Important legal notice
Opinion of Mr Advocate General Mischo delivered on 3 May 1990. - Belgian State v Philipp Brothers SA. - Reference for a preliminary ruling: Cour d'appel de Paris - France. - Agriculture - Export refunds paid in advance - Erroneous release of the security - Failure to comply with the periods prescribed for the submission of documents - Grant of an extension of time - Loss of entitlement to refunds - Consequences - Proportionality. - Case C-155/89.
European Court reports 1990 Page I-03265
Opinion of the Advocate-General
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Mr President,
Members of the Court,
1 . Article 25(1 ) of Commission Regulation ( EEC ) No 2730/79 of 29 November 1979 laying down common detailed rules for the application of the system of export refunds on agricultural products ( Official Journal 1979, L 317, p . 1 ) provides that "Member States may advance to the exporter all or part of the amount of the refund as soon as customs export formalities are completed, on condition that he provides security to guarantee repayment of the amount advanced plus 15 %".
2 . On 18 March 1981, Philipp Brothers SA, a commercial firm specialized in international trade in raw materials and agricultural produce, received from the Belgian intervention agency, the Office central des contingents et des licences ( the "OCCL "), advance payment of refunds corresponding to two consignments of common wheat, one exported to Finland, and the other to Norway, in respect of which it had obtained export licences dated 23 and 28 January 1981 respectively . The export operations seem to have taken place on 26 and 29 January 1981 . By way of security for the sums advanced, Philipp Brothers had provided two guarantees .
3 . On 24 April 1981, the OCCL released the security provided for the exports to Norway . The security provided for the exports to Finland was released on 3 February 1982 . The OCCL maintains that the securities were released because of an error regarding their nature . The OCCL had been under the impression that these were comprehensive securities provided in respect of several operations carried out by the same exporter, and not specific securities in respect of a particular operation . The two securities were therefore cancelled not following verification that the documents relating to the exports in question were in order but on the basis of the fact that the outstanding balance of the securities provided by Philipp Brothers was sufficient to cover the two operations in question .
4 . In any event, since this is a case in which the rate of refund varies according to destination, as referred to in Article 20 of Regulation No 2730/79, it was for Philipp Brothers to demonstrate that the customs formalities governing the entry of the wheat for home use had been accomplished in Finland and Norway .
5 . Proof should have been furnished by the production of the documents listed in Article 20(3 ) (" the customs documents ") or possibly Article 20(4 ) (" the substitute documents ") and the transport document referred to in Article 20(5 ). According to Article 31(1 ) those documents should, except in cases of force majeure, be submitted "within six months following the date on which customs export formalities were completed" otherwise "entitlement to payment of the refund shall be lost ". However, according to Article 31(2 ), an extension of time may be granted, but only for the production of the customs documents or the substitute documents, on condition that the exporter has acted with all due diligence to obtain them within the prescribed periods .
6 . On 10 August 1981 the OCCL asked Philipp Brothers to produce the documents in question . According to the OCCL, that request remained unanswered . On 27 August 1982, therefore, the OCCL demanded repayment of the sums paid in advance, plus 15 %. Acting through its agent, S . G . S . Van Bree, Philipp Brothers then sent to the OCCL :
( i ) on 17 September 1982, the customs documents relating to the two export operations, only one of which, that relating to the consignment for Norway, was forwarded in the form of a certified true copy, as required by Article 20(3 ) of Regulation No 2730/79, whereas the other was forwarded in the form of a mere copy;
( ii ) on 24 December 1982, a copy of the transport documents, specifying that the original documents had been despatched on 19 August 1981; the OCCL maintains that it never received the originals, which are available in the form of copies, but in respect of which no provision is made for an extension of time ( I would also point out that it seems in any event to be undisputed that on 19 August 1981 only the transport documents were sent and not the customs documents or the substitute documents ).
7 . Those are the legal and factual circumstances in which the cour d' appel, Paris, was moved to refer to the Court a series of questions for a preliminary ruling concerning, in substance, the consequences of the erroneous release of a security provided in accordance with Article 25 of Regulation No 2730/79 ( first and second questions ), the conditions for the grant of an extension of time as provided for in Article 31 ( third and fourth questions ) and the applicability of that provision to the transport documents ( fifth and sixth questions ), and the validity of Articles 25 and 31 in the light of the principle of proportionality inasmuch as they require an exporter to repay a refund received in advance where the requisite proof has not been submitted within the prescribed periods, even though exportation has actually taken place ( seventh question ).
8 . For the exact wording of the questions and details of the written observations submitted to the Court, which I shall incorporate in my Opinion only in so far as is necessary for the reasoning, I would refer to the Report for the Hearing . In order to facilitate discussion of the issues and to avoid repetition, however, I shall begin with some general remarks concerning the nature of the security provided for in Article 25 and the obligations whose performance it is meant to ensure .
9 . It should be noted in the first place that, apart from the security under consideration in this case, exporters must provide a further deposit which is connected with the issue of an export licence . Its aim is to guarantee
"that ... exportation will be effected during the period of validity of the licence"
and it
"shall be forfeited in whole or in part if the transaction is not effected, or is only partially effected, within that period ". ( 1 )
10 . That system was established because
"the competent authorities must be in a position constantly to follow trade movements in order to assess market trends and to apply the measures laid down in this regulation as necessary ". ( 2 )
11 . But what is the purpose of the security at issue in this case? In that regard it must be remembered that, normally, refunds are paid only after proof has been furnished that the product has left the geographical territory of the Community ( Article 9 of Regulation No 2730/79 ) or, in the case of a variable refund, only after proof has been furnished that the product has been imported into a non-member country ( Article 20 ). In those circumstances an exporter who fails to comply with the time-limit for submitting the documents does not receive a refund . It should be noted that Article 31 forms part of Title 4 of Regulation No 2730/79, which is entitled "Procedure for payment of the refund" and applies not only where refunds have been paid in advance but in all cases in which application for payment is made .
12 . It is only where a Member State avails itself of the possibility of advance payment offered by Article 25 that the refund may be paid in advance, that is to say, before the product has left the geographical territory of the Community or has been imported into a non-member country . However, even in that case, entitlement to the refund arises once proof is furnished, in the prescribed form and within the prescribed periods, that exportation has in fact taken place . ( 3 )
13 . In those circumstances, it is in order to guarantee "repayment of the amount advanced if it should later be found that the refund ought not to be paid" ( see the 19th recital in the preamble to Regulation No 2730/79 ) that, in accordance with Article 25, security is to be provided by an exporter wishing to qualify for the refund as soon as customs export formalities are completed . Accordingly, that security is not intended in any way to guarantee exportation itself . ( Hence the application for an advance reflects at most, on the part of the trader, a desire or an intention to export .) As is clear from the Court' s judgment of 18 November 1987 in Case 137/85 Maizena [1987] ECR 4587, that distinction is far from artificial and the concurrent provision of two securities, in connection with a single export operation, one of which is intended to ensure that the undertaking to export is honoured and the other to ensure repayment of the export refund paid in advance, is quite legitimate ( see, in particular, paragraphs 22 and 23 of the judgment ).
14 . The wording of Article 25(2 ) and ( 3 ) confirms, moreover, that forfeiture of the security is not the penalty for non-compliance with a hypothetical obligation to export . It is only "if the amount is not repaid after being requested" ( paragraph 3 ) that the security provided is forfeited "in proportion to the quantities in respect of which the proof required ... to qualify for the refund is not furnished within the period stipulated in Article 31" ( paragraph 2 ). Loss of the security therefore "penalizes" non-compliance with the obligation to repay the advance which is borne by an exporter who has not fulfilled the conditions laid down in order to "qualify for the refund ".
15 . That finding is not invalidated by the fact that the amount of the security to be provided is higher than that of the refund advanced . The Court has already held that an increase similar to that of 15% provided for by Article 25(1 ) of Regulation No 2370/79 is designed solely to prevent the exporter concerned from obtaining undue benefit in view of the fact that "under the arrangements for advanced payments traders would obtain undue interest-free credit if it subsequently emerged that the refund should not have been granted ". ( 4 ) The same justification is expressly given, moreover, in the 21st recital in the preamble to Regulation No 2730/79 .
16 . As the rest of my Opinion will show, the foregoing considerations are destined to exert a powerful influence on the answers to be given, in particular to the question relating to the consequences of the release of the security and to that relating to loss of the security where the proof required has not been furnished within the prescribed periods .
1 . The effects of the release of the security ( first and second questions )
17 . It can be argued a contrario from the finding that the security provided is not intended to guarantee exportation that its release cannot be interpreted as evidence that exportation has actually taken place . Moreover, in the same way that entitlement to the refund only arises once proof of exportation has been furnished in the prescribed form and within the prescribed periods, release of the security cannot discharge the exporter from the obligation to furnish such proof if he wishes to acquire entitlement to the refund once and for all .
18 . Since the security guarantees reimbursement of the refund paid in advance if it subsequently becomes apparent that the exporter does not fulfil the conditions of eligibility for the refund, release of the security can only have the effect of depriving the agency which advanced the refund of the guarantee of being reimbursed in a situation of that kind .
19 . That is confirmed by the Court' s judgment of 5 February 1987 in Case 288/85 Plange Kraftfutterwerke [1987] ECR 611 . In that judgment the Court expressly stated, in connection with rules similar to those at issue in this case, that "the obligation to repay the refund is not affected by the fact that the competent authorities have already released the deposit ..." ( paragraph 10 ). After pointing out that "the obligation to repay the refund arises when certain evidence is not furnished" and that "the grant of the refund constitutes an advantage for the trader which is justified if certain conditions ... are fulfilled", the Court added that, if those conditions are not fulfilled, "the refund is not due to the exporter and it must be repaid if it has already been received, for example under arrangements for advance payment" ( paragraph 11 ). If the exporter can escape the obligation to repay the refund only if he succeeds, even after the release of the security, in fulfilling the conditions laid down and furnishing the proof required in order to qualify for it, such release cannot have had "the effect of discharging [the] exporter from all or part of his obligations, particularly as regards the form of and the time-limit for submitting the proof required in order to qualify for the refund" ( see the wording of the first question ).
20 . Furthermore, it follows from the Court' s judgment of 5 December 1985 in Case 124/83 Corman [1985] ECR 3777, and in particular from the answer given to the sixth question therein, that the exporter' s obligation to repay the refund, which continues to exist even after the security has been released, has as its corollary an obligation on the part of the Member State which wrongly released the security to recover the sums unduly paid ( see paragraphs 34 to 36 of the judgment ). That obligation is expressly laid down in Article 8(1 ) of Regulation ( EEC ) No 729/70 of the Council of 21 April 1970 on the financing of the common agricultural policy ( Official Journal, English Special Edition 1970 ( I ), p . 218 ), according to which "the Member States in accordance with national provisions laid down by law, regulation or administrative action shall take the measures necessary to ... recover sums lost as a result of irregularities or negligence ". Moreover, the Court pointed out in the same judgment that, in the event of release of the security, an action against the successful tenderer for failure to fulfil his obligations is not barred even by the principle of legal certainty ( see paragraphs 43 and 44 of the judgment ).
21 . Finally, with regard to the argument that it was legitimate for the exporter to assume that everything was in order because the administration had released the securities or that, in the light of that consideration, the administration did not show any flexibility towards him inasmuch as he had failed to comply with the prescribed period, I would recall that the Court has traditionally been extremely strict in its attitude to traders . In that connection I would refer to the judgment of 13 November 1984 in Joined Cases 98/83 and 230/83 Van Gend and Loos v Commission [1984] ECR 3763, paragraph 16, in which the Court stated that :
"In this case, since the applicants are competent professionals, the fact of having been furnished with invalid certificates of origin cannot be regarded as an unforeseeable and inevitable circumstance which occurred in spite of the exercise of all due care ."
There, invalid certificates of origin had been issued by the customs authorities of the countries specified thereon .
22 . If that is the degree of strictness which must be shown towards trading circles, then Philipp Brothers should have been aware of the wording of the regulation and known that it is ex hypothesi for an exporter to furnish, in the prescribed form and within the prescribed periods, proof of entry of the goods for home use in the importing country .
23 . By way of conclusion, I propose that the Court answer the first two questions as follows :
"The release of the security provided for in Article 25 of Commission Regulation No 2730/79 does not have the effect of discharging the exporter from all or part of his obligations, particularly as regards the form of and the time-limit for submitting the proof required in order to qualify for the refund . If the conditions of eligibility for the refund are not fulfilled, the obligation on the part of the exporter to reimburse the amount of the refund paid, plus a possible increase, and the obligation on the part of the Member State to recover that amount, are not affected by the fact that the security has been released ."
2 . The conditions for the grant of an extension of time ( third and fourth questions )
24 . Article 31(1 ) of Regulation No 2730/79 provides that "except in cases of force majeure, entitlement to payment of the refund shall be lost unless the relevant documents are submitted within six months following the date on which customs export formalities were completed ". As the Commission has pointed out, that six-month period was extended to 12 months by Regulation ( EEC ) No 1663/81 of 23 June 1981 ( 5 ) with regard to all operations, including those at issue in this case, in respect of which the six-month period had not yet expired on 1 July 1981, the date of the entry into force of the amending regulation .
25 . According to the 23rd recital in the preamble to Regulation No 2730/79, that period was introduced "in the interests of sound administration ". In its judgment of 22 July 1986 in Case 266/84 Denkavit France [1986] ECR 149, the Court considered, in a virtually identical context, that having regard to that aim, namely the settlement of administrative matters without undue delay, "the setting of a mandatory time-limit for the submission of applications is a necessary measure" ( paragraph 20 ). It went on to add that "the barring of claims on the ground that the requisite documents have been submitted out of time is ..., as a general rule, the normal consequence of the expiry of any prescribed period the observance of which is mandatory ..." ( paragraph 21 ). Such a mandatory time-limit would cease to have effect of barring claims if it were permissible for a request for an extension of time to be made after its expiry .
26 . Admittedly, a textual argument against that conclusion could be derived from the fact that, according to the French version, Article 31(2 ) applies where the documents required "n' ont pas pu être produits dans les délais prescrits" ( past tense ) and not "ne peuvent pas être produits" ( present tense ). That might suggest that this provision also applies to cases in which the time-limit has already expired . However, the second subparagraph of Article 33(5 ) of Commission Regulation ( EEC ) No 3183/80 of 3 December 1980 laying down common detailed rules for the application of the system of import and export licences and advance fixing certificates for agricultural products ( Official Journal 1980, L 338, p . 1 ) contains the following passage :
"However, where the documents required under Article 20 of Regulation ( EEC ) No 2730/79 cannot be submitted within the prescribed period although the exporter has acted with all due diligence to obtain them within such a period, he may be granted an extension of time for the submission of these documents ."
27 . Moreover, Article 47(5 ) of Regulation ( EEC ) No 3665/87 of 27 November 1987 ( Official Journal 1987, L 351, p . 1 ), which replaced Regulation No 2730/79, whilst again using the words "n' ont pas pu être produits" ( past tense ), expressly provides that
"... requests for extension of time referred to in paragraph 4 must be submitted within the period referred to in paragraph 2",
namely the 12 months following the date on which the export declaration was accepted . That lends support to the view that this was also the meaning of the former Article 31(2 ).
28 . I consider, therefore, that the answer to the third question must be in the affirmative, to the effect that any grant of an extension of time, as provided for in Article 31(2 ) of Regulation No 2730/79, must be requested before the expiry of the time-limit provided for in Article 31(1 ) if entitlement to the refund is not to be lost .
29 . In my view, that conclusion cannot be invalidated by a reference to the Kampffmeyer and Pfuetzenreuter judgments, cited by Philipp Brothers . In the first of those cases, ( 6 ) the legislative measure at issue expressly provided that "such extension ( of the period of validity of the import or export licence or of the advance fixing certificate ) may be granted after the expiry of the period of validity of the licence" or certificate . In its judgment, the Court extended that possibility "in the absence of any provision in the regulation" to requests for cancellation of the licence or certificate . In this case the situation is quite different : Article 31 expressly provides that the period prescribed is one which has the effect of barring claims submitted out of time, in other words, any request for an extension must be submitted before its expiry .
30 . That also distinguishes this case from Pfuetzenreuter ( 7 ), in which the legislative measure at issue again did not prescribe a time-limit for the submission of a request for an extension of the period in which the obligation to import or export had to be performed . Furthermore, that case was concerned with a request for consideration of circumstances constituting force majeure which, under Regulation No 2730/79, automatically relieve the exporter of the need to comply with the prescribed periods and therefore enable him to avoid losing entitlement to the refund altogether .
31 . In this case as in Denkavit France, non-compliance with the time-limit remains a possibility, in accordance with Article 31(1 ), in the event of force majeure . Force majeure therefore constitutes an automatic exception to the barring of claims provided for in paragraph 1, with the result that in those circumstances paragraph 2 is inapplicable and any request for an extension of time in accordance with that paragraph must be considered admissible even if it is made out of time . That consideration, as well as the fact that compliance with the normal time-limits is already facilitated by the possibility offered to an exporter by Article 20(4 ) of submitting a series of substitute documents where the customs documents referred to in paragraph 3 cannot be produced owing to circumstances beyond the exporter' s control, are, in my view, sufficient to mitigate the strictness of both the time-limit and its mandatory character, and I therefore consider it unnecessary for provision to be made, as the Belgian Government suggests in the alternative, for the possibility of requesting an extension of time after the expiry of the normal time-limits if it was impossible for the exporter to submit that request within the prescribed period on account of force majeure .
32 . In the light of the foregoing considerations, I propose that the Court answer the third question in the affirmative :
"The grant of an extension of time, as provided for in Article 31(2 ) of Regulation No 2730/79, must be requested before the expiry of the normal time-limit provided for in Article 31(1 ) if entitlement to the refund is not to be lost ."
33 . So far as the fourth question is concerned, I consider it sufficient to state, in keeping with the view expressed by all the parties which have submitted written observations, that as is clear from the wording of Article 31(2 ) the grant of an extension of time is not conditional on the existence of a case of force majeure which has prevented the requisite customs documents or substitute documents from being submitted within the prescribed periods . It is sufficient if "the exporter has acted with all due diligence to obtain them within such periods ". The answer to the fourth question must therefore be as follows :
"Article 31(2 ) of Regulation No 2730/79 does not make the grant of an extension of time for the submission of the requisite documents subject to the existence of force majeure, but conditional on the exporter having acted with all due diligence to obtain them within the prescribed period ."
3 . The grant of an extension of time for the submission of the transport documents ( fifth and sixth questions )
34 . As Article 31(2 ) expressly limits the possibility of granting an extension of time for the submission of the relevant documents to the customs documents and the substitute documents, it is difficult, in my view, to apply that provision to the transport documents by analogy . Is that provision therefore to be regarded as invalid?
35 . On that point, I fully agree with the views expressed by the Belgian State and the Commission, namely that the distinction made by Article 31(2 ) between the customs documents and the substitute documents, on the one hand, and the transport documents, on the other, is justified on objective grounds which are wholly valid and relate to the consideration that the first-mentioned documents, which frequently call for the intervention of the authorities of non-member countries, may be more difficult and slower to assemble than the transport documents, which are retained by the exporter himself in the case of a cif sale or which he can more easily obtain from the purchaser in the case of a fob sale .
36 . In my view, the two situations envisaged by Philipp Brothers to demonstrate that it would be absurd to adhere to a literal interpretation of Article 31(2 ) are not persuasive and are based, moreover, on contradictory arguments . On the one hand, to argue that in a situation in which only the transport documents are missing it is contrary to the principle of proportionality to decide that the security is forfeit clearly amounts to calling in question the need to produce the transport documents and, consequently, the fact that Article 20 of Regulation No 2730/79 provides for the submission of the customs documents or substitute documents and of the transport document . That argument therefore disregards the very premiss on which Philipp Brothers based its reasoning, namely that release of the security is conditional on the submission of all the relevant documents for payment of the refund ( see p . 35 of Philipp Brothers' written observations ). On the other hand, Philipp Brothers maintains that the grant of an extension of time for the submission of the customs documents or the substitute documents should automatically be extended to the transport documents precisely because release of the security is subject to submission of all the relevant documents and it would therefore serve no purpose not to provide for an extension of time for the submission of the transport documents .
37 . Accordingly, there can be no question of discrimination or breach of the principle of proportionality particularly since, even as regards the transport documents, the exception in the case of force majeure provided for in Article 31(1 ) may come into play and the grant of an extension of time for the submission of the other documents, in accordance with Article 31(2 ), is far from automatic and is conditional on the exporter having acted with all due diligence to obtain them, a requirement whose fulfilment, in the case of the transport documents which are more easily obtainable, should in any event be assessed according to stricter criteria .
38 . If, therefore, Article 31(2 ) in its initial version is neither discriminatory nor disproportionate, the fact that Article 1(14 ) of Regulation ( EEC ) No 568/85 ( 8 ) and Article 47(4 ) of Regulation No 3665/87, ( 9 ) which replaced Regulation No 2730/79, provide for the possibility of granting an extension of time also for the submission of the transport documents cannot be interpreted as a posteriori proof to the contrary . In particular, the arguments put forward by the Commission to justify that amendment, namely the need for the documents to be properly processed, however sound and convincing they may be, show at most that the previous legislation may have complicated the work of the national authorities but not that the reasons which had led the Commission to treat the transport documents differently were unlawful and incapable of justifying the requirement of greater strictness with regard to the submission of the transport documents by comparison with the other documents .
39 . I therefore propose that the Court answer the fifth and sixth questions as follows :
"Article 31(2 ) of Regulation No 2730/79 precludes the grant of an extension of time for the submission of the transport document referred to in Article 20(5 ). However, that cannot affect the validity of Article 31(2 )."
4 . The validity of Articles 25 and 31 of Regulation No 2730/79 in the light of the principle of proportionality ( seventh question )
40 . In this question, the national court seeks in substance to ascertain whether the obligation to reimburse the refund paid in advance plus 15%, or, failing reimbursement, the loss of the security, where the proof required by Article 25(2 ) has not been produced within the periods prescribed by Article 31, even though the export operation has actually been carried out, is contrary to the principle of proportionality .
41 . In that regard, it must be borne in mind in the first place that, for the principle of proportionality to come into play in the event of non-compliance with the time-limit, it is not sufficient to state that exportation has taken place but it must be possible to prove that such is the case with the aid of the documents required for the purpose . The opposite solution would be tantamount to calling in question the very obligation to submit the requisite proof . That is precisely the attitude taken by Philipp Brothers, which states, in its proposed answer to the first two questions, that "where it is established that the agricultural products have actually been exported and entered for home use in the non-member countries concerned" ( established how and by whom ?) "release of the security" ( even as the result of an error ) "has the effect of discharging an exporter from his obligation to submit the documents relating to payment of the refund in the form and within the time-limit prescribed by Regulation No 2730/79 ". In other words, once the administration no longer has a direct hold on the trader, through the security provided by him, the trader can prove that the exportation has taken place in the form and within the time-limit selected by him . It follows, moreover, from the documents before the Court that, so far as the exports intended for Finland are concerned, the requisite proof has never been furnished by Philipp Brothers .
42 . Let us return, however, to the question of non-compliance with the time-limit . It follows from the order for reference that the doubts expressed by the national court with regard to the legality of the provision at issue arose from the consideration that "the fundamental obligation to be guaranteed by the provision of security, in the event of advance payment of a refund, is the actual exportation of the agricultural products in question and their entry for home use in the country of destination ". Philipp Brothers also relies on the distinction between the primary obligation, namely to export the goods, and the secondary obligation, namely to submit the requisite proof within the prescribed periods, in support of the view that, in those circumstances, according to the case-law of the Court, Community legislation "cannot, without breaching the principle of proportionality, penalize failure to comply with the secondary obligation as severely as failure to comply with the primary obligation ". ( 10 )
43 . I do not believe, however, that those decisions are applicable in connection with the legislation at issue in these proceedings .
44 . The premiss underlying the reasoning of Philipp Brothers, namely that it is clear from the wording of Article 25(2 ) of Regulation No 2730/79 that the aim of the provision is to penalize failure to fulfil two distinct obligations ( see p . 13 of its written observations ) - hence the reference to the aforesaid case-law of the Court - is unsound in my view . Article 25(2 ) does not distinguish between the obligation to export and the obligation to submit the documents establishing that exportation took place within the prescribed periods . According to that provision, and the other provisions of Regulation No 2730/79 ( see, in particular, Articles 9, 10, 11 and 20 ), exportation or entry for home use in a non-member country must be established with the aid of the documents required . That also applies in the case of the second indent of Article 25(2 ) inasmuch as, in order to come within its terms, the exporter must of course furnish proof within the prescribed periods that the product has been delivered to a destination other than that for which the advance was calculated . It is on the basis of such proof that the amount unduly paid can be ascertained and thus repaid .
45 . Therefore, it is only reasonable that, in the example given by Philipp Brothers, an exporter who exports only one-half of the products for which an advance has been granted and furnishes proof of partial performance of his obligation is required to repay one-half of the advance obtained, plus 15%, whereas an exporter who has exported all the quantities for which the advance was granted, but furnishes proof thereof only after the expiry of the time-limit referred to in Article 31, is required to repay the total amount of the advance plus 15 %. The first exporter, unlike the second, has in fact furnished within the prescribed periods the proof required in order to be able to retain one-half of the refund paid in advance . Hence the system already contains an element of proportionality since the refund is to be repaid only in proportion to the quantities in respect of which proof cannot be furnished .
46 . Finally, as I stated at the beginning of this Opinion, the security provided in accordance with Article 25(1 ) is not in any event intended to ensure that the undertaking to export is in fact honoured . That is the object of the distinct security required by Regulation No 2727/75 on the common organization of the markets in cereals . I would remind the Court "that the grant of the refund constitutes an advantage for the trader which is justified if certain conditions concerning the characteristics of the product exported and the method of exportation are fulfilled" and that "when ... that has not been the case, the refund is not due to the exporter and it must be repaid if it has already been received, for example under arrangements for advance payment" ( 11 ). Hence it is not the grant of an advance on the refund which requires the trader to export the goods; proof of exportation constitutes merely the condition for the trader to be allowed to keep the refund once and for all . Hence, if exportation does not take place or no proof thereof is furnished, no penalty is imposed on the trader who is merely required to repay the advantage received in advance, plus 15% by way of compensation for the undue benefit of the credit obtained free of charge in the form of an advance .
47 . It follows, moreover, from the regulations on the common organization of the markets in various agricultural products, and in particular from Article 16 of Regulation ( EEC ) No 2727/75 on the common organization of the market in cereals, that the refund is granted "up to the extent necessary to enable the products ... to be exported ". With regard to advances, Regulation No 2730/79 states, in the 19th recital of the preamble thereto, that they are intended simply to "enable exporters to finance their transactions more easily ".
48 . All the foregoing considerations distinguish this case from the Buitoni, Man ( Sugar ) and Maas cases referred to by Philipp Brothers and align it, contrary to what Philipp Brothers would have us believe, with Denkavit France .
49 . In the Buitoni case ( 12 ) the system of securities at issue was "intended to guarantee that the obligation to import or export, which has been voluntarily undertaken, will be fulfilled during the period of validity of the licence issued for that purpose ". The loss of the security therefore constituted a genuine penalty for non-compliance either with the obligation to import or export, or with the obligation to furnish within the prescribed periods proof of performance of the first obligation . None of the trader' s financial advantages, which could simply have been recovered, was therefore at stake and it seemed excessive to penalize non-compliance with the time-limit more severely than non-compliance with the obligation to import or export "which the security itself [was] intended to guarantee" and which was sanctioned by an essentially proportionate penalty .
50 . The situation which arose in the Man ( Sugar ) case ( 13 ) was entirely comparable . There, a trader had submitted seven tenders under a standing invitation to tender in order to determine the refunds on exports of sugar to non-member countries, five of which had been accepted . Man Sugar was at that point required to apply for export licences within a given period . The competent authority received the applications only after a delay of four hours . The security provided was intended to guarantee both the obligation to export the quantities of sugar in respect of which tenders had been accepted and the obligation to apply for an export licence within a short period . It is only after establishing that the system of securities
"is intended above all to ensure that the undertaking, voluntarily entered into by the trader, to export the quantities of sugar in respect of which tenders have been accepted is fulfilled" ( paragraph 21 )
that the Court held as contrary to the principle of proportionality
"the automatic forfeiture of the entire security, in the event of an infringement significantly less serious than the failure to fulfil the primary obligation, which the security itself is intended to guarantee" ( paragraph 29 ).
51 . The Atalanta case ( 14 ) ( referred to by the Commission ) was concerned with a provision which expressly denied a trader the benefit of storage aid only if the primary obligations assumed by him were not fulfilled in their entirety .
52 . Finally, the situation in Maas was so specific and so different from the present case that the judgment of the Court ( 15 ) cannot serve as a precedent applicable to this case as such . Moreover, there the Court did not rule on the "proportionality" of the loss of the security in the event of non-compliance with the period in question, namely the period within which the goods should have been shipped, but considered "that, in the case of goods carried by sea, that obligation [to ship the goods within a specified period] is not infringed where the goods are shipped and the vessel puts out to sea a few days behind schedule" ( paragraph 17 ). In the absence of such an infringement, therefore, the question of the loss of the security did not arise .
53 . This case, on the other hand, bears a strong resemblance in some respects to Denkavit France, even though in its judgment of 22 January 1986 ( 16 ) the Court ruled only on the compatibility with the principle of proportionality of the barring of claims where the time-limit is exceeded, and not of the consequences to which the barring of claims may give rise .
54 . As we have seen, in its judgment the Court was extremely inflexible in that regard and, in circumstances substantially identical to the present situation, it came to the conclusion that "there are no grounds for stating that the rule ... which bars claims submitted out of time is out of proportion to the aim pursued by the Community legislature" ( paragraph 22 ). I would recall that there, as in this case, the period prescribed for the submission of the documents expressly barred claims submitted out of time, was established "in the interests of sound administration", was initially fixed at six months and subsequently extended to 12 months ( 17 ) and was subject to a reservation in the case of force majeure . However, no provision was made for the possibility of obtaining an extension of time . On the other hand, it is untrue to state, as Philipp Brothers does, that the fixing of a mandatory time-limit for the submission of the documents in Denkavit France was justified not only in the interests of sound administration but also, indirectly, by the concern to avoid distortions of competition . It is quite clear from paragraph 19 of the Court' s judgment in that case that it was the fixing of a time-limit for the payment of monetary compensatory amounts, and not for the submission of applications, that was designed "to prevent distortions of competition between the trade interests concerned in the Member States" ( 18 ). Furthermore, it is apparent from the seventh recital in the preamble to Regulation ( EEC ) No 2746/75 of the Council of 29 October 1975 laying down general rules for granting export refunds on cereals and criteria for fixing the amount of such refunds ( Official Journal 1975, L 281, p . 78 ) that the concern to avoid distortions of competition between Community traders informs any action taken by the Community institutions to establish "administrative conditions .... which .... must be identical throughout the Community ". More specifically, that recital explains Article 8 of the regulation, which, in paragraph 1 and the first subparagraph of paragraph 2, lays down the principle that the refund is to be paid upon proof that the products have been exported and, in the case of a variable refund, have reached the destination for which the refund was fixed, and, in the second subparagraph of paragraph 2 and in paragraph 3, permits derogating provisions and additional provisions to be adopted . It is precisely upon those last two paragraphs, and on the corresponding provisions adopted in connection with the common organizations of the markets in other agricultural products, that Regulation No 2730/79 is based ( see the third citation in the preamble thereto ).
55 . That being so, I agree with the Belgian State that, if the Court was so strict in Denkavit France, treating any failure to comply with the prescribed period as unacceptable except in the case of force majeure, the reason is that the issue involved was the grant in the form of monetary compensatory amounts of substantial financial advantages to traders .
56 . That is also the position in this case, where the financial advantage takes the form of an export refund and where, as we have seen, payment of the refund is also subject to the requisite proof being furnished within a time-limit which bars claims submitted out of time . In my view, a strict approach is all the more acceptable, since here the additional possibility exists of obtaining an extension of time . The logical consequence of this is that a person who does not comply with the time-limit is not entitled to the refund except in the case of force majeure or where he is granted an extension of time .
57 . If that inference is correct, it cannot of course be otherwise where the refund has been paid in advance, so that, like the rule barring claims submitted out of time, a mere obligation to reimburse the advance ( plus 15% by way of compensation for the credit free of charge represented by the advance ) or, failing reimbursement, loss of the security provided in order to guarantee reimbursement, cannot be regarded as disproportionate to the objectives pursued . The means employed by the contested provision to achieve its aim correspond to the importance of the aim and are necessary for its achievement . ( 19 )
58 . That conclusion cannot be invalidated by the reference made by Philipp Brothers to Article 48(3 ) of Regulation No 3665/87, which, in now providing for a penalty whose severity is graduated according to various criteria in the event of non-compliance with the period prescribed for the submission of the requisite proof, is said to demonstrate a posteriori that Article 25(2 ) of Regulation No 2730/79 was inconsistent with the principle of proportionality .
59 . The measure adopted, which is characterized by a degree of flexibility, merely provides that, if the proof required is furnished after the expiry of one year, but before 18 months have elapsed, the amount to be reimbursed is to be equal to 85% of the usual amount . Hence the difference is not very great . ( Moreover, Philipp Brothers exceeded the period of 18 months as well .) In any event, a mere amendment to existing legislation is not sufficient evidence that the previous legislation was unlawful . Besides, it follows from the final recital at the bottom of p . 3 in the relevant Official Journal ( L 351, 14.12.1987, p . 1, at p . 3 ) that, in the circumstances, the Community legislature considered only that the rules on non-compliance with the time-limits set "should" be relaxed .
60 . Admittedly, in intellectual terms it is possible to envisage a system in which the amount to be repaid by the trader is strictly proportional to the extent to which the time-limit has been exceeded, for instance a 5% reduction for each week of non-compliance ( total repayment after 20 weeks ), a reduction of 5% per day of non-compliance ( total repayment after 20 days ) or a 1% reduction per day ( total repayment after 100 days ). However, all those solutions would encourage carelessness on the part of traders and compel the national authorities to carry out a multiplicity of calculations which would aggravate the bureaucratic unwieldiness, which is perhaps already excessive, of the numerous export arrangements in force in the Community .
61 . Finally, it must be borne in mind that Article 20 of the regulation in question is extremely flexible as regards the methods of proving that customs entry formalities for home use have been completed . Such proof may be furnished :
( i ) by the production of the relevant customs document;
( ii ) by the production of a certified true copy or photocopy thereof;
( iii ) by the production of a "customs entry certificate" made out in accordance with the specimen annexed to the regulation .
62 . If none of those documents can be produced owing to circumstances beyond the control of the exporter, the latter may still produce one or more of the following documents :
( i ) a copy of the unloading document issued or endorsed in a non-member country;
( ii ) a certificate of unloading issued by an official agency of one of the Member States in the country of destination; ( 20 )
( iii ) a certificate of unloading from an international control and surveillance agency approved by the Member State in which customs export formalities were completed;
( iv ) in the case of the non-member countries set out in Annex III from which funds cannot be transferred until the goods have been imported, a bank document issued by approved intermediaries established in the Community certifying that payment for the export in question has been credited to the exporter' s account with them;
( v ) a statement of acceptance of delivery issued by an official agency of the non-member country, if the goods have been bought by that country or by an official agency of that country or form part of a food-aid programme;
( vi ) a statement of acceptance of delivery issued by an international organization if the goods form part of a food-aid programme .
63 . It is very hard to believe that a commercial firm specialized in international trade in raw materials and agricultural produce may be unable to obtain one or other of those documents, if necessary after requesting the grant of an extension of time, and that it needed more than 18 months ( from 29 January 1981 to 17 September 1982 ) in which to submit a certified true photocopy of the customs document in the case of one operation and an uncertified photocopy in the case of the other .
64 . To summarize, I consider that a provision such as the one at issue here, which provides that :
( i ) several alternative kinds of proof may be furnished,
( ii ) the time-limit for furnishing such proof is one year,
( iii ) an extension of time may be obtained simply on condition that the exporter has acted with all due diligence to obtain such proof within the prescribed periods,
( iv ) proof of force majeure may be adduced,
does not contravene the principle of proportionality .
65 . I therefore propose that the national court' s question be answered as follows : consideration of the seventh question has disclosed no factor of such a kind as to affect the validity of Articles 25 and 31 of Regulation No 2730/79 .
Conclusion
66 . I therefore propose that the following answers be given the questions submitted :
"( 1 ) The release of the security provided for in Article 25 of Commission Regulation ( EEC ) No 2730/79 does not have the effect of discharging the exporter from all or part of his obligations, particularly as regards the form of and the time-limit for submitting the proof required in order to qualify for the refund . If the conditions of eligibility for the refund are not fulfilled, the obligation on the part of the exporter to reimburse the amount of the refund paid, plus a possible increase, and the obligation on the part of the Member State to recover that amount, are not affected by the fact that the security has been released .
( 2 ) The grant of an extension of time, as provided for in Article 31(2 ) of Regulation No 2730/79, must be requested before the expiry of the normal time-limit provided for in Article 31(1 ) if entitlement to the refund is not to be lost .
( 3 ) Article 31(2 ) of Regulation No 2730/79 does not make the grant of an extension of time for the submission of the requisite documents subject to the existence of force majeure, but conditional on the exporter having acted with all due diligence to obtain them within the prescribed period .
( 4 ) Article 31(2 ) of Regulation No 2730/79 precludes the grant of an extension of time for the submission of the transport document referred to in Article 20(5 ). However, that cannot affect the validity of Article 31(2 ).
( 5 ) Consideration of the seventh question has disclosed no factor of such a kind as to effect the validity of Articles 25 and 31 of Regulation No 2730/79 ."
(*) Original language : French .
( 1 ) Article 12 of Regulation ( EEC ) No 2727/75 of the Council of 29 October 1975 on the common organization of the market in cereals ( OJ 1975, L 281, p . 1 ).
( 2 ) Twelfth recital in the preamble to Regulation No 2727/75
( 3 ) For ease of comprehension, the term "exportation" is to be understood throughout this Opinion as covering in some cases the fact of leaving the geographical territory of the Community ( Article 9 ) and in others the fact of importation or entry for home use in a non-member country ( Article 20 ).
( 4 ) Judgment of 5 February 1987 in Case 288/85 Hauptzollamt Hamburg-Jonas v Plange Kraftfutterwerke [1987] ECR 611, paragraph 14 . See also the judgment of 18 November 1987 in Case 137/85 Maizena v BALM [1987] ECR 4587, paragraph 24 . ( Although in its judgment of 30 June 1987 in Case 47/86 Roquette Frères v ONIC [1987] ECR 2889 the Court held to be invalid a legislative measure providing for the forfeiture of part of the security corresponding to a similar increase, it was only because such forfeiture involved the loss of the entire additional percentage and had not been calculated in proportion to the ( production ) refund to be repaid . That is not the case here, since paragraphs 2 and 3 of Article 25 of Regulation 2730/79 provide for the forfeiture of a proportion of the total amount of the security, including the increase .)
( 5 ) Commission Regulation ( EEC ) No 1663/81 of 23 June 1981 amending for the fifth time Regulation ( EEC ) No 2730/79 amending for the second time Regulation ( EEC ) No 798/80 and amending Regulation ( EEC ) No 52/81 as regards in particular the period for submission of the documents necessary for certain payments to be made ( OJ 1981, L 166, p . 9 ).
( 6 ) Judgment of 30 January 1974 in Case 158/73 Kampffmeyer v Einfuhr-und Vorratsstelle fuer Getreide [1974] ECR 101 .
( 7 ) Judgment of 25 May 1974 in Case 3/74 Einfuhr-und Vorratsstelle fuer Getreide v Pfuetzenreuter [1974] ECR 589 .
( 8 ) Commission Regulation ( EEC ) No 568/85 of 4 March 1985 amending for the 10th time Regulation ( EEC ) No 2730/79 laying down common detailed rules for the application of the system of export refunds on agricultural products ( OJ 1985, L 65, p . 5 ).
( 9 ) Commission Regulation ( EEC ) No 3665/87 of 27 November 1987 laying down common detailed rules for the application of the system of export refunds on agricultural products ( OJ 1987, L 351, p . 1 ).
( 10 ) See, in particular, the judgment of 24 September 1985 in Case 181/84 Man ( Sugar ) v IBAP [1985] ECR 2889, paragraph 20 . See also the judgment of 27 November 1986 in Case 21/85 Maas v BALM [1986] ECR 3537, paragraph 15 .
( 11 ) Judgment of 5 February 1987 in Plange Kraftfutterwerke, paragraph 11, cited above .
( 12 ) Judgment of 20 February 1979 in Case 122/78 Buitoni v Forma [1979] ECR 677, paragraphs 17 to 20 .
( 13 ) Judgment of 24 September 1985 in Case 181/84 Man ( Sugar ) [1985] ECR 2889 .
( 14 ) Judgment of 21 June 1979 in Case 240/78 Atalanta v Produktshap voor Vee en Vlees [1979] ECR 2137, paragraph 10 .
( 15 ) Judgment of 27 November 1986 in Maas, cited above .
( 16 ) Case 266/84 Denkavit France v Forma [1986] ECR 149 .
( 17 ) The section on detailed rules of administrative application in Commission Regulation ( EEC ) No 1380/75 of 29 May 1975 laying down detailed rules for the application of monetary compensatory amounts ( OJ 1975, L 139, p . 37 ), which was at issue in Case 266/84 Denkavit France, was replaced by Commission Regulation ( EEC ) No 1371/81 of 19 May 1981 laying down detailed rules for the administrative application of monetary compensatory amounts ( OJ 1981, L 138, p . 1 ). The Court' s judgment of 5 February 1987 in Case 145/85 Denkavit België v Belgium [1987] ECR 565 was concerned with the latter regulation .
( 18 ) See, in that regard, also the judgment of 5 February 1987 in Denkavit België, paragraphs 7 and 8, cited above .
( 19 ) See the definition of the principle of proportionality in the case-law of the Court, in particular at paragraph 17 of the Denkavit France judgment .
( 20 ) Not emphasized in the original . It is therefore sufficient for the Consul of any Member State in the port of arrival to issue such a certificate .
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