Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
1 . PRELIMINARY QUESTIONS - COURT OF JUSTICE - NATIONAL COURTS - JURISDICTION OF EACH
( EEC TREATY , ART . 177 )
2 . AGRICULTURE - MONETARY COMPENSATORY AMOUNTS - OBJECTIVE - MAINTENANCE OF THE SYSTEM OF SINGLE PRICES WITHIN THE COMMON ORGANIZATION OF AGRICULTURAL MARKETS - ADDITIONAL PROTECTION FOR NATIONAL MARKETS - EXCLUSION
( REGULATION NO 974/71 OF THE COUNCIL )
3 . AGRICULTURE - MONETARY COMPENSATORY AMOUNTS - FIXING - DERIVED PRODUCTS - CALCULATION OF INCIDENCE OF MONETARY COMPENSATORY AMOUNT APPLICABLE TO BASIC PRODUCT - DISCRETION OF COMMISSION - LIMITS
( REGULATION NO 974/71 OF THE COUNCIL , ART . 2 ( 2 ))
4 . AGRICULTURE - MONETARY COMPENSATORY AMOUNTS - FIXING - DERIVED PRODUCTS - CALCULATION OF INCIDENCE OF MONETARY COMPENSATORY AMOUNT APPLICABLE TO BASIC PRODUCT - BASIS OF CALCULATION - CHOICE OF PRICE TO BE TAKEN INTO CONSIDERATION - DISCRETION OF COMMISSION - LIMITS
( REGULATION NO 974/71 OF THE COUNCIL , ART . 2 ( 2 ); COMMISSION REGULATION NO 652/76 )
5 . AGRICULTURE - MONETARY COMPENSATORY AMOUNTS - FIXING - DERIVED PRODUCTS - CALCULATION OF INCIDENCE OF MONETARY COMPENSATORY AMOUNT APPLICABLE TO BASIC PRODUCT - RULE AS TO CEILING - SUM OF MONETARY COMPENSATORY AMOUNTS ON DERIVED PRODUCTS IN EXCESS OF COMPENSATORY AMOUNT ON BASIC PRODUCT - NOT PERMISSIBLE
( REGULATION NO 974/71 OF THE COUNCIL , ART . 2 ( 2 ); COMMISSION REGULATION NO 652/76 )
6 . PRELIMINARY QUESTIONS - APPRAISAL OF VALIDITY - DECLARATION THAT A REGULATION IS VOID - EFFECTS - APPLICATION BY ANALOGY OF SECOND PARAGRAPH OF ARTICLE 174 OF THE TREATY
( EEC TREATY , SECOND PARAGRAPH OF ART . 174 AND ART . 177 )
Summary
1 . ALTHOUGH , WITHIN THE FRAMEWORK OF THE DISTRIBUTION OF TASKS BETWEEN THE NATIONAL COURTS AND THE COURT OF JUSTICE FOR THE IMPLEMENTATION OF ARTICLE 177 OF THE TREATY , IT IS FOR THE NATIONAL COURTS TO DECIDE THE RELEVANCE OF THE QUESTIONS WHICH ARE REFERRED TO THE COURT OF JUSTICE , IT IS HOWEVER RESERVED TO THE COURT OF JUSTICE TO EXTRACT FROM ALL THE INFORMATION PROVIDED BY THE NATIONAL COURT THOSE POINTS OF COMMUNITY LAW WHICH , HAVING REGARD TO THE SUBJECT-MATTER OF THE DISPUTE , REQUIRE INTERPRETATION , OR WHOSE VALIDITY REQUIRES APPRAISAL .
2 . THE INTRODUCTION OF MONETARY COMPENSATORY AMOUNTS IS ESSENTIALLY INTENDED TO MAINTAIN THE SYSTEM OF SINGLE PRICES WITHIN THE COMMON ORGANIZATION OF AGRICULTURAL MARKETS , SINCE THAT SYSTEM OF SINGLE PRICES , HAVING REGARD TO THE OBJECTIVES OF SUCH ORGANIZATIONS , THAT IS , TO MAINTAIN THE STANDARD OF LIVING OF AGRICULTURAL PRODUCERS AND TO STABILIZE THE MARKETS , CONSTITUTES THE FOUNDATION OF THE FREE MOVEMENT OF AGRICULTURAL PRODUCTS WITHIN THE COMMUNITY . ITS OBJECTIVE IS NOT AND CANNOT BE TO PROVIDE ADDITIONAL PROTECTION FOR THE MARKETS IN RESPECT OF THE LEVEL OF AGRICULTURAL PRICES OF ONE PARTICULAR STATE IN RELATION TO THE OTHERS , WHICH WOULD BE INCOMPATIBLE WITH THE UNIFORMITY SOUGHT .
3 . IT IS FOR THE COMMISSION TO RESOLVE THE TECHNICAL AND ECONOMIC PROBLEMS CAUSED BY THE CALCULATION OF THE INCIDENCE - WITHIN THE MEANING OF ARTICLE 2 ( 2 ) OF REGULATION NO 974/71 - ON THE PRICES OF DEPENDENT PRODUCTS OF THE MONETARY COMPENSATORY AMOUNT FIXED FOR A BASIC PRODUCT . IN DOING SO IT MUST MAINTAIN A DEGREE OF CONSISTENCY AND CLARITY IN THE SYSTEM OF MONETARY COMPENSATORY AMOUNTS WHICH IT IS REQUIRED TO ESTABLISH IN THAT SECTOR . ALTHOUGH FOR THIS PURPOSE IT HAS A WIDE MARGIN OF DISCRETION WHICH MAY EVEN EXTEND TO GENERAL ASSESSMENTS , THAT DISCRETION NEVERTHELESS HAS LIMITS . THUS IF THE RESULT OF THE METHOD OF CALCULATION EMPLOYED IS PERSISTENTLY TO APPLY TO PROCESSED PRODUCTS COMPENSATORY AMOUNTS THE BURDEN OR , AS THE CASE MAY BE , THE BENEFIT OF WHICH CONTINUALLY EXCEEDS THE AMOUNT NECESSARY TO TAKE ACCOUNT OF THE INCIDENCE OF THE COMPENSATORY AMOUNT APPLICABLE TO THE BASIC PRODUCT , THE OBJECTIVE OF THE PROVISIONS ESTABLISHING THESE AMOUNTS MAY NO LONGER BE DEEMED TO BE TO NEUTRALIZE THE EFFECTS OF THE CURRENCY FLUCTUATIONS BETWEEN THE MEMBER STATES . IN THAT CASE THE COMMISSION NO LONGER ACTS WITHIN ITS POWERS UNDER REGULATION NO 974/71 .
4 . THE DISCRETION CONFERRED UPON THE COMMISSION CONCERNING THE METHOD OF CALCULATING THE COMPENSATORY AMOUNTS APPLICABLE TO PROCESSED PRODUCTS IS NOT INTENDED TO ENABLE IT TO TAKE ACCOUNT OF THE ECONOMIC SITUATION IN A CERTAIN SECTOR OF PRODUCTION BUT TO APPRAISE , WITHIN THE LIMITS LAID DOWN BY REGULATION NO 974/71 , THE INCIDENCE ON THE PRICE OF PROCESSED PRODUCTS OF THE COMPENSATORY AMOUNTS APPLICABLE TO THE BASIC PRODUCTS . THUS BY TAKING INTO CONSIDERATION FACTORS WHICH ARE EXTRANEOUS TO THAT SITUATION AND THEREBY FIXING THE COMPENSATORY AMOUNTS ON A PROCESSED PRODUCT ON THE BASIS OF THE INTERVENTION PRICE THEREOF WITHOUT DEDUCTING THE PRODUCTION REFUND , WHEN THE COMPENSATORY AMOUNTS ON OTHER PRODUCTS PROCESSED FROM THE SAME BASIC PRODUCT IN RESPECT OF WHICH NO PRODUCTION REFUND IS PROVIDED FOR ARE ALSO CALCULATED ON THE BASIS OF THE INTERVENTION PRICE OF THE BASIC PRODUCT , THE COMMISSION EXCEEDS THE LIMITS PLACED UPON IT BY THE SAID REGULATION . THIS ALSO APPLIES WHEN IT ADOPTS , IN ORDER TO ESTABLISH THE COMPENSATORY AMOUNT APPLICABLE TO A DEPENDENT PRODUCT , A PRICE DIFFERENT FROM THAT WHICH IT ADOPTS FOR CALCULATING THE COMPENSATORY AMOUNT ON THE BASIC PRODUCT .
5 . THE COMMISSION MAY NOT ADOPT , WITH REGARD TO PRODUCTS PROCESSED FROM THE BASIC PRODUCT THE PRICE OF WHICH DEPENDS ON THAT OF THE LATTER PRODUCT , A SYSTEM FOR CALCULATING MONETARY COMPENSATORY AMOUNTS WHICH RESULTS IN ESTABLISHING FOR THE VARIOUS PRODUCTS OBTAINED BY PROCESSING A GIVEN QUANTITY OF THE BASIC PRODUCT IN A SPECIFIC MANUFACTURING PROCESS MONETARY COMPENSATORY AMOUNTS THE SUM OF WHICH AMOUNTS TO A FIGURE CLEARLY IN EXCESS OF THAT OF THE MONETARY COMPENSATORY AMOUNT FIXED FOR THAT GIVEN QUANTITY OF THE BASIC PRODUCT .
6 . THE SECOND PARAGRAPH OF ARTICLE 174 OF THE EEC TREATY , WHEREBY THE COURT OF JUSTICE MAY STATE WHICH OF THE EFFECTS OF A REGULATION WHICH IT HAS DECLARED VOID SHALL BE CONSIDERED AS DEFINITIVE , IS APPLICABLE BY ANALOGY , FOR THE SAME REASONS OF LEGAL CERTAINTY AS THOSE WHICH FORM THE BASIS OF THAT PROVISION , TO THE JUDGMENTS WHEREBY THE COURT , IN GIVING A RULING UNDER ARTICLE 177 , DECLARES THAT A REGULATION IS VOID .
Parties
IN CASE 145/79
REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE TRIBUNAL D ' INSTANCE ( DISTRICT COURT ), LILLE , FOR A PRELIMINARY RULING IN THE ACTION PENDING BEFORE THAT COURT BETWEEN
SA ROQUETTE FRERES , LESTREM ,
AND
FRENCH STATE - CUSTOMS ADMINISTRATION
Subject of the case
ON THE INTERPRETATION OF ARTICLE 40 OF THE TREATY AND OF ARTICLES 1 AND 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 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1971 ( I ), P . 257 ),
Grounds
1 BY JUDGMENT OF 29 JUNE 1979 , WHICH WAS RECEIVED AT THE COURT ON 17 SEPTEMBER 1979 , THE TRIBUNAL D ' INSTANCE ( DISTRICT COURT ), LILLE , REFERRED TO THE COURT FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY SEVEN QUESTIONS ON THE INTERPRETATION OF ARTICLE 40 OF THE TREATY AND OF ARTICLES 1 AND 2 OF REGULATION ( EEC ) 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 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1971 ( I ), P . 257 ).
2 PROCEEDINGS WERE INSTITUTED BEFORE THE TRIBUNAL D ' INSTANCE , LILLE , AGAINST THE FRENCH STATE , CUSTOMS ADMINISTRATION , BY ROQUETTE FRERES SA FOR REIMBURSEMENT OF THE SUMS OVERCHARGED BY THE CUSTOMS AUTHORITIES BY WAY OF MONETARY COMPENSATORY AMOUNTS SINCE 25 MARCH 1976 , THE DATE ON WHICH COMMISSION REGULATION ( EEC ) NO 652/76 OF 24 MARCH 1976 CHANGING THE MONETARY COMPENSATORY AMOUNTS FOLLOWING CHANGES IN EXCHANGE RATES FOR THE FRENCH FRANC ( OFFICIAL JOURNAL 1976 L 79 , P . 4 ) CAME INTO FORCE .
3 THE PLAINTIFF IN THE MAIN ACTION , ROQUETTE FRERES SA , CHALLENGED THE METHODS OF CALCULATION EMPLOYED BY THE COMMISSION IN FIXING THE MONETARY COMPENSATORY AMOUNTS APPLICABLE TO PROCESSED PRODUCTS OF THE MAIZE AND WHEAT STARCH INDUSTRIES , AND TO POTATO STARCH , SORBITOL AND ISOGLUCOSE . THOSE METHODS ARE , IT CLAIMS , CONTRARY TO THE RULES LAID DOWN BY THE COUNCIL ON THE METHOD OF CALCULATING THE MONETARY COMPENSATORY AMOUNTS APPLICABLE TO PRODUCTS WHICH DEPEND UPON PRODUCTS IN RESPECT OF WHICH INTERVENTION MEASURES HAVE BEEN LAID DOWN ; THEY ARE IN PARTICULAR IN BREACH OF ARTICLE 2 ( 2 ) OF REGULATION NO 974/71 . FURTHERMORE , THE EFFECT OF THOSE METHODS HAS BEEN TO CREATE DISTORTION IN COMPETITION BETWEEN PRODUCERS IN THE COMMON MARKET .
4 THE DEFENDANT IN THE MAIN ACTION CLAIMS THAT THE FRENCH STATE MERELY APPLIES THE COMMUNITY PROVISIONS WITHOUT BEING ABLE TO APPRAISE THE VALIDITY OF THE METHOD OF CALCULATING THE MONETARY COMPENSATORY AMOUNTS . IT COLLECTS THESE AMOUNTS AND PAYS THEM TO THE EUROPEAN AGRICULTURAL GUIDANCE AND GUARANTEE FUND .
5 THE COURT ORDERED THAT AN EXPERT ' S REPORT BE OBTAINED . IT ACCEPTED THE FINDINGS IN THE EXPERT ' S REPORT IN SO FAR AS THEY CONCERNED THE EXISTENCE AND EXTENT OF THE DISTORTION ALLEGED BY ROQUETTE AS A CONSEQUENCE OF THE METHODS OF CALCULATING THE COMPENSATORY AMOUNTS . IN THOSE CIRCUMSTANCES , THE COURT CONSIDERED IT NECESSARY TO STAY THE PROCEEDINGS UNTIL THE COURT OF JUSTICE HAD DECIDED WHETHER THE DISTORTION THUS ESTABLISHED IS CONTRARY TO ARTICLE 40 OF THE TREATY AND WHETHER IT IS NECESSARY TO MODIFY THE METHOD OF CALCULATING THE MONETARY COMPENSATORY AMOUNTS ALONG THE LINES DESIRED BY ROQUETTE .
PRELIMINARY OBSERVATION
6 THE FIRST SIX QUESTIONS SUBMITTED BY THE COURT ASK WHAT THE CORRECT METHOD IS FOR CALCULATING THE MONETARY COMPENSATORY AMOUNTS APPLICABLE TO MAIZE STARCH , WHEAT STARCH , POTATO STARCH , SORBITOL AND ISOGLUCOSE . IT MUST BE OBSERVED THAT THE COMPENSATORY AMOUNTS IN QUESTION WERE FIXED AND MODIFIED BY COMMISSION REGULATIONS ; THE COMMISSION WAS EMPOWERED TO DO SO BY ARTICLES 3 AND 6 OF REGULATION NO 974/71 . THE SIX QUESTIONS REQUEST THE COURT OF JUSTICE TO GIVE A RULING ON THE METHODS OF CALCULATION WHICH THE COMMISSION EMPLOYED IN DETERMINING THE AMOUNTS FIXED BY IT . THE QUESTIONS THEREFORE INDIRECTLY REQUEST AN APPRAISAL OF THE VALIDITY OF THE PROVISIONS OF THE REGULATIONS WHEREBY THE COMMISSION ESTABLISHED THE COMPENSATORY AMOUNTS APPLICABLE TO THE PRODUCTS IN QUESTION .
7 ALTHOUGH , WITHIN THE FRAMEWORK OF THE DISTRIBUTION OF TASKS BETWEEN THE NATIONAL COURTS AND THE COURT OF JUSTICE FOR THE IMPLEMENTATION OF ARTICLE 177 OF THE TREATY , IT IS FOR THE NATIONAL COURTS TO DECIDE THE RELEVANCE OF THE QUESTIONS WHICH ARE REFERRED TO THE COURT OF JUSTICE , IT IS HOWEVER RESERVED TO THE COURT OF JUSTICE TO EXTRACT FROM ALL THE INFORMATION PROVIDED BY THE NATIONAL COURT THOSE POINTS OF COMMUNITY LAW WHICH , HAVING REGARD TO THE SUBJECT-MATTER OF THE DISPUTE , REQUIRE INTERPRETATION , OR WHOSE VALIDITY REQUIRES APPRAISAL .
GENERAL CONSIDERATIONS
8 THE REPLY TO THE QUESTIONS SUBMITTED MUST BE CONSIDERED IN THE LIGHT OF THE OBJECTIVES WHICH PROMPTED THE INTRODUCTION , BY REGULATION NO 974/71 , OF MONETARY COMPENSATORY AMOUNTS WITHIN THE FRAMEWORK OF THE COMMON AGRICULTURAL POLICY AND OF THE PROVISIONS OF THE TREATY ON THAT POLICY , IN PARTICULAR ARTICLES 39 , 40 AND 43 .
9 MONETARY COMPENSATORY AMOUNTS WERE INTRODUCED BY REGULATION NO 974/71 IN ORDER TO PREVENT , WITHIN THE COMMON ORGANIZATIONS OF THE MARKETS , DISRUPTION OF THE INTERVENTION SYSTEM LAID DOWN BY COMMUNITY RULES AND ABNORMAL MOVEMENTS OF PRICES CAUSED BY FLUCTUATIONS IN THE CURRENCIES OF CERTAIN MEMBER STATES . THE RECITALS OF THE PREAMBLE TO REGULATION NO 974/71 STATE THAT THE COMPENSATORY AMOUNTS TO BE INTRODUCED SHOULD BE LIMITED TO THE AMOUNTS STRICTLY NECESSARY TO COMPENSATE THE INCIDENCE OF THE MONETARY MEASURES ON THE PRICES OF BASIC PRODUCTS COVERED BY INTERVENTION ARRANGEMENTS AND THAT IT IS APPROPRIATE TO APPLY THEM ONLY IN CASES WHERE THIS INCIDENCE WOULD LEAD TO DIFFICULTIES .
10 UNDER ARTICLE 1 ( 2 ) OF REGULATION NO 974/71 , THE CHARGING OR GRANTING OF COMPENSATORY AMOUNTS APPLIES TO PRODUCTS COVERED BY INTERVENTION ARRANGEMENTS UNDER THE COMMON ORGANIZATION OF AGRICULTURAL MARKETS AND TO PRODUCTS WHOSE PRICE DEPENDS ON THE PRICE OF THE PRODUCTS IN THAT FIRST CATEGORY AND WHICH ARE GOVERNED BY THE COMMON ORGANIZATION OF THE MARKET OR ARE THE SUBJECT OF A SPECIFIC ARRANGEMENT UNDER ARTICLE 235 OF THE TREATY . ARTICLE 2 ( 2 ) STATES THAT FOR PRODUCTS OTHER THAN THOSE COVERED BY INTERVENTION ARRANGEMENTS , THE COMPENSATORY AMOUNTS 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 PRODUCT COVERED BY INTERVENTION ARRANGEMENTS ON WHICH THEY DEPEND .
11 THESE PROVISIONS SHOW THAT IN RELATION BOTH TO BASIC PRODUCTS AND TO DEPENDENT PRODUCTS , THE INTRODUCTION OF MONETARY COMPENSATORY AMOUNTS IS INTENDED TO CORRECT THE EFFECTS OF UNSTABLE VARIATIONS IN THE RATES OF EXCHANGE WHICH , WITHIN A SYSTEM OF ORGANIZATION OF THE MARKETS IN AGRICULTURAL PRODUCTS BASED ON COMMON PRICES , ARE CAPABLE OF CAUSING DISTURBANCES IN TRADE AND IN PARTICULAR OF JEOPARDIZING THE SYSTEM OF INTERVENTION LAID DOWN IN RESPECT OF SUCH PRODUCTS . THE INTRODUCTION OF MONETARY COMPENSATORY AMOUNTS IS THUS ESSENTIALLY INTENDED TO MAINTAIN THE SYSTEM OF SINGLE PRICES WITHIN THE COMMON ORGANIZATION OF AGRICULTURAL MARKETS , SINCE THAT SYSTEM OF SINGLE PRICES , HAVING REGARD TO THE OBJECTIVES OF SUCH ORGANIZATIONS , THAT IS , TO MAINTAIN THE STANDARD OF LIVING OF AGRICULTURAL PRODUCERS AND TO STABILIZE THE MARKETS , CONSTITUTES THE FOUNDATION OF THE FREE MOVEMENT OF AGRICULTURAL PRODUCTS WITHIN THE COMMUNITY . ITS OBJECTIVE IS NOT AND CANNOT BE TO PROVIDE ADDITIONAL PROTECTION FOR THE MARKETS IN RESPECT OF THE LEVEL OF AGRICULTURAL PRICES OF ONE PARTICULAR STATE IN RELATION TO THE OTHERS , WHICH WOULD BE INCOMPATIBLE WITH THE UNIFORMITY SOUGHT .
12 WITH REGARD IN PARTICULAR TO DEPENDENT PRODUCTS IT MUST BE OBSERVED THAT , AS THE COURT FOUND IN ITS JUDGMENT OF 12 NOVEMBER 1974 IN CASE 34/74 , ROQUETTE , ( 1974 ) ECR 1217 , ALTHOUGH IN PURSUANCE OF ARTICLE 2 OF REGULATION NO 974/71 MONETARY FLUCTUATIONS SHOULD BE ENTIRELY COMPENSATED FOR BASIC PRODUCTS , THIS DOES NOT APPLY TO DEPENDENT PRODUCTS . IN THE CASE OF THE LATTER PRODUCTS THE WORD ' ' INCIDENCE ' ' IN ARTICLE 2 ( 2 ) MERELY PERMITS THE COMMISSION TO TAKE INTO ACCOUNT , IN FIXING THE MONETARY COMPENSATORY AMOUNTS , THE EFFECT ON THE PRICE OF THE DEPENDENT PRODUCT OF THE MONETARY COMPENSATORY AMOUNTS APPLIED TO THE BASIC PRODUCT .
13 THE COURT ADMITS THAT THE CALCULATION OF THE INCIDENCE ON THE PRICES OF DEPENDENT PRODUCTS OF THE MONETARY COMPENSATORY AMOUNT FIXED FOR A BASIC PRODUCT CAUSES DIFFICULT TECHNICAL AND ECONOMIC PROBLEMS WITH REGARD TO A LARGE NUMBER OF PRODUCTS WHOSE MANUFACTURING PROCESS AND COMPOSITION MAY VARY IN THE VARIOUS REGIONS OF THE COMMUNITY . IT IS FOR THE COMMISSION TO RESOLVE THESE PROBLEMS WHILST MAINTAINING A DEGREE OF CONSISTENCY AND CLARITY IN THE SYSTEM OF MONETARY COMPENSATORY AMOUNTS WHICH IT IS REQUIRED TO ESTABLISH IN THAT SECTOR . FOR THIS PURPOSE IT MUST HAVE A WIDE MARGIN OF DISCRETION IN PARTICULAR WITH REGARD TO THE EXISTENCE OR THE THREAT OF DISTURBANCES IN TRADE , THE NUMBER OF DEPENDENT PRODUCTS TO WHICH A COMPENSATORY AMOUNT MUST BE APPLIED AND THE INCIDENCE ON THE PRICE OF THE DEPENDENT PRODUCT OF THE COMPENSATORY AMOUNT APPLIED TO THE BASIC PRODUCT . THE FIXING OF THE COMPENSATORY AMOUNT ON A PROCESSED PRODUCT CANNOT BE CHALLENGED ON THE SOLE GROUND THAT , FOR A PARTICULAR UNDERTAKING OR GROUP OF PRODUCERS , THE CALCULATION OF THE INCIDENCE OF THE COMPENSATORY AMOUNT APPLICABLE TO THE BASIC PRODUCT IS NOT ENTIRELY APPROPRIATE , AS IT MAY BE ESSENTIAL TO MAKE GENERAL ASSESSMENTS .
14 THE DISCRETION WHICH THE COMMISSION MUST BE RECOGNIZED TO HAVE NEVERTHELESS HAS LIMITS . IF THE RESULT OF THE METHOD OF CALCULATION EMPLOYED IS PERSISTENTLY TO APPLY TO PROCESSED PRODUCTS COMPENSATORY AMOUNTS THE BURDEN OR , AS THE CASE MAY BE , THE BENEFIT OF WHICH CONTINUALLY EXCEEDS THE AMOUNT NECESSARY TO TAKE ACCOUNT OF THE INCIDENCE OF THE COMPENSATORY AMOUNT APPLICABLE TO THE BASIC PRODUCT , THE OBJECTIVE OF THE PROVISIONS ESTABLISHING THESE AMOUNTS MAY NO LONGER BE DEEMED TO BE THE NEUTRALIZATION OF THE EFFECTS OF THE CURRENCY FLUCTUATIONS BETWEEN THE MEMBER STATES . IN THAT CASE THE COMMISSION NO LONGER ACTS WITHIN ITS POWERS UNDER REGULATION NO 974/71 .
15 THE FIRST SIX QUESTIONS SUBMITTED BY THE NATIONAL COURT MUST NOW BE EXAMINED IN THE LIGHT OF THOSE CONSIDERATIONS .
MAIZE STARCH ( FIRST QUESTION )
16 IN ITS FIRST QUESTION THE COURT ASKS WHETHER THE PRODUCTION REFUND , WHICH IS CALCULATED AT THE ' ' GREEN RATE ' ' , MUST BE TAKEN INTO ACCOUNT IN CALCULATING THE MONETARY COMPENSATORY AMOUNTS APPLICABLE TO MAIZE STARCH AND TO PRODUCTS DERIVED FROM IT .
17 THE FILE AND THE EXPLANATIONS PROVIDED BY THE COMMISSION SHOW THAT THE COMPENSATORY AMOUNTS APPLICABLE TO MAIZE STARCH ESTABLISHED BY REGULATION NO 652/76 , WHICH GAVE RISE TO THE MAIN ACTION , AND BY THE SUBSEQUENT AMENDING REGULATIONS , WERE CALCULATED ON THE BASIS OF THE INTERVENTION PRICE OF MAIZE . THE QUESTION SUBMITTED TO THIS COURT ASKS WHETHER THAT METHOD OF CALCULATION IS NOT INCORRECT IN THAT IT FAILS TO TAKE INTO ACCOUNT THE PRODUCTION REFUND , GRANTED UNDER THE COMMUNITY RULES , ON MAIZE USED WITHIN THE COMMUNITY FOR THE MANUFACTURE OF STARCH .
18 IN THE COURSE OF THE PROCEDURE BEFORE THE COURT OF JUSTICE THE COMMISSION EXPLAINED ITS METHOD OF CALCULATING THE COMPENSATORY AMOUNTS APPLICABLE TO MAIZE STARCH . IN ITS OPINION , THERE IS NO REASON TO TAKE THE INTERVENTION PRICE OF MAIZE INTO CONSIDERATION FOR THE PURPOSES OF THAT CALCULATION SINCE STARCH PRODUCERS OBTAIN THEIR SUPPLIES OF MAIZE AT A PRICE HIGHER THAN THE INTERVENTION PRICE WHICH IS APPROXIMATELY THAT OF THE THRESHOLD PRICE . IN VIEW OF THE DIFFICULTIES ENTAILED IN TAKING INTO CONSIDERATION THE ACTUAL SUPPLY PRICE , WHICH DEPENDS ON THE MARKET SITUATION , THE COMMISSION BASED ITS CALCULATION ON A SUPPLY PRICE FIXED AT A STANDARD AMOUNT . ACCORDINGLY , IN CALCULATING THE COMPENSATORY AMOUNTS APPLICABLE TO MAIZE STARCH IT TOOK INTO CONSIDERATION THE THRESHOLD PRICE OF MAIZE AFTER DEDUCTION OF THE PRODUCTION REFUND FOR STARCH . NEVERTHELESS , WHERE THE SUPPLY PRICE THEREBY DETERMINED IS HIGHER THAN THE INTERVENTION PRICE , THE COMMISSION BASED ITSELF ON THE LATTER PRICE INSTEAD OF THE SUPPLY PRICE , ON THE GROUND THAT IT IS REQUIRED TO FIX THE LOWEST POSSIBLE COMPENSATORY AMOUNTS HAVING REGARD TO THE PARTICULAR FEATURES OF THE AGRICULTURAL SECTOR IN QUESTION . IN THIS CASE THERE IS NO ECONOMIC JUSTIFICATION FOR DEDUCTING THE PRODUCTION REFUND FROM THE INTERVENTION PRICE , SINCE THE LATTER IS LOWER THAN THE SUPPLY PRICE INCLUDING THE PRODUCTION REFUND .
19 THE TABLES SUBMITTED TO THE COURT BY THE COMMISSION SHOW THAT SINCE 1975 THE INTERVENTION PRICE OF MAIZE HAS BEEN LOWER THAN THE THRESHOLD PRICE OF MAIZE AFTER DEDUCTION OF THE PRODUCTION REFUND ON STARCH . IT FOLLOWS THAT IN THE COURSE OF THE PERIOD TO WHICH THIS ACTION RELATES THE COMPENSATORY AMOUNT APPLICABLE TO MAIZE STARCH WAS DETERMINED ON THE BASIS OF THE INTERVENTION PRICE OF MAIZE WITHOUT DEDUCTING THE PRODUCTION REFUND .
20 SINCE THE PRINCIPAL OBJECTIVE OF THE INTRODUCTION OF MONETARY COMPENSATORY AMOUNTS IS TO GUARD AGAINST THE RISK OF DISORGANIZATION OF THE INTERVENTION SYSTEM BY CURRENCY FLUCTUATIONS , IT DOES NOT ENTAIL THE NEED TO DETERMINE SUCH AMOUNTS ON THE BASIS OF THE MARKET PRICE OF THE AGRICULTURAL PRODUCT IN QUESTION OR ON THE BASIS OF A STANDARD SUPPLY PRICE . THE COMPENSATORY AMOUNTS APPLICABLE TO THE BASIC PRODUCT , MAIZE , WERE DETERMINED ON THE BASIS OF THE INTERVENTION PRICE OF MAIZE .
21 IF THE COMPENSATORY AMOUNTS APPLICABLE TO THE BASIC PRODUCT ARE BASED ON THE INTERVENTION PRICE IT IS DIFFICULT TO UNDERSTAND HOW THE INCIDENCE ON THE PRICE OF THE PROCESSED PRODUCT OF THE APPLICATION OF THE COMPENSATORY AMOUNT TO THE PRICE OF THE BASIC PRODUCT , WITHIN THE MEANING OF ARTICLE 2 ( 2 ) OF REGULATION NO 974/71 , COULD BE CALCULATED FROM A PRICE OF THE BASIC PRODUCT OTHER THAN THE INTERVENTION PRICE . THE FILE SHOWS THAT THE COMPENSATORY AMOUNTS APPLICABLE TO PRODUCTS PROCESSED FROM MAIZE OTHER THAN STARCH , IN RESPECT OF WHICH NO PRODUCTION REFUND HAS BEEN LAID DOWN , ARE IN FACT CALCULATED FROM THE INTERVENTION PRICE OF MAIZE .
22 IN THUS APPEARS THAT THE SUPPLY PRICE OF MAIZE WAS TAKEN INTO ACCOUNT ONLY TO DETERMINE THE COMPENSATORY AMOUNTS ON A PROCESSED PRODUCT WHICH MAY QUALIFY FOR A PRODUCTION REFUND AND THAT THE RESULT OF TAKING THAT PRICE INTO ACCOUNT WAS THAT SUCH COMPENSATORY AMOUNTS ARE IN FACT ESTABLISHED ON THE BASIS OF THE INTERVENTION PRICE OF MAIZE WITHOUT DEDUCTION OF THE PRODUCTION REFUND .
23 IN ORDER TO JUSTIFY THAT METHOD OF CALCULATION THE COMMISSION HAS CLAIMED IN ITS OBSERVATIONS THAT THE CHOICE OF THE MOST SIGNIFICANT PRICE FOR THE PURPOSE OF CALCULATING THE MONETARY COMPENSATORY AMOUNTS APPLICABLE TO PRODUCTS PROCESSED FROM CEREALS FORMS PART OF A GENERAL ECONOMIC APPRAISAL . IN THIS CONNEXION , IT INDICATED CERTAIN CIRCUMSTANCES WHICH IT CLAIMS FAVOURABLY AFFECT PRODUCERS SITUATED IN COUNTRIES , LIKE FRANCE , WITH DEPRECIATED CURRENCIES , SUCH AS FOR EXAMPLE THE POSSIBILITY OF OBTAINING SUPPLIES OF HOME-PRODUCED MAIZE , THE EXEMPTION PROVIDED FOR IN ARTICLE 2 ( 1 ) ( B ) OF REGULATION NO 974/71 WITH REGARD TO THE CALCULATION OF THE MONETARY COMPENSATORY AMOUNTS APPLICABLE TO MEMBER STATES WITH DEPRECIATED CURRENCIES AND THE FACT THAT THE MONTHLY INCREASES IN THE INTERVENTION PRICE ARE NOT TAKEN INTO ACCOUNT IN CALCULATING THE COMPENSATORY AMOUNTS ON PRODUCTS PROCESSED FROM MAIZE . FOR THESE REASONS IT CLAIMS THAT THE CHOICE OF THE PRICE TO BE TAKEN INTO CONSIDERATION COMES WITHIN THE WIDE DISCRETION WHICH THE COMMISSION ENJOYS IN THIS FIELD .
24 THOSE ARGUMENTS ARE HOWEVER IRRELEVANT . THE DISCRETION CONFERRED UPON THE COMMISSION WITH REGARD TO THE METHOD OF CALCULATING THE COMPENSATORY AMOUNTS APPLICABLE TO PROCESSED PRODUCTS IS NOT INTENDED TO ENABLE THE COMMISSION TO TAKE ACCOUNT OF THE ECONOMIC SITUATION IN A CERTAIN SECTOR OF PRODUCTION BUT TO APPRAISE , WITHIN THE LIMITS LAID DOWN BY REGULATION NO 974/71 , THE INCIDENCE ON THE PRICE OF PROCESSED PRODUCTS OF THE COMPENSATORY AMOUNTS APPLICABLE TO THE BASIC PRODUCTS . BY TAKING INTO CONSIDERATION FACTORS WHICH ARE EXTRANEOUS TO THAT SITUATION AND THEREBY FIXING THE COMPENSATORY AMOUNTS ON MAIZE STARCH ON THE BASIS OF THE INTERVENTION PRICE OF MAIZE WITHOUT DEDUCTING THE PRODUCTION REFUND , WHEN THE COMPENSATORY AMOUNTS ON OTHER PRODUCTS PROCESSED FROM MAIZE IN RESPECT OF WHICH NO PRODUCTION REFUND IS PROVIDED FOR ARE ALSO CALCULATED ON THE BASIS OF THE INTERVENTION PRICE OF MAIZE , THE COMMISSION HAS EXCEEDED THE LIMITS PLACED UPON IT BY REGULATION NO 974/71 .
25 THE REPLY TO THE FIRST QUESTION MUST ACCORDINGLY BE THAT , PURSUANT TO REGULATION NO 974/71 , THE MONETARY COMPENSATORY AMOUNTS APPLICABLE TO MAIZE STARCH MUST BE CALCULATED ON THE BASIS OF THE INTERVENTION PRICE OF MAIZE AFTER DEDUCTION OF THE PRODUCTION REFUND ON MAIZE STARCH .
WHEAT STARCH ( SECOND QUESTION )
26 THE SECOND QUESTION ASKS WHETHER , FOR THE PURPOSE OF CALCULATING THE MONETARY COMPENSATORY AMOUNT APPLICABLE TO WHEAT STARCH , THE PRICE OF THE BASIC PRODUCT , BEFORE DEDUCTION OF THE PRODUCTION REFUND , MUST BE THE SAME AS THAT TAKEN INTO ACCOUNT FOR THE PURPOSE OF CALCULATING THE COMPENSATORY AMOUNT ON WHEAT .
27 THE COMMISSION HAS STATED THAT IT DETERMINED THE METHOD OF CALCULATION APPLICABLE TO WHEAT STARCH SO AS TO TREAT WHEAT STARCH IN THE SAME WAY AS MAIZE STARCH , WHILST TAKING INTO CONSIDERATION THE REFERENCE PRICE OF WHEAT INSTEAD OF THE INTERVENTION PRICE SINCE THE FORMER PRICE PERFORMS THE SAME FUNCTION IN THE CALCULATION OF COMPENSATORY AMOUNTS WITH REGARD TO WHEAT AND ITS SECONDARY PRODUCTS AS THE INTERVENTION PRICE WITH REGARD TO MAIZE AND ITS SECONDARY PRODUCTS . THE FILE SHOWS THAT THE COMPENSATORY AMOUNTS APPLICABLE TO WHEAT ARE CALCULATED ON THE BASIS OF THE REFERENCE PRICE OF WHEAT WHILST THE COMPENSATORY AMOUNTS APPLICABLE TO WHEAT STARCH ARE ESTABLISHED ON THE BASIS OF THE THRESHOLD PRICE OF WHEAT AFTER DEDUCTION OF THE PRODUCTION REFUND .
28 ACCORDING TO THE INFORMATION WHICH THE COMMISSION HAS SUPPLIED TO THE COURT , IT ADOPTED THE THRESHOLD PRICE AFTER DEDUCTION OF THE PRODUCTION REFUND BECAUSE THE LATTER REPRESENTS THE SUPPLY PRICE OF WHEAT FOR STARCH MANUFACTURERS . IT HAS STATED THAT , NEVERTHELESS , UNLIKE THE SITUATION IN THE MAIZE SECTOR , THAT SUPPLY PRICE HAS ALWAYS BEEN LOWER THAN THE REFERENCE PRICE ; ACCORDINGLY IT WAS INVARIABLY TAKEN INTO CONSIDERATION FOR THE CALCULATION OF THE COMPENSATORY AMOUNTS APPLICABLE TO WHEAT STARCH .
29 HAVING REGARD TO THE CONSIDERATIONS RELATING TO MAIZE STARCH AND TO THE CHOICE WHICH THE COMMISSION HAS STATED THAT IT MADE TO GIVE IDENTICAL TREATMENT TO MAIZE STARCH AND WHEAT STARCH , IT IS CLEAR THAT THE COMMISSION HAS EXCEEDED ITS POWERS BY ADOPTING IN RESPECT OF THE COMPENSATORY AMOUNTS APPLICABLE TO WHEAT STARCH A BASIS OF CALCULATION OTHER THAN THE REFERENCE PRICE AFTER DEDUCTION OF THE PRODUCTION REFUND . IT FOLLOWS THAT THE REPLY TO THE SECOND QUESTION MUST BE IN THE AFFIRMATIVE .
ALL PRODUCTS DERIVED FROM THE SAME BASIC PRODUCT ( THIRD QUESTION )
30 THE THIRD QUESTION RAISES THE PROBLEM WHETHER THE SUM OF THE COMPENSATORY AMOUNTS APPLIED TO ALL THE PRODUCTS AND SECONDARY PRODUCTS PROCESSED FROM THE SAME BASIC PRODUCT MAY EXCEED THE COMPENSATORY AMOUNT APPLICABLE TO THE BASIC PRODUCT .
31 THE COURT HAS CONSIDERED THIS QUESTION IN THE JUDGMENTS DELIVERED ON THE SAME DATE AS THIRD JUDGMENT ( 15 OCTOBER 1980 ) IN CASE 4/79 ( PROVIDENCE AGRICOLE DE LA CHAMPAGNE ) AND CASE 109/79 ( MAISERIES DE BEAUCE ).
32 IT FOLLOWS FROM THOSE JUDGMENTS THAT , BY ADOPTING FOR THE CALCULATION OF THE MONETARY COMPENSATORY AMOUNTS ON PRODUCTS PROCESSED FROM THE SAME BASIC PRODUCT , SUCH AS MAIZE OR WHEAT , THE PRICE OF WHICH DEPENDS ON THAT OF MAIZE OR WHEAT , A SYSTEM WHICH RESULTS IN ESTABLISHING FOR THE VARIOUS PRODUCTS OBTAINED BY PROCESSING A GIVEN QUANTITY OF MAIZE OR WHEAT IN A SPECIFIC MANUFACTURING PROCESS MONETARY COMPENSATORY AMOUNTS THE SUM OF WHICH AMOUNTS TO A FIGURE CLEARLY IN EXCESS OF THAT OF THE MONETARY COMPENSATORY AMOUNT FIXED FOR THAT GIVEN QUANTITY OF MAIZE OR OF WHEAT , THE COMMISSION HAS INFRINGED REGULATION NO 974/71 AND ARTICLE 43 ( 3 ) OF THE TREATY .
POTATO STARCH ( FOURTH QUESTION )
33 THE FOURTH QUESTION ASKS WHETHER THE COMPENSATORY AMOUNT APPLIED TO POTATO STARCH MUST BE IDENTICAL TO THAT APPLIED TO MAIZE STARCH .
34 IT SHOULD BE RECALLED THAT REGULATION NO 974/71 MAKES PROVISION FOR COMPENSATORY AMOUNTS ON PRODUCTS COVERED BY INTERVENTION ARRANGEMENTS AND ON PRODUCTS WHOSE PRICE DEPENDS ON THE PRICE OF THE PRODUCTS COVERED BY INTERVENTION ARRANGEMENTS AND WHICH ARE IN ADDITION GOVERNED BY THE COMMON ORGANIZATION OF THE MARKET OR ARE THE SUBJECT OF A SPECIFIC ARRANGEMENT UNDER ARTICLE 235 OF THE TREATY . IT IS COMMON GROUND THAT NO INTERVENTION ARRANGEMENTS HAVE BEEN LAID DOWN WITH REGARD TO POTATOES BUT THAT THE PRICE OF POTATO STARCH DEPENDS ON THAT OF MAIZE , SINCE POTATO STARCH IS IN COMPETITION WITH OR MAY EVEN BE SUBSTITUTED FOR MAIZE STARCH .
35 IN THOSE CIRCUMSTANCES THE INCIDENCE , WITHIN THE MEANING OF ARTICLE 2 ( 2 ) OF REGULATION NO 974/71 , ON POTATO STARCH OF THE APPLICATION OF THE COMPENSATORY AMOUNT TO THE PRICES OF MAIZE CANNOT BE DIFFERENT FROM THE SAME INCIDENCE ON MAIZE STARCH .
36 THE COMMISSION HAS HOWEVER DISPUTED THIS POINT OF VIEW . IT EMPHASIZED THAT , WITH REGARD TO POTATO STARCH , THE SECONDARY PRODUCTS OBTAINED ARE OF NO REAL VALUE AND , CONSEQUENTLY , ARE NOT SUBJECT TO MONETARY COMPENSATORY AMOUNTS , UNLIKE THE SITUATION IN THE MAIZE SECTOR . FURTHERMORE , IT CONSIDERS THAT IT MUST , WITHIN THE FRAMEWORK OF ITS DISCRETION IN ECONOMIC MATTERS , TAKE ACCOUNT OF THE SPECIAL DIFFICULTIES OF THE POTATO STARCH INDUSTRY , WHICH WERE ACKNOWLEDGED BY THE COURT IN ITS JUDGMENT OF 12 JULY 1979 ( CASE 166/78 , ITALIAN REPUBLIC V COUNCIL ( 1979 ) ECR 2575 ).
37 WHILST THE LATTER CONSIDERATIONS MAY BE RELEVANT IN RELATION TO PRODUCTION AIDS , AS THE COURT IN FACT ACKNOWLEDGED IN THAT JUDGMENT , THEY ARE EXTRANEOUS TO THE FACTORS WHICH MUST BE TAKEN INTO ACCOUNT IN FIXING MONETARY COMPENSATORY AMOUNTS . MONETARY COMPENSATORY AMOUNTS ARE NOT INTENDED TO GUARD AGAINST SPECIAL DIFFICULTIES OF A PARTICULAR BRANCH OF THE PROCESSING INDUSTRY BUT TO NEUTRALIZE THE EFFECTS OF CURRENCY FLUCTUATIONS ON THE SYSTEM OF SINGLE PRICES WITHIN THE FRAMEWORK OF THE COMMON ORGANIZATIONS OF THE MARKETS IN AGRICULTURAL PRODUCTS .
38 THE FACT THAT THE SECONDARY PRODUCTS OBTAINED DURING THE MANUFACTURE OF POTATO STARCH ARE NOT SUBJECT TO MONETARY COMPENSATORY AMOUNTS IS IRRELEVANT . SINCE THE PRICE OF POTATO STARCH DEPENDS ON THAT OF MAIZE BECAUSE POTATO STARCH AND MAIZE STARCH ARE IN DIRECT COMPETITION , THE CALCULATION OF THE COMPENSATORY AMOUNTS TO BE APPLIED CANNOT BE SUBJECT TO MANUFACTURING CONDITIONS PECULIAR TO THE POTATO SECTOR . ON THE OTHER HAND THE COMPENSATORY AMOUNT APPLICABLE TO MAIZE STARCH MIGHT BE INFLUENCED BY THE SUM OF THE COMPENSATORY AMOUNTS APPLICABLE TO THE SECONDARY PRODUCTS DERIVED FROM THE SAME QUANTITY OF MAIZE , AS SHOWN BY THE REPLY GIVEN TO THE THIRD QUESTION ; IN THAT CASE THE COMPENSATORY AMOUNT APPLICABLE TO POTATO STARCH SHOULD BE SUBJECT TO THE SAME INFLUENCE .
39 IF , ACCORDINGLY , AS STATED IN THE SIXTH RECITAL OF THE PREAMBLE TO REGULATION NO 974/71 , THE COMPENSATORY AMOUNTS TO BE FIXED SHOULD BE LIMITED TO THE AMOUNTS STRICTLY NECESSARY TO COMPENSATE THE INCIDENCE OF THE MONETARY MEASURES ON THE PRICES OF BASIC PRODUCTS COVERED BY INTERVENTION ARRANGEMENTS , THE REPLY TO THE FOURTH QUESTION MUST BE THAT THE COMPENSATORY AMOUNT APPLICABLE TO POTATO STARCH MAY NOT EXCEED THAT APPLICABLE TO MAIZE STARCH .
SORBITOL ( FIFTH QUESTION )
40 IN ITS FIFTH QUESTION THE NATIONAL COURT ASKS WHETHER SORBITOL CONTAINING MORE THAN 2% MANNITOL , PROCESSED FROM MAIZE , THE PRICE OF WHICH IS RELATED TO THAT OF MAIZE , MUST BE SUBJECT TO A MONETARY COMPENSATORY AMOUNT BASED ON THAT FOR MAIZE .
41 SORBITOL IS A PRODUCT COVERED BY A SPECIFIC ARRANGEMENT UNDER ARTICLE 235 OF THE TREATY . THE TRADE ARRANGEMENTS APPLICABLE TO SORBITOL WERE LAID DOWN IN REGULATION ( EEC ) NO 1059/69 OF THE COUNCIL OF 28 MAY 1969 LAYING DOWN THE TRADE ARRANGEMENTS APPLICABLE TO CERTAIN GOODS RESULTING FROM THE PROCESSING OF AGRICULTRUAL PRODUCTS ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1969 ( I ), P . 240 ) AND BY REGULATION ( EEC ) NO 1060/69 OF THE COUNCIL OF THE SAME DATE FIXING THE QUANTITIES OF BASIC PRODUCTS CONSIDERED TO HAVE BEEN USED IN THE MANUFACTURE OF THE GOODS COVERED BY REGULATION ( EEC ) NO 1059/69 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1969 ( I ), P . 246 ).
42 PURSUANT TO REGULATION NO 1059/69 , SORBITOL IS SUBJECT ON IMPORTATION INTO THE COMMUNITY TO A CHARGE CONSISTING OF A FIXED COMPONENT AND A VARIABLE COMPONENT . THE METHOD OF CALCULATING THE VARIABLE COMPONENT IS DETERMINED BY REGULATION NO 1060/69 , WHICH DRAWS A DISTINCTION FOR THIS PURPOSE BETWEEN SORBITOL CONTAINING 2% OR LESS BY WEIGHT OF MANNITOL , CALCULATED ON THE SORBITOL CONTENT , WHICH IS CONSIDERED TO HAVE BEEN MADE FROM MAIZE , AND SORBITOL CONTAINING MORE THAN 2% MANNITOL , WHICH IS CONSIDERED TO HAVE BEEN MADE FROM SUGAR ( ANNEX TO THE REGULATION , TARIFF SUBHEADING 29.04 C III ). THE COMMISSION BASED ITSELF ON THE SAME DISTINCTION IN ORDER TO CALCULATE THE COMPENSATORY AMOUNTS APPLICABLE TO SORBITOL .
43 ROQUETTE MAINTAINS THAT THE VIEW THAT SORBITOL WITH A HIGH MANNITOL CONTENT IS NORMALLY OBTAINED FROM SUGAR IS MISTAKEN . IT POINTS OUT THAT ITS SORBITOL PRODUCTION , WHICH CONSTITUTES MORE THAN HALF THE COMMUNITY PRODUCTION OF THAT PRODUCT , IS MANUFACTURED EXCLUSIVELY FROM MAIZE , AND THAT 60% OF ITS SORBITOL PRODUCTION HAS A MANNITOL CONTENT OF BETWEEN 3% AND 4% ; FURTHERMORE , IT STATES THAT 90% OF COMMUNITY PRODUCTION OF SORBITOL , MORE THAN HALF OF WHICH HAS A MANNITOL CONTENT OF BETWEEN 3% AND 4% , IS MANUFACTURED FROM MAIZE . THE EXPERT APPOINTED BY THE NATIONAL COURT FOUND THAT THE APPLICATION TO SORBITOL OBTAINED FROM MAIZE OF A COMPENSATORY AMOUNT CALCULATED ON THE PRICE OF SUGAR CREATES ARTIFICIAL DIFFERENCES IN PRICE .
44 THESE FACTS ARE NOT HOWEVER SUCH AS TO AFFECT THE VALIDITY OF THE FIXING OF THE COMPENSATORY AMOUNTS APPLICABLE TO SORBITOL . PURSUANT TO ARTICLE 2 ( 2 ) OF REGULATION NO 974/71 , THE COMMISSION WAS REQUIRED TO TAKE INTO CONSIDERATION THE INCIDENCE ON THE PRICES OF SORBITOL OF THE APPLICATION OF THE COMPENSATORY AMOUNT TO THE PRICE OF THE PRODUCT UPON WHICH THE PRICES OF SORBITOL DEPEND . THE COMMISSION , BY DETERMINING THE LATTER PRODUCT ON THE BASIS OF THE MANNITOL CONTENT OF SORBITOL , ACTED IN ACCORDANCE WITH THE RULES LAID DOWN BY THE COUNCIL WITH REGARD TO THE COMMON ORGANIZATION OF THE MARKET APPLICABLE TO SORBITOL . IN DOING SO IT RAMAINED WITHIN THE LIMITS OF THE POWERS CONFERRED UPON IT BY REGULATION NO 974/71 .
45 THE REPLY TO THE FIFTH QUESTION MUST ACCORDINGLY BE THAT SORBITOL CONTAINING MORE THAN 2% MANNITOL AND PROCESSED FROM MAIZE NEED NOT NECESSARILY BE SUBJECT TO A MONETARY COMPENSATORY AMOUNT BASED ON THAT OF MAIZE .
ISOGLUCOSE ( SIXTH QUESTION )
46 THE SIXTH QUESTION ASKS WHETHER ISOGLUCOSE , PROCESSED FROM MAIZE , THE PRICE OF WHICH IS RELATED TO THAT OF MAIZE , MUST BE SUBJECT TO A MONETARY COMPENSATORY AMOUNT BASED ON THAT FOR MAIZE .
47 THE REPLY TO THAT QUESTION IS IN THE NEGATIVE . ISOGLUCOSE IS COVERED BY A NUMBER OF COMMUNITY MEASURES LAYING DOWN SPECIAL ARRANGEMENTS FOR THAT PRODUCT WHICH ARE HOWEVER SIMILAR TO THE ARRANGEMENTS APPLICABLE TO LIQUID SUGAR WITH WHICH ISOGLUCOSE IS CONSIDERED TO BE IN DIRECT COMPETITION . IN THESE CIRCUMSTANCES THE COMMISSION WAS CORRECT IN CALCULATING THE COMPENSATORY AMOUNTS APPLICABLE TO ISOGLUCOSE ON THE BASIS OF THOSE APPLICABLE TO WHITE SUGAR .
THE VALIDITY OF REGULATION NO 652/76 AND THE REGULATIONS AMENDING THAT REGULATION
48 IT FOLLOWS FROM THE REPLIES GIVEN TO THE FIRST , SECOND , THIRD AND FOURTH QUESTIONS THAT REGULATION NO 652/76 IS INVALID :
- IN SO FAR AS IT FIXES THE COMPENSATORY AMOUNTS APPLICABLE TO MAIZE STARCH ON A BASIS OTHER THAN THAT OF THE INTERVENTION PRICE OF MAIZE AFTER DEDUCTION OF THE PRODUCTION REFUND ON STARCH ;
- IN SO FAR AS IT FIXES THE COMPENSATORY AMOUNTS APPLICABLE TO WHEAT STARCH ON A BASIS OTHER THAN THAT OF THE REFERENCE PRICE OF WHEAT AFTER DEDUCTION OF THE PRODUCTION REFUND ON STARCH ;
- IN SO FAR AS IT FIXES THE COMPENSATORY AMOUNTS APPLICABLE TO ALL THE DIFFERENT PRODUCTS OBTAINED BY THE PROCESSING OF A GIVEN QUANTITY OF THE SAME BASIC PRODUCT , SUCH AS MAIZE OR WHEAT , IN A SPECIFIED MANUFACTURING PROCESS AT A FIGURE CLEARLY HIGHER THAN THE COMPENSATORY AMOUNT FIXED FOR THAT GIVEN QUANTITY OF THE BASIC PRODUCT ; AND
- IN SO FAR AS IT FIXES COMPENSATORY AMOUNTS APPLICABLE TO POTATO STARCH WHICH EXCEED THOSE APPLICABLE TO MAIZE STARCH .
49 THE SAME CONCLUSION MUST ALSO APPLY WITH REGARD TO THE VALIDITY OF THE SUBSEQUENT REGULATIONS OF THE COMMISSION FIXING OR ALTERING THE MONETARY COMPENSATORY AMOUNTS APPLICABLE TO THE PRODUCTS REFERRED TO IN THE FOREGOING PARAGRAPH .
50 SINCE THIS DECLARATION OF INVALIDITY IS MADE WITHIN THE FRAMEWORK OF A PRELIMINARY RULING UNDER ARTICLE 177 OF THE TREATY , IT IS NECESSARY TO SPECIFY ITS CONSEQUENCES .
51 ALTHOUGH THE TREATY DOES NOT EXPRESSLY LAY DOWN THE CONSEQUENCES WHICH FLOW FROM A DECLARATION OF INVALIDITY WITHIN THE FRAMEWORK OF A REFERENCE TO THE COURT FOR A PRELIMINARY RULING , ARTICLES 174 AND 176 CONTAIN CLEAR RULES AS TO THE EFFECTS OF THE ANNULMENT OF A REGULATION WITHIN THE FRAMEWORK OF A DIRECT ACTION . THUS ARTICLE 176 PROVIDES THAT THE INSTITUTION WHOSE ACT HAS BEEN DECLARED VOID SHALL BE REQUIRED TO TAKE THE NECESSARY MEASURES TO COMPLY WITH THE JUDGMENT OF THE COURT OF JUSTICE . IN ITS JUDGMENTS OF 19 OCTOBER 1977 IN JOINED CASES 117/76 AND 16/77 ( ALBERT RUCKDESCHEL & CO . AND HANSA-LAGERHAUS STROH & CO . ( 1977 ) ECR 1753 ) AND IN JOINED CASES 124/76 AND 20/77 ( MOULINS ET HUILERIES DE PONT-A-MOUSSON AND PROVIDENCE AGRICOLE DE LA CHAMPAGNE , ( 1977 ) ECR 1795 ) THE COURT HAS ALREADY REFERRED TO THAT RULE WITHIN THE CONTEXT OF A REFERENCE TO IT FOR A PRELIMINARY RULING .
52 IN THIS CASE IT IS NECESSARY TO APPLY BY ANALOGY THE SECOND PARAGRAPH OF ARTICLE 174 OF THE TREATY , WHEREBY THE COURT OF JUSTICE MAY STATE WHICH OF THE EFFECTS OF THE REGULATION WHICH IT HAS DECLARED VOID SHALL BE CONSIDERED AS DEFINITIVE , FOR THE SAME REASONS OF LEGAL CERTAINTY AS THOSE WHICH FORM THE BASIS OF THAT PROVISION . ON THE ONE HAND THE INVALIDITY OF THE REGULATION IN THIS CASE MIGHT GIVE RISE TO THE RECOVERY OF SUMS PAID BUT NOT OWED BY THE UNDERTAKINGS CONCERNED IN COUNTRIES WITH DEPRECIATED CURRENCIES AND BY THE NATIONAL AUTHORITIES IN QUESTION IN COUNTRIES WITH HARD CURRENCIES WHICH , IN VIEW OF THE LACK OF UNIFORMITY OF THE RELEVANT NATIONAL LEGISLATION , WOULD BE CAPABLE OF CAUSING CONSIDERABLE DIFFERENCES IN TREATMENT , THEREBY CAUSING FURTHER DISTORTION IN COMPETITION . ON THE OTHER HAND , IT IS IMPOSSIBLE TO APPRAISE THE ECONOMIC DISADVANTAGES RESULTING FROM THE INVALIDITY OF THE PROVISIONS OF THE REGULATIONS IN QUESTION WITHOUT MAKING ASSESSMENTS WHICH THE COMMISSION ALONE IS REQUIRED TO MAKE UNDER REGULATION NO 974/71 , HAVING REGARD TO OTHER RELEVANT FACTORS , FOR EXAMPLE THE APPLICATION OF THE ' ' GREEN RATE ' ' TO THE PRODUCTION REFUND .
53 FOR THESE REASONS IT MUST BE HELD THAT THE FACT THAT THE PROVISIONS OF THE REGULATIONS IN QUESTION HAVE BEEN FOUND INVALID DOES NOT ENABLE THE CHARGING OR THE PAYMENT OF MONETARY COMPENSATORY AMOUNTS BY THE NATIONAL AUTHORITIES ON THE BASIS OF THOSE PROVISIONS TO BE CHALLENGED AS REGARDS THE PERIOD PRIOR TO THE DATE OF THIS JUDGMENT .
THE DEFAULT INTEREST ( SEVENTH QUESTION )
54 THE SEVENTH QUESTION IS WORDED AS FOLLOWS :
' ' IF THE COURT REPLIES IN THE AFFIRMATIVE TO ONE OF THE QUESTIONS REFERRED TO IT FOR A PRELIMINARY RULING SET OUT ABOVE , THAT IS TO SAY , IF THE REPLIES GIVEN ARE SUCH AS TO LEAD THE COURT HEARING THE CASE TO ORDER A REIMBURSEMENT , EVEN A PARTIAL ONE , OF THE MONETARY COMPENSATORY AMOUNTS , SHOULD ANY DEFAULT INTEREST DUE , NOT BY VIRTUE OF COMMUNITY LAWS , BUT BY VIRTUE OF NATIONAL LAWS , BE CHARGED TO THE BUDGET OF THE EUROPEAN COMMUNITIES BY DEDUCTION FROM THE SUMS LEVIED BY FRANCE FOR THE ACCOUNT OF THE COMMUNITY?
' '
55 IT FOLLOWS FROM THE CONSIDERATIONS SET OUT ABOVE THAT THIS QUESTION HAS BECOME PURPOSELESS .
Decision on costs
56 THE COSTS INCURRED BY THE GOVERNMENT OF THE FRENCH REPUBLIC AND THE COMMISSION OF THE EUROPEAN COMMUNITIES , 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 , THE DECISION ON COSTS IS 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 , LILLE , BY JUDGMENT OF 29 JUNE 1979 , HEREBY RULES :
1 . REGULATION NO 652/76 OF THE COMMISSION OF 24 MARCH IS INVALID :
- IN SO FAR AS IT FIXES THE COMPENSATORY AMOUNTS APPLICABLE TO MAIZE STARCH ON A BASIS OTHER THAN THAT OF THE INTERVENTION PRICE OF MAIZE AFTER DEDUCTION OF THE PRODUCTION REFUND ON STARCH ;
-IN SO FAR AS IT FIXES THE COMPENSATORY AMOUNTS APPLICABLE TO WHEAT STARCH ON A BASIS OTHER THAN THAT OF THE REFERENCE PRICE OF WHEAT AFTER DEDUCTION OF THE PRODUCTION REFUND ON STARCH ;
-IN SO FAR AS IT FIXES THE COMPENSATORY AMOUNTS APPLICABLE TO ALL THE DIFFERENT PRODUCTS OBTAINED BY THE PROCESSING OF A GIVEN QUANTITY OF THE SAME BASIC PRODUCT , SUCH AS MAIZE OR WHEAT , IN A SPECIFIED MANUFACTURING PROCESS AT A FIGURE APPRECIABLY HIGHER THAN THE COMPENSATORY AMOUNT FIXED FOR THAT GIVEN QUANTITY OF THE BASIC PRODUCT , AND
-IN SO FAR AS IT FIXES COMPENSATORY AMOUNTS APPLICABLE TO POTATO STARCH WHICH EXCEED THOSE APPLICABLE TO MAIZE STARCH .
2.THE FACT THAT THAT REGULATION IS INVALID RENDERS INVALID THE PROVISIONS OF THE SUBSEQUENT REGULATIONS OF THE COMMISSION THE PURPOSE OF WHICH IS TO ALTER THE MONETARY COMPENSATORY AMOUNTS APPLICABLE TO THE PRODUCTS REFERRED TO IN THE FOREGOING PARAGRAPH .
3.THE FACT THAT THE ABOVE-MENTIONED PROVISIONS ARE INVALID DOES NOT ENABLE THE CHARGING OR PAYMENT OF MONETARY COMPENSATORY AMOUNTS BY THE NATIONAL AUTHORITIES ON THE BASIS OF THOSE PROVISIONS TO BE CHALLENGED AS REGARDS THE PERIOD PRIOR TO THE DATE OF THIS JUDGMENT .
4.IN FIXING THE MONETARY COMPENSATORY AMOUNTS APPLICABLE TO SORBITOL CONTAINING MORE THAN 2% OF MANNITOL AND MANUFACTURED FROM MAIZE THE COMMISSION WAS NOT REQUIRED TO FIX FOR THAT PRODUCT A MONETARY COMPENSATORY AMOUNT BASED ON THAT APPLICABLE TO MAIZE .
5.IT IS NOT NECESSARY THAT ISOGLUCOSE MANUFACTURED FROM MAIZE SHOULD BE SUBJECT TO A MONETARY COMPENSATORY AMOUNT BASED ON THAT APPLICABLE TO MAIZE .
Full & Egal Universal Law Academy