1 BY A JUDGMENT OF 17 JUNE 1980 WHICH WAS RECEIVED AT THE COURT REGISTRY ON 25 JUNE 1980 THE TRIBUNAL ADMINISTRATIF ( ADMINISTRATIVE COURT ), PARIS , REFERRED TO THE COURT FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY A QUESTION CONCERNING THE VALIDITY OF ARTICLE 2 ( 1 ) OF REGULATION NO 1608/74 OF THE COMMISSION OF 26 JUNE 1974 ON SPECIAL PROVISIONS IN RESPECT OF MONETARY COMPENSATORY AMOUNTS ( OFFICIAL JOURNAL L 170 , P . 38 ).
2 THE QUESTION AROSE IN THE COURSE OF LEGAL PROCEEDINGS BETWEEN DEBAYSER SA , SUCRE-UNION SA AND JEAN LION SA , AND THE FONDS D ' INTERVENTION ET DE REGULARISATION DU MARCHE DU SUCRE ( HEREINAFTER REFERRED TO AS ' ' THE FIRS ' ' ), WHICH IS THE AUTHORITY IN FRANCE RESPONSIBLE FOR THE CHARGING AND PAYMENT OF MONETARY COMPENSATORY AMOUNTS IN THE SUGAR SECTOR , CONCERNING THE REFUSAL OF THAT INSTITUTION TO APPLY THE PROVISION FOR DISCRETIONARY RELIEF CONTAINED IN THE ABOVE-MENTIONED REGULATION NO 1608/74 TO THE APPLICANTS IN ORDER TO EXEMPT THEM FROM THAT PORTION OF THE MONETARY COMPENSATORY AMOUNTS WHICH REPRESENTS THE DIFFERENCE BETWEEN THE AMOUNTS APPLICABLE ON THE DATE ON WHICH THEY CONCLUDED CONTRACTS FOR THE EXPORT OF SUGAR AND THE AMOUNTS IN FORCE ON THE DATE WHEN THOSE EXPORTS WERE EFFECTED .
3 ACCORDING TO ARTICLE 1 OF REGULATION NO 1608/74 : ' ' WHERE MONETARY COMPENSATORY AMOUNTS ARE INTRODUCED OR INCREASED AS A RESULT OF THE FIXING OR THE AMENDMENT OF THE CENTRAL RATE OR OF THE REPRESENTATIVE RATE OF THE CURRENCY OF A MEMBER STATE USED IN THE CONTEXT OF THE COMMON AGRICULTURAL POLICY , OR ( AS A RESULT OF ) THE DECISION OF A MEMBER STATE TO PERMIT ITS CURRENCY TO FLOAT IN RELATION TO THE CURRENCIES OF THE MEMBER STATES WHERE THE FLUCTUATION OF THE RATES OF EXCHANGE IS KEPT WITHIN A MAXIMUM SPREAD OF 2.25% , THE MEMBER STATE IN QUESTION SHALL BE AUTH ORIZED TO WAIVE , ON A DISCRETIONARY BASIS AND ACCORDING TO THE FOLLOWING CONDITIONS , THE MONETARY COMPENSATORY AMOUNT OR SO MUCH THEREOF AS CORRESPONDS TO THE INCREASE ' ' . ARTICLE 2 ( 1 ) OF THE SAME REGULATION STATES THAT : ' ' ARTICLE 1 SHALL APPLY ONLY TO IMPORTS AND EXPORTS CARRIED OUT PURSUANT TO BINDING CONTRACTS CONCLUDED BEFORE THE MONETARY MEASURES REFERRED TO IN THAT ARTICLE ' ' .
4 FOLLOWING THE DECISION OF THE FRENCH GOVERNMENT ON 15 MARCH 1976 TO ALLOW THE FRENCH FRANC TO FLOAT MONETARY COMPENSATORY AMOUNTS WERE INTRODUCED AS FROM 25 MARCH 1976 . THE AMOUNTS , FIXED AT FF 4.46 ON 25 MARCH 1976 , WERE INCREASED SEVERAL TIMES AS A RESULT OF THE FALL IN THE VALUE OF THE FRENCH FRANC . THEY ROSE IN SUCESSIVE STAGES FROM FF 4.85 ON 23 JULY 1976 TO FF 32.67 ON 27 DECEMBER 1976 .
5 ON THE INTRODUCTION OF THE SCHEME THE APPLICANTS REQUESTED THE FIRS TO EXTEND IN THEIR FAVOUR THE APPLICATION OF REGULATION NO 1608/74 TO BINDING CONTRACTS CONCLUDED AFTER 15 MARCH 1976 AND PERFORMED AFTER 23 JULY 1976 , THE DATE AFTER WHICH THE AMOUNTS WERE SUBJECTED TO THE INCREASES MENTIONED ABOVE .
6 WITH REGARD TO SUCH CONTRACTS A CIRCULAR FROM THE FIRS INFORMED THE EXPORTERS CONCERNED THAT THEY COULD NOT BE GRANTED THE EXEMPTION THEY SOUGHT UNDER REGULATION NO 1608/74 BECAUSE THE AMBIT OF THE CLAUSE PROVIDING DISCRETIONARY RELIEF WAS RESTRICTED TO IMPORTS OR EXPORTS EFFECTED UNDER BINDING CONTRACTS CONCLUDED BEFORE THE MONETARY MEASURE DESCRIBED IN ARTICLE 1 OF THAT REGULATION , AND THE MONETARY MEASURE IN QUESTION IN THIS INSTANCE COULD ONLY BE THE DECISION ADOPTED BY THE FRENCH GOVERNMENT ON 15 MARCH 1976 TO ALLOW THE FRANC TO FLOAT . AN IDENTICAL REPLY WAS GIVEN BY THE COMMISSION ON 7 DECEMBER 1976 TO THE PRESIDENT OF THE SYNDICAT DU COMMERCE DES SUCRES ( SUGAR TRADE ASSOCIATION ).
7 HAVING BROUGHT AN ACTION AGAINST THE COMMISSION BEFORE THIS COURT UNDER THE SECOND PARAGRAPH OF ARTICLE 215 OF THE EEC TREATY FOR A REFUND , IN THE FORM OF DAMAGES , OF THE INCREASES IN THE MONETARY COMPENSATORY AMOUNTS WHICH THEY CLAIMED THEY SHOULD NOT HAVE HAD TO PAY , WHICH ACTION WAS DISMISSED BY THE COURT AS INADMISSIBLE IN A JUDGMENT OF 2 MARCH 1978 ( JOINED CASES 12 , 18 AND 21/77 ( 1978 ) ECR 553 ) ON THE GROUND THAT THE ACTION CONCERNED MEASURES ADOPTED BY THE NATIONAL AUTHORITIES , THE APPLICANTS BROUGHT AN ACTION FOR ANNULMENT AGAINST THE FIRS BEFORE THE TRIBUNAL ADMINISTRATIF DE PARIS . THAT APPLICATION IS DIRECTED AGAINST THE REFUSAL OF THAT INSTITUTION TO APPLY THE PROVISION FOR DISCRETIONARY RELIEF IN REGULATION NO 1608/74 IN THE CASE OF EXPORTS EFFECTED UNDER BINDING CONTRACTS CONCLUDED AFTER 15 MARCH 1976 AND PERFORMED BEFORE 23 JULY 1976 , AND SEEKS REIMBURSEMENT OF THE INCREASE IN THE MONETARY COMPENSATORY AMOUNTS WHICH WERE PAID ON COMPLETION OF EXPORT CONTRACTS WHICH HAD BEEN CONCLUDED PRIOR TO THE DATE OF EACH INCREASE .
8 IN THE COURSE OF THOSE PROCEEDINGS THEY REQUESTED THE NATIONAL COURT TO REFER TO THIS COURT FOR A PRELIMINARY RULING QUESTIONS CONCERNING , INTER ALIA , THE INTERPRETATION OF THE WORDS ' ' MONETARY MEASURE ' ' IN ARTICLE 2 ( 1 ) OF REGULATION NO 1608/74 AND , IF THOSE WORDS MUST BE INTERPRETED AS APPLYING IN THE CIRCUMSTANCES EXCLUSIVELY TO THE DECISION TAKEN BY THE FRENCH GOVERNMENT ON 15 MARCH 1976 , THE VALIDITY OF THE ABOVE-MENTIONED PROVISION IN SO FAR AS IT EXCLUDES FROM THE AMBIT OF THE SAID REGULATION BINDING CONTRACTS CONCLUDED AFTER 15 MARCH 1976 .
9 CONSIDERING THAT THE CONCEPT OF ' ' MONETARY MEASURE ' ' USED IN ARTICLE 2 ( 1 ) OF REGULATION NO 1608/74 DID NOT PRESENT A DIFFICULTY OF INTERPRETATION AND THAT IT COULD REFER IN THE PRESENT CIRCUMSTANCES ONLY TO THE DECISION TAKEN BY THE FRENCH GOVERNMENT ON 15 MARCH 1976 , THE NATIONAL COURT DECIDED TO REFER TO THIS COURT ONLY THE SECOND QUESTION , REQUESTING FROM IT A RULING ON THE VALIDITY OF ARTICLE 2 ( 1 ) OF REGULATION NO 1608/74 OF THE COMMISSION .
10 THE NATIONAL COURT WAS CORRECT IN CONSIDERING THAT THE CONCEPT OF A ' ' MONETARY MEASURE ' ' WITHIN THE MEANING OF ARTICLE 2 ( 1 ) OF THE REGULATION CITED ABOVE MUST BE CONSTRUED AS APPLYING IN THE PRESENT CIRCUMSTANCES SOLELY TO THE DECISION TAKEN ON 15 MARCH 1976 BY THE FRENCH GOVERNMENT TO ALLOW THE FRENCH FRANC TO FLOAT BEYOND THE MARGINS OF FLUCTUATION PERMITTED AS AGAINST THE CURRENCIES OF THE MEMBER STATES IN WHAT WAS THEN KNOWN BY COMMON CONSENT AS THE ' ' MONETARY SNAKE ' ' .
11 ON THE BASIS OF THAT INTERPRETATION THE NATIONAL COURT ASKS WHETHER ARTICLE 2 ( 1 ) OF THAT REGULATION MAY BE CONSIDERED , ' ' REGARD BEING HAD TO THE WORDING OF THE THIRD RECITAL IN THE PREAMBLE THERETO ' ' , AS VALID IN SO FAR AS IT EXCLUDES FROM THE AMBIT OF THE REGULATION IMPORTS OR EXPORTS EFFECTED UNDER BINDING CONTRACTS AFTER THE MONETARY MEASURE CONTEMPLATED IN ARTICLE 1 BUT BEFORE EACH INCREASE OF THE MONETARY COMPENSATORY AMOUNTS , INVOLVING AN INCREASED CHARGE FOR THE PARTY CONCERNED .
12 FROM THE PREAMBLE TO REGULATION NO 1608/74 OF THE COMMISSION IT APPEARS THAT THE PURPOSE WHICH THE PROVISIONS OF THAT REGULATION WERE DESIGNED TO FULFIL WAS NOT TO PROVIDE TRADERS ENGAGED IN THE PERFORMANCE OF CONTRACTS CONTAINING PRE-FIXED CONDITIONS WITH FULL PROTECTION AGAINST THE APPLICATION OF MONETARY COMPENSATORY AMOUNTS FOLLOWING THE MONETARY EVENT DESCRIBED IN THE FIRST RECITAL AND IN ARTICLE 1 BUT SOLELY TO INTRODUCE , IN RESPECT OF CONTRACTS CONCLUDED PRIOR TO SUCH EVENT , A ' ' CERTAIN FLEXIBILITY ' ' INTO THE MONETARY RULES BY GIVING THE MEMBER STATES THE OPPORTUNITY TO APPLY A CLAUSE CONFERRING DISCRETIONARY RELIEF PERMITTING ' ' EACH INDIVIDUAL CASE TO BE EXAMINED BY THEM IN THE LIGHT OF THE LOSS SUFFERED WHILST MAINTAINING MEASURES TO ENSURE A COORDINATED APPLICATION THEREOF . ' '
13 IN VIEW OF THOSE WORDS THE ARGUMENT PUT FORWARD IN THE PROCEEDINGS BY THE PLAINTIFFS IN THE MAIN ACTION TO THE EFFECT THAT ARTICLE 2 ( 1 ) OF REGULATION NO 1608/74 PREVENTS THE REGULATION FROM ACHIEVING ITS END BECAUSE OF THE RESTRICTIVE CRITERION IT ADOPTS IS BASED ON A MISCONSTRUCTION OF THE NATURE AND PURPOSE OF THAT REGULATION . BY RESTRICTING THE AMBIT OF REGULATION NO 1608/74 TO IMPORTS OR EXPORTS EFFECTED UNDER BINDING CONTRACTS WHICH WERE CONCLUDED BEFORE THE MONETARY MEASURE REFERRED TO IN ARTICLE 1 THAT PROVISION DOES NOT THWART THE AIMS OF THAT REGULATION BUT CONFINES ITSELF WITHIN THE BOUNDS OF THOSE AIMS AS DEFINED BY ALL THAT IS STATED IN THE PREAMBLE TO THAT REGULATION , WHICH IS DESIGNED TO ENSURE THAT THE TRUE FUNCTION OF THE MONETARY COMPENSATORY AMOUNTS IS PRESERVED .
14 INDEED , SUCH AN ARGUMENT FAILS TO HAVE REGARD FOR THE REQUIREMENTS PERTAINING TO THE ORDERLY AND EFFICIENT OPERATION OF THE MONETARY COMPENSATORY AMOUNTS WHICH MUST , IN ORDER TO ACHIEVE THEIR PURPOSE OF COMPENSATING FOR ALTERATIONS OCCURRING IN THE FIXING OF THE CENTRAL RATE OR THE REPRESENTATIVE RATE FOR A NATIONAL CURRENCY USED FOR THE PURPOSES OF THE COMMON AGRICULTURAL POLICY , OR IN THE STABILITY OF THE EXCHANGE RATE FOR SUCH A CURRENCY , BE PERMITTED TO APPLY , APART FROM THE OPTION LEFT TO THE MEMBER STATES TO MAKE USE OF THE CLAUSE FOR DISCRETIONARY RELIEF IN CERTAIN INDIVIDUAL CASES , IN A GENERAL WAY TO IMPORTS AND EXPORTS OF THE AGRICULTURAL PRODUCTS CONCERNED .
15 THE PLAINTIFFS IN THE MAIN ACTION ALLEGED FURTHER THAT ARTICLE 2 ( 1 ) IS CONTRARY TO THE PRINCIPLE OF LEGAL CERTAINTY WHICH IS INHERENT IN THE COMMUNITY LEGAL ORDER . IN THEIR ARGUMENT THEY MAINTAINED THAT ONCE THEY HAD OBTAINED EXPORT LICENCES IN RESPECT OF THE CONTRACTS CONCERNED IN THE DISPUTE THE ISSUE OF THOSE LICENCES OUGHT TO GUARANTEE THEIR RIGHT TO COMPLETE THEIR EXPORTS SUBJECT TO THE RULES IN FORCE ON THE DATE OF SUCH ISSUE WITHOUT BEING EXPOSED TO CHARGES RESULTING FROM AN ALTERATION IN THE MONETARY SITUATION AND THE RULES CONCERNED THEREWITH .
16 HOWEVER , THAT LINE OF ARGUMENT IGNORES THE CONSIDERATION THAT ONCE THE MONETARY MEASURE CONTEMPLATED IN ARTICLE 1 OF REGULATION NO 1608/74 IS TAKEN APPLICATION OF THE MONETARY COMPENSATORY AMOUNTS IN TRADE IS THE DIRECT CONSEQUENCE OF THAT MEASURE AND IS DESIGNED TO COMPENSATE FOR ITS EFFECTS ON TRADING CONDITIONS AND THE FUNCTIONING OF THE COMMON ORGANIZATION OF THE MARKET ON WHICH THE COMMON AGRICULTURAL POLICY IS BASED .
17 THE APPLICATION IN SUCH A CASE OF MONETARY COMPENSATORY AMOUNTS , WHICH IS DUE PRINCIPALLY TO THE ABSENCE OF A MONETARY POLICY HARMONIZED AS BETWEEN THE MEMBER STATES , THUS MEETS THE NEEDS OF THE SYSTEM AND PRECLUDES , ESPECIALLY WHERE A MONETARY SYSTEM IS CHARACTERIZED BY UNSTABLE RATES OF EXCHANGE FOR THE NATIONAL CURRENCY IN QUESTION , TRADERS FROM RELYING ON THE PRINCIPLE OF LEGAL CERTAINTY IN ORDER TO CLAIM A RIGHT TO BE EXEMPTED FROM INCREASES IN MONETARY COMPENSATORY AMOUNTS CAUSED BY THE FALL IN VALUE OF THAT CURRENCY .
18 FURTHERMORE , THE SOLE PURPOSE OF THE ISSUE OF THE EXPORT LICENCE IS TO AUTHORIZE EXPORT OF THE GOODS CONCERNED AND NOT TO GUARANTEE THE CONDITIONS UNDER WHICH THE GOODS WILL IN FACT BE EXPORTED . IT CANNOT THEREFORE IN ITSELF CONFER ON THE EXPORTER A RIGHT NOT TO BE SUBJECTED TO THE CONSEQUENCES ON TRADE OF A FALL IN THE VALUE OF A NATIONAL CURRENCY .
19 THE FACT THAT SUBSEQUENTLY THE COMMISSION PROVIDED , IN REGULATION NO 243/78 OF 1 FEBRUARY 1978 ( OFFICIAL JOURNAL L 37 , P . 5 ) THAT HOLDERS OF EXPORT LICENCES MAY ASK FOR AND OBTAIN ADVANCE FIXING OF THE MONETARY COMPENSATORY AMOUNTS IS NOT DECISIVE . EVEN IF THE UNSTABLE RATE OF INCREASE OF THE MONETARY COMPENSATORY AMOUNTS APPEARED TO THE COMMISSION WHEN IT ADOPTED REGULATION NO 243/78 TO CREATE A NEW SITUATION JUSTIFYING AN APPROPRIATE AMENDMENT OF THE COMMUNITY LEGISLATION WHICH EXISTED AT THE TIME , IT DOES NOT FOLLOW THAT THAT ALTERATION IS SUFFICIENT TO JUSTIFY THE CONCLUSION THAT A CLAUSE PROVIDING DISCRETIONARY RELIEF PREVIOUSLY IN APPLICATION WAS UNDULY RESTRICTIVE IN NATURE . MOREOVER , THE THIRD RECITAL IN THE PREAMBLE TO THAT REGULATION REVEALS THAT THE SUBJECT-MATTER GOVERNED BY THE LATTER REGULATION AND THAT TO WHICH REGULATION NO 1608/74 MAY BE APPLIED IS NOT IDENTICAL , FOR REGULATION NO 243/78 ALLOWS THE ADVANCE FIXING OF MONETARY COMPENSATORY AMOUNTS ONLY FOR PRODUCTS IN RESPECT OF WHICH THE LEVY OR THE REFUND TOO , HAS BEEN FIXED IN ADVANCE .
20 IT WAS ALSO SUBMITTED BY THE PLAINTIFFS IN THE MAIN ACTION THAT ARTICLE 2 ( 1 ) OF REGULATION NO 1608/74 OF THE COMMISSION BREACHES THE PRINCIPLE THAT LEGITIMATE EXPECTATION MUST BE PROTECTED .
21 HOWEVER , THE RESULT OF THE FOREGOING IS THAT IT IS UNQUESTIONABLY PRUDENT MANAGEMENT ON THE PART OF A TRADER FACED WITH THE DECISION OF A MEMBER STATE TO ALLOW ITS NATIONAL CURRENCY TO FLOAT , AND FACED WITH THE FALL IN THE VALUE OF THAT CURRENCY , TO REVIEW , ONCE THE SYSTEM OF MONETARY COMPENSATORY AMOUNTS HAS BEEN INTRODUCED , THE CONDITIONS ON THE BASIS OF WHICH THE CONTRACTS TO BE PERFORMED DURING THE PERIOD OF MONETARY FLUCTUATION ARE CONCLUDED .
22 THE TRANSITIONAL MEASURES , WHICH HAVE BEEN CITED BY THE PLAINTIFFS AS PRECEDENTS JUSTIFYING THEIR CONVICTION THAT THEY SHOULD BE PROTECTED AGAINST UNFORESEEABLE INCREASES IN THE MONETARY COMPENSATORY AMOUNTS , DEAL IN ANY CASE WITH EITHER THE POSSIBILITY OF ALTERING THE UNIT OF ACCOUNT USED FOR THE COMMON AGRICULTURAL POLICY , OR THE DEVALUATION OF A NATIONAL CURRENCY OR THE DOLLAR , OR , LASTLY , THE WITHDRAWAL OF A CURRENCY FROM THE MONETARY SNAKE AS IT EXISTED AT THE TIME OF THE EVENTS IN QUESTION . THE SOLE PURPOSE OF REGULATION NO 1608/74 IS PRECISELY TO CONSOLIDATE SUCH SPECIFIC MEASURES BY LAYING DOWN THE CRITERIA TO BE APPLIED IN EACH INDIVIDUAL CASE CONSIDERED , IN ORDER IN PARTICULAR TO ENSURE UNIFORM APPLICATION BY THE MEMBER STATES OF THE DISCRETIONARY RELIEF THUS INTRODUCED .
23 THOSE CONSIDERATIONS TAKEN TOGETHER SUFFICE , LASTLY , TO REFUTE THE COMPLAINT PUT FORWARD BY THE PLAINTIFFS IN THE MAIN ACTION THAT ARTICLE 2 ( 1 ) OF REGULATION NO 1608/74 BREACHES THE PRINCIPLE OF PROPORTIONALITY INASMUCH AS IT HAS THE EFFECT OF EXPOSING TRADERS SUCH AS THE PLAINTIFFS TO LARGE AND UNFORESEEABLE FLUCTUATIONS IN THE MONETARY COMPENSATORY AMOUNTS .
24 IN ANSWER IT MUST BE EMPHASIZED THAT REGULATION NO 1608/74 , BEING A PROVISION PROVIDING FOR DISCRETIONARY RELIEF , IS DESIGNED PRECISELY TO MITIGATE IN THE APPROPRIATE CIRCUMSTANCES OF FACT AND OF LAW THE HARDSHIP WHICH MAY RESULT FOR TRADERS FROM THE APPLICATION OF THE MONETARY COMPENSATORY AMOUNTS AND IT ALSO HELPS TO PREVENT THE INTRODUCTION OF THE AMOUNTS FROM PROVING EXCESSIVELY BURDENSOME FOR SOME OF THEM . IN THE CIRCUMSTANCES IT CANNOT BE HELD THAT SUCH A REGULATION BREACHES THE PRINCIPLE OF PROPORTIONALITY BY NOT AFFORDING TRADERS MORE AMPLE OPPORTUNITY TO BENEFIT FROM A CLAUSE PROVIDING FOR DISCRETIONARY RELIEF .
25 ON THOSE GROUNDS , THE REPLY TO THE NATIONAL COURT MUST BE THAT CONSIDERATION OF THE QUESTION RAISED HAS DISCLOSED NO FACTOR OF SUCH A KIND AS TO AFFECT THE VALIDITY OF ARTICLE 2 ( 1 ) OF REGULATION NO 1608/74 OF THE COMMISSION OF 26 JUNE 1974 .