Federal Republic of Germany v Commission of the European Communities.
Date: 1992-10-27
19 In that respect it must be stressed that, as the German Government itself recognizes, exclusions, like surcharges, are intended to combat the numerous irregularities which are committed in the context of agricultural aid. Because they weigh heavily on the Community budget those irregularities are likely to compromise the action undertaken by the institutions in that field to stabilize markets, to support the standard of living of farmers and to ensure that supplies reach consumers at reasonable prices.
25 In fact the exclusions at issue do not constitute penal sanctions. In that respect the German Government, which has not challenged the Community' s power to impose the surcharges challenged in the present action, has not shown that there is any fundamental difference between the penalty consisting in the imposition on an operator of a surcharge and a penalty consisting in the withdrawal for a certain period of the right to receive a benefit. In both cases the person concerned suffers a financial loss greater than the mere reimbursement, perhaps with interest, of the aid improperly received.
26 Furthermore, the imposition of a penalty on a trader presupposes that he has just been granted a right. Since that right relates to a scheme of Community aid paid out of public funds and based on the notion of solidarity, it must be subject to the condition that the beneficiary offers all guarantees of probity and trustworthiness. From that point of view the contested penalty constitutes a specific administrative instrument forming an integral part of the scheme of aid and intended to ensure the sound financial management of the Community public funds.
35 For the rest, it is necessary to refer to the legislative system established by the Treaty. Whereas the third paragraph of Article 43(2) in principle gives the Council power to adopt, on a proposal from the Commission and after consulting the European Parliament, rules relating to a common organization of the market, Articles 145 and 155 allow the Council to confer on the Commission, in the acts which it adopts, implementing powers in respect of the rules which it lays down. Article 145 nevertheless provides that the Council may also reserve the right, in specific cases, to exercise those powers itself.
36 It follows from the judgment in Case 25/70 Einfuhr-und Vorratstelle fuer Getreide v Koester [1970] ECR 1161, paragraph 6, that the aforementioned provisions distinguish between rules which, since they are essential to the subject-matter envisaged, must be reserved to the Council' s power, and those which being merely of an implementing nature may be delegated to the Commission.
37 In the present case the rules challenged by the German Government cannot be classified as essential to the common organization of the market established by the first basic regulation and the scheme of aid established by the second basic regulation. Such classification must be reserved for provisions which are intended to give concrete shape to the fundamental guidelines of Community policy. That is not true of penalties, such as surcharges or exclusions, which are intended to underpin the options chosen by ensuring the proper financial management of the Community funds designated for their attainment.
38 Finally it should be added that the inclusion of the power to impose penalties in the implementing powers was already recognized by the Court in the aforementioned Koester judgment. It will be remembered that in that judgment it was held that provisions which made the issue of an export licence conditional upon the provision of security and which provided for the forfeiture of that security when the obligation to export was not fulfilled within the requisite time-limits came within the Commission' s implementing powers. Like surcharges and exclusions which are at the origin of the present proceedings, that penalty did not comprise merely the refund of a payment improperly made.
39 Consequently, it must be concluded that measures consisting of the imposition of penalties such as surcharges and exclusions on a trader giving false information to the administrative authorities amount to no more than implementation of the principles established in the basic regulations and, since the Council did not reserve that power to itself, it was properly delegated to the Commission.
41 That argument does not carry conviction either. It is clear from the aforementioned Koester judgment that since the Council has laid down in its basic regulation the essential rules governing the matter in question, it may delegate to the Commission general implementing power without having to specify the essential components of the delegated power; for that purpose, a provision drafted in general terms provides a sufficient basis for the authority to act.
42 That principle is not affected by the aforementioned decision. As a measure of secondary law it cannot add to the rules of the Treaty, which do not require the Council to specify the essential components of the implementing powers delegated to the Commission.