1 BY ORDER DATED 19 FEBRUARY 1974, FILED AT THE COURT REGISTRY ON 21 MARCH 1974, THE BUNDESFINANZHOF REFERRED TO THE COURT FOR A PRELIMINARY RULING, UNDER ARTICLE 177 OF THE EEC TREATY, QUESTIONS ON THE INTERPRETATION OF ARTICLE 18 OF REGULATION ( EEC ) NO 141/64 OF THE COUNCIL ( OJ 27 . 10 . 1964, P . 2666 ) AND ARTICLE 3 OF REGULATION ( EEC ) NO 163/64 OF THE COMMISSION ( OJ 31 . 10 . 1964, P . 2741 ).
2 THE QUESTIONS ARE RAISED IN AN ACTION RELATING TO THE AMOUNT OF EXPORT REFUND FOR GLUTEN FLOUR FROM MAIZE, A BY-PRODUCT OF THE MANUFACTURE OF STARCH, SUBHEADING 11.09 OF THE CCT . THE PLAINTIFF IN THE MAIN ACTION EXPORTED A CONSIGNMENT OF THIS FLOUR MADE NOT FROM MAIZE BUT FROM 'MAIZE GLUTEN', A BY-PRODUCT OF THE MANUFACTURE OF STARCH, WHICH DOES NOT COME UNDER THE COMMON ORGANIZATION OF THE MARKETS AND WHICH CAN THEREFORE BE FREELY IMPORTED INTO THE COMMON MARKET AT THE WORLD PRICE . ON ASSESSING THE AMOUNT OF THE EXPORT REFUND THE DEFENDANT IN THE MAIN ACTION REDUCED IT BY THE AMOUNT OF THE REFUND TO PRODUCERS GRANTED BY THE FEDERAL REPUBLIC OF GERMANY AT THE DATE OF EXPORTATION, FOR MAIZE IMPORTED AND USED TO MANUFACTURE GLUTEN FLOUR, UNDER ARTICLE 18 OF REGULATION ( EEC ) NO 141/64 IN CONJUNCTION WITH ARTICLE 3 OF REGULATION ( EEC ) NO 163/64 .
3 THE COURT IS ASKED TO DECLARE WHETHER THESE PROVISIONS MUST BE INTERPRETED AS MEANING THAT THE REFUND TO PRODUCERS IN RESPECT OF THE MANUFACTURE OF STARCH FROM MAIZE IS TO BE DEDUCTED FROM THE EXPORT REFUND FOR GLUTEN UNDER TARIFF HEADING 11.09 ONLY IN THOSE CASES IN WHICH A REFUND TO PRODUCERS WAS ACTUALLY GRANTED UPON THE MAIZE PRODUCT IMPORTED FOR THE PURPOSE OF MANUFACTURE OF THE GLUTEN . IF THIS QUESTION IS ANSWERED IN THE AFFIRMATIVE, IT IS ASKED WHETHER THE ANSWER WOULD BE THE SAME WHERE THERE COULD BE NO REFUND TO PRODUCERS IN RESPECT OF THE RAW MATERIAL FROM WHICH THE EXPORTED GOODS ARE MANUFACTURED SINCE SUCH RAW MATERIAL IS NOT LIABLE TO THE LEVY .
4 ACCORDING TO THE SECOND RECITAL OF REGULATION NO 19, WHICH GOVERNED CEREALS AT THE TIME, THIS SECTOR HAS SPECIAL IMPORTANCE IN THE ECONOMY OF THE COMMUNITY BOTH AS A DIRECT SOURCE OF INCOME FOR PRODUCERS AND AS A SOURCE OF SUPPLY FOR PROCESSING PURPOSES . THUS THE SYSTEM OF PRICES, OF LEVY AND OF EXPORT REFUND PROVIDED FOR BY THIS REGULATION HAD TO COVER NOT ONLY CERTAIN DIRECT AGRICULTURAL PRODUCTS, LISTED IN ARTICLE 1 ( A ), BUT ALSO, ACCORDING TO ARTICLE 1 ( D ), CERTAIN PRODUCTS PROCESSED FROM THESE AND LISTED IN THE ANNEX TO THE REGULATION, INCLUDING GLUTEN AND GLUTEN FLOUR . IN PURSUANCE, INTER ALIA OF THE SECOND SENTENCE OF ARTICLE 20 ( 2 ) OF REGULATION NO 19, THE COUNCIL ISSUED REGULATION NO 141/64 RELATING TO THE SYSTEM OF PRODUCTS PROCESSED FROM CEREALS .
5 ACCORDING TO THE 11TH RECITAL OF THIS REGULATION THE OBJECTIVE OF THE EXPORT REFUND FOR PRODUCTS PROCESSED FROM CEREALS IS 'TO COMPENSATE FOR THE DIFFERENCE BETWEEN THE PRICES OF THE BASIC PRODUCTS WITHIN THE EXPORTING MEMBER STATE AND PRICES ON THE WORLD MARKET '. THE 'BASIC PRODUCTS' ARE DEFINED IN ARTICLE 1 ( 3 ) OF THE SAID REGULATION AS BROKEN RICE AND THE CEREALS LISTED IN ARTICLE 1 ( A ) OF REGULATION NO 19, WHICH INCLUDES MAIZE, BUT NOT 'MAIZE GLUTEN '.
6 ALTHOUGH THE PRELIMINARY QUESTION COULD BE ASKED WHETHER A MEMBER STATE IS AUTHORIZED TO GRANT AN EXPORT REFUND WHEN THE EXPORTED PRODUCT HAS NOT BEEN MANUFACTURED FROM A BASIC PRODUCT SO DEFINED, SUCH A QUESTION HAS NOT HOWEVER BEEN PUT IN THE PRESENT CASE .
7 IN ORDER TO ALLOW STARCH MANUFACTURERS TO MAINTAIN COMPETITIVE PRICES IN RELATION TO SUBSTITUTE PRODUCTS, REGULATION NO 141/64 AUTHORIZED MEMBER STATES TO GRANT A REFUND TO PRODUCERS HAVING THE EFFECT OF MAKING AVAILABLE TO MANUFACTURERS OF STARCH THE NECESSARY BASIC PRODUCTS AT A PRICE LOWER THAN THAT WHICH WOULD ARISE IF THE SYSTEM OF LEVIES WERE APPLIED . ARTICLE 15 PROVIDES THAT, AS REGARDS TRADE IN PROCESSED PRODUCTS WITH THIRD COUNTRIES, THE REFUND WHICH MEMBER STATES MAY GRANT SHALL BE DETERMINED HAVING REGARD TO THE CONDITIONS OF THE WORLD MARKET AND THE PRICES OF THE BASIC PRODUCTS . NEVERTHELESS, ACCORDING TO ARTICLE 18, IN CALCULATING THE AMOUNT OF THE REFUNDS ON EXPORTS FOR PROCESSED PRODUCTS, REFUNDS TO PRODUCERS ALLOWED IN RESPECT OF MAIZE FOR THE MANUFACTURE OF STARCH SHALL BE TAKEN INTO ACCOUNT . ARTICLE 3 ( B ) OF REGULATION NO 163/64 PROVIDES THAT WHEN A MEMBER STATE GRANTS A REFUND TO PRODUCERS, THE AMOUNT OF REFUND WHICH MAY BE GRANTED ON THE EXPORT OF THE PROCESSED PRODUCTS SHALL BE REDUCED BY THE AMOUNT OF THE REFUND TO PRODUCERS GRANTED BY THE EXPORTING MEMBER STATE ON THE DATE OF EXPORTATION . IT FOLLOWS FROM REGULATION NO 60/66/EEC OF THE COMMISSION ( OJ 103, P . 1854/66 ) THAT THE MAXIMUM AMOUNT OF THE EXPORT REFUND FOR THE PROCESSED PRODUCT WHICH A MEMBER STATE MAY GRANT IS AT A FLAT RATE, WITHOUT TAKING INTO ACCOUNT THE INDIVIDUAL COST PRICES OF THE EXPORTER .
8 IT APPEARS FROM THE SYSTEM THUS ESTABLISHED THAT AFTER THE EXPORT REFUND HAS BEEN AT THE FLAT RATE FOR A QUANTITY OF THE BASIC PRODUCT WHICH IS REGARDED AS BEING USED IN THE MANUFACTURE OF THE PROCESSED PRODUCT, THE AMOUNT OF THE REFUND TO PRODUCERS TO BE DEDUCTED IS THAT GRANTED AT THE DATE OF EXPORTATION OF THIS SAME BASIC PRODUCT . UNDER THIS SYSTEM THE INDIVIDUAL COST FACTORS CANNOT AFFECT THE AMOUNT OF THE REFUND .
9 IT IS THEREFORE RIGHT TO REPLY THAT ARTICLE 18 OF REGULATION ( EEC ) NO 141/64 IN CONJUNCTION WITH ARTICLE 3 ( B ) OF REGULATION NO 163/64 MUST BE INTERPRETED AS MEANING THAT THE AMOUNT OF THE REFUND ON EXPORT OF ONE OF THE PROCESSED PRODUCTS REFERRED TO IN THESE REGULATIONS MUST BE PRODUCED BY THE REFUND TO PRODUCERS GRANTED AT THE DATE OF EXPORTATION BY THE EXPORTING MEMBER STATE FOR THE BASIC PRODUCT ON WHICH THE REFUND WAS CALCULATED .