(Reference for a preliminary ruling from the Court of Appeal (England and Wales) (Civil Division))

«(Regulation (EEC) No 3950/92 – Additional levy in the milk and milk products sector – Deliveries by a producer to a purchaser – Payment of levy – Recovery from the producer)»

Opinion of Advocate General Geelhoed delivered on 13 February 2003

Judgment of the Court (Sixth Chamber), 15 January 2004

Summary of the Judgment

Agriculture – Common organisation of the markets – Milk and milk products – Additional levy on milk – Delivery by a producer to a purchaser – Purchaser's failure to fulfil his obligation to collect the levy from the producer – Direct recovery from the producer – Whether permissible – Conditions

(Art. 10 EC; Council Regulation No 3950/92, Arts 1 and 2; Commission Regulation No 536/93, Art. 7)

Articles 1 and 2 of Regulation No 3950/92 establishing an additional levy in the milk and milk products sector do not authorise the competent body to act directly, in cases other than that of direct sales, against a producer to recover the amount owed by him in respect of the additional levy on milk. However, the Member States' obligation under Article 10 EC to take measures to ensure collection of the levy in the event of the mechanism provided for in Article 2(2) of that regulation being frustrated includes the power to take direct action against the producer with a view to recovering the amount payable where it is established that the producer has not paid it to the purchaser and that the purchaser is not taking due steps to collect it from the producer. On the other hand, non-compliance with the conditions laid down in Article 7 of Regulation No 536/93 laying down detailed rules on the application of the additional levy on milk and milk products, and in particular the absence of approval as purchaser, is not in itself relevant.

JUDGMENT OF THE COURT (Sixth Chamber) 15 January 2004 (1)

((Regulation (EEC) No 3950/92 – Additional levy in the milk and milk products sector – Deliveries by a producer to a purchaser – Payment of levy – Recovery from the producer))

In Case C-230/01, REFERENCE to the Court under Article 234 EC by the Court of Appeal (England and Wales) (Civil Division) for a preliminary ruling in the proceedings pending before that court between

The Intervention Board for Agricultural Produce

Penycoed Farming Partnership,

on the interpretation of Council Regulation (EEC) No 3950/92 of 28 December 1992 establishing an additional levy in the milk and milk products sector (OJ 1992 L 405, p. 1) and Commission Regulation (EEC) No 536/93 of 9 March 1993 laying down detailed rules on the application of the additional levy on milk and milk products (OJ 1993 L 57, p. 12),

THE COURT (Sixth Chamber),

composed of: V. Skouris, acting for the President of the Sixth Chamber, J.-P. Puissochet, R. Schintgen, F. Macken and N. Colneric (Rapporteur), Judges, Advocate General: L.A. Geelhoed, Registrar: L. Hewlett, Principal Administrator,

after considering the written observations submitted on behalf of:

the United Kingdom Government, by G. Amodeo, acting as Agent, and R. Thompson, barrister,

the Greek Government, by I. Chalkias and C. Tsiavou, acting as Agents,

the Italian Government, by I.M. Braguglia, acting as Agent, assisted by G. Aiello, avvocato dello Stato,

the Commission of the European Communities, by M. Niejahr and K. Fitch, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of the Intervention Board for Agricultural Produce and the United Kingdom Government, represented by R. Thompson, of Penycoed Farming Partnership, represented by P. Stanley, Barrister, of the Greek Government, represented by I. Chalkias, and of the Commission, represented by M. Niejahr and K. Fitch, at the hearing on 28 November 2002,

after hearing the Opinion of the Advocate General at the sitting on 13 February 2003,

gives the following

By order of 31 May 2001, received at the Court on 12 June 2001, the Court of Appeal (England and Wales) (Civil Division) referred to the Court for a preliminary ruling under Article 234 EC three questions on the interpretation of Council Regulation (EEC) No 3950/92 of 28 December 1992 establishing an additional levy in the milk and milk products sector (OJ 1992 L 405, p. 1) and Commission Regulation (EEC) No 536/93 of 9 March 1993 laying down detailed rules on the application of the additional levy on milk and milk products (OJ 1993 L 57, p. 12).

Those questions were raised in proceedings between Penycoed Farming Partnership (Penycoed) and the Intervention Board for Agricultural Produce (the Board), which is responsible for administering the milk quota system in the United Kingdom, concerning direct recovery from Penycoed, as milk producer, of the amount of the additional levy on the milk due for the 2.11 million litres of milk which that producer had delivered in excess of its quota during the 1997/98 marketing year.

The purpose of that arrangement was to enable Penycoed to undertake its dairy activities without having to hold milk quotas. Under Regulations Nos 3950/92 and 536/93, Penycoed was not a producer within the meaning of the DPQR 1997, and Elm Farms and TDM were not purchasers but producers, and would either have to obtain a quota or be liable for any levy incurred.

The Board condemned that mechanism, taking the view that Penycoed was the producer, that Elm Farms and TDM were purchasers and that there had been supplies of milk by Penycoed to both. Penycoed had thus produced milk without possessing the requisite quota.

In January 1999, the Board commenced proceedings to compel Penycoed to pay it GBP 561 872.44, representing the levy due for the 2.11 million litres of milk which it had delivered in the course of the 1997/98 marketing year.

Penycoed objected that the Board's action was inadmissible on the ground that, even if the facts alleged were true, the Board had no direct claim against it. According to Penycoed, the Board's only claim was against the purchasers of the milk, who would then claim against Penycoed.

For the purposes of its objection of inadmissibility, Penycoed asks the Court to assume that the Board's analysis is correct. The parties to the main proceedings agree that it would follow that Penycoed was a producer within the meaning of Regulations Nos 3950/92 and 536/93, that Elm Farms and TDM were purchasers to whom deliveries of milk were made by Penycoed for the purposes of Regulation No 3950/92 and, at least, for the purposes of Article 7 of Regulation No 536/93, and that the Board had not approved Elm Farms and TDM as purchasers pursuant to that article.

It was in those circumstances that the Court of Appeal (England and Wales) (Civil Division) stayed proceedings and referred the following questions to the Court for a preliminary ruling:

Do Articles 1 and/or 2 of Council Regulation No 3950/92 permit the competent body in a Member State to take legal action directly against a producer to recover levy due from that producer (otherwise than pursuant to Article 2(3) in respect of direct sales)?

If so, in what circumstances may such action be taken?

In particular, may such action be taken where the purchaser to whom milk was delivered was (a) not approved pursuant to Article 7 of Commission Regulation No 536/93 and/or (b) has not complied with any of its obligations under Article 7 of that Regulation and/or (c) has not recovered or sought to recover levy from the producers concerned?

The questions submitted

26

By those questions, which it is appropriate to examine together, the national court asks whether and, if so, under what conditions, Articles 1 and/or 2 of Regulation No 3950/92 authorise the competent body of a Member State to take action directly against a milk producer to recover the additional levy payable on the milk by the latter.

27

At the outset, it is appropriate to say something about the mechanism for collecting the additional levy on milk introduced by Regulation No 3950/92.

28

The additional milk levy scheme is based on a distinction between reference quantities for milk sold directly for consumption and those for milk delivered to purchasers (see, to that effect, Case C-288/97 Consorzio Caseifici dell'Altopiano di Asiago [1999] ECR I-2575, paragraph 18).

29

In the case of direct sales, the producer pays the levy due to the competent body of the Member State in accordance with Article 2(3) of Regulation No 3950/92. As regards deliveries, the purchaser liable for the levy pays to that body the amount due, which he deducts from the price of milk paid to producers who owe the levy or, failing this, collects by any appropriate means, as indicated in Article 2(2) of Regulation No 3950/92. In both cases, the levy is thus payable by the producers.

In the case of deliveries, the additional levy scheme, as established by Regulations Nos 3950/92 and 536/93, is not, however, designed to govern the relationship existing between the person liable and the debtor or that between the person liable and the competent body to which those sums should be paid.

31

Article 2 of Regulation No 3950/92 cannot therefore serve as a legal basis for the competent body of a Member State to act directly, except in the case of direct sales, against a producer in order to recover the levy payable by him.

32

The fact that the purchaser does not fulfil, or no longer fulfils, his function as the person liable likewise does not allow the producer to be substituted for the purchaser for the benefit of the competent body. Such a penalty would presuppose the prior existence of a legal basis defining its conditions and scope (see, to that effect, Case C-352/92 Milchwerke Köln v Wuppertal [1994] ECR I-3385, paragraph 22, and Case C-277/98 France v Commission [2001] ECR I-8453, paragraph 37). However, there is no such legal basis in this case.

33

It follows from the foregoing considerations that Regulation No 3950/92 does not provide the competent authority with any legal basis for collecting the additional levy on milk direct from the producer.

34

However, that scheme cannot be regarded as exhaustive in the sense that it precludes any other method of recovery in a case where a purchaser has not fulfilled his obligations. In that connection, the eighth recital in the preamble to Regulation No 3950/92 states that the purchaser is the person liable for the levy because he is in the best position to carry out the necessary operations. To the extent to which that assumption proves incorrect, in particular where the purchaser does not comply with his obligation to effect collection, direct recovery by the competent authority from the producer cannot be excluded.

35

As is clear from the sixth recital in the preamble to Regulation No 3950/92, it is incumbent solely on the producer who has contributed to the overrun of the quota to pay the levy.

36

Where a Community regulation does not specifically provide any penalty for an infringement or refers for that purpose to national laws, regulations and administrative provisions, Article 10 EC requires the Member States to take all measures necessary to guarantee the application and effectiveness of Community law (Case 68/88 Commission v Greece [1989] ECR 2965, paragraph 23; Case C-326/88 Hansen [1990] ECR I-2911, paragraph 17; Milchwerke Köln v Wuppertal, cited above, paragraph 23; Case C-36/94 Siesse [1995] ECR I-3573, paragraph 20; Case C-177/95 Ebony Maritime and Loten Navigation [1997] ECR I-1111, paragraph 35, and Case C-167/01 Inspire Art [2003] ECR I-10155, paragraph 62).

37

The obligation based on Article 10 EC also extends to the initiation of any proceedings under administrative, fiscal or civil law for the collection or recovery of duties or levies which have been fraudulently evaded or for damages ( Milchwerke Köln v Wuppertal, paragraph 23).

38

Accordingly, the Member States are required to take measures to ensure collection of the levy in any cases where the mechanism provided for in Article 2(2) of Regulation No 3950/92 has been frustrated.

That obligation entails the power to take action directly against the producer in order to recover the amount payable by the latter in respect of the additional levy on milk where it is established that the producer did not pay it to the purchaser and the latter is not taking due steps to collect it from the producer.

40

On the other hand, non-compliance with the conditions laid down in Article 7 of Regulation No 536/93, and in particular the lack of approval as purchaser, is not in itself relevant because the payment to the competent body of the amount due in respect of the additional levy is not necessarily adversely affected by such non-compliance. Notwithstanding such failings, the main purpose of the levy scheme, namely the penalisation of overproduction, can be achieved.

41

It follows from the foregoing considerations that the answer to the questions submitted must be that Articles 1 and 2 of Regulation No 3950/92 do not authorise the competent body to act directly, in cases other than that of direct sales, against a producer to recover the amount owed by him in respect of the additional levy on milk. However, the Member States' obligation under Article 10 EC to take measures to ensure collection of the levy in the event of the mechanism provided for in Article 2(2) of that regulation being frustrated includes the power to take direct action against the producer with a view to recovering the amount payable where it is established that the producer has not paid it to the purchaser and that the purchaser is not taking due steps to collect it from the producer. On the other hand, non-compliance with the conditions laid down in Article 7 of Commission Regulation (EEC) No 536/93 of 9 March 1993 laying down detailed rules on the application of the additional levy on milk and milk products, and in particular the absence of approval as purchaser, is not in itself relevant.

Costs

42

The costs incurred by the United Kingdom, Greek and Italian Governments and by the Commission, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main action, a step in the proceedings pending before the national court, the decision on costs is a matter for that court.

On those grounds,

THE COURT (Sixth Chamber),

in answer to the questions referred to it by the Court of Appeal (England and Wales) (Civil Division) by order of 31 May 1991, hereby rules:

Articles 1 and 2 of Council Regulation (EEC) No 3950/92 of 28 December 1992 establishing an additional levy in the milk and milk products sector do not authorise the competent body to act directly, in cases other than that of direct sales, against a producer to recover the amount owed by him in respect of the additional levy on milk. However, the Member States' obligation under Article 10 EC to take measures to ensure collection of the levy in the event of the mechanism provided for in Article 2(2) of that regulation being frustrated includes the power to take direct action against the producer with a view to recovering the amount payable where it is established that the producer has not paid it to the purchaser and that the purchaser is not taking due steps to collect it from the producer. On the other hand, non-compliance with the conditions laid down in Article 7 of Commission Regulation (EEC) No 536/93 of 9 March 1993 laying down detailed rules on the application of the additional levy on milk and milk products, and in particular the absence of approval as purchaser, is not in itself relevant.

Delivered in open court in Luxembourg on 15 January 2004.

THE COURT (Sixth Chamber),

Skouris

Puissochet

Schintgen

Macken

Colneric

Registrar

President

1 – Language of the case: English.