1 By order of 17 September 1997, received at the Court on 16 October 1997, the Finanzgericht München (Finance Court, Munich) referred to the Court for a preliminary ruling under Article 177 of the EC Treaty (now Article 234 EC) a question on the validity of the second subparagraph of Article 3(2) of 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).
2 That question was raised in proceedings between Molkereigenossenschaft Wiedergeltingen eG (hereinafter the Wiedergeltingen dairy) and the Hauptzollamt Lindau (Principal Customs Office, Lindau, hereinafter the HZA) concerning the late communication by that dairy, in its capacity as a purchaser of milk, of the summary of the statements drawn up for each affiliated producer indicating the quantities of milk which it had delivered. Legal background
3 Council Regulation (EEC) No 3950/92 of 28 December 1992 establishing an additional levy in the milk and milk products sector (OJ 1992 L 405, p. 1, hereinafter the basic regulation)extended for seven new consecutive 12-month periods from 1 April 1993 the additional levy on milk introduced by Council Regulation (EEC) No 856/84 of 31 March 1984 amending Regulation (EEC) No 804/68 on the common organisation of the market in milk and milk products (OJ 1984 L 90, p. 10).
4 Article 2(1) and (2), first subparagraph, of the basic regulation provides: 1. The levy shall be payable on all quantities of milk or milk equivalent marketed during the 12-month period in question in excess of the relevant quantity referred to in Article 3. It shall be shared between the producers who contributed to the overrun. In accordance with a decision of the Member State, the contribution of producers towards the levy payable shall be established, after the unused reference quantities have been reallocated or not, either at the level of the purchaser, in the light of the overrun remaining after unused reference quantities have been allocated in proportion to the reference quantities of each producer, or at national level, in the light of the overrun in the reference quantity of each individual producer. 2. As regards 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.
5 Article 11 of the basic regulation provides: The detailed rules for the application of this Regulation and in particular the characteristics of milk, including fat content, which are considered representative for the purposes of establishing the quantities of milk delivered or purchased shall be adopted in accordance with the procedure provided for in Article 30 of Regulation (EEC) No 804/68.
6 Pursuant to the latter provision, the Commission adopted Regulation No 563/93.
7 Article 3(2) and (4), first subparagraph, of that regulation provides, as regards the period for communication and payment: 2. Before 15 May each year, the purchasers shall forward to the competent authority of the Member State a summary of the statements drawn up for each producer or, where appropriate, by decision of the Member State, the total quantity, the quantity corrected in accordance with Article 2(2) and the average fat content of the milk and/or milk equivalent delivered to it by producers and the sum of the individual reference quantities and the average representative fat content of such producers' production. Where that time-limit is not observed, the purchaser shall be liable to a penalty equal to the amount of the levy due for a 0.1% overrun on the quantities of milk and milk equivalent delivered to them by producers. Such penalty may not exceed ECU 20 000. ... 4. Before 1 September each year, the purchaser liable for levies shall pay the competent body the amount due in accordance with rules laid down by the Member State.
8 The time-limit laid down in the second subparagraph of Article 3(2) of Regulation No 536/93 was reproduced in Paragraph 11(3) of the Milch-Garantiemengen-Verordnung (Regulation on Milk Quantities).
9 It should also be noted that on 13 May 1998 the Commission adopted Regulation (EC) No 1001/98 of 13 May 1998 amending Regulation (EEC) No 536/93 laying down detailed rules on the application of the additional levy on milk and milk products (OJ 1998 L 142, p. 22), which, although it does not apply in the present case, now provides in Article 1: Article 3(2) second subparagraph of Regulation (EEC) No 536/93, is hereby replaced by the following: "Where that time-limit is not observed, the purchaser shall be liable to a penalty calculated as follows: - if the communication referred to in the first subparagraph is made before 1 June, the penalty shall be equal to the amount of the levy due for a 0.1% overrun on the quantities of milk and milk equivalent delivered to them by producers. Such penalty may not be less than ECU 500 nor more than ECU 20 000, - if the communication referred to in the first subparagraph is made after 31 May but before 16 June, the penalty shall be equal to the amount of the levy due for a 0.2% overrun on the quantities of milk and milk equivalent delivered to them by producers. Such penalty may not be less than ECU 1 000 nor more than ECU 40 000, - if the communication referred to in the first subparagraph is made after 15 June but before 1 July, the penalty shall be equal to the amount of the levy due for a 0.3% overrun on the quantities of milk and milk equivalent delivered to them by producers. Such penalty may not be less than ECU 1 500 nor more than ECU 60 000, - if the communication referred to in the first subparagraph is not made before 1 July, the penalty shall be that referred to in the third indent plus an amount equal to 3% of that penalty for each calendar day of delay from 1 July. Such penalty may not exceed ECU 100 000. However, if the quantities of milk or milk equivalent delivered to the purchaser per period of 12 months are less than 100 000 kilograms, the minimum penalties referred to in the first three indents shall be reduced to ECU 100, 200 and 300 respectively." Facts and main proceedings
10 The Wiedergeltingen dairy is a milk-processing undertaking which operates in the form of a cooperative (dairy cooperative); its members are the milk producers which supply it and they take the profits it makes. In 1996 it had a turnover of DEM 17 086 021.
11 The 24 289 tonnes of milk processed in 1996 were delivered by 165 suppliers, representing an average quantity of milk delivered of 147 206 kg per producer; that quantity is significantly higher than the average production per farmer in Bavaria, which is 95 642 kg per annum.
12 On 9 April 1997, the HZA reminded the Wiedergeltingen dairy that it had to communicate the summary of statements provided for in the first subparagraph of Article 3(2) of Regulation No 536/93 no later than 14 May 1997. However, the summary of statements was not sent until 16 May 1997 and was received by the HZA on 20 May 1997, since 19 May was a public holiday.
13 On 22 May 1997, the HZA imposed a penalty, pursuant to the second subparagraph of Article 3(2) of Regulation No 536/93, amounting to DEM 16 661.90.
14 The Wiedergeltingen dairy's complaint against that decision was rejected and it brought proceedings before the national court.
15 The Finanzgericht München decided to stay proceedings and to refer the following question to the Court: Is the second subparagraph of Article 3(2) of Commission Regulation (EEC) No 536/93 of 9 March 1993 (OJ 1993 L 57, p. 12), relating to the imposition of penalties on dairies (purchasers of milk), valid? The question referred to the Court
16 The Finanzgericht is uncertain about the validity of the second subparagraph of Article 3(2) of Regulation No 536/93 owing, first, to the absence in the basic regulation of a valid legal basis on which the power to adopt sanctions could be delegated to the Commission and, second, to the disproportionate nature of the penalty in relation to the length of time by which the deadline in question was exceeded.
17 The German Government claims that the second subparagraph of Article 3(2) of Regulation No 536/93 infringes the principles of proportionality and non-discrimination. The Wiedergeltingen dairy claims that, besides being in breach of those principles, the said provision is also contrary to a number of fundamental principles of criminal law. The alleged absence of a legal basis
18 The national court considers that neither Article 11 of the basic regulation nor the provisions on agricultural matters, namely Articles 38, 40 and 43 of the EC Treaty (now, after amendment, Articles 32 EC, 34 EC and 37 EC), nor Articles 39, 41, 42 and 46 of the EC Treaty (now Articles 33 EC, 35 EC, 36 EC and 38 EC), are of such a kind as to constitute a legal basis authorising the Commission to lay down the penalty referred to in the second subparagraph of Article 3(2) of Regulation No 536/93. Only a basic regulation adopted by the Council on the basis of Article 145 of the EC Treaty (now Article 202 EC) could have enabled the Commission to introduce such a penalty.
19 On the other hand, the German Government and the Commission contend that Article 11 of the basic regulation confers power on the Commission to adopt detailed rules for the application of the additional levy scheme, and in particular to lay down penalties.
20 In that regard, it should be pointed out that the Court had already held, in Case C-240/90 Germany v Commission [1992] ECR I-5383, paragraph 35, that, whilst the third paragraph of Article 43(2) of the Treaty 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 organisation of the market, Articles 145 and 155 of the EC Treaty (now Article 211 EC) also 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.
21 Although, in applying Articles 145 and 155 of the Treaty, a distinction is drawn in case-law between essential rules, which are the Council's preserve, and those which, being merely of an implementing nature, may be delegated to the Commission, only provisions intended to give concrete shape to the fundamental guidelines of Community policy must be classified as essential rules (see Germany v Commission, cited above, paragraphs 36 and 37).
22 As the Advocate General observes in point 23 of his Opinion, that cannot be the case of sanctions, such as the penalty referred to in the second subparagraph of Article 3(2) of Regulation No 536/93, which are designed to ensure implementation of those fundamental guidelines.
23 Under the abovementioned case-law, if the essential rules of the additional milk levy scheme have been fixed by the Council in the basic regulation, it is sufficient for a general power to be delegated to the Commission to adopt the implementing measures. In those circumstances, Article 11 of the basic regulation must be regarded as constituting a valid delegation to the Commission to lay down the penalty referred to in the second subparagraph of Article 3(2) of Regulation No 536/93.
24 However, Article 11 of the basic regulation authorises the Commission to adopt all the measures which are necessary or appropriate for the implementation of the basic regulation, provided that they are not contrary to it (see, in that regard, Case C-478/93 Netherlands v Commission [1995] ECR I-3081, paragraph 31).
25 The national court raises the question whether the Commission, when it exercised its implementing power by introducing the penalty in question, observed the guidelines and the objectives pursued by the Council in the basic regulation. The Finanzgericht considers that there is a difference between the Council's intentions and the objectives which the Commission pursues by means of the penalty.
26 As regards the Council's objectives, the national court first refers to the eighth recital in the preamble to the basic regulation, which states that 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. The national court contends that it follows from that recital that the Council wished to strengthen the position and rights of purchasers, that is to say the dairies.
27 Second, the national court infers from the fifth recital in the preamble to Regulation No 536/93 that, unlike the intention expressed by the Council, the Commission attributed the delays essentially to the activities of the purchasers, since experience gained has shown that major delays in both the transmission of figures on collections or direct sales and payment of the levy, have prevented the arrangements from being fully effective; ... therefore, lessons should be learned from the past and the necessary conclusions drawn by laying down strict requirements as regards notification and payment deadlines and providing for penalties where deadlines are not met.
28 In that regard, it must be pointed out that the eighth recital in the preamble to the basic regulation is not inconsistent with the objective pursued by the Commission in introducing the financial sanction.
29 That recital defines the role of the purchaser in his capacity as the person liable for the additional levy on milk and then specifies the nature of his relationship with the persons who owe that levy. Thus, it is essentially the collection of the sums which the person liable must then pay pursuant to the first subparagraph of Article 2(2) of the basic regulation and Article 3(4) of Regulation No 536/93 that is at the focus of that recital and, accordingly, the relationship between the person liable to pay the levy and the person who owes it. As the Advocate General observes in point 26 of his Opinion, it does not appear that the Council, when adopting the basic regulation, wished to compensate for the administrative burdens which have been placed on dairies in the context of the provisions applicable in milk quota matters.
30 On the other hand, the fifth recital in the preamble to Regulation No 536/93 concerns the detailed rules for payment of the sums collected by way of the additional levy on milk and therefore concerns the relationship between the person liable for payment and the competent body to which those sums are to be paid.
31 Thus, both recitals tend to improve and speed up the transfer of the additional levy on milk by the debtor, that is the producer, to the creditor, namely the competent body of the Member State. At the same time, they emphasise the role as intermediary played by the purchaser in his capacity as person liable for payment when the transfer is effected.
32 It follows from the foregoing that Article 11 of the basic regulation constitutes a valid legal basis enabling the Commission to adopt the penalty referred to in the second subparagraph of Article 3(2) of Regulation No 536/93. Infringement of the principles of proportionality and non-discrimination and infringement of certain fundamental principles of criminal law
33 As regards the breach of the principle of proportionality, the parties which have submitted observations to the Court have all maintained, with the exception of the Commission, that that principle was infringed, since the amount of the financial penalty is fixed independently of the length of the delay in communicating the summary of statements, that the date of 15 May is quite arbitrary, that the financial sanction is calculated from the quantities of milk delivered and not according to the amount of any additional levy on milk which may be payable, that the sanction is imposed even where the dairy is not required to pay a levy, that it is calculated without regard to the dairy's responsibility for the delay and, finally, that any difficulties in the relations between the competent authorities of the Member State have no effect on the calculation of the amount of the penalty.
34 The national court and the Wiedergeltingen dairy observe, essentially, that the amount of the financial sanction is fixed without regard to the length of the delay. Thus, the penalty referred to in the second subparagraph of Article 3(2) is the same whether the delay is one day or much longer.
35 The Court considers that it is to be observed first of all that, according to its settled case-law, in order to establish, in particular in the sector of the common organisation of the agricultural markets, whether a provision of Community law complies with the principle of proportionality, it is necessary to ascertain whether the penalty exceeds what is appropriate and necessary to attain the objective pursued by the rules which have been breached (see Case C-118/89 Lingenfelser [1990] ECR I-2637, paragraph 12; Case C-319/90 Pressler [1992] ECR I-203, paragraph 12; and Case C-354/95 National Farmers' Union and Others [1997] ECR I-4559, paragraph 49).
36 More particularly, it is necessary to ascertain whether the penalty laid down by the provision in question to achieve the aim in view corresponds with the importance of that aim and whether the disadvantages caused are not disproportionate to the aims pursued (see, in that regard, Case C-8/89 Zardi [1990] ECR I-2515, paragraph 10; Pressler, cited above, paragraph 12; and Joined Cases C-133/93, C-300/93 and C-362/93 Crispoltoni and Others [1994] ECR I-4863, paragraph 41).
37 In the light of that case-law, it is important to point out, first, that the penalty provided for in the second subparagraph of Article 3(2) of Regulation No 536/93 is designed to ensure observance of the date of 15 May each year, the final date before which the summary of the statements of the quantities of milk delivered by each producer must be communicated by each dairy to the competent national authority.
38 As regards the purpose of that deadline, it follows from the undisputed submissions of the Wiedergeltingen dairy that it constitutes the first stage of a national administrative procedure which is ultimately designed to enable payment by the dairy to the competent body of the sums due by way of the additional levy on milk. More specifically, that deadline must ensure that that procedure runs on time so that payment can be made before 1 September of each year, as provided for in Article 3(4) of Regulation No 536/93.
39 As regards the importance of that deadline, according to the fifth recital in the preamble to Regulation No 536/93, the regulation lays down strict requirements as regards deadlines for communication so that lessons can be learned from the past, when major delays in the transmission of figures on collections and in payment of the levy prevented the arrangements from being fully effective.
40 A strict application of the deadline for the communication of information provided for in the second subparagraph of Article 3(2) of Regulation No 536/93 appears to be even more necessary, as is apparent, in particular, from the Commission's explanations, because a delay in transmitting the collection figures after the 15 May deadline would not only have repercussions on all the other deadlines in the administrative procedure but might also jeopardise the punctual payment of the additional levy sums due.
41 Although the 15 May deadline must be observed for the smooth operation of the scheme so as to ensure the punctual payment of those sums, it cannot be concluded that observance of that deadline is absolutely indispensable to its smooth operation, since a slight delay, such as that with which the main proceedings are concerned, would not jeopardise payment of the additional levy on milk before 1 September.
42 It is clear in particular from the Wiedergeltingen dairy's detailed description of the administrative formalities subsequent to the sending of the summary of statements that a slight delay in observing the deadline cannot affect the punctual payment of the sums payable by way of the additional levy on milk.
43 In that regard, it must be pointed out that the financial sanction provided for in the second subparagraph of Article 3(2) of Regulation No 536/93 does not allow any account to be taken of the seriousness of the delay or of the impact which it may have on the attainment of the aim pursued by that legislation.
44 Consequently - and irrespective of the reasons which caused the dairy to exceed the 15 May deadline -, it must be held that the second subparagraph of Article 3(2) of Regulation No 536/93 is invalid in so far as it does not allow the amount of the penalty to be adjusted according to the length of time by which the deadline for communication is exceeded and according to the resulting impact on the purchaser's obligation to pay, before 1 September each year, the sums payable by way of the additional levy on milk.
45 Accordingly, and without its being necessary to consider the other grounds on which the Wiedergeltingen dairy and the German Government contend that the provision at issue in the main proceedings is invalid, it follows from the foregoing that the answer to the question referred to the Court must be that the second subparagraph of Article 3(2) of Regulation No 536/93 is invalid in that it imposes on the purchaser, in the event of failure to observe the time-limit referred to in the first subparagraph of Article 3(2), a financial penalty equal to the amount of the additional levy on milk due for a 0.1% overrun on the quantities of milk and milk equivalent delivered by producers, without making any provision for the length of time by which the time-limit is exceeded to be taken into account.