1 By order of 15 November 1989, which was received at the Court on 4 December 1989, the Finanzgericht (Finance Court), Duesseldorf, referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty two questions on the interpretation of Articles 8 and 9 of Commission Regulation (EEC) No 926/80 of 15 April 1980 on exemption from the application of monetary compensatory amounts in certain cases (Official Journal 1980 L 99, p. 15), as amended by Commission Regulation (EEC) No 2899/81 of 7 October 1981 (Official Journal 1981 L 287, p. 3).
2 Those questions were raised in the course of proceedings between the Irish cooperative society, An Bord Bainne, and the Hauptzollamt (Principal Customs Office) Gronau concerning exemption from the application of increased monetary compensatory amounts which the undertaking in question was required to pay following the revaluation of the German mark.
3 The Commission adopted Regulation No 926/80, the second of its kind, in order to alleviate the disadvantages which might be incurred by economic operators as a result of amendments to the monetary compensatory amounts between the conclusion and the performance of certain contracts.
4 According to the third recital in the preamble to that regulation, "... the purpose of the rules is to exempt, on a discretionary basis, operations carried out under 'existing contracts' from the application of monetary compensatory amounts ... such an equity clause gives rise to a degree of flexibility enabling each case to be considered on its merits ...".
5 Article 8 of the regulation in question, as amended by Regulation No 2899/81, is in the following terms: "1. Exemption may be granted only where the applicant, or the contracting party on whose behalf he acts, is subject, by virtue of the new monetary compensatory amount, to an additional expense which he could not have avoided by taking all the necessary and normal precautions. 2. However, the provisions of this Regulation shall not apply: (a) where the import or export contract lays down that the applicant, or the contracting party on whose behalf he acts, is not liable for payment of the new monetary compensatory amount; (b) where it is established that the product to which the new monetary compensatory amount applies is reexported or reimported within six months of import or export. 3. Where movements on the exchange markets yield an advantage to the operator, in particular where he buys or sells currency at forward rates, the advantage shall be deducted from the additional expense. For the purpose of calculating the advantage, the spot rates for the currencies specified in the contract valid: (a) on the day of conclusion of the contract, and (b) on the day of import or export, as the case may be, shall be compared. In the case of a currency operation at forward rates, the spot rate applicable on the day of import or export shall be replaced by that determined by the said operation. However, in the case of an operation at forward rates concluded on the same day as the contract for goods, no exchange advantage may be taken into account in determining the additional expense."
6 Article 9 is worded as follows: "1. An additional expense shall be taken to mean the payment of a new monetary compensatory amount which is not necessary, in the circumstances of the case, to offset the effect of the monetary measure on the contract price of the product. 2. Assessment of the circumstances of the case shall include consideration of the following: (a) the currency in which the invoice is paid; (b) the date on which payment is made; (c) the purchase or sale of currency at forward rates in connection with the performance of the contract in question; (d) the granting of the new monetary compensatory amount for the same product, after processing where applicable. Forward currency operations shall not be taken into account if: (a) they are undertaken: - before conclusion of the contract, - after the monetary measure; (b) they have no direct or indirect economic connection with the contract relating to the product."
7 Regulation No 926/80 was repealed by Commission Regulation (EEC) No 1084/84 of 18 April 1984 (Official Journal 1984 L 106, p. 26), and was not superseded by another regulation.
8 It is apparent from the documents before the Court that on 11 February 1983 An Bord Bainne concluded several contracts for the delivery, between April and September 1983, of skimmed milk powder to an undertaking in Germany. In accordance with those contracts, the risk of the monetary compensatory amounts was borne by An Bord Bainne and the price of the goods in question was to be paid in German marks.
9 On the date when the contracts for those goods were concluded, that is to say on 11 February 1983, An Bord Bainne concluded a forward currency operation for the purchase of United States dollars in two tranches, one of DM 3.65 million and the other of DM 7 million, that is for a total amount of German marks equivalent to the entire proceeds expected from the performance of the contracts for goods.
10 Furthermore, by means of what are known as swap transactions, An Bord Bainne sold the US dollars thus acquired against German marks and on 15 February 1983 concluded other forward currency operations whereby the German marks purchased under the swap arrangements were definitively converted into US dollars.
11 An Bord Bainne stated before the Court that it was customary to execute forward currency operations through the intermediary of a swap transaction, comprising three parallel exchange transactions, and that, moreover, the lapse of time from 11 to 15 February 1983 resulted from the fact that the banks state the value date two working days after the transaction has been concluded and from the fact that 11 February 1983 was a Friday and there were no exchange transactions on the Saturday or Sunday.
12 Following the revaluation of the German mark on 21 March 1983, that is to say after the conclusion of the contracts in issue but before the delivery of the relevant goods, the Commission, by Regulation (EEC) No 689/83 of 23 March 1983 (Official Journal 1983 L 80, p. 1), was obliged to increase the German monetary compensatory amounts.
13 An Bord Bainne' s requests for total or partial exemption from the application of the increased monetary compensatory amounts were refused by the Hauptzollamt Gronau, and its appeal to the Oberfinanzdirektion (Principal Revenue Office) Muenster was dismissed.
14 The Finanzgericht Duesseldorf, before which the matter was brought, was confronted with the problem of determining the additional expense within the meaning of Articles 8 and 9 cited above. More particularly, it questioned the manner in which the advantage resulting from the exchange operations, which, pursuant to Article 8(3), was to be deducted from the additional expense, was to be taken into account and calculated. Expressing doubts as to the interpretation of the Community legislation in question, it stayed its proceedings and referred to the Court the following questions for a preliminary ruling: "1. Must Article 8(3) of Commission Regulation (EEC) No 926/80 on exemption from the application of monetary compensatory amounts in certain cases (Official Journal 1980 L 99, p. 15), as amended by Regulation (EEC) No 2899/81 (Official Journal 1981 L 287, p. 3), be interpreted as meaning that the advantage referred to in that provision may be calculated on the basis of a non-Community currency, in this case the US dollar, rather than on the basis of the domestic currency of the Community national concerned? If not: Can account therefore be taken only of forward currency operations which, as a result of the exchange relationship agreed on therein (in the present case, the sale of German marks against Irish pounds), enable the advantage to be calculated on the basis of the domestic currency of the operator concerned? 2. Must the second subparagraph of Article 9(2) of Regulation (EEC) No 926/80 be interpreted as meaning that, leaving aside cases coming under point (a), the economic connection with the contract relating to the product must in principle be proved in the case of all forward currency operations? If so: Does the third subparagraph of Article 8(3) of Regulation (EEC) No 926/80 mean that, apart from the question of the two contracts' having been concluded on the same day, account cannot be taken of additional factors, such as whether the currency, the contractually agreed sum and the due date tally, in order to check the economic connection required under the second subparagraph of Article 9(2) of Regulation (EEC) No 926/80? Is it sufficient for the economic connection to exist at the time when the contracts are concluded or must the existence of such a connection during the performance of the contracts also be checked, having regard to point (c) of the first subparagraph of Article 9(2) of Regulation (EEC) No 926/80? Does the fact that the purchase or sale of currency under the forward currency operation has an effect at least in economic terms on the commercial result of the contract relating to the products help to prove that economic connection?"
15 Reference is made to the Report for the Hearing for a fuller account of the facts of the main proceedings, the legislative framework 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. First question
16 By its first question, the national court seeks to ascertain whether Article 8(3) of Regulation No 926/80, as amended, must be interpreted as meaning that the advantage referred to therein may be calculated on the basis of a non-Community currency.
17 An Bord Bainne and the Commission are at one in contending that the advantage referred to in the provision in question must be calculated on the basis of the currency actually used by the person concerned in a forward currency operation, even if it is a non-Community currency.
18 That approach must be accepted.
19 The wording of the provision in question includes no restriction on the currency which may be used in a forward currency operation or any indication leading to the conclusion that only forward currency operations concluded in a specified currency can be accepted for the purpose of calculating the possible advantage.
20 Moreover, the spirit and purpose of the provision under consideration are to permit determination, for the purpose of exemption, of the additional expense resulting from the new monetary compensatory amount, after deduction of the advantage obtained following a forward currency operation having an economic connection with the operation relating to the goods, in such a way that the economic operator concerned is not accorded favourable treatment.
21 Such an advantage may result from a forward currency operation actually carried out by the economic operator concerned in the currency of his choice.
22 To preclude from the calculation of the advantage operations carried out in a non-Community currency would be to accord favourable treatment to certain economic operators in so far as they may receive exemption from the additional expense and, at the same time, benefit from the advantage obtained following a forward currency operation concluded in such a currency. Such a result is outside the purpose of the provision in question.
23 Accordingly, the reply to the first question must be that Article 8(3) of Regulation No 926/80 must be interpreted as meaning that the advantage referred to therein must be calculated on the basis of the currency actually used by the person concerned in connection with a forward currency operation, even if that currency is not a Community currency.
24 In the light of that reply, there is no need to reply to the question submitted in the alternative by the national court. Second question
25 In the first part of its second question the national court essentially asks whether the second subparagraph of Article 9(2) of Regulation No 926/80, apart from the cases referred to at (a), requires the economic connection to be verified in the case of every forward currency operation, including those concluded on the same day as the contract for goods.
26 An Bord Bainne contends in that respect that the final subparagraph of Article 8(3), according to which, where both operations are concluded on the same day, "... no exchange advantage may be taken into account in determining the additional expense", lays down a rule of evidence and establishes an irrebuttable presumption. In such a case, therefore, the economic connection between the two contracts should be regarded as having been proved.
27 The Commission takes the view, on the other hand, that the contradiction between the second subparagraph of Article 9(2) and the last subparagraph of Article 8(3) is only apparent, since the two provisions have different objectives: the first lays down the general requirement of an economic connection in the case of forward currency operations, whilst the second concerns the calculation of the advantage resulting from a forward currency operation where it is proven that that operation has an economic connection with a contract for goods. Thus, in the Commission' s view, the economic connection of a forward currency operation with the contract for goods must always be proved before the question arises of the calculation of the possible advantage which may result therefrom.
28 In that connection it must be pointed out that the final subparagraph of Article 8(3) was specifically added to Regulation No 926/80 by Regulation No 2899/81, for the reason stated in the recital in the preamble to that regulation, according to which, where the forward currency operation and the contract for goods were concluded on the same day, "one may reasonably consider that the forward currency rate is reflected in the price of the goods and, accordingly, is the rate employed for concluding the contract, which implies that there is no difference between the conversion rates to be compared and that there is no exchange advantage to be taken into consideration when determining the additional expense". Consequently, in the view of the Community legislature, where both operations are concluded on the same day, there is definitely an economic connection, but account will have been taken of all the monetary circumstances at the time when the contract for the goods was concluded.
29 Where both operations are concluded on the same day, the wording of the provision in question thus precludes the taking into account of any advantage with sufficient clarity and precision to leave no doubt as to its interpretation, and does not warrant any verification of the economic connection under Article 9.
30 Accordingly, the reply to the second question must be that the second subparagraph of Article 9(2) of Regulation No 926/80 must be interpreted as meaning that, apart from the cases mentioned under (a) of the provision in question, as a general rule, evidence must be produced of the economic connection with the contract for goods for every forward currency operation, except where, as provided for in Article 8(3), both operations were concluded on the same day.
31 In the light of that reply, there is no need to reply to the questions submitted in the alternative by the national court.