Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
1 . AGRICULTURE - COMMON ORGANIZATION OF THE MARKET - MILK AND MILK PRODUCTS - CO-RESPONSIBILITY LEVY - LEGALITY
( COUNCIL REGULATION NO 1079/77 )
2 . AGRICULTURE - COMMON AGRICULTURAL POLICY - ' ' GREEN ' ' EXCHANGE RATES - SYSTEM - LEGALITY
( COUNCIL REGULATION NO 878/77 )
Summary
1 . THE VALIDITY OF COUNCIL REGULATION NO 1079/77 ON THE CHARGING OF A CO-RESPONSIBILITY LEVY IN THE MILK SECTOR CANNOT BE CONTESTED IN SO FAR AS , BY SEEKING TO RESTRAIN THE PRODUCTION OF MILK IN THE FACE OF THE SURPLUSES OBSERVED , THE SAID CO-RESPONSIBILITY LEVY CONTRIBUTES TO THE ATTAINMENT OF THE OBJECTIVE OF STABILIZING MARKETS AND IN SO FAR AS THE LEVEL OF THE RATE OF LEVY DOES NOT APPEAR TO BE DISPROPORTIONATE IN RELATION TO THE FACTS WHICH LED TO ITS ADOPTION .
2 . ALTHOUGH IN CERTAIN TRANSACTIONS THE APPLICATION OF THE SO-CALLED GREEN EXCHANGE RATES MAY POSSIBLY INVOLVE ADVANTAGES OR DISADVANTAGES WHICH MAY APPEAR AS DISCRIMINATION , IT NONE THE LESS REMAINS TRUE THAT IN GENERAL SUCH APPLICATION SERVES TO REMEDY MONETARY SITUATIONS WHICH IN THE ABSENCE OF A MEASURE SUCH AS REGULATION NO 878/77 WOULD RESULT IN MUCH MORE SERIOUS , OBVIOUS AND GENERAL DISCRIMINATION . ALTHOUGH IT IS NOT WITHOUT CERTAIN DRAWBACKS , THE ADOPTION OF THE SYSTEM OF THE SO-CALLED GREEN EXCHANGE RATES IS THEREFORE JUSTIFIED BY THE PROHIBITION ON DISCRIMINATION AND THE REQUIREMENTS OF A COMMON AGRICULTURAL POLICY .
Parties
IN CASE 138/78 ,
REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE FINANZGERICHT ( FINANCE COURT ) HAMBURG FOR A PRELIMINARY RULING IN THE ACTION PENDING BEFORE THAT COURT BETWEEN
HANS-MARKUS STOLTING , TANKENRADER BERG
AND
HAUPTZOLLAMT ( PRINCIPAL CUSTOMS OFFICE ) HAMBURG-JONAS
Subject of the case
ON THE VALIDITY OF COUNCIL REGULATION NO 1079/77 OF 17 MAY 1977 ( OFFICIAL JOURNAL 1977 L 131 , P . 6 ) AND COMMISSION REGULATION NO 1822/77 OF 5 AUGUST 1977 ( OFFICIAL JOURNAL 1977 L 203 , P . 1 ), ON THE CHARGING OF A CO-RESPONSIBILITY LEVY IN THE MILK SECTOR AND ON THE INTERPRETATION OF ARTICLE 40 ( 3 ) OF THE EEC TREATY ,
Grounds
1BY AN ORDER OF 2 JUNE 1978 , WHICH WAS RECEIVED AT THE COURT ON 14 JUNE 1978 , THE FINANZGERICHT HAMBURG REFERRED TO THE COURT PURSUANT TO ARTICLE 177 OF THE EEC TREATY THREE QUESTIONS CONCERNING THE VALIDITY OF COUNCIL REGULATION NO 1079/77 OF 17 MAY 1977 ON A CO-RESPONSIBILITY LEVY AND ON MEASURES FOR EXPANDING THE MARKETS IN MILK AND MILK PRODUCTS ( OFFICIAL JOURNAL 1977 L 131 , P . 6 ) AND COMMISSION REGULATION NO 1822/77 OF 5 AUGUST 1977 LAYING DOWN DETAILED RULES FOR THE COLLECTION OF THE CO-RESPONSIBILITY LEVY INTRODUCED IN RESPECT OF MILK AND MILK PRODUCTS ( OFFICIAL JOURNAL 1977 L 203 , P . 1 ).
2THESE QUESTIONS ARE RAISED IN THE CONTEXT OF AN ACTION IN WHICH THE PLAINTIFF CHALLENGES THE LEGALITY OF THE DEDUCTION OF DM 37.31 CARRIED OUT PURSUANT TO THE SAID REGULATIONS IN RESPECT OF A DELIVERY OF MILK TO THE BUYING DEPARTMENT OF A DAIRY .
3THE FIRST QUESTION ASKS WHETHER THE REGULATIONS ARE INVALID BECAUSE THE EEC TREATY CONTAINS NO POWER UNDER WHICH THEY COULD BE ADOPTED . REGULATION NO 1079/77 IS BASED ON ARTICLE 43 OF THE TREATY , BUT THE PLAINTIFF IN THE MAIN ACTION DENIES THAT THAT PROVISION AUTHORIZES THE COMMUNITY INSTITUTIONS TO CHARGE A LEVY ON THE PRODUCTION OF MILK . IN THE ORDER MAKING THE REFERENCE THE NATIONAL COURT STATES THAT IT REGARDS THE REGULATIONS IN QUESTION AS BEING VALID BUT THAT TO COVER ALL EVENTUALITIES ANY DOUBTS IN THIS CONNEXION SHOULD BE REMOVED AS SOON AS POSSIBLE .
4ARTICLE 43 OF THE TREATY MUST BE INTERPRETED IN THE LIGHT OF ARTICLE 39 , WHICH SETS OUT THE OBJECTIVES OF THE COMMON AGRICULTURAL POLICY , AND ARTICLE 40 , WHICH REGULATES ITS IMPLEMENTATION BY PROVIDING INTER ALIA THAT IN ORDER TO ATTAIN THE OBJECTIVES SET OUT IN ARTICLE 39 A COMMON ORGANIZATION OF AGRICULTURAL MARKETS SHALL BE ESTABLISHED AND THAT THIS ORGANIZATION MAY INCLUDE ALL MEASURES REQUIRED TO ATTAIN THE SAID OBJECTIVES . IN THIS CONNEXION ARTICLE 40 ( 3 ) MENTIONS IN PARTICULAR ' ' REGULATION OF PRICES , AIDS FOR THE PRODUCTION AND MARKETING OF THE VARIOUS PRODUCTS , STORAGE AND CARRY-OVER ARRANGEMENTS AND COMMON MACHINERY FOR STABILIZING IMPORTS OR EXPORTS ' ' .
5THE REASONS WHICH LED THE COUNCIL TO INTRODUCE THE LEVY IN QUESTION ARE SET OUT AS FOLLOWS IN THE PREAMBLE TO REGULATION NO 1079/77 :
' ' WHEREAS THE COMMUNITY MARKET IN MILK PRODUCTS IS MARKED BY STRUCTURAL SURPLUSES ARISING FROM AN IMBALANCE BETWEEN SUPPLY AND DEMAND IN ( THOSE ) PRODUCTS . . .;
WHEREAS A MORE DIRECT LINK SHOULD BE ESTABLISHED BETWEEN PRODUCTION AND OUTLETS FOR MILK PRODUCTS IN ORDER GRADUALLY TO RESTORE EQUILIBRIUM BETWEEN PRODUCTION AND MARKET REQUIREMENTS AND TO REDUCE THE HEAVY COSTS INCURRED BY THE COMMUNITY AS A RESULT OF THE PRESENT SITUATION AND IN PARTICULAR OF THE LARGE SURPLUSES WHICH EXIST ; WHEREAS IT IS NECESSARY , IN VIEW OF THE MAJOR PUBLIC INTEREST ATTACHED , TO INTRODUCE A UNIFORM CO-RESPONSIBILITY LEVY FOR SEVERAL YEARS ON ALL MILK DELIVERED TO DAIRIES AND CERTAIN FARM SALES OF MILK PRODUCTS ;
. . . . . . .
WHEREAS PROVISION SHOULD BE MADE FOR SPECIFIC MEASURES LINKED TO THE LEVY TO ENCOURAGE THE EXPANSION OF MARKETS AND THE DISPOSAL OF SURPLUSES ON THE COMMUNITY AND WORLD MARKETS ;
WHEREAS ALL THE MEASURES PROVIDED FOR IN THIS REGULATION ARE DESIGNED TO STABILIZE THE MARKET IN MILK PRODUCTS AND THUS TO SUPPLEMENT THE EXISTING INTERVENTION SYSTEM ; WHEREAS CARE SHOULD THEREFORE BE TAKEN TO ENSURE THAT THE ARRANGEMENTS FOR FINANCING THE COMMON AGRICULTURAL POLICY TAKE ACCOUNT OF THE LEVIES AND EXPENDITURE ENTAILED IN THE SPECIFIC MEASURES . ' '
IT EMERGES FROM THIS THAT THE REGULATION IS INTENDED TO CONTRIBUTE TO THE STABILIZATION OF THE MARKETS IN QUESTION , AND THEREFORE REMAINS WITHIN THE LIMITS LAID DOWN BY ARTICLES 39 AND 40 . CONSEQUENTLY , IN ADOPTING IT THE COUNCIL WAS ENTITLED TO BASE ITSELF ON ARTICLE 43 OF THE TREATY .
6HOWEVER , THE PLAINTIFF IN THE MAIN ACTION DENIES THAT THE ADOPTION OF A CO-RESPONSIBILITY LEVY HAS THE EFFECT OF REDUCING THE PRODUCTION OF MILK AND THUS STABILIZING THE MARKET , SINCE IN HIS SUBMISSION THE CHARGING OF SUCH A LEVY HAS THE EFFECT NOT OF REDUCING PRODUCTION AND SUPPLY BUT ON THE CONTRARY OF ENCOURAGING THEIR GROWTH . THESE ASSERTIONS ARE CHALLENGED BY THE COUNCIL AND THE COMMISSION , WHICH HAVE STATED THAT THE LEVY WILL HAVE THE SAME EFFECT AS A REDUCTION OF PRICES BUT UNLIKE SUCH REDUCTION ALLOWS CERTAIN AREAS OF PRODUCTION REQUIRING SPECIAL PROTECTION TO BE EXCLUDED FROM ITS APPLICATION AND HENCE FROM ITS EFFECTS .
7THIS DIFFERENCE OF OPINION CONCERNS IN PARTICULAR THE EXPEDIENCY AND EFFECTIVENESS OF THE MEASURE ADOPTED IN THE REGULATIONS IN QUESTION . IF A MEASURE IS PATENTLY UNSUITED TO THE OBJECTIVE WHICH THE COMPETENT INSTITUTION SEEKS TO PURSUE THIS MAY AFFECT ITS LEGALITY , BUT ON THE OTHER HAND THE COUNCIL MUST BE RECOGNIZED AS HAVING A DISCRETIONARY POWER IN THIS AREA WHICH CORRESPONDS TO THE POLITICAL RESPONSIBILITIES WHICH ARTICLES 40 AND 43 IMPOSE UPON IT . AS IT IS DIRECTED TOWARDS RESTRAINING PRODUCTION IN THE FACE OF THE SURPLUSES OBSERVED , THE CO-RESPONSIBILITY LEVY CONTRIBUTES TO THE ATTAINMENT OF THE OBJECTIVE OF STABILIZING MARKETS . NOR DOES THE LEVEL OF THE RATE OF LEVY APPEAR TO BE DISPROPORTIONATE IN RELATION TO THE FACTS REFERRED TO BY THE COUNCIL . THEREFORE THE ANSWER SHOULD BE THAT CONSIDERATION OF THE QUESTION HAS DISCLOSED NO FACTOR OF SUCH A KIND AS TO AFFECT THE VALIDITY OF REGULATION NO 1079/77 .
8SINCE REGULATION NO 1822/77 IS UNQUESTIONABLY A MEASURE FOR THE IMPLEMENTATION OF THE SAID REGULATION NO 1079/77 IT FOLLOWS FROM THE FOREGOING THAT THE SAME CONCLUSION MUST APPLY TO IT .
9QUESTION 2 ASKS WHETHER THE CHARGING OF THE CO-RESPONSIBILITY LEVY ON MILK PRODUCERS INFRINGES THE PROHIBITION ON DISCRIMINATION CONTAINED IN ARTICLE 40 ( 3 ) OF THE TREATY IN THAT THE LEVY IS LAID DOWN IN UNITS OF ACCOUNT AND ITS CONVERSION INTO NATIONAL CURRENCIES ACCORDING TO THE SO-CALLED GREEN EXCHANGE RATES - PROVIDED FOR IN COUNCIL REGULATION NO 878/77 OF 26 APRIL 1977 ON THE EXCHANGE RATES TO BE APPLIED IN AGRICULTURE ( OFFICIAL JOURNAL 1977 L 106 , P . 27 ) - CAN LEAD TO UNEQUAL BURDENS IN RELATION TO THE MONETARY SITUATIONS OF THE MEMBER STATES AT ANY GIVEN TIME .
10REGULATION NO 878/77 PROVIDES FOR THE EXCHANGE RATES WHICH IT LAYS DOWN TO BE USED IN ' ' TRANSACTIONS TO BE CARRIED OUT IN PURSUANCE OF INSTRUMENTS RELATING TO THE COMMON AGRICULTURAL POLICY ' ' . CONSEQUENTLY THOSE EXCHANGE RATES APPLY WHENEVER IT IS NECESSARY TO CONVERT INTO NATIONAL CURRENCIES THE AMOUNTS EXPRESSED IN UNITS OF ACCOUNT LAID DOWN IN THE PROVISIONS ON GUIDE PRICES , INTERVENTION PRICES AND OTHER PRICES PROVIDED FOR IN A COMMON ORGANIZATION OF THE MARKET , SUCH AS THAT ESTABLISHED FOR MILK AND MILK PRODUCTS . ALTHOUGH IN CERTAIN TRANSACTIONS THE APPLICATION OF THESE EXCHANGE RATES MAY POSSIBLY INVOLVE ADVANTAGES OR DISADVANTAGES WHICH MAY APPEAR AS DISCRIMINATION , IT NONE THE LESS REMAINS TRUE THAT IN GENERAL SUCH APPLICATION SERVES TO REMEDY MONETARY SITUATIONS WHICH IN THE ABSENCE OF A MEASURE SUCH AS REGULATION NO 878/77 WOULD RESULT IN MUCH MORE SERIOUS , OBVIOUS AND GENERAL DISCRIMINATION . ALTHOUGH IT IS NOT WITHOUT CERTAIN DRAWBACKS , THE ADOPTION OF THE SYSTEM OF THE SO-CALLED GREEN EXCHANGE RATES IS THEREFORE JUSTIFIED BY THE PROHIBITION ON DISCRIMINATION AND THE REQUIREMENTS OF A COMMON AGRICULTURAL POLICY .
11IN THESE CIRCUMSTANCES IT WOULD BE DISCRIMINATORY TO EXEMPT FROM THE APPLICATION OF REGULATION NO 878/77 THE CHARGING OF THE CO-RESPONSIBILITY LEVY THE AMOUNT OF WHICH IS A FUNCTION OF THE PRICES OF THE MILK CONCERNED , WHEN THOSE PRICES ARE THEMSELVES FORMED UNDER THE INFLUENCE OF THE PRICE PROVISIONS MENTIONED ABOVE . MOREOVER , SUCH AN EXEMPTION WOULD RENDER INOPERATIVE ARTICLE 2 ( 3 ) OF REGULATION NO 1079/77 , WHICH LAYS DOWN THE MINIMUM AND MAXIMUM RATES OF THE LEVY IN TERMS ' ' OF THE MILK TARGET PRICE VALID FOR THE MILK YEAR IN QUESTION ' ' . CONSIDERATION OF QUESTION 2 HAS ALSO DISCLOSED NO FACTOR OF SUCH A KIND AS TO AFFECT THE VALIDITY OF THE REGULATIONS IN QUESTION .
12SINCE QUESTION 3 IS ASKED ONLY IN THE EVENT OF QUESTION 2 BEING ANSWERED IN THE AFFIRMATIVE , IT IS NOT NECESSARY TO CONSIDER IT .
13THEREFORE THE ANSWER TO BE GIVEN TO THE NATIONAL COURT MUST BE THAT CONSIDERATION OF THE QUESTIONS RAISED HAS DISCLOSED NO FACTOR OF SUCH A KIND AS TO AFFECT THE VALIDITY OF REGULATIONS NOS 1079/77 AND 1822/77 .
Decision on costs
COSTS
14THE COSTS INCURRED BY THE COMMISSION OF THE EUROPEAN COMMUNITIES , THE COUNCIL OF THE EUROPEAN COMMUNITIES AND THE GOVERNMENT OF THE FEDERAL REPUBLIC OF GERMANY , WHICH HAVE SUBMITTED OBSERVATIONS TO THE COURT , ARE NOT RECOVERABLE . AS THESE PROCEEDINGS ARE , IN SO FAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED , IN THE NATURE OF A STEP IN THE ACTION PENDING BEFORE THE NATIONAL COURT , COSTS ARE A MATTER FOR THAT COURT .
Operative part
ON THOSE GROUNDS ,
THE COURT ,
IN ANSWER TO THE QUESTIONS REFERRED TO IT BY THE FINANZGERICHT HAMBURG BY ORDER OF 2 JUNE 1978 , HEREBY RULES :
CONSIDERATION OF THE QUESTIONS RAISED HAS DISCLOSED NO FACTOR OF SUCH A KIND AS TO AFFECT THE VALIDITY OF REGULATIONS NOS 1079/77 AND 1822/77 .
Full & Egal Universal Law Academy