1 By an order of 21 November 1989, which was received at the Court on 8 January 1990, the Bundesfinanzhof (Federal Finance Court) referred for a preliminary ruling under Article 177 of the EEC Treaty two questions on the interpretation of Article 10(4) of Commission Regulation (EEC) No 798/80 of 31 March 1980 laying down general rules on the advance payment of export refunds and positive monetary compensatory amounts in respect of agricultural products (Official Journal 1980 L 87, p. 42), as amended by Commission Regulation (EEC) No 3445/85 of 6 December 1985 (Official Journal 1985 L 328, p. 13), and on the validity of the provisions of Commission Regulation (EEC) No 1633/80 of 26 June 1980 fixing the export refunds on cereals and on wheat or rye flour, groats and meal (Official Journal 1980 L 162, p. 45).
2 By an order of 8 May 1990, which was received at the Court on 6 July 1990, the Bundesfinanzhof referred for a preliminary ruling under Article 177 of the EEC Treaty a question identical to the first question in the above order of 21 November 1989.
3 The questions referred by the order of 21 November 1989 in Case C-5/90 arose in the course of proceedings between two undertakings, Bremer Rolandmuehle Erling & Co. (hereinafter referred to as "Bremer Rolandmuehle") and Kurt A. Becher GmbH & Co. KG (hereinafter referred to as "Becher"), which had joined together as an ad hoc association, and Hauptzollamt (Principal Customs Office) Hamburg-Jonas (hereinafter referred to as "the Hauptzollamt"), which is seeking reimbursement by the undertakings of export refunds which they had obtained in the form of an advance payment pursuant to Council Regulation (EEC) No 565/80 of 4 March 1980 on the advance payment of export refunds in respect of agricultural products (Official Journal 1980 L 62, p. 5).
4 According to the order making the reference, Bremer Rolandmuehle and Becher placed 10 533 837 kg of wheat under customs control on 27 November 1980 pursuant to the conditions set out in Regulation No 565/80.
5 The payment declaration stated that the wheat placed under customs control would be used for the manufacture and export of flour with an ash content of 0 to 520 mg/100 g.
6 The two undertakings received advance payment of the export refunds.
7 Subsequent checks established that the flour actually exported to Poland, North and South Yemen and the Soviet Union had in fact an ash content far in excess of 520 mg/100 g.
8 The Hauptzollamt requested the undertakings to reimburse the refunds which had been paid in advance. However, it abandoned its request for payment of the supplement provided for under Article 7(1) of Regulation No 798/80. It accepted that the amounts to be paid by the undertakings might be set off against the refunds due to those same undertakings calculated according to the common rules of law defined by Commission Regulation (EEC) No 2730/79 of 29 November 1979 laying down common detailed rules for the application of the system of export refunds on agricultural products (Official Journal 1979 L 317, p. 1). In order to calculate those refunds, it was necessary, in the view of the Hauptzollamt, to apply the rate of refund applicable on the date of exportation to exports effected after the expiry on 30 November 1980 of the period of validity of the advance fixing certificate. That rate was ECU 0 for exports to the Soviet Union.
9 The Finanzgericht (Finance Court) Hamburg, to which the two undertakings appealed against the Hauptzollamt' s decisions ordering reimbursement of the refunds, took the view that Article 10(4)(c) of Regulation No 798/80 was applicable to the case. From this it concluded that, in order to calculate the amount of refund due to the undertakings in respect of the products actually exported, it was necessary to apply the rates of refund fixed in advance in accordance with the conditions set out in Article 4(5) and (6) of Regulation No 565/80 and that those refunds could be set off against the amounts which were repayable by the exporters.
10 An appeal on a point of law against the decision of the Finanzgericht was brought by the parties before the Bundesfinanzhof, which took the view that a previous judgment of the Court delivered in a similar case, Case 288/85 Hauptzollamt Hamburg-Jonas v Plange Kraftfutterwerke GmbH & Co. [1987] ECR 611, had not specified the Community rules applicable to the calculation of refunds in the case where a trader, after receiving advance payment of refunds, exported goods the characteristics of which differed from those stated in the payment declaration.
11 In the view of the Bundesfinanzhof, that question was important in the present case because the answer to it would determine whether the provisions of Regulation No 1633/80 fixing at ECU 0 the rate of refund in respect of exports to the Soviet Union were to be applied for the purpose of calculating the refund actually due to the trader.
12 In those circumstances the Bundesfinanzhof stayed the proceedings and referred the following two questions to the Court for a preliminary ruling: "1. Is Community law, in particular Article 10(4) of Commission Regulation (EEC) No 798/80, as amended by Commission Regulation (EEC) No 3445/85, to be interpreted as meaning that a recipient of export refunds who, in claiming advance payment of the export refunds under Article 4 of Regulation (EEC) No 565/80, had undertaken pursuant to Article 2 of Regulation No 798/80 to export flour with an ash content of 0 to 520 mg/100 g but in fact exported flour with an ash content of more than 520 mg/100 g must repay the entire amount of the advance payment and only claim instead an export refund for the goods actually exported, in accordance with the rules in Commission Regulation (EEC) No 2730/79 of 29 November 1979? 2. If Question 1 is answered in the affirmative, is Regulation (EEC) No 1633/80 valid inasmuch as it fixes the rate of export refunds for exports to the USSR at 0 ECU? If not, in certain circumstances is an exporter to be put in a position as if the refund for exports to the USSR had not been suspended?"
13 The question in Case C-206/90, referred by order of 8 May 1990, arose in the course of proceedings between Bremer Rolandmuehle and Getreide-Import GmbH (hereinafter referred to as "Getreide-Import"), joined together as an ad hoc association, and the Hauptzollamt.
14 On 28 November 1980, the two undertakings placed 7 682 779 kg of wheat under customs control for export to North Yemen in the form of flour with an ash content between 0 and 520 mg/100 g. They obtained advance payment of refunds pursuant to the above provisions.
15 As in the previous case, the Hauptzollamt established that the flour actually exported had an ash content appreciably greater than that stated and accordingly requested reimbursement of the refunds.
16 In those circumstances the Bundesfinanzhof, before which an appeal on a point of law was brought against a decision of the Finanzgericht Hamburg ruling on an appeal brought by the two undertakings, stayed the proceedings and referred to the Court for a preliminary ruling a question identical to the first question referred in Case C-5/90.
17 Reference is made to the Report for the Hearing for a fuller account of the facts of the main proceedings, the course of the procedure and the written observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court. The first question referred in Case C-5/90 and the single question referred in Case C-206/90
18 In those questions, the national court is concerned exclusively with the case in which the ash content of the flour actually exported is appreciably higher than that stated in the payment declaration. It refers implicitly to the nomenclature used at the time of the relevant facts by the regulations on export refunds, which, in the case of wheat flour, determine the applicable rates of refund on the basis of six categories of ash content (0 to 520 mg/100 g, 521 to 600 mg/100 g, 601 to 900 mg/ 100 g, 901 to 1100 mg/100 g, 1101 to 1650 mg/100 g, 1651 to 1900 mg/100 g), the rate of refund decreasing (with the exception of the cases in which it is zero) in proportion to the increase in the ash content.
19 In order to reply to the question referred, it is necessary to determine in order the Community law provisions applicable in the cases referred by the national court and the rate of refund requiring to be chosen on the basis of those provisions in order to calculate the refund actually due to the trader.
20 It is first of all necessary to outline the legislative framework of the system of advance payment of export refunds.
21 Regulation No 565/80 introduces for certain agricultural products, including those covered by Council Regulation (EEC) No 2727/75 of 29 October 1975 on the common organization of the market in cereals (Official Journal 1975 L 281, p. 1), as amended, a system of advance payment of refunds in respect of exports to third countries. It is clear from the third recital in the preamble to Regulation No 565/80 that the purpose of such advance payment, which applies to exports of agricultural products processed from basic Community products, is to ensure a balance between such operations and the use of basic products from third countries admitted under inward processing arrangements.
22 The detailed arrangements for the application of that regulation were laid down in Regulation No 798/80 of 31 March 1980.
23 Article 4(1) of Regulation No 565/80 provides that an amount equal to the refund is to be paid to the exporter as soon as the basic products are placed under customs control. Article 4(5) states that, unless fixed in advance, the rate of the export refund is to be that in force on the day on which the basic products are brought under customs control. Where the export refund is fixed in advance, Article 4(6) provides that the day on which the basic products are brought under customs control is to be the operative date for determining any adjustment to be made to the rate of refund available.
24 Entitlement to advance payment of refunds is subject to the lodging with the customs authorities, and their acceptance, of a "payment declaration", the content of which is set out in Article 2(2) of Regulation No 798/80. That declaration must, inter alia, include a description of the products exported in accordance with the nomenclatures used for refunds and particulars of the composition of the products concerned in so far as that is necessary for determining the amount of the refund.
25 Traders must, under the conditions set out in Article 7(1) of Regulation No 798/80, furnish a security equal to the amount of the refund plus any positive monetary compensatory amount, and increased by 20% of those amounts. The second subparagraph of Article 7(1) states that this increase may not be less than 3 ECU per 100 kilograms net of the products exported.
26 Traders must comply with Article 11 of Regulation No 798/80, which lays down the periods during which the basic products may remain under customs control with a view to their being processed and those within which the processed products must be exported at the end of customs control. As the Advocate General pointed out in his Opinion (point 21), the application of those periods may in fact result in an extension of the period of validity of the advance fixing certificate.
27 Article 10(4) of the regulation sets out the cases in which exporters who have received advance payment of refunds are required to reimburse or pay certain amounts. That article was amended by Regulation No 3445/85 of 6 December 1985, which, at the request of the parties concerned, is applicable to the present proceedings.
28 As amended by the latter regulation, Article 10(4), with which the question in the preliminary references is concerned, provides as follows: "Except in cases of force majeure, reimbursement of the following amounts shall be required: (a) where the time-limits laid down in Article 11 have not been complied with: - an amount equal to the security; (b) where the time-limits laid down in Article 11 have been complied with but the entitlement to refund covers a smaller amount than that referred to in paragraph 1(b) and the minimum increase provided for in Article 7(1), second sentence, has not been applied: - where Article 7(3) applies, an amount equal to the security, less the amount of the actual refund reduced by any negative monetary compensatory amount, increased by 20%; - in other cases, an amount equal to the security, less the amount of the actual refund and any positive monetary compensatory amount due, increased by 20%; (c) where the time-limits laid down in Article 11 have been complied with but the entitlement to refund covers a smaller amount than that referred to in paragraph 1(b) and where the minimum increase provided for in Article 7(1), second sentence, has been applied: - an amount equal to the difference between the amount advanced and the amount due, this difference being increased by the percentage which expresses the relationship between the minimum increase and the amount advanced." The provisions of Community law applicable in the cases described by the national court
29 The provisions of Article 10(4) and (5) of Regulation No 798/80, pursuant to the second paragraph of Article 6 of Regulation No 565/80 under which they were adopted, govern all cases in which persons receiving advance payment of refunds are not entitled to those refunds or are entitled only to refunds in a smaller amount. Article 10(5) contains specific provisions applicable only in the case of force majeure. Article 10(4) must for that reason be treated as applying to all other cases, including that envisaged by the national court, in which force majeure is not involved.
30 Those provisions draw a distinction between the case covered by Article 10(4)(a), in which the trader has failed to comply with the time-limits laid down in Article 11 of Regulation No 798/80, and those covered by Article 10(4)(b) and (c), in which the amount of the "actual refund", that is to say, the refund due, turns out to be smaller than the amount of the refund paid in advance. In the first case, the trader is required to pay an amount equal to that of the security. In the second case, the trader is required, according to a variety of arrangements, to repay the difference between the refund paid in advance and the refund due and to pay either an increase equal to 20% of the amount of that difference or a minimum increase.
31 The Commission argues that the cases referred by the national court are covered by Article 10(4)(a) of Regulation No 798/80 on the ground that the time-limits laid down in Article 11 must necessarily be regarded as having been exceeded where the characteristics of the product exported differ from those mentioned in the payment declaration. In the view of the Commission and the Hauptzollamt, the provisions of Article 10(4)(b) and (c) are inapplicable in view of the fact that they cover cases where the smaller amount of the refund due is attributable to a change, vis-à-vis the information in the payment declaration, in the quantities of products exported or the destination of those products.
32 That interpretation cannot be accepted.
33 In the first place, the provisions of Article 11 of Regulation No 798/80 deal only with the periods during which the basic products may remain under customs control and the periods within which the processed products must be exported at the end of customs control. Those provisions contain no information regarding the characteristics of the product actually exported vis-à-vis those set out in the payment declaration.
34 Secondly, neither the wording nor the purpose of Article 10(4)(b) and (c) allow the cases described by the national court to be excluded from their scope. Those provisions, the purpose of which is to define the rights and obligations of exporters in cases where the amount of the refund paid in advance exceeds that of the refund due, must in particular be applied, in the absence of express provisions to the contrary, where the product actually exported is the product mentioned in the payment declaration and where, in circumstances justifying the application of a lower rate of refund, only the characteristics of that product are different.
35 That is precisely the position in the cases described by the national court. The flour mentioned in the payment declaration and the flour actually exported cannot be regarded as two different products. These two types of flour occupy the same position in the Common Customs Tariff and, as pointed out above, they are covered by the same rules of Community law, which, for the purpose of determining the rate of refund applicable to "wheat flour", distinguish six different categories of ash content. In the present cases, the application of a lower rate of refund, justified by the fact that the flour actually exported came within a different category from that of the flour mentioned in the payment declaration, is the only issue in dispute.
36 In conclusion, reference must be made to the objectives pursued by the Community law rules in question. In its judgment in Plange Kraftfutterwerke, cited above, the Court took the view that the provisions then in force, which predated those of Regulation No 798/80, were designed to avoid the unjust enrichment of a trader who had enjoyed interest-free credit in the case where it transpired that he was not entitled to the refund paid before the exported products were actually processed. According to the Court, the interest-free credit from which a trader had benefited, in a case similar to that in the present references, did not cover the whole of the refund actually paid in advance but only that refund reduced by the amount of the refund to which the trader was entitled. The additional amount owed by the trader therefore had to be calculated on the basis of the difference between the two refunds. The principles which that case laid down can be transposed to the area of application of Regulation No 798/80, the objective of which is identical to that of the previous legislation. The application of Article 10(4)(a) of the regulation to these cases, as advocated by the Commission, would require the trader, contrary to those principles, to repay the amount of the security, that is to say, a sum greater even than that of the total amount of the refund paid in advance. On the contrary, it is in accordance with the objective of the rules in question to apply the provisions of Article 10(4)(b) or (c) of Regulation No 798/80, which limit the amounts repayable in such a case to the credit which the trader has unjustifiably enjoyed, increased by an additional amount operating as a penalty.
37 The cases in question are therefore covered either by Article 10(4)(c), where the minimum increase provided for under the second sentence of Article 7(1) of Regulation No 798/80 has been applied, or by Article 10(4)(b) if the contrary is the case. The rate of refund
38 The question referred by the national court also seeks to ascertain whether it is necessary, for the calculation of the refund to which a trader may in fact be entitled, to apply the rate of refund provided for under Article 4(5) and (6) of Regulation No 565/80, or, on the other hand, to apply, following expiry of the period of validity of the advance fixing certificate, the rate of refund applicable on the date of export as provided for generally in Article 3 of Regulation No 2730/79.
39 Where, as in these cases, the characteristics of the product actually exported differ from those mentioned in the payment declaration, the unjustified advantage enjoyed by the trader corresponds to the difference, calculated on the basis of the rate of refund provided for in Article 4 of Regulation No 565/80, between the amount of the refund paid in advance and that of the refund which he would have obtained for the product actually exported if that product had been correctly described in the payment declaration. In order to calculate the amount of the actual refund, it is therefore necessary to take into account the rate of refund applicable under Regulation No 565/80 dealing with the advance payment of refunds.
40 It must be pointed out that this is the only interpretation capable of guaranteeing an effective sanction. The application of the rate of refund specified in Article 3 of Regulation No 2730/79 could in fact constitute an advantage, rather than a sanction, for a trader in the case where the rate of refund had increased between the date of the advance fixing or the placing of the basic product under customs control and the date on which the processed product was exported.
41 The answer to the question referred must therefore be that where a trader has undertaken, pursuant to Article 2 of Regulation No 798/80, to export flour with an ash content of 0 to 520 mg/100 g and it is found that for reasons other than force majeure he in fact exported flour with a considerably higher ash content, the amount of the sums which that trader must pay is determined by the provisions of Article 10(4)(b) or (c) of Regulation No 798/80. In order to calculate the actual refund to which the trader may claim entitlement under those provisions, the rate of refund laid down in Article 4(5) and (6) of Regulation No 565/80 should be applied. The second question referred in Case C-5/90
42 This question, which concerns the validity of the provisions of Regulation No 1633/80 fixing the rate of refund for exports to the Soviet Union at ECU 0, was referred by the national court in case the Court' s reply to the first question should be that the rate applicable for the calculation of the refund to which a trader may claim entitlement in the cases described is that laid down in Regulation No 2730/79.
43 The Court' s reply to the first question was not to that effect and it is therefore unnecessary to reply to the second question.