May 1999, the Intervention Board set out the facts on which it relied in support of its claim.  At
      paragraph 11 of that statement of claim, it alleged as follows:  
      During the quota year 1997/98, the defendant was a producer of milk for the purposes of the [relevant Community and national
      instruments] and delivered 2 111 023 litres of milk or milk equivalent to persons who were not purchasers approved by the
      plaintiff.
      
       17.  As is apparent from the order for reference, the factual background to this case is a scheme whereby farmers delivered milk
      to Elm Farms Limited (an English company, now in liquidation, hereinafter:  
      Elm Farms) and, from 1 January 1998 onwards, to TDM Dairy Management Incorporated (a company incorporated in Delaware, hereinafter:
       
      TDM).
      
       18.  The farmers who joined the scheme entered into arrangements with Elm Farms and TDM.  Most of the participating farmers were
      registered holders of milk quotas but some of them, including the defendant, were not.  Under those arrangements, the farmers
      rented out (parts of) their land and their cows to Elm Farms or TDM.  The farmers who held a milk quota permitted Elm Farms
      and TDM to use that quota in their name.  At the same time, Elm Farms and TDM agreed with the farmers that they would be paid
      to care for and milk the cows as agents for Elm Farms and TDM.
      
       19.  The purpose of the scheme was to enable the farmers to engage in dairy farming without requiring milk quotas to do so.  The
      object was that the farmers would not be producers within the meaning of the additional levy regulations and that Elm Farms
      and TDM would not be purchasers.  Elm Farms and TDM would themselves be the producers who would either have needed milk quotas
      or been responsible for any levy payable.  The Intervention Board claimed that the scheme did not have the intended result
      and that the farmers remained  
      producers and Elm Farms and TDM were  
      purchasers.  Thus milk was delivered by the farmers to Elm Farms and TDM.  The farmers disputed that view of the Intervention Board.
      
      
       20.  In March 2000 Penycoed issued an application seeking to have the Intervention Board's claim summarily dismissed.  Penycoed
      argued that, even if the facts alleged were true, the Intervention Board had no direct claim against it.  The Intervention
      Board's only claim, according to Penycoed, was against the purchasers of the milk.  The purchasers for their part had a claim
      against Penycoed.  The Intervention Board opposed that application.
      
       21.  Penycoed's application is, legally speaking, to be regarded as a preliminary objection of inadmissibility.  By judgment of
      27 June 2000, Master Eyre dismissed the preliminary objection because he considered that it should be ruled upon, not at a
      preliminary stage of proceedings, but during the hearing of the substance of the case.   Master Eyre granted Penycoed leave
      to appeal to the Court of Appeal against his decision.  The Court of Appeal heard the case on 25 April 2001.
      
       22.  It should be noted that the parties to the main proceedings have agreed, for the purposes of the preliminary objection of
      inadmissibility, that the Intervention Board's factual analysis will be deemed to be correct.  Thus, in the further course
      of proceedings, Penycoed will be regarded as a producer and Elm Farms and TDM as purchasers to whom Penycoed made deliveries.  It
      is also established in the proceedings that the Intervention Board has not approved Elm Farms and TDM as purchasers. 
      
       23.  Subsequently, by order of 31 May 2001, lodged at the Registry of the Court of Justice on 12 June 2001, the Court of Appeal
      (England and Wales) (Civil Division) referred the following questions to the Court of Justice of the European Communities
      for a preliminary ruling: 
       1.  Do Articles 1 and/or 2 of Council Regulation No 3950/92 permit the competent body in a Member State to take legal action directly
      against a producer to recover levy due from that producer (otherwise than pursuant to Article 2(3) in respect of direct sales)?
      
      
       2.  If so, in what circumstances may such action be taken?  
      
       3.  In particular, may such action be taken where the purchaser to whom milk was delivered was (a) not approved pursuant to Article
      7 of Commission Regulation No 536/93 
      
         			(13)
         		 and/or (b) has not complied with any of its obligations under Article 7 of that Regulation and/or (c) has not recovered or
      sought to recover levy from the producers concerned?
      
      
       24.  In addition to this case, there are 22 other cases arising out of the same or similar transactions; in 21 of them, the same
      point has been or might be raised by the defendant.  All those cases are currently stayed by the national court, pending the
      decision in this case.
      
       25.  Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice, written observations have been submitted by
      the Governments of Greece, Italy and the United Kingdom and by the Commission.  On 28 November 2002 a hearing was held in
      this case, at which Penycoed also put forward its point of view.
       IV ─ Organisation of the market in the milk sector
      
       26.  The rules governing the additional levy form part of the organisation of the market in the milk sector.  For the sake of a
      clear understanding of the context of this case, I shall outline here a few  features of that market organisation.
      
       27.  The European Union produces 122 million tonnes of milk annually.  That takes place on approximately 720 000 dairy farms with
      21 million dairy cows.  Of that milk production, 115 million tonnes (94%) are delivered to the dairy factory; the remainder
      is processed on the farm.  Approximately 100 million tonnes (82%) are sold within the European Union at normal market prices,
      well over half of it in the form of cheese; 10 million tonnes (8%) are also sold on the internal market but at a subsidised
      price and the remaining 12 million tonnes of milk (10%) are exported to non-Community countries in the form of milk powder,
      butter, butter oil, cheese and condensed milk.  This takes place largely with the help of export refunds, which bridge the
      price gap with the level on the world market.
      
       28.  Until 1 January 2000, Regulation No 804/68 was in force. 
      
         			(14)
         		  The market organisation was based, pursuant to that regulation, on three principles:
      (1) A system of prices, which involves fixing for each milk year a target price 
      
         			(15)
         		 for milk and intervention prices 
      
         			(16)
         		 for butter and skimmed-milk powder.
      
      (2) A system of intervention.  Since 1987, the possibility of intervention for butter has depended on the level of the market
      price in a Member State ─ intervention takes place only if the market price is below 92% of the intervention price ─ and the
      price paid for the butter handed over and stored is only 90% of the intervention price; in the case of skimmed-milk powder,
      intervention is possible only in the summer period (1 March to 31 August), and the intervention price of 100% is guaranteed
      only in respect of a certain quantity (109 000 tonnes on an annual basis for the whole of the European Union).
      
      (3) A system of trade with non-Community countries.  For exports of milk products to non-Community countries, export subsidies
      (refunds) are granted in order to bridge the price gap between the internal market and the world market.  Under the WTO Agreement,
      the European Union has already had to reduce subsidised exports drastically between 1995 and 2001: by 36% in value and 21%
      in quantity.
      
       Since 1 January 2000 ─ and thus of less relevance in this case ─ a somewhat amended regime has applied by virtue of Regulation
      No 1255/1999. 
      
         			(17)
         		 Put briefly, the target price for milk and the intervention prices have been reduced.  They have been replaced by other forms
      of support such as premium supplements, area payments and direct income support.
       V ─ Assessment
       
      
      
      A ─
       Preliminary observations
      
       29.  I am of the opinion that the referring court's three questions are so closely connected that there is no need to consider
      each of them separately.
      
       30.  In essence, the issue facing the Court in this case is the following.  The additional levy is owed by the milk producer, but
      must be paid to the competent authority of the Member State by the purchaser of milk.  In most cases that is the dairy factory
      where the milk is treated or processed.  Neither the relevant provisions of Community law nor the national implementing provisions
      in the United Kingdom empower the competent authority to recover the additional levy directly from the milk producer.  The
      main question before the Court is whether recovery direct from the milk producer is nevertheless possible in a case where
      the additional levy cannot be recovered from the purchaser of the milk.  The Court can confine itself to that main question
      and leave out of consideration many of the arguments which have been put forward in these proceedings.      
      
       31.  First of all, I shall give below a brief outline of the applicable system, in so far, of course, as that is relevant to the
      question to be answered.  I shall then turn to the observations which have been submitted in these proceedings.  Then I shall
      describe the arguments which, in my view, can be left out of consideration.  Finally, I shall come to the proposed answer
      to the main question as formulated.
      
      
      
      B ─
       A brief outline of the purpose and content of the applicable system
      
       32.  The additional levy system was introduced on 1 April 1984 for the purpose of controlling milk production in the European Community.
      The introduction of individual milk quotas was intended to restrict milk production to existing dairy farms and to discourage
      the advent of new holdings.  Individual milk quotas determine the amount of milk which a dairy farmer may produce without
      having an additional ─ prohibitive ─ levy imposed on him.  The amount of that levy is currently 115% of the target price for
      milk.
      
       33.  Considered from the point of view of the individual dairy farmer, he has the right to produce milk to the extent of his quota.  If
      he produces more, he is obliged to pay.  In  
      Molkereigenossenschaft Wiedergeltlingen, 
      
         			(18)
         		 the Court expressly says so.  The additional levy must be transferred  
      by the debtor, that is the producer, to the creditor, namely the competent body of the Member State.  Those rights and obligations of the dairy farmer constitute the essence of the additional levy scheme.
      
       34.  In addition, in order to ensure that milk production is effectively curbed, the system confers a succession of administrative
      powers intended to ensure that the levy is actually paid.  The administrative powers are for the most part laid down in the
      EC regulations concerning the additional levy.  The Member States play a central role in the implementation of the system.  The
      regulations give them a mandate for that purpose.  The Member States are responsible  
      inter alia for the collection of the levy.  Nevertheless, the powers of the Member States' authorities in respect of collection are
      laid down at Community level.  That is intended to ensure that the additional levy is effectively applied in all the Member
      States without entailing any loss of Community resources.  At the same time, the intention is that application should take
      place uniformly so as to prevent milk production in the Member States from being influenced by improper competitive disparities.
      
       35.  For administrative reasons, it was decided that the competent authority of the Member State should collect the additional
      levy, not from the milk producer, but from the purchaser of the milk.  As the Court points out in  
      Molkereigenossenschaft Wiedergeltlingen, 
      
         			(19)
         		 the purchaser has the role of intermediary, which arises from his capacity as the person liable for the levy when the transfer
      is effected.  It is clear from the eighth recital in the preamble that the assignment of that role to the purchaser is intended
      to avoid long delays in the collection of the levy.  The producer is and remains the person who owes the levy. 
      
       36.  The purchaser is thus assigned a role as intermediary for practical, administrative reasons.  That role of the purchaser is
      without prejudice to the obligation of the dairy farmer to curb his milk production and to pay the levy on excess production.  In
      its judgment in  
      Consorzio fra i Caseifici dell'Altopiano di Asiago,  
      
         			(20)
         		 the Court interprets the term  
      purchaser for the purposes of Articles 2(2) and 9(e) of Regulation No 3950/92 as  
      including any intermediary undertaking which acquires milk from a producer under a contract, irrespective of the manner in
      which the latter is paid, for the purpose either of treating or processing the milk itself or of transferring it to another
      undertaking for treatment or processing ....  That is a broad interpretation, as the Court itself expressly states in that judgment.
      
       37.  That broad interpretation by the Court is necessary because the Community legislature has conferred a monopoly position on
      the purchaser so far as the collection of the levy from the milk producer and the payment of the collected amount to the national
      authority are concerned.  The legislation does not provide for any obligation for the milk producer to pay the levy to the
      authority, or for any power for the authority to recover the levy from the milk producer, in both cases with the exception
      of direct farm sales. 
      
       38.  The Community legislature clearly assumes that there is always a purchaser of milk who can be held liable for the financial
      settlement of the additional levy owed by the milk producer.  In this case, however, there is no such liable purchaser.  A
      gap in the legislation has thus been brought to light by the actions of the parties involved.
      
      
      
      C ─
       The observations submitted
      
       39.  In essence, the answer to the main question as formulated by me under A above, which relates to the existence of a power to
      recover levy directly from the producer, is decisive for the various submissions made in these proceedings.  Briefly stated,
      the United Kingdom and Italian Governments and the Commission propose that this question should be answered in the affirmative,
      whereas Penycoed and the Greek Government propose, on the contrary, an answer in the negative.
      
       40.  The United Kingdom Government submits that effective implementation of the additional levy system requires that the Intervention
      Board should in principle be entitled to make recovery from the producer directly, since it is the producer who is the ultimate
      debtor pursuant to Articles 1 and 2 of Regulation No 3950/92.   Article 2(2) of Regulation No 3950/92 is intended to facilitate
      recovery from producers and not to impede such recovery where the purchaser fails to act as intermediary.  Penycoed, Elm Farms
      and TDM were in breach, according to the United Kingdom Government, of the requirements of Article 7 of Regulation No 536/93.  Elm
      Farms and TDM were unapproved purchasers and Penycoed delivered milk to those unapproved purchasers.  An unapproved purchaser
      does not fall under Article 2(2) of Regulation No 3950/92 and therefore does not have the powers conferred on a purchaser
      under Article 2(2).
      
       41.  Moreover, Penycoed, Elm Farms and TDM made no attempt either to pay the levy or to collect the levy.  Despite the fact that
      the regulation lays down no rules for such a situation, the United Kingdom Government contends that the competent body of
      a Member State may take action directly in such a case.  That applies particularly where, as in this case, the purchaser fails
      to discharge his role as intermediary.  However, according to the United Kingdom Government, direct action may not be taken
      where the producer would then have to pay levy twice or where the Intervention Board could make a double recovery.
      
       42.  The Italian Government submits that Community law does not expressly preclude direct legal action from being taken against
      a producer.  On the contrary, the Member States are obliged to take all the verification measures necessary to ensure payment
      of the levy.  The taking of legal action against a producer falls within those measures. 
      
       43.  According to the Italian Government, the competent national body can take legal action directly against a producer where it
      is proven that the producer has taken no steps to pay the levy, even after he has been called upon to do so.  Direct legal
      action by the competent authority may also take place where a purchaser is not approved.  The fact that the purchaser is not
      approved does not exempt the producer from his obligation to pay the levy.  Even where the purchaser has failed to comply
      with his obligations under Article 7 of Regulation No 536/93, that does not exempt the producer from his obligations.  This
      means that the national authority must have the power to take action to avoid breaches of Community law. 
      
       44.  According to the Commission, purchasers are liable to pay the levy purely for reasons of administrative efficiency.  That
      follows from Article 2 of, and the seventh recital in the preamble to, Regulation No 3950/92.  The fact that individual producers
      are regarded as being ultimately responsible for the levy is expressed in Article 2(2) of Regulation No 3950/92.  That provision
      requires purchasers to recover the levy from producers.  That interpretation is supported by Article 3 of Regulation No 536/93.  The
      purpose of the levy would be undermined if it were possible for producers to evade payment of the levy by selling milk to
      purchasers from whom Member States do not, in practice, have any prospect of recovering the levy.  Producers would also be
      unjustly enriched if they did not have to pay any levy.
      
       45.  The Commission submits that the purchaser is entitled to recover the levy from the producer only after he has paid it to the
      Member State.  The purchaser has no right to pursue the producer for the levy if the producer has paid it directly to the
      Member State.  However, the purchaser may deduct an amount from the price of all milk deliveries from that producer, as an
      advance on the levy payable, where the quantities delivered by a producer exceed his reference quantity.  However, the Commission
      considers it to be clear that where an advance on the levy has been collected, the Member State (in the absence of fraud between
      producer and purchaser) can pursue only the purchaser for the levy.
      
       46.  According to the Commission, there are three circumstances in which Member States are permitted to recover the levy directly
      from producers.  First, where the producer has not yet paid the levy to the purchaser, and the factual and legal circumstances
      of the purchaser are such that it would lead to an unreasonable outcome if the competent authority recovered the levy from
      the purchaser.  Whether such circumstances exist in a given case is a matter for the national courts.  Second, direct recovery
      is permitted if the purchaser is unapproved, since practical experience shows that it is very difficult to recover the levy
      from such a purchaser.  In such a case, Regulation No 3950/92 must be interpreted as meaning that it is permitted to take
      direct action against the producer.  Third, the levy may be recovered directly if the requirements of Article 7 of Regulation
      No 536/93 are not fulfilled by the purchaser, or if the purchaser has not recovered, or not attempted to recover, the levy
      from the producers involved.
      
       47.  In answering the questions referred for a preliminary ruling, Penycoed first examines the legal positions of the parties involved.  The
      producer is a party liable for payment of the levy, the purchaser is the creditor and the national competent body is also
      a creditor.  According to Penycoed, the duties which a person has under the law must be clear.  Since the producer has two
      creditors, namely the purchaser and the national competent body, an uncertain situation has arisen for the producer.
      
       48.  Penycoed submits that the Intervention Board has no right to take direct legal action against a producer because the national
      body lacks the power to do so.  It is the task of the legislature to rectify such a gap in the legislation.  That is not the
      task of the Court.
      
       49.  The United Kingdom Government's argument that, in the case of delivery to an unapproved purchaser, the national competent
      body has the right to take direct legal action against the producer is refuted by Penycoed as follows.  Penycoed finds that
      argument unacceptable since the additional levy system provides for other penalties where a purchaser is not approved.  The
      regulation may not be interpreted as meaning that it is possible to take legal action directly against a producer.
      
       50.  The Greek Government also submits that the national competent body may not take any direct legal action against a producer
      because the person liable for the levy is the purchaser within the meaning of Article 9(e) of Regulation No 3950/92 and not
      the producer.
      
      
      
      D ─
       Matters of no relevance to the answer
      
       51.  First: the parties in the main proceedings have ended the dispute concerning the status of the defendant itself and of Elm
      Farms and TDM.  The proceedings before the Court can therefore be confined to the main question formulated above.  The parties
      agree that the defendant in the main proceedings can be regarded as a milk producer.  Nor is it relevant ─ at least in the
      proceedings before the Court ─ to examine whether Elm Farms and TDM really cannot be held liable by the national authorities.  The
      Court can assume that there is no purchaser who can be held liable. 
      
       52.  Second: the Court does not need to give an answer to the question whether the text of the Community legislation concerning
      the additional levy provides a legal basis for recovery of the levy by the national authority directly from the milk producer.  That
      power is not included in Regulation No 3950/92, or in Regulation No 536/93.  Nor is it in dispute whether a possible legal
      basis might be constituted by an additional measure as referred to in Article 5(2) of Regulation No 536/93, which a Member
      State can take to ensure payment of levies owed to the Community within the prescribed period.  The United Kingdom has not
      in fact taken any measure to that effect.
      
       53.  Third: in this case no reliance may be placed on legal principles from which citizens derive protection in Community law,
      such as the principles of legal certainty and the protection of legitimate expectations.  Even though the Community regulation
      concerned and the legislation on the additional levy contain no power to collect levy from the milk producer, a milk producer
      still may not entertain a legitimate expectation that he is allowed to produce, without a milk quota, milk on which he need
      pay no levy.  Possible deception of the milk producer is also irrelevant.  The only matter over which a milk producer may
      possibly have been misled is the question to whom he must pay, not the fact that he must pay.
      
       54.  Fourth: as is apparent from the national court's order for reference, the main proceedings concern a scheme the purpose of
      which is to enable farmers to engage in dairy farming without requiring milk quotas.  There has thus been a deliberate attempt
      to evade the obligation to pay.  However, I do not consider the element of intention relevant to the resolution of the dispute.  Even
      in situations where those involved do not act intentionally but are able for other reasons to produce milk free of levy without
      holding a quota, such action is contrary to the substance and purpose of Regulation No 3950/92.
      
       55.  Fifth: Article 7 of Regulation No 536/93 provides that a purchaser to whom a milk producer delivers must be approved.  It
      also provides that milk producers must ensure that they deliver to approved purchasers.  That is an obligation which is incumbent
      on the milk producer and which will also have to be enforced by the Member State, but it is also unconnected with the question
      whether the milk producer is obliged to pay the levy directly to the national body.  In other words, the question whether
      the milk producer is discharged from his debt if he pays to an unapproved purchaser is not in issue here.  On this point I
      thus share the view of Penycoed.  The arguments of the United Kingdom and the Commission do not convince me.  Even the unapproved
      purchaser is a purchaser within the meaning of Article 9(e) of Regulation No 3950/92.  In so far as the Commission states
      that it is extremely difficult to recover levy from an unapproved purchaser, I regard that as a factually correct observation
      which, however, may not be interpreted as therefore giving rise to a power to recover the levy directly from the producer.
      
       56.  Sixth: I also do not think it relevant in this case to examine how the purchaser's intermediary role should be characterised:
      is he in the first place a representative of the milk producer, who can be held liable by the competent national authority,
      or is he rather an agency charged with collection and thus more an extension of the competent national authority?  That question
      ─ however interesting it may be ─ has no relevance in this case which concerns the milk producer's obligation to pay.
      
      
      
      E ─
       The answer
       General observations
      
       57.  The questions referred must be answered in the light of the following facts:
      
      
      ─
          the relevant Community legislation gives no express authority to the Member State's competent body to recover the additional
         levy from the milk producer, except in the case of direct delivery to the consumer, which is not relevant here; 
       the relevant Community legislation gives no express authority to the Member State's competent body to recover the additional
      levy from the milk producer, except in the case of direct delivery to the consumer, which is not relevant here; 
      
      
      
      ─
          the essence of the additional levy system is that the milk producer is entitled to actual payment for the milk delivered by
         him only in so far as the quantity of milk delivered does not exceed the individual milk quota allocated to him.  In respect
         of the overrun, he is obliged to pay a levy of 115% of the target price for milk; 
       the essence of the additional levy system is that the milk producer is entitled to actual payment for the milk delivered by
      him only in so far as the quantity of milk delivered does not exceed the individual milk quota allocated to him.  In respect
      of the overrun, he is obliged to pay a levy of 115% of the target price for milk; 
      
      
      
      ─
          the payment which accrues to the milk producer is not a price which is paid on the normal basis of supply and demand.  The
         level of that price is guaranteed by the authorities, directly by virtue of the fact that, when the market price is too low,
         certain milk products can be handed over to an intervention agency against payment of an intervention price, and indirectly
         by the limitation of the quantity of milk coming onto the market, which is inherent in the additional levy system.  An artificially
         low supply of milk leads to a higher price; 
       the payment which accrues to the milk producer is not a price which is paid on the normal basis of supply and demand.  The
      level of that price is guaranteed by the authorities, directly by virtue of the fact that, when the market price is too low,
      certain milk products can be handed over to an intervention agency against payment of an intervention price, and indirectly
      by the limitation of the quantity of milk coming onto the market, which is inherent in the additional levy system.  An artificially
      low supply of milk leads to a higher price; 
      
      
      
      ─
          a portion of the payment which the milk producer receives for the milk delivered by him is in the nature of a subsidy provided
         out of Community resources.  That applies to milk which is handed over to the intervention agency and milk in respect of which
         an export refund is granted on export from the European Union; 
       a portion of the payment which the milk producer receives for the milk delivered by him is in the nature of a subsidy provided
      out of Community resources.  That applies to milk which is handed over to the intervention agency and milk in respect of which
      an export refund is granted on export from the European Union; 
      
      
      
      ─
          in such a system, production on a dairy holding is fixed by government intervention at an artificial level, both in terms
         of the volume of production and in terms of the price paid for the milk delivered.  That level is not determined by production
         capacity or market conditions.  For that reason alone, an incentive arises for interested parties to evade or circumvent the
         rules laid down by the authorities.  From the point of view of the public interest, there is therefore a need to have an effective
         set of instruments in order to enforce compliance;   
       in such a system, production on a dairy holding is fixed by government intervention at an artificial level, both in terms
      of the volume of production and in terms of the price paid for the milk delivered.  That level is not determined by production
      capacity or market conditions.  For that reason alone, an incentive arises for interested parties to evade or circumvent the
      rules laid down by the authorities.  From the point of view of the public interest, there is therefore a need to have an effective
      set of instruments in order to enforce compliance;   
      
      
      
      ─
          in addition, the system, the purpose of which is to control milk production in the European Union, can work only if the levy
         payable can be both imposed and collected in all circumstances.  If that is not the case, milk production cannot be uniformly
         controlled.  
       in addition, the system, the purpose of which is to control milk production in the European Union, can work only if the levy
      payable can be both imposed and collected in all circumstances.  If that is not the case, milk production cannot be uniformly
      controlled.  
      
      
      
       58.  However,  there is such a defect in the Community legislation, which encourages circumvention of the rules, as long as the
      national authorities responsible for implementation continue not to have any express power to enforce compliance.  The Community
      legislation does not provide for any right to recover the additional levy directly from the milk producer.
      
       59.  Even though the authorities do not have any power to collect the levy, the milk producer does have a duty to pay it.  He is
      obliged to pay the additional levy on the basis of the wording of Article 1 of Regulation No 3950/92, but also by virtue of
      the fact that he has received a payment, to which he is not entitled, for milk produced without a corresponding quota.  He
      has thereby been unjustly enriched, as the Commission and the United Kingdom rightly point out.  Moreover, non-compliance
      with the obligation to pay is to be regarded as an illegal activity affecting the financial interests of the Community for
      the purposes of Article 280 EC.  Under Article 10 of Regulation No 3950/92, the levy is to be used to finance Community expenditure
      in the milk sector.  Under Article 280 EC, the Member States are obliged to counter such illegal activity through measures
      which must act as a deterrent and be such as to afford the necessary protection in the Member States. 
      
       60.  The Court does not have jurisdiction to rectify a defect in Community legislation, even if it is an obvious defect.  The Court
      does have jurisdiction to declare a provision of Community law invalid, but cannot of its own motion insert another provision
      in its place.  That task is for the Community institutions responsible for adopting legislation. 
      
         			(21)
         		
       61.  The question which the Court is required to answer is therefore of a different nature.  Where there is no express public-law
      power to recover the levy, may the national authorities nevertheless derive from Community law in some other way the power
      to collect the amount owed to them?   The further question then arises as to whether in such circumstances the authorities
      may, or even must, pursue the matter in the civil courts.  The Member States are, after all, obliged to ensure the effective
      implementation of Community law.  
      
       62.  In these proceedings a number of arguments have been put forward in favour of a power of collection for the national authorities
      (see paragraphs 40 to 46 above).  The most relevant arguments relate to the importance of effective implementation of Community
      law.  The United Kingdom Government refers to it, the Italian Government mentions the obligation of Member States to take
      all the necessary verification measures and the Commission devotes attention to the fact that evasion of the levy undermines
      the purpose of the levy.  An argument of a different kind, mentioned by the Commission, relates to the unjust enrichment of
      the milk producer if he does not have to pay the levy due from him.
      
       63.  Both of those (categories of) arguments are central in my view also.   In the absence of any express power, they may constitute
      the legal basis for recovery of the additional levy.  In my opinion, two legal principles, which must be distinguished, are
      involved here.  They are, in the first place, the principle of effectiveness and, in the second place, the doctrine of unjust
      enrichment.  I shall discuss those two legal principles separately in the first instance, but draw attention now to the possible
      connection between them.  Certainly, if a private individual is unjustly enriched at the expense of Community funds, the principle
      of effectiveness may require the reversal of that enrichment by a Member State. 
       The principle of effectiveness
      
       64.  The principle of effectiveness has been recognised in the Court's case-law with a view to safeguarding rights which citizens
      derive from the direct effect of Community law.  That has been done  
      inter alia in a series of judgments concerning the repayment of taxes levied in breach of Community law.  The implementation of Community
      law, which I take also to mean the organisation of the national legal system, must not be framed in such a way that the exercise
      of those rights is in practice made impossible or excessively difficult.  
      
         			(22)
         		
       65.  In more general terms, the principle of effectiveness implies that interested parties should also be able in fact to avail
      themselves of the opportunities for which Community law provides. 
      
         			(23)
         		  This case concerns the obverse of that proposition.  What is at issue is not a directly effective right of an interested
      party, but a directly effective obligation of the interested party under Article 1 of Regulation No 3950/92.  He owes the
      additional levy to the Member State in which he is established.  The question now is whether the principle of effectiveness
      also requires a national legal system to be organised in such a way that the interested party must also settle his debt in
      all circumstances.
      
       66.  I take the view that this question must be answered in the affirmative in this case which concerns a financial advantage wrongfully
      enjoyed at the expense of the Community budget.  Revenues which are contributed to the Community budget and financial advantages
      charged to it must be so arranged and applied as to constitute a uniform burden or to confer uniform benefits on all persons
      who meet the conditions specified in the Community provisions on such burdens or advantages. 
      
         			(24)
         		  The principle of effectiveness also implies in this context that the administrative authorities of the Member States which
      are responsible for implementation must be able to collect levies and to recover financial benefits which have been unlawfully
      granted. 
      
         			(25)
         		
       67.  I would point out that there are also in general two sides to the principle of effectiveness.  Citizens must not only be able
      to exercise the rights which Community law grants to them, but they must also be able to comply with their obligations.  The
      principle of effectiveness implies that the policy objective envisaged by the Community legislature can be implemented in
      the Member States, thereby ensuring that Community law produces its full effects.  That principle stems from Article 10 EC,
      which requires the Member States to take all appropriate measures, whether general or particular, to ensure fulfilment of
      their obligations under Community law.  Among these is the obligation to nullify the unlawful consequences of a breach of
      Community law. 
      
         			(26)
         		
       68.  Viewed from the perspective of the Member State, the principle of effectiveness thus requires that a Member State be able
      in all circumstances to fulfil its obligation under Community law to ensure the collection of the additional levy.
      
       69.  In the light of the foregoing, I am of the opinion that a defect in Community legislation can be rectified in circumstances
      to which the principle of effectiveness applies.  In the given special circumstances, an answer to the questions referred
      for a preliminary ruling whereby the Court rectifies a defect in the Community legislation does not mean that the Court takes
      the place of the legislature.  The Court does not substitute a different provision.
      
       70.  I consider the following circumstances to be decisive for the Court's answer:
      
      
      ─
          it is established that the conduct of the party concerned is detrimental to the attainment of an essential objective of the
         Community legislation concerning the additional levy, namely the control of milk production in the Community.  At the same
         time, the Community budget sustains a loss; 
       it is established that the conduct of the party concerned is detrimental to the attainment of an essential objective of the
      Community legislation concerning the additional levy, namely the control of milk production in the Community.  At the same
      time, the Community budget sustains a loss; 
      
      
      
      ─
          there is an absolutely clear defect, which is not open to any other interpretation, in the Community legislation, in which
         a provision specifically intended to increase the effectiveness of its implementation (Article 2 of Regulation No 3950/92)
         makes it possible for interested parties to circumvent their obligation.  Furthermore, the Court gives a broad interpretation
         to the term  
         purchaser in Article 2 precisely in order to prevent administrative difficulties;    
       there is an absolutely clear defect, which is not open to any other interpretation, in the Community legislation, in which
      a provision specifically intended to increase the effectiveness of its implementation (Article 2 of Regulation No 3950/92)
      makes it possible for interested parties to circumvent their obligation.  Furthermore, the Court gives a broad interpretation
      to the term  
      purchaser in Article 2 precisely in order to prevent administrative difficulties;    
      
      
      
      ─
          the Member State has an obligation to implement Community law effectively.  That obligation applies  
         a fortiori where it is a matter of countering an illegal activity affecting the financial interests of the Community; 
       the Member State has an obligation to implement Community law effectively.  That obligation applies  
      a fortiori where it is a matter of countering an illegal activity affecting the financial interests of the Community; 
      
      
      
      ─
          it is established that the milk producer concerned is the debtor owing the additional levy, and the amount of the debt is
         also established.  It is likewise established that the Member State is the creditor. 
         
            			(27)
            		 it is established that the milk producer concerned is the debtor owing the additional levy, and the amount of the debt is
      also established.  It is likewise established that the Member State is the creditor. 
      
         			(27)
         		
      
      
       71.  In short, the milk producer owes a debt to the European Community directly on the basis of Community law.  The principle of
      effectiveness implies that that debt must be capable of settlement.  In the absence of any powers provided for in the Community
      legislation, that means that national law must make available to the implementing Member State the legal remedies necessary
      in order actually to recover that debt.  If national public law precludes recovery by the authorities of an amount owed without
      their being expressly empowered, the national authorities will have to be able to take recourse to private law for that purpose.  Community
      law thus provides that in those circumstances the debt must be capable of being recovered, whilst national law determines
      the basis and form of the legal action. 
       The doctrine of unjust enrichment
      
       72.  One possible basis for recovery of the additional levy is the unjust enrichment of Penycoed.  The prohibition of unjust enrichment
      produces its effect in Community law as a doctrine generally accepted in the national laws of the Member States in connection
      with the recovery of amounts unduly paid.  
      
       73.  Moreover, it is settled case-law that the protection of rights guaranteed in the matter by Community law does not require
      an order for the recovery of charges improperly made to be granted in conditions which would involve the unjust enrichment
      of those entitled. 
      
         			(28)
         		  The determination as to whether there is unjust enrichment is made by the national court in the light of the facts of each
      case.  Repayment of a charge levied in breach of Community law may be resisted only where it is established that that would
      constitute unjust enrichment. 
      
         			(29)
         		
       74.  What is the situation here?  In this case there is of course no question of a levy having been unduly paid.  On the contrary,
      Penycoed produced milk without holding a milk quota.  It did not pay the levy owed pursuant to the main provision of Article
      12 of Regulation No 3950/92 on deliveries of milk without a quota, yet received a price in respect of the milk delivered by
      it.  That price is, as I stated in paragraph 57 above, guaranteed by the Community and is in part a subsidy.  Penycoed was
      thereby unjustly enriched at the expense of the European Community budget.
      
       75.  I regard it as consistent with Community law for a subsidy wrongly paid to be recovered.  I would point out in this regard
      that if the subsidy in question is paid out of the resources of the Member States, according to the Court's settled case-law
      the subsidy wrongly paid must always be recovered, together with interest.  By repaying the aid, the recipient forfeits the
      advantage which it had enjoyed over its competitors on the market, and the situation prior to payment of the aid is restored. 
      
         			(30)
         		  That which applies to a subsidy paid out of national resources naturally also applies to a subsidy paid out of Community
      resources. 
      
       76.  However, even in so far as the milk price paid is not to be regarded as a subsidy, there is unjust enrichment at the expense
      of Community resources which must be recovered.  It is established that Penycoed obtained an economic advantage by receiving
      money to which it was not entitled.  Furthermore, that was money the amount of which is guaranteed by the Community.  There
      is also a debt to the European Community, as a consequence of which the latter sustains a loss, since it is incurred at the
      cost of the resources available for expenditure in the milk sector.    
      
       77.  Here too, it is for national law to determine to what extent recovery on the basis of unjust enrichment is to be regarded
      as a public-law or a private-law action.  Community law provides that recovery must take place in a case such as this. 
       The connection 
      
       78.  In my opinion, both the principle of effectiveness and the doctrine of unjust enrichment provide a self-standing basis for
      the recovery of the additional levy.  Should the Court not agree and instead take the view that neither of those two principles
      is capable of providing a self-standing legal basis, I would argue in the alternative that in a special case such as this
      both principles should be viewed in conjunction with one another.  If a private individual enriches himself unjustly at the
      expense of Community funds and thereby impairs the attainment of an essential objective of a Community provision, the principle
      of effectiveness requires that a Member State reverse that enrichment.  
        VI ─ Conclusion
      
       79.  In the light of the foregoing considerations, I propose that the Court answer the questions submitted by the Court of Appeal
      (England and Wales) (Civil Division) as follows:Under Article 1 of Council Regulation (EEC) No 3950/92 of 28 December 1992 establishing an additional levy in the milk and
      milk products sector, a producer of cow's milk is obliged to pay a levy to the competent body of the Member State charged
      with implementing the regulation.  Except in the circumstance referred to in Article 2(3) of that regulation, no power is
      expressly conferred on the competent body to recover the levy directly from that producer.  Nevertheless, the principle of
      effectiveness and the doctrine of unjust enrichment require that the levy be recovered directly from the producer of cow's
      milk if recovery from the purchaser of cow's milk is not possible.
      
       1 –
         
           Original language: Dutch.
      
      2 –
         
         OJ 1992 L 405, p. 1.
      
      3 –
         
         OJ 1993 L 57, p. 12.
      
      4 –
         
         Regulation (EEC) No 804/68 of the Council of 27 June 1968 on the common organisation of the market in milk and milk products
            (OJ, English Special Edition 1968(I), p. 176).
         
      
      5 –
         
         OJ 1984 L 90, p. 10.
      
      6 –
         
         The regulation uses the phrase  
            individual reference quantities.
         
      
      7 –
         
         OJ 1984 L 90, p. 10.
      
      8 –
         
         This regulation was repealed as of 1 April 1993.
      
      9 –
         
         Under Council Regulation (EC) No 1256/1999 of 17 May 1999 amending Regulation (EEC) No 3950/92 establishing an additional
            levy in the milk and milk products sector (OJ 1999 L 160, p. 73), the period of operation of the system was again extended,
            this time until 1 April 2008. 
         
      
      10 –
         
         SI 1997, 733 (published as  
            Statutory Instrument 1997, 733).
         
      
      11 –
         
         Hereinafter:  
            the Intervention Board.
         
      
      12 –
         
         Hereinafter:  
            Penycoed.
         
      
      13 –
         
         Commission Regulation (EEC) No 536/93 of 9 March 1993 laying down detailed rules on the application of the additional levy
            on milk and milk products (OJ 1993 L 57, p. 12).
         
      
      14 –
         
         Replaced since 1 January 2000 by Regulation No 1255/99.
      
      15 –
         
         A target price is the price which it is aimed to obtain for all the milk sold during a given milk year.
      
      16 –
         
         Intervention prices are market support prices for products which can be surrendered in times of milk surplus, namely butter
            and skimmed milk powder.
         
      
      17 –
         
         Council Regulation (EC) No 1255/1999 of 17 May 1999 on the common organisation of the market in milk and milk products (OJ
            1999 L 160, p. 48). 
         
      
      18 –
         
         Judgment of the Court in Case C-356/97 [2000] ECR I-5461, in particular paragraph 31.
      
      19 –
         
         Cited in footnote 18, paragraph 30.
      
      20 –
         
         Case C-288/97 [1999] ECR I-2575, paragraph 28.
      
      21 –
         
         See in this regard, for example, the judgment in Joined Cases 117/76 and 16/77  
            Ruckdeschel and Others [1977] ECR 1753, paragraph 13.
         
      
      22 –
         
         See the Court's settled case-law on the repayment of taxes levied in breach of Community law, as most recently set out in
            Case C-255/00  
            Grundig Italiana [2002] ECR I-8003, paragraph 25. 
         
      
      23 –
         
         As observed in my Opinion of 4 July 2002 in Case C-97/01  
            Commission   v  
            Luxembourg [2003] ECR I-5797, paragraph 8.
         
      
      24 –
         
         Case 265/78  
            Ferwerda [1980] ECR 617, paragraph 8.
         
      
      25 –
         
         See also paragraph 8 of  
            Ferwerda (cited in footnote 24 above).  The Court is referring there to the principle of effectiveness, although not explicitly.
         
      
      26 –
         
         See  
            inter alia Joined Cases C-6/90 and C-9/90  
            Francovich and Others [1991] ECR I-5357, paragraph 36. 
         
      
      27 –
         
         See, for example, the judgment of the Court of First Instance in Case T-171/99  
            Corus UK v  
            Commission [2001] ECR II-2967, paragraph 55.
         
      
      28 –
         
         See, for example, Case 68/79  
            Just [1980] ECR 501, paragraph 26.
         
      
      29 –
         
         Joined Cases C-441/98 and C-442/98  
            Michaïlidis  [2000] ECR I-7145, paragraphs 32 and 33.
         
      
      30 –
         
         See in particular Case C-350/93  
            Commission   v  
            Italy  [1995] ECR I-699.