Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
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AGRICULTURE - COMMON ORGANIZATION OF THE MARKET - SHORT-TERM ECONOMIC POLICY - FLUCTUATION OF CURRENCIES - MONETARY COMPENSATORY AMOUNTS - OBJECTIVE - DERIVED PRODUCTS - CHARGE ON PRODUCTS IMPORTED FROM THIRD COUNTRIES - CONCEPT
( REGULATION NO 974/71, ARTICLE 4A ( 2 ))
Summary
THE SOLE OBJECTIVE OF THE INTRODUCTION OF MONETARY COMPENSATORY AMOUNTS IS TO NEUTRALIZE THE EFFECT OF DISTURBANCES ARISING IN AGRICULTURAL TRADE PROVOKED BY THE FLUCTUATION OF EXCHANGE RATES FOR THE CURRENCIES OF CERTAIN MEMBER STATES; FOR DERIVED PRODUCTS, THE COMPENSATION OF SUCH FLUCTUATIONS SHOULD BE IN PROPORTION TO THE INCIDENCE, ON THE PRICES OF THE PRODUCTS CONCERNED, OF THE APPLICATION OF THE COMPENSATORY AMOUNT TO THE BASIC PRODUCT .
THE " CHARGE ON PRODUCTS IMPORTED " FROM THIRD COUNTRIES, WHICH, UNDER THE TERMS OF ARTICLE 4 A ( 2 ) OF REGULATION NO 974/71, AS AMENDED BY REGULATION NO 509/73, DETERMINES THE UPPER LIMIT FOR COMPENSATORY AMOUNTS APPLICABLE BY REASON OF THE FALL IN VALUE OF A CURRENCY, CONSISTS, IN RESPECT OF DERIVED PRODUCTS, WHOSE PRICE DEPENDS ON THE PRICE OF BASIC PRODUCTS COVERED BY INTERVENTION ARRANGEMENTS UNDER THE COMMON ORGANIZATION OF AGRICULTURAL MARKETS, SOLELY OF THE VARIABLE COMPONENT OF THE LEVY, INTENDED TO TAKE ACCOUNT OF THE PRICE OF BASIC PRODUCTS, TO THE EXCLUSION OF THE FIXED COMPONENT, INTENDED TO PROTECT THE PROCESSING INDUSTRY .
Parties
IN CASE 34/74
REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE TRIBUNAL D' INSTANCE OF LILLE FOR A PRELIMINARY RULING IN THE ACTION PENDING BEFORE THAT COURT BETWEEN
ROQUETTE FRERES, A LIMITED LIABILITY COMPANY GOVERNED BY FRENCH LAW HAVING ITS HEAD OFFICE AT LESTREM ( PAS-DE-CALAIS ),
AND
FRENCH STATE, CUSTOMS ADMINISTRATION,
Subject of the case
ON THE INTERPRETATION OF CERTAIN PROVISIONS OF REGULATION NO 974/71 OF THE COUNCIL OF 12 MAY 1971 ON CERTAIN MEASURES OF CONJUNCTURAL POLICY TO BE TAKEN IN AGRICULTURE FOLLOWING THE TEMPORARY WIDENING OF THE MARGINS OF FLUCTUATION FOR THE CURRENCIES OF CERTAIN MEMBER STATES, AS AMENDED BY REGULATION NO 509/73 OF THE COUNCIL OF 22 FEBRUARY 1973,
Grounds
1 BY JUDGMENT OF 30 APRIL 1974, REGISTERED AT THE COURT ON 16 MAY, THE TRIBUNAL D' INSTANCE OF LILLE REFERRED, PURSUANT TO ARTICLE 177 OF THE EEC TREATY, TWO QUESTIONS ON THE INTERPRETATION OF ARTICLES 2 ( 2 ) AND 4 A ( 2 ) OF REGULATION NO 974/71 OF THE COUNCIL OF 12 MAY 1971 ON CERTAIN MEASURES OF CONJUNCTURAL POLICY TO BE TAKEN IN AGRICULTURE FOLLOWING THE TEMPORARY WIDENING OF THE MARGINS OF FLUCTUATION FOR THE CURRENCIES OF CERTAIN MEMBER STATES ( OJ L 106, P . 1 ), AS AMENDED IN PARTICULAR BY REGULATION NO 509/73 OF 22 FEBRUARY 1973 ( OJ L 50, P . 1 ), FOR THE PURPOSE OF ASCERTAINING THE CONFORMITY WITH THAT REGULATION OF THE APPLICATION OF COMPENSATORY AMOUNTS TO EXPORTS OF AMYLOID PRODUCTS, AS LAID DOWN BY REGULATION NO 218/74 OF THE COMMISSION OF 25 JANUARY 1974 ( OJ L 24, P . 1 ), FIXING THE MONETARY COMPENSATORY AMOUNTS IN IMPLEMENTATION OF REGULATION NO 974/71 .
2 THE FIRST QUESTION ASKS WHETHER THE CHARGE ON PRODUCTS IMPORTED FROM THIRD COUNTRIES, REFERRED TO IN PARAGRAPH 4 A ( 2 ) OF REGULATION NO 974/71, AS AMENDED IN PARTICULAR BY REGULATION NO 509/73, MUST BE UNDERSTOOD, IN RESPECT OF THE PRODUCTS REFERRED TO IN ARTICLE 1 ( 2 ) ( B ) OF REGULATION NO 974/71, WHOSE PRICE DEPENDS ON THE PRICE OF THE PRODUCTS COVERED BY INTERVENTION ARRANGEMENTS UNDER THE COMMON ORGANIZATION OF AGRICULTURAL MARKETS :
( A ) AS CONSISTING OF BOTH THE VARIABLE COMPONENT INTENDED TO TAKE ACCOUNT OF DIFFERENCES IN THE PRICES OF BASIC PRODUCTS AND THE FIXED COMPONENT INTENDED FOR THE PROTECTION OF THE INDUSTRY, OR
( B ) AS CONSISTING SOLELY OF THE VARIABLE COMPONENT INTENDED TO TAKE ACCOUNT OF THE PRICES OF BASIC PRODUCTS .
3 IN THE EVENT OF THE COURT GIVING AN AFFIRMATIVE ANSWER TO QUESTION 1 ( A ) THE COURT IS ASKED TO STATE WHETHER, GIVEN THAT THERE IS NO COMPENSATORY AMOUNT FOR MAIZE, WHICH IS A BASIC PRODUCT, THE SIMULTANEOUS APPLICATION OF COMPENSATORY AMOUNTS OF DIFFERENT RATES TO AMYLOID PRODUCTS WHOSE PRICE DEPENDS ON THAT OF MAIZE IS CONSISTENT
( A ) WITH THE PROVISIONS OF ARTICLE 2 ( 2 ) OF REGULATION NO 974/71, CLARIFIED BY THE FOURTH AND FINAL RECITALS TO THE SAID REGULATION, AND
( B ) WITH THE PRINCIPLES GOVERNING NORMAL COMPETITIVE CONDITIONS AS BETWEEN NATIONALS OF DIFFERENT MEMBER STATES .
4 THESE QUESTIONS HAVE ARISEN IN THE CONTEXT OF AN ACTION BROUGHT BEFORE THE TRIBUNAL D' INSTANCE BY THE PLAINTIFF IN THE MAIN ACTION AGAINST THE FRENCH CUSTOMS ADMINISTRATION FOR THE PURPOSE OF OBTAINING RESTITUTION OF COMPENSATORY AMOUNTS WHICH IT WAS OBLIGED TO PAY ON EXPORTS OF AMYLOID PRODUCTS DERIVED FROM MAIZE, AT A TIME WHEN, ACCORDING TO THE UNCONTESTED STATEMENTS OF THE PARTIES TO THE PROCEEDINGS BEFORE THE COURT, NO COMPENSATORY AMOUNT WAS DUE UNDER THE PROVISIONS OF REGULATION NO 974/71 ON IMPORTS OF THAT BASIC PRODUCT, FOLLOWING A RISE IN PRICES ON THE WORLD MARKET .
5 THE GOVERNMENT OF THE FRENCH REPUBLIC STATED AT THE HEARING THAT BY CHARGING COMPENSATORY AMOUNTS ON EXPORT OF THE PRODUCT IN QUESTION THE FRENCH AUTHORITIES MERELY UNDERTOOK A PRECISE APPLICATION OF REGULATION NO 218/74 OF THE COMMISSION, ALTHOUGH, FUNDAMENTALLY, THEY CONSIDERED THAT REGULATION TO BE CONTRARY TO THE PRINCIPLES OF REGULATION NO 974/71 OF THE COUNCIL .
6 IN ORDER TO NEUTRALIZE THE EFFECT, ON THE WORKING OF AGRICULTURAL MARKETS, OF THE WIDENING OF THE MARGINS OF FLUCTUATION FOR THE CURRENCIES OF CERTAIN MEMBER STATES, REGULATION NO 974/71, AS SUPPLEMENTED SUBSEQUENTLY, INTRODUCED COMPENSATORY AMOUNTS, TO BE CHARGED ON IMPORTS OF AGRICULTURAL PRODUCTS AND GRANTED ON EXPORTS .
7 ACCORDING TO ARTICLE 2 ( 1 ) OF THAT REGULATION THE COMPENSATORY AMOUNTS SHALL BE FIXED, IN RELATION TO THE CURRENCY FLUCTUATIONS RECORDED, FOR BASIC PRODUCTS COVERED BY INTERVENTION ARRANGEMENTS UNDER THE COMMON ORGANIZATION OF AGRICULTURAL MARKETS .
8 ACCORDING TO ARTICLE 2 ( 2 ), COMPENSATORY AMOUNTS FOR DERIVED PRODUCTS SHALL BE EQUAL TO THE INCIDENCE, ON THE PRICES OF THE PRODUCT CONCERNED, OF THE APPLICATION OF THE COMPENSATORY AMOUNT TO THE PRICES OF THE BASIC PRODUCT ON WHICH THEY DEPEND .
9 REGULATION NO 509/73, WHICH SUPPLEMENTED REGULATION NO 974/71, CONTAINS AN ARTICLE 4 A WHICH PARAGRAPH ( 2 ) PROVIDES THAT " IN TRADE BETWEEN THE MEMBER STATES AND WITH THIRD COUNTRIES, THE COMPENSATORY AMOUNTS APPLICABLE DUE TO THE DECREASE IN VALUE OF THE CURRENCY CONCERNED MAY NOT BE HIGHER THAN THE CHARGE ON PRODUCTS IMPORTED FROM THIRD COUNTRIES ".
10 THE COMPENSATORY AMOUNTS APPLICABLE AT THE TIME OF THE EXPORTS IN QUESTION WERE FIXED BY REGULATION NO 218/74 OF THE COMMISSION AND, MORE PARTICULARLY, BY ANNEX I TO THAT REGULATION .
11 IT IS CLEAR FROM INFORMATION GIVEN DURING THE PROCEEDINGS THAT, IN IMPLEMENTING ARTICLE 4 A OF REGULATION NO 974/71, THE COMMISSION INTERPRETED THE TERM " CHARGE ON PRODUCTS IMPORTED " TO REFER TO THE LEVIES LAID DOWN BY REGULATION NO 120/67 OF 13 JUNE 1967 ON THE COMMON ORGANIZATION OF THE MARKET IN CEREALS ( OJ P . 2269 ), ARTICLE 13 OF WHICH PROVIDES THAT A SINGLE LEVY SHALL BE CHARGED ON IMPORTS OF BASIC PRODUCTS, FIXED BY REFERENCE TO THE DIFFERENCE BETWEEN PRICES ON THE WORLD MARKET AND PRICES WITHIN THE COMMUNITY, WHEREAS ARTICLE 14 PROVIDES THAT A LEVY SHALL BE CHARGED ON THE IMPORTATION OF DERIVED PRODUCTS, CONSISTING OF TWO COMPONENTS, THAT IS TO SAY A " VARIABLE COMPONENT " CORRESPONDING TO THE INCIDENCE, ON THE PRIME COST OF PROCESSED PRODUCTS, OF THE LEVIES ON THE BASIC PRODUCTS AND A " FIXED COMPONENT ", DESIGNED TO PROTECT THE PROCESSING INDUSTRY .
12 AS A CONSEQUENCE OF THIS INTERPRETATION, IN SPITE OF AN ECONOMIC SITUATION IN WHICH NO LEVY WAS IMPOSED ON THE BASIC PRODUCT INVOLVED, THAT IS TO SAY MAIZE, REGULATION NO 218/74 OF THE COMMISSION NEVERTHELESS MAINTAINED, ON DERIVED PRODUCTS, AND IN PARTICULAR AMYLOID PRODUCTS, A COMPENSATORY AMOUNT CORRESPONDING TO THE " FIXED COMPONENT " LAID DOWN BY ARTICLE 14 OF REGULATION NO 120/67 .
13 THE INTERPRETATION OF THE CONCEPT " CHARGE ON PRODUCTS IMPORTED ", TAKEN BY THE COMMISSION AS THE BASIS OF REGULATION NO 218/74, IS NOT IN CONFORMITY WITH THE PROVISIONS OF ARTICLES 2 ( 2 ) AND 4 A ( 2 ) OF REGULATION NO 974/71, AS INTERPRETED IN THE LIGHT OF THE OBJECTIVE SOUGHT BY THAT REGULATION .
14 IN FACT, THE SOLE OBJECTIVE OF THE INTRODUCTION OF COMPENSATORY AMOUNTS WAS TO NEUTRALIZE THE EFFECT OF DISTURBANCES ARISING IN AGRICULTURAL TRADE PROVOKED BY THE FLUCTUATION OF EXCHANGE RATES FOR THE CURRENCIES OF CERTAIN MEMBER STATES, AS EMPHASIZED IN THE FINAL RECITAL OF THE PREAMBLE TO REGULATION NO 974/71, ACCORDING TO WHICH " THE COMPENSATORY AMOUNTS SHOULD BE LIMITED TO THE AMOUNTS STRICTLY NECESSARY TO COMPENSATE THE INCIDENCE OF THE MONETARY MEASURES ON THE PRICES OF BASIC PRODUCTS ".
15 IN PURSUANCE OF ARTICLE 2 OF REGULATION NO 974/71 THE FLUCTUATIONS SHOULD BE ENTIRELY COMPENSATED FOR BASIC PRODUCTS, WHEREAS UNDER PARAGRAPH ( 2 ) OF THE SAME ARTICLE, FOR DERIVED PRODUCTS, THE COMPENSATION SHOULD BE IN PROPORTION TO THE INCIDENCE, ON THE PRICES OF THE PRODUCT CONCERNED, OF THE APPLICATION OF THE COMPENSATORY AMOUNT TO THE BASIC PRODUCT .
16 THIS PROVISION THEREFORE IMPOSES A PARALLELISM BETWEEN THE APPLICATION OF COMPENSATORY AMOUNTS TO BASIC PRODUCTS AND THEIR APPLICATION TO DERIVED PRODUCTS .
17 HOWEVER, WITH A VIEW TO AVOIDING, IN THE CASE OF A FALL IN VALUE OF THE CURRENCY OF A MEMBER STATE THE APPLICATION OF EXCESSIVE COMPENSATORY AMOUNTS, LIKELY TO DISTURB MARKETS WITHIN THE COMMUNITY, ARTICLE 4 A ( 2 ), FIRST PARAGRAPH, IMPOSED AN UPPER LIMIT UPON COMPENSATORY AMOUNTS, AT THE LEVEL OF THE " CHARGE ON PRODUCTS IMPORTED " FROM THIRD COUNTRIES .
18 THE RESULT OF THE APPLICATION OF THIS PROVISION, FOLLOWING THE INCREASE IN PRICE OF CEREALS ON THE WORLD MARKET, WAS THE ABOLITION OF COMPENSATORY AMOUNTS IN RESPECT OF TRADE IN MAIZE FROM THE MOMENT WHEN THE CIF PRICE REACHED THE THRESHOLD PRICE FIXED PURSUANT TO REGULATION NO 120/67 .
19 IN SUCH A SITUATION, IT WAS CONTRARY TO THE OBJECTIVE OF REGULATION NO 974/71 TO TAKE ACCOUNT, BY WAY OF A " CHARGE ON PRODUCTS IMPORTED ", OF THE FIXED COMPONENT OF THE IMPORT LEVY ON PRODUCTS DERIVED FROM CEREALS, FIXED BY REFERENCE TO CONSIDERATIONS - THE PROTECTION OF THE PROCESSING INDUSTRY - WHICH WERE TOTALLY EXTRANEOUS TO THE OBJECTIVE OF REGULATION NO 974/71 .
20 THE RESULT OF TAKING ACCOUNT OF THIS FACTOR IN CALCULATING THE RATES FIXED IN ANNEX I TO REGULATION NO 218/74 WAS TO IMPOSE ON EXPORTERS OF DERIVED PRODUCTS A CHARGE WHICH BORE NO RELATION TO MONETARY FLUCTUATIONS AND, IN CONSEQUENCE, WORSENED THEIR COMPETITIVE POSITION .
21 THE FIRST QUESTION SHOULD THEREFORE BE ANSWERED TO THE EFFECT THAT THE " CHARGE ON PRODUCTS IMPORTED " FROM THIRD COUNTRIES, REFERRED TO IN ARTICLE 4 A ( 2 ) OF REGULATION NO 974/71, AS AMENDED BY REGULATION NO 509/73, MUST BE UNDERSTOOD - IN RESPECT OF THE PRODUCTS REFERRED TO IN ARTICLE 1 ( 2 ) ( B ) OF THE SAME REGULATION, WHOSE PRICE DEPENDS ON THE PRICE OF THE PRODUCTS COVERED BY INTERVENTION ARRANGEMENTS UNDER THE COMMON ORGANIZATION OF AGRICULTURAL MARKETS - AS CONSISTING SOLELY OF THE VARIABLE COMPONENT INTENDED TO TAKE ACCOUNT OF THE PRICES OF BASIC PRODUCTS .
22 SINCE THE ANSWER TO QUESTION 1 ( A ) REFERRED BY THE TRIBUNAL D' INSTANCE IS THEREFORE ANSWERED IN THE NEGATIVE THE SECOND QUESTION DOES NOT REQUIRE AN ANSWER .
Decision on costs
23 THE COSTS INCURRED BY THE GOVERNMENT OF THE KINGDOM OF DENMARK, THE GOVERNMENT OF THE FRENCH REPUBLIC AND THE COMMISSION OF THE EUROPEAN COMMUNITIES, WHICH HAVE SUBMITTED OBSERVATIONS TO THE COURT, ARE NOT RECOVERABLE .
24 SINCE THESE PROCEEDINGS ARE, INSOFAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED, A STEP IN THE ACTION PENDING BEFORE THE TRIBUNAL D' INSTANCE OF LILLE, COSTS ARE A MATTER FOR THAT COURT .
Operative part
ON THOSE GROUNDS,
THE COURT,
IN ANSWER TO THE QUESTIONS REFERRED TO IT BY THE TRIBUNAL D' INSTANCE OF LILLE BY JUDGMENT OF 30 APRIL 1974, HEREBY RULES :
THE " CHARGE ON PRODUCTS IMPORTED " FROM THIRD COUNTRIES, REFERRED TO IN ARTICLE 4 A ( 2 ) OF REGULATION NO 974/71 AS AMENDED BY REGULATION NO 509/73, MUST BE UNDERSTOOD - IN RESPECT OF THE PRODUCTS REFERRED TO IN ARTICLE 1 ( 2 ) ( B ) OF THE SAME REGULATION, WHOSE PRICE DEPENDS ON THE PRICE OF THE PRODUCTS COVERED BY INTERVENTION ARRANGEMENTS UNDER THE COMMON ORGANIZATION OF AGRICULTURAL MARKETS - AS CONSISTING SOLELY OF THE VARIABLE COMPONENT INTENDED TO TAKE ACCOUNT OF THE PRICES OF BASIC PRODUCTS .
Full & Egal Universal Law Academy