1 By order of 22 September 1994, which was received at the Court on 4 November 1994, the Finanzgericht Hamburg referred to the Court for a preliminary ruling under Article 177 of the EC Treaty a question concerning the validity of Council Regulation (EEC) No 1796/81 of 30 June 1981 on measures applicable to imports of preserved cultivated mushrooms (OJ 1981 L 183, p. 1, "the regulation at issue").
2 The question was raised in proceedings between Huepeden & Co. KG and Hauptzollamt Hamburg-Jonas ("the Hauptzollamt") concerning the payment of additional amounts required by the latter pursuant to Council Regulation (EEC) No 1697/79 of 24 July 1979 on the post-clearance recovery of import duties or export duties which have not been required of the person liable for payment on goods entered for a customs procedure involving the obligation to pay such duties (OJ 1979 L 197, p. 1) and the regulation at issue. The Community rules
3 Prior to the adoption of the regulation at issue, the Commission had adopted Regulation (EEC) No 3429/80 of 29 December 1980 adopting protective measures applicable to imports of preserved mushrooms (OJ 1980 L 358, p. 66). That regulation, which was based on Council Regulation No 516/77 of 14 March 1977 on the common organization of the market in products processed from fruit and vegetables (OJ 1977 L 73, p. 1), in particular Article 14 thereof, had set for the three-month period from 1 January 1981 to 31 March 1981 the import quota for preserved mushrooms from non-member countries at 7 196 tonnes. In addition, it introduced controls on imports by way of import licences and had provided, in the case where the quantities of preserved mushrooms from non-member countries released into free circulation in the Community exceeded the quantity established by that regulation, for a levy of an additional amount of ECU 175 per 100 kg net.
4 For the following three-month period from 1 April 1981 to 30 June 1981, the Commission subsequently adopted Regulation (EEC) No 796/81 of 27 March 1981 adopting protective measures applicable to imports of preserved mushrooms (OJ 1981 L 82, p. 8), also based on Article 14 of Regulation No 516/77. That regulation set the import quota at 7 618 tonnes and provided that, where that quantity was exceeded, an additional amount of ECU 175 per 100 kg net would be levied.
5 For the three-month period from 1 July 1981 to 30 September 1981, Commission Regulation (EEC) No 1755/81 of 30 June 1981 adopting protective measures applicable to imports of preserved cultivated mushrooms (OJ 1981 L 175, p. 23), also based on Article 14 of Regulation No 516/77, this time set the import quota at 5 736 tonnes and the additional amount to be levied when it was exceeded at ECU 160 per 100 kg net.
6 That regulation was followed by the regulation at issue, No 1796/81, which, in contrast to the preceding Commission regulations, was based not on Article 14 but on Article 13(2) of Regulation No 516/77, and does not describe the measures which it lays down as "protective measures" but as "measures of market management". Furthermore, Article 3 of that regulation set the import quota at 34 750 tonnes per annum and Article 2 thereof set the additional amount to be levied when the quota was exceeded at ECU 160 per 100 kg net.
7 In its judgments of 16 October 1991 Werner Faust (C-24/90 [1991] ECR I-4905) and Wuensche (C-25/90 [1991] ECR I-4939 and C-26/90 [1991] ECR I-4961), the Court held Article 1 of Regulations Nos 3429/90, 796/81 and 1755/81 invalid as regards the level of the additional amount set, on the ground of breach of the principle of proportionality. It did not, however, rule on the validity of the regulation at issue.
8 In order to comply with those judgments, the Commission adopted Regulation (EEC) No 2163/92 of 30 July 1992 on the levying of the additional amount provided for by Regulations (EEC) No 3429/80, (EEC) No 796/81, and (EEC) No 1755/81 adopting protective measures applicable to imports of preserved cultivated mushrooms (OJ 1992 L 217, p. 16), by which it reduced, with retroactive effect, to ECU 105 per 100 kg net the additional amount provided for in the three regulations concerning protective measures for imports carried out between 1 January 1981 and 30 September 1981.
9 Regulation No 2163/92 did not affect the regulation at issue. Thus, the level of the additional amount set by that regulation at ECU 160 per 100 kg net was maintained. The dispute in the main proceedings
10 In July and December 1987 Huepeden imported into Germany several consignments of preserved mushrooms from China. After the formalities for release into free circulation had been carried out, it came to light that Huepeden could not produce a valid import licence for one consignment imported in July 1987 and two other consignments imported in December of the same year. The Hauptzollamt accordingly required payment of an additional amount of DM 165 467.13 on the basis of the regulation at issue.
11 After its objection was dismissed, Huepeden brought an action before the Finanzgericht (Finance Court) Hamburg, in which it contested the validity of the regulation at issue on the ground that it was contrary to the principle of proportionality.
12 Since the Finanzgericht took the view that the outcome of the dispute depended on the validity of that regulation, it decided to stay proceedings and refer the following question to the Court for a preliminary ruling: "Is Article 2(1) of Council Regulation (EEC) No 1796/81 of 30 June 1981 valid?" The question referred to the Court
13 By this question the national court is asking essentially whether the level of the additional amount provided for in the regulation at issue is in conformity with the principle of proportionality.
14 According to settled case-law, by virtue of that principle measures imposing financial charges on economic operators are lawful provided that they are appropriate and necessary for meeting the objectives legitimately pursued by the rules in question. However, when there is a choice between several appropriate measures, the least onerous measure must be used and the charges imposed must not be disproportionate to the aims pursued (see, in particular, the judgment in Case 265/87 Schraeder v Hauptzollamt Gronau [1989] ECR 2237, paragraph 21).
15 The objective of the regulation at issue must therefore be examined in order to establish whether the measures are appropriate and not disproportionate.
16 The regulation is based on Regulation No 516/77, specifically Article 13(2), according to which, save for derogation decided by the Council, the application of any quantitative restriction or measure having equivalent effect is to be prohibited in trade with non-member countries.
17 According to the first and fourth recitals in its preamble, the regulation at issue is aimed at introducing measures to manage the market in preserved mushrooms in order to protect against disturbances due to imports from non-member countries.
18 As is specified in the third recital of the regulation, it was apparent that the protective measures which had been taken did not, in themselves, constitute the most suitable means of remedying the situation.
19 In the light of the objective of the regulation at issue as thus specified, it must be held that the requirement of an additional amount where the authorized quota was exceeded was appropriate and necessary to its attainment.
20 As far as the level of that amount is concerned, it will be noted that this was set at a flat rate of ECU 160 per 100 kg net, with no provision for graduation according to the quality of the products and the circumstances in which they were imported. Furthermore, the amount was set at practically the same level as that provided for in the preceding Commission regulations which introduced protective measures, and it corresponds, according to the file on the case, to approximately 150% of the value of grade 3 cultivated mushrooms.
21 Consideration must accordingly be given to the question whether that level of additional amount exceeds what is permissible under the principle of proportionality.
22 First of all the Council and the Commission maintain, in support of the validity of the regulation at issue, that the Court' s reasons for declaring the three preceding Commission regulations invalid cannot be carried over to this case because of the differences presented by this regulation when compared with the regulations held invalid. In that connection they contend that the regulation at issue was not adopted on the basis of Article 14(2) of Regulation No 516/77, so that Article 2(2) of Council Regulation (EEC) No 521/77 of 14 March 1977 laying down detailed rules for applying protective measures in the market in products processed from fruit and vegetables (OJ 1977 L 73, p. 28) was not applicable. That provision, which constitutes a specific application of the principle of proportionality, provides that measures which might be taken pursuant to Article 14 of Regulation No 516/77 could be taken only to such extent and for such length of time as was strictly necessary. It follows, they say, that the regulation at issue needed only to comply with the general principle of proportionality, the requirements of which are less strict than those contained in Article 2(2) of Regulation No 521/77.
23 That argument must be rejected. Regardless of their arguments concerning the inapplicability of Article 2(2) of Regulation No 521/77, which are correct, the Council and the Commission themselves admit that the general principle of proportionality is applicable.
24 The Council and the Commission then consider that the fact that the regulation at issue introduced not temporary protective measures but long-term measures of market management precludes its being declared invalid on the same grounds as those given by the Court in its judgments in Werner Faust and Wuensche cited above.
25 That argument must also be rejected. It is apparent from the regulation at issue that the measures adopted therein are substantively identical to the protective measures previously adopted by the Commission regulations. Both from the point of view of its purpose, namely the protection of the Community market, and the techniques used, namely the setting of import quotas, the control of imports by means of import licences and the setting of additional amounts where quotas are exceeded, the regulation at issue does not differ fundamentally from Regulations Nos 3429/80, 796/81 and 1755/81, and the difference in the description of the measures is of no importance in that regard.
26 That being the case, a flat-rate charge such as that provided for in the regulation at issue, which is set at a very high level and levied on all traders who exceed the quantities laid down, regardless whether they did so inadvertently or fraudulently, is excessive, because it goes beyond the objective of the regulation, which is to protect the Community market, and penalizes importers. In those circumstances it must be held that there has not been compliance with the principle of proportionality.
27 On this point the Council and the Commission object that, in order to assess whether the measure is disproportionate, it does not suffice to examine the level of the additional amounts but rather the system introduced by the regulation as a whole should be examined, together with the relationship between the determination of those amounts and the setting of the quantities which may be imported free of levy. In that connection, the Council and the Commission point out that the regulation at issue is less onerous for traders than the previous Commission regulations, because the quantities exempt from the levy of the additional amount which, in the latter, amounted to approximately 27 000 tonnes for 1981, are, in the regulation, close to 37 000 tonnes for subsequent years. The retention of the additional amount of ECU 160 per 100 kg is, in consequence, justified. The Council adds that the fact that the regulation at issue introduces long-term measures rather than temporary measures, such as those previously adopted, allows traders to plan their activities and thus justifies setting the additional amount at a higher level.
28 Those arguments cannot be accepted. Apart from the fact that the quantities exempted from the additional amount are not at issue in the main proceedings, their increase indicates, on the contrary, as the Advocate General points out in point 27 of his Opinion, that the threat of market disruption was not great. Moreover, the fact that long-term measures, such as the measures of market management at issue, facilitate, in contrast to temporary measures, long-term planning of the commercial activities of importers cannot justify the setting of a levy at an excessive level. The maintenance of the additional amount at the level already provided for by the Commission regulations which previously introduced protective measures cannot therefore be justified.
29 The Council and the Commission also contend that, when the regulation at issue was adopted, the principle of proportionality was complied with because the additional amount at issue is less restrictive of trade than a complete prohibition of imports, a measure which the Council could have taken in the exercise of its wide discretionary powers under the common agricultural policy.
30 That argument cannot be accepted. The regulation at issue was not designed to exclude imports above certain quantities completely but left open the possibility of issuing import licences against payment of an additional amount (see the judgment in Case 345/82 Wuensche [1984] ECR 1995, paragraph 25). Having opted for that latter solution, the Council was obliged to comply with the principle of proportionality.
31 The Council also contends that the additional amount had to be set at a high level in order to ensure that the measures of market management established by the regulation at issue were effective.
32 Although the Council has some discretion in setting the level of the additional amount, it is not entitled to set it at such a high level that it amounts to a prohibition. The aim of the regulation is not to prohibit all imports above the quantities set but to protect the Community market in mushrooms from disruption due to excessive imports from non-member countries.
33 The Commission also maintains that the level of the additional amount was justified because it corresponded to the cost price of top grade mushrooms, thus ensuring that imports exceeding the quantities set were principally of that type of mushroom.
34 That argument must also be rejected. As the Advocate General states in point 31 of his Opinion, the level of the additional amount set by the regulation at issue, which corresponds to the cost price of grade 1 mushrooms produced in the Community, represents at least 100% of the production costs of those imported mushrooms.
35 Furthermore, as the Commission accepts, the additional amount was set by the regulation at issue on the basis of the cost of top-grade mushrooms produced in the Community. It follows that the level of the additional amount for lower grade mushrooms imported from non-member countries had a much more serious effect and in consequence considerably exceeds the cost of lower grade mushrooms produced in the Community. Consequently, in setting the additional amount at a level beyond that necessary to attain the regulation' s objective, the Council clearly exceeded its discretionary powers and disregarded the principle of proportionality.
36 The Commission also claims that the additional amount laid down by the regulation at issue did not give rise to any objections on the part of non-member countries in the Uruguay Round negotiations.
37 That argument is irrelevant, since the lack of reaction from non-member countries as regards the level of the additional amount cannot affect the question whether that level is in conformity with Community law, and in particular with the principle of proportionality.
38 Lastly, the Commission maintains that it is very difficult to graduate the additional amount according to the quality of mushrooms, in particular because it does not have information on a number of factors allowing it to apply such a differentiation.
39 Even if that was a real difficulty, it could not justify setting an additional amount at a level lying outside the bounds of the Council' s discretionary powers.
40 In the light of all the foregoing considerations, the reply to the question referred to the Court must be that Article 2(1) of the regulation at issue is invalid as regards the level of the additional amount set.