CELEX: 61977CC0078
Language: en
Date: 1978-01-11 00:00:00
Title: Opinion of Mr Advocate General Mayras delivered on 11 January 1978. # Johann Lührs v Hauptzollamt Hamburg-Jonas. # Reference for a preliminary ruling: Finanzgericht Hamburg - Germany. # Case 78/77.

OPINION OF MR ADVOCATE GENERAL MAYRAS
      DELIVERED ON 11 JANUARY 1978 (
            1
         )
      
         Mr President,
      
         Members of the Court,
      This case concerns certain of the Community measures adopted to deal with the consequences of the potato shortage during the winter of 1975/1976. None of the Member States has taken the opportunity to submit observations and the plaintiff in the main action did so only during the oral procedure; however, as the Council and the Commission both availed themselves of the opportunity to do so and as the case concerns the question of the principle of the protection of legitimate expectation — a principle whose consequences are a little difficult to determine — the Court did not assign the case to one of its Chambers. Although it is difficult for the Court to deliver judgment in the abstract on the occasion of an objective review of interpretation or validity carried out within the framework of Article 177 with regard to any ‘expectation’ which the plaintiff in the main action might have as an individual in the maintenance of a given legal situation, it is not so much that the principle or its consequences which seem to me to present the major problem in this case (first question) as the determination of the exchange rate applicable (second question).
      
               I —
            
            
               Under Article 1 (1) of Council Regulation (EEC) No 348/76 of 17 February 1976 on measures to be taken owing to the difficulties affecting potato supplies, a tax is levied on exports to non-Member countries of non-certified seed potatoes falling within subheading ex 07.01 A I and of potatoes falling within subheading 07.01 A III of the Common Customs Tariff. The amount of the tax is 25 units of account per 100 kg.
               The national court is asking the Court of Justice first whether the application of that measure to consignments of potatoes which had been sold before its coming into force and the price of which had therefore been fixed does not constitute a breach of the principle of the ‘protection of legitimate expectation’. Only the national court is in a position to sute whether ‘legitimate expectation’ has been disappointed in this case; however, I shall attempt to suggest the factors which might be useful in arriving at a decision in the main action.
               The regulation proposed by the Commission on 17 February 1976 and adopted on the same day by the Council came into force on the date of its publication in the Official Journal of the European Communities, that is two days later on 19 February 1976; it applied to operations in respect of which customs export formalities had been completed from the day following that of its entry into force, that is to say from 20 February, and until 30 June 1976 (second paragraph of Article 2).
               
                        (1)
                     
                     
                        On the supposition that the sales contracts relating to the 119 tonnes of potatoes initially declared by the plaintiff in the main action to the German customs and to the 2 tonnes which were shipped without its knowledge were actually concluded with the Swedish purchaser on 10 and 16 February, it is clear that the regulation did not have any retroactive effect or even any immediate effect — a condition required by the case-law of the Court before it can be stated that there has been a breach of the principles of the ‘protection of legitimate expectation’ or of ‘legal certainty’.
                        If the Official Journal of the European Communities reached the Federal Republic of Germany during the day on which it was published, namely on 19 February 1976, the plaintiff still had a few hours before 20 February to complete the ‘customs export formalities’ for the potatoes which he had purchased in the Netherlands. Disunces are not immense in that part of the Common Market and the telex is well known to traders.
                     
                  
                        (2)
                     
                     
                        Furthermore, the adoption of the measure in question was not unforeseeable — another condition required by the case-law of the Court before ‘legitimate expectation’ can be said to have been disappointed.
                        The countermanding of orders and the uncertainties prevailing in the trade and in German custom circles to which the plaintiff refers — and which were not the acts of the Community institutions — should rather have put him on his guard as to the risky nature of the operation.
                        A prudent and discriminating trader could not have been unaware of the following facts:
                        
                                 —
                              
                              
                                 That by Council Regulation (EEC) No 128/76 of 20 January 1976, the autonomous Common Customs Tariff duty for potatoes had been totally suspended until 28 March 1976;
                              
                           
                                 —
                              
                              
                                 That by Council Regulation (EEC) No 288/76 of 9 February 1976, autonomous and conventional Common Customs Tariff duties for seed potatoes and new potatoes had also been totally suspended until 28 March 1976.
                              
                           Quite apart from the Council s statement publicizing the full scope of the new regulation by ‘communications’ to the press on 17 and 18 February 1976 — news of which was carried by several German national daily newspapers in their editions of 19 February — there were therefore grounds, having regard to the shortage psychosis, to expect that at any moment severer measures would be adopted.
                     
                  
                        (3)
                     
                     
                        Having regard to the overriding public interest which necessitated the adoption of the measure taken by the Council, its effect of course depended on its coming into force if not immediately at least with very little delay. In a crisis situation in which prices are fluctuating as much as they were on the potato market at that time it is impossible to ensure proper functioning of the market if the Brussels authorities are not in a position to bring into force very quickly, if not immediately, administrative instruments for its control.
                     
                  
                        (4)
                     
                     
                        By Regulation (EEC) No 890/76 of 14 April 1976, the Commission authorized the Member States to exempt from the export tax exports of potatoes to certain countries or territories provided that such exports were effected pursuant to contracts concluded before 17 February 1976. However, the adoption of these transitional measures, intended to permit the maintenance of certain traditional trade flows, was not justified in the case of Sweden which was not amongst the countries listed in the annex to that regulation. The plaintiff in the main action has not claimed that that provision was illegal in so far as it did not include Sweden amongst the non-Member countries or territories for which exports of potatoes might enjoy a ‘reprieve’.
                     
                  
                        (5)
                     
                     
                        Having regard to the fact that Sweden itself, so it appears, granted a subsidy of 18 units of account per 100 kg on potato imports, the amount of the tax brought into force (25 units of account per 100 kg) does not seem to me to have amounted to anything excessive; still, everything depends of course on one's point of view and I am quite ready to agree that the party concerned takes the opposite view.
                     
                  
         
               II —
            
            
               The second question put by the national court arises from the fact that the rate of exchange applied at that time in the Federal Republic of Germany in agricultural matters was slightly lower (DM 3.57 per unit of account) than the rate applied in customs matters (DM 3.66 per unit of account).
               This disparity will only appear strange to those who are not familiar with the pragmatism with which the Council acts in economic matters and with the considerations which led it on 30 May 1968 to adopt Regulation (EEC) No 653/68 on conditions for alterations to the value of the unit of account used for the common agricultural policy.
               The agricultural unit of account is formally defined by the same weight of fine gold (0.88867088 grammes) as the gold parity unit of account declared to the International Monetary Fund, which is used in particular for the implementation of the budget and for the application of the Common Customs Tariff; however, for the purposes of conversion into the currencies of the Member States of amounts fixed in units of account by measures adopted under the common agricultural policy (common prices, levies, export refunds, production refunds, aids etc.), the unit of account is converted into national currency by means of a representative rate which tends to converge with the rate resulting from the actual rates of exchange dealt with on the market. That representative rate, which is progressively substituted for the conversion rate of the gold parity unit of account, is modified from time to time by decision of the Council to reflect more closely exchange relationships on the markets (thus it was that quite recently the ‘green rate’ of the French franc was adapted), and this brings about an increase in the expenses of the European Agricultural Guidance and Guarantee Fund which are expressed in units of account converted at the rate resulting from the parities declared to the International Monetary Fund. At the time in question the conversion rate for the ‘general’ unit of account, used in particular for the application of the Common Customs Tariff, was DM 3.66).
               As from 3 March 1975 (Regulation (EEC) No 475/75 of the Council of 27 February 1975), for the common agricultural policy the representative rate (‘green rate’) of the German mark was fixed at 0.279429 units of account for 1 Deutsche Mark, whereas it had previously been 0.242806 units of account, which corresponded to the parity declared to the International Monetary Fund. It can therefore be seen that the application of the conversion rate of the ‘general’ unit of account (DM 3.66) or, on the contrary, a recourse to the ‘representative’ rate of the ‘agricultural’ unit of account (DM 3.57) is a matter of some interest for the plaintiff in the main action.
               
                        (1)
                     
                     
                        The fact that under Article 1 of Commission Regulation (EEC) No 485/76 of 3 March 1976 laying down detailed rules for the application of Regulation (EEC) No 348/76, the provisions of Regulation No 645/75 of the Commission of 13 March 1975 apply to the tax introduced by Article 1 of Regulation No 348/76 is not decisive. Those provisions are in fact only intended ‘to ensure the uniform management of the market’ and in particular to determine the date from which the goods must be considered as ‘placed under customs control … until they leave the Community’. That date is the one on which the customs authority accepts the document in which the declarant states his intention to export the products. That acceptance is considered as ‘the completion of customs export formalities’ (Article 4).
                        Nor is it decisive that, as the Commission explains, at the time when Regulation No 348/76 was drafted, the competent authorities took as the basis the ‘green’ exchange rate of national currencies; such an argument seems to me to amount to begging the question.
                     
                  
                        (2)
                     
                     
                        On the other hand it is clear that potatoes are an agricultural product suitable for treatment under a common organization of the markets.
                        Moreover at the time of the situation which gave rise to the dispute in the main action the potato was, and still is today, the subject of more or less well defined national organizations of the markets:
                        
                                 —
                              
                              
                                 In France, in the Federal Republic of Germany and in the Belgo-Luxembourg Economic Union there is a minimum price system;
                              
                           
                                 —
                              
                              
                                 In France there is a buffer stock system;
                              
                           
                                 —
                              
                              
                                 In the United Kingdom there is a quota system for the area planted with potatoes and sales control. In the United Kingdom too the Potato Marketing Board has the duty of purchasing surplus stocks and prohibiting exports except for new potatoes; when market prices are lower than a certain reference price the government pays the Board a ‘deficiency payment’.
                              
                           But the fact that potatoes come under national organizations of the market is not a sufficient ground for stating that there exists a common agricultural policy concerning it.
                        The scope generally attributed to the Court's judgments in the cases of Charmasson ([1974] ECR 1383), Rewe-Zentrale ([1976] ECR 181), Miritz ([1976] ECR 217) and Commission v French Republic ([1977] ECR 515) should simply mean that the maintenance by Member States, after the end of the transitional period, of obstacles to trade in potatoes is illegal even if such trade is still not the subject of ‘Community rules’.
                     
                  
                        (3)
                     
                     
                        In the proposal for a regulation on the common organization of the market in potatoes, which the Commission submitted to the Council on 23 January 1976, it was stated that the application of the Common Customs Tariff duties should suffice, as a rule, to stabilize the Community market as in the case of other fruit and vegetables.
                        The specific duties charged on the importation of certain fruit and vegetables are fixed in gold parity units of account. The export tax in question is the counterpart of the customs duty on imports the charging of which was suspended by the regulations to which I have referred. Potato imports are of course subject only to an ad valorem duty, which is not fixed in units of account. But the fact that the application of the regulation is limited to products coming under tariff heading 07.01 A II indirectly but necessarily implies a reference to the unit of account defined in the General Rules of the Common Customs Tariff (Part I, Section I, C), even if in this case there is no need to have recourse to that criterion to define the products in question.
                     
                  
                        (4)
                     
                     
                        The only measures which have been adopted hitherto at Community level are temporary and are in the nature of tariffs, as Mr Advocate General Franco Capotorti pertinently reminded us in his opinion in Case 68/76, Commission v French Republic ([1977] ECR 538). Regulations Nos 128/76 and 288/76 refer to Article 28 of the EEC Treaty. Regulation No 348/76 bases the tax in question exclusively on Articles 103 and 113 which deal with conjunctural policy and commercial policy and not on Article 39 (1) (d) or (e), which deals with the agricultural policy, or on Article 235.
                        Consequently the ‘green’ rate applies only to dealings to be carried out in implementation of measures concerning the common agricultural policy. The application of that rate to the tax in question would result in potatoes being treated as a product subject to a common organization of the market whereas in all other respects they are considered in the case-law of the Court as products subject only to the ordinary law.
                        Finally I would add that, if Commission Regulations Nos 458/76 and 890/76 were to be considered as measures of the common agricultural policy they would very probably have had to be adopted according to quite a different procedure, for example after the opinion of a ‘Potato Management Committee’.
                     
                  
         
               III —
            
            
               In these circumstances it seems to me that there is no need to reply to the final question put by the national court.
               In that question the national court criticizes the application of the ‘green’ rate which, whilst adapting itself with less rigidity than the gold parity rate to the trends of the various currencies of the Community, has not been accompanied by monetary compensatory amounts. However, as monetary compensatory amounts are only provided for within the framework of the common agricultural policy, the criticism would only be valid if recourse were had to the ‘green’ rate, which I am suggesting the Court should declare not to be the case.
               With regard to the statement that the application of the gold parity rate of the Common Customs Tariff was itself discriminatory, this cannot be accepted in tariff matters otherwise the system of monetary compensatory amounts would have to be extended to all products coming under the Common Customs Tariff!
               The fact that monetary compensatory amounts are not applied to the tax in question may perhaps also be explained, as the Council and the Commission state, by the marginal nature of potato exports — in which case moreover one might wonder what is the practical scope of the institution of the tax — and by the considerable practical problems which their extension to a measure of a temporary nature would have entailed.
               The theoretical advantage for traders presented, according to the Council, by the application of a relatively stable rate which, if it did not make up for the gap which has arisen in monetary situations since 1969, has on the other hand made it possible for them to take more confidently into account in advance the economic conditions, constitutes rather an argument in favour of the application of the customs rate. But these considerations do not seem to me to be decisive: recourse to the gold parity unit of account is explained by the purely tariff nature of the measure in question.
               Consequently I take the view that the tax of 25 units of account per 100 kg established for potatoes by Article 1 (1) of Regulation No 348/76 must be converted on the basis of the rate of exchange of DM 3.66 per unit of account (Article 1 of Regulation No 129 of the Council, as amended by Regulation No 653/68 of 30 May 1968).
            
         My opinion is that the Court should reply to the questions put to it in the sense of the observations which I have made above.
      (
            1
         )	Translated from the French.