1 By order of 11 May 1988, which was received at the Court Registry on 2 June 1988, the College van Beroep voor het Bedrijfsleven ( Court of last instance in administrative matters ), the Hague, referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty three questions on the interpretation of point 3 of Annex A to Council Regulation ( EEC ) No 1418/76 of 21 June 1976 on the common organization of the market in rice ( Official Journal 1976, L 166, p . 1, hereinafter referred to as "the basic regulation ").
2 The questions were raised in proceedings brought by three Netherlands rice importers against the Hoofdproduktschap voor Akkerbouwprodukten ( Central Board for Agricultural Products ) concerning the amount of the levy which the plaintiffs in the main proceedings had had to pay on a consignment of white long-grain broken rice from Thailand . For reasons associated with the grading technique employed in the country of origin, the consignment contained not only broken rice but also whole grains which had not grown to their full size .
3 Pursuant to the first indent of point 2(2 ) of Regulation ( EEC ) No 2729/75 of the Council of 29 October 1975 on the import levies on mixtures of cereals, rice and broken rice ( Official Journal 1975, L 281, p . 18, hereinafter referred to as the "levy regulation "), the levy applicable to mixtures of rice and broken rice is that applicable to the component predominating by weight when that component represents at least 90% of the weight of the mixture . On the other hand, if neither component accounts for 90% the higher levy applies by virtue of the second indent of Article 2(2 ).
4 . Under the price regime introduced by the basic regulation, the levy for long-grain white rice is higher than that applied to broken rice . By virtue of Article 11 of that regulation, the levies are intended to offset, for both white long-grained rice and broken rice, the difference between the world price and the Community threshold price . Pursuant to Article 15 of the basic regulation, the threshold price for broken rice, which is essentially used for industrial purposes such as processing into animal feedingstuffs, is calculated by reference to the threshold price for maize, a competing product . That price is much lower than the threshold price for white long-grain rice, the latter being calculated pursuant to Article 14 of the basic regulation by reference to the threshold price for long-grain husked rice .
5 It is apparent from point 3 of Annex A to the basic regulation that only grain fragments of a length not exceeding three-quarters of the average length of the whole grain are to be regarded as broken rice . Paragraphs ( a ) and ( b ) of point 2 of the same annex define round-grain and long-grain rice and paragraph ( c ) lays down the method for measuring the grains . According to that method, the grains contained in a representative sample taken from the consignment concerned are to be measured .
6 In order to determine the percentage of broken rice in the consignment of rice in question, the customs authorities applied the "internal" measurement method : it took as the average length of the whole grain within the meaning of point 3 of Annex A that of the whole grains in a sample taken from that same consignment . That method differs from the "external" method which relies on the average length of whole grains as certified for the variety of rice in question by the competent authorities in the country of origin .
7 The customs authorities then established that the average length of the whole grains contained in the consignment concerned was 5.7 mm and that 83% of the rice fragments which that consignment contained were not of a length exceeding three-quarters of that length and were therefore to be regarded as broken rice . Since the broken rice did not therefore, according to that analysis, account for 90% of the weight of the mixture, the Hoofdproduktschap voor Akkerbouwprodukten applied the higher levy prescribed for rice, pursuant to the second indent of Article 2(2 ) of the levy regulation .
8 It was against that decision that the plaintiffs in the main proceedings brought an action for annulment . They claim that the average length of the whole grain referred to in point 3 of Annex A must be taken to mean the average length of whole grains of the variety of rice to which the rice fragments contained in the consignment belong . According to a certificate issued by the Thai authorities, the average length of the grains of the variety of rice involved in this case, namely long-grain white rice, is 7.00 mm . If the Netherlands customs authorities had taken that length as a basis, they would have arrived at a proportion of broken rice exceeding 90% of the weight of the consignment . In support of that claim the plaintiffs in the main proceedings refer to an analysis which they themselves commissioned from a private research institute, according to which 97.7% of the rice fragments did not exceed three-quarters of the certified average length of 7.00 mm . They conclude that the levy prescribed for broken rice should have been applied in this case .
9 In its order for reference, the national court states that it has heard expert evidence . The experts stated that the manner in which the customs authorities applied the "internal" measurement method gave a result whereby the average length of the whole grains contained in the consignment of rice did not correspond to the standard length of the variety of rice concerned . As regards the "external" method, they stated that the certificates from the authorities in the country of origin as to the average length of the whole grains of the variety concerned are universally recognized in international trade .
10 It was in those circumstances that the national court decided to stay the proceedings and to refer to the Court three questions on the interpretation of point 3 of Annex A to the basic regulation . They are as follows : "( 1 ) Should point 3 of Annex A to Regulation ( EEC ) No 1418/76 be interpreted as meaning that for the purposes of the application of the three-quarters criterion referred to therein 'average length of the whole grain' is to be understood as meaning the average length of the whole grain occurring in the sample in question or in the consignment in question, inclusive of the whole grains found therein which are not fully developed? ( 2 ) If Question 1 is answered in the negative must the provision referred to therein be interpreted as meaning that the competent authorities of the Member States are free to take into account as the 'average length of the whole grain' , for the purposes of the application of the three-quarters criterion, some relevant external reference point, and if so, to what extent should they have regard in making their choice to standard measurements recognized in international trade? ( 3 ) If Question 1 is answered wholly or partly in the affirmative, is the provision referred to therein compatible with the levy system laid down in Regulation ( EEC ) No 1418/76 and with the principle of legal certainty and/or the principle of equality?"
11 Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the applicable legislation and the submissions and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court . The first and second questions
12 By its first and second questions, the national court wishes essentially to establish whether, in order to determine the average length of the whole grain for the purposes of point 3 of Annex A to the basic regulation, it is necessary to take the average length of the whole grains contained in a sample from the consignment of imported rice or the average length of the whole grains of the variety of rice in question as indicated in certificates issued by the competent authorities in the country of origin, which are recognized in international trade, and then, in the event that the first method is to be applied, whether grains which are not fully developed must be excluded .
13 As regards the first part of the question, it must be noted that point 2 of Annex A indicates the measurement method to be applied in determining whether the whole grains contained in a consignment of rice are to be regarded as round grains or long grains within the meaning of paragraphs ( a ) and ( b ) of that point . Paragraph ( c ) of point 3 states that the average length must be measured of the whole grains contained in a representative sample taken from the consignment of rice concerned . Point 2 of Annex A thus excludes the possibility of reference to certificates drawn up by the authorities of the country of origin of the consignment of rice in question as to the average length of whole grains of the variety of rice concerned .
14 It must be concluded that, in defining as broken rice fragments of rice whose length does not exceed three-quarters of the average length of the whole grain, point 3 of Annex A can only be referring to the average length of the whole grains contained in the consignment of imported rice, with which point 2 is concerned, and excludes the application of any external rule .
15 As regards the second part of the question, it must be emphasized that the whole grains to be measured must be representative of the variety of rice to which the rice fragments concerned belong . Account may not therefore be taken of whole grains which are not fully developed, whose length is relatively limited and whose presence in the consignment is likely to be fortuitous .
16 The results of measurement of the average length of the whole grain would, moreover, become uncertain if grains that were not fully developed were taken into account . As the national court states in its order, the average length of the whole grains would then be likely to vary not only from one consignment of rice to another but also from one sample to another taken from the same consignment of rice . The percentage of broken rice, which would be calculated by reference to that length, would also vary, with the result that the importer would have no certainty as to the levy to be applied until the time at which the consignment was actually imported .
17 In those circumstances it must be stated in reply to the first and second questions that, for the purpose of determining the average length of the whole grain within the meaning of point 3 of Annex A to the basic regulation, it is necessary to consider the average length of the whole grains in a sample from the consignment of imported rice, without taking account of grains which are not fully developed . The third question
18 In its third question, the national court asks essentially whether point 3 of Annex A, interpreted as meaning that the whole grains in a consignment of imported rice must be taken into consideration, to the exclusion of grains which are not fully developed, is incompatible with the principle of legal certainty or the principle of equality .
19 It must be observed that the average length of the whole grains contained in consignments of imported rice may indeed vary from one consignment to another and that as a result importers will have no certainty as to the average length of such grains or, consequently, as to the percentage of broken grains contained in the consignments in question . However, that lack of certainty is not contrary to the principle of legal certainty since the importer is apprised, before importation of the consignment in question, of the measurement method . Moreover, the lack of certainty is reduced in so far as the grains that are not fully developed are excluded from the measurement operation .
20 The Commission suggested that the principle of equality might be infringed if the grains that were not fully developed were excluded from the measurement operation . The broken rice would then more easily amount to 90% of the weight of the consignment in question, which would give rise to application of the levy for broken rice . Netherlands importers who, like those in the present case, sell the broken rice not for industrial use but for human consumption would thus enjoy a competitive advantage over importers of rice comprising whole grains .
21 It need merely be stated that, by virtue of the second indent of Article 2(2 ) of the levy regulation, it is the levy prescribed for broken rice which applies to a consignment of imported rice if 90% of the weight of that consignment is accounted for by broken rice within the meaning of point 3 of Annex A to the basic regulation . The question whether such broken rice is then sold for purposes other than those for which it is traditionally used is therefore irrelevant .
22 It must therefore be stated in reply to the third question that point 3 of Annex A, understood as requiring that account be taken of whole grains in a sample from the consignment of imported rice, to the exclusion of grains which are not fully developed, does not create any inequality or uncertainty in the application of the levy system such as to bring that system into conflict with the general principles of Community law .