OPINION OF ADVOCATE GENERAL

delivered on 18 January 1996 (1)

Anglo Irish Beef Processors International and Others

(Reference for a preliminary ruling from the High Court of Ireland)

((Differentiated export refunds – Force majeure – Additional security – Release of the security – Resolution of the UN Security Council))

3. Anglo Irish Beef thereupon brought proceedings before the High Court of Ireland, challenging the Minister's claim for reimbursement and seeking release of the security in full. The national court accordingly referred the following questions to the Court of Justice for a preliminary ruling:

─ Can Commission Regulation (EEC) No 3665/87 be interpreted in such a manner as to prohibit the drawing down on the security provided by the exporter in the above circumstances whether by reason of force majeure or by reason of the disproportionate effect which the drawing down of the security would have in comparison to the circumstances relied upon as justifying such a drawing down or otherwise?

─ If Commission Regulation (EEC) No 3665/87 cannot be interpreted in the above manner is it void in whole or in part because of this?

─ Can Council Regulation (EEC) No 2340/90 be interpreted as covering goods in transit to Iraq and if so is it void in whole or in part because of its treatment of goods in transit in the present circumstances?

5. I now turn to the other aspect of Question 1. It is necessary to ascertain whether, in the circumstances described above, Regulation No 3665/87 may be interpreted as precluding forfeiture of the security by the relevant authority, in view of the allegedly disproportionate effects otherwise foreseeable to the detriment of the exporter. According to Anglo Irish Beef, that question must be answered in the affirmative. I disagree. First, as was mentioned in the order for reference, forfeiture of the security is restricted to the amount unduly paid and therefore does not cover, as Anglo Irish Beef seems to suggest, the whole amount of the refund paid in advance. If that is the case, I am at a loss to identify the disproportionate effect. As I pointed out above, the intention underlying the export refunds ─ which has been emphasized by the Court in other judgments (7) ─ is to facilitate the sale of Community products on world markets. To that end, exporters are paid a sum of money which is intended solely as compensation for any disparity between the Community price and the current price on other markets. The refund rate is differentiated, precisely in that it is calculated by reference to the various prices charged in the country of destination. That is why it is essential that the products in question actually reach their declared destination: (8) if they were sold on a different market, where the price is higher and for which the refund rate is accordingly lower, the transaction would result in the unjust enrichment of the trader in question. That is to say, he would profit from the higher selling price and, at the same time, retain the higher rate of refund to which, however, he would not be entitled. That said, it is plain that the refund scheme, far from contravening the principle of proportionality, actually applies it: the amount paid by the intervention agency is equal to the difference between the Community price for the product exported and the price charged in the country of destination. Thus the means adopted ─ differential payment in advance ─ is suitably proportional to the objective pursued by the Community legislature. When a case of force majeure arises, and the trader concerned is compelled to export his products elsewhere than the original destination, his right to the refund remains intact and is not affected by any penalty, except that its exercise must take into account the disparity between the Community price and the price which is charged on the market to which the product has actually been exported. That alone is the rationale behind the regulation. The rules laid down seek its comprehensive and logical implementation.

Question 2

7. The second question asks whether, since Regulation No 3665/87 cannot be interpreted as precluding forfeiture of the security in the event of force majeure, it should for that reason be considered invalid. Anglo Irish Beef adduces two arguments in support of that view: breach of the principle of proportionality and frustration of the exporter's legitimate expectations. I have already explained why the first argument should be dismissed. As regards the frustration of legitimate expectations, Anglo Irish Beef seeks to substantiate that allegation by asserting that exporters rely on being able to retain in any case ─ and especially in the event of force majeure ─ the amount of the refund paid in advance. (9) However, I am unable to discern a basis for that point of view. Any moderately prudent trader has only to read the regulation to realize that the right to retain the full refund paid in advance and consequently to release of the security is necessarily contingent upon the goods actually reaching their declared destination. Article 33(2) of Regulation No 3665/87 provides that the release in full of the security shall be subject to the production of proof that ... (b) the products concerned give entitlement to a refund equal to or higher than the amount determined in accordance with Article 29(3). Furthermore, the fifth recital in the preamble to Regulation No 565/80 expressly states that security is to be lodged in order to guarantee the reimbursement of a sum not less than the amount paid where it is subsequently established that there was no right to the export refund or that the products or goods ... were not actually exported from the Community within the time-limits laid down. The relevant rules are those set out above and they cannot arouse any legitimate expectation other than the right to a refund, subject, obviously, to the limits within which that right was conferred.

Question 3

Conclusion

In the light of the foregoing considerations, therefore, I am of the opinion that the questions referred to the Court of Justice by the High Court of Ireland, should be answered as follows:

(1) Where, on the basis of Article 33(5) of 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, an exporter receives an export refund and, owing to force majeure, the goods are sold, not at the declared destination, but in countries in respect of which a lower rate of refund has been fixed, the security to be forfeited is equal to the difference between the amount of the refund advanced and the amount of the refund actually due.

(2) Consideration of Regulation (EEC) No 3665/87 on the basis of the information provided in the order for reference has disclosed no factor of such a kind as to affect its legality.

1 – Original language: Italian.

2 – OJ 1987 L 351, p. 1.

3 – OJ 1990 L 213, p. 1.

4 – The sector in question is governed by the regulation cited above, as last amended by Commission Regulation (EEC) No 354/90 of 9 February 1990 (OJ 1990 L 38, p. 34), in conjunction with Council Regulation (EEC) No 565/80 of 4 March 1980 on the advance payment of export refunds in respect of agricultural products (OJ 1980 L 62, p. 5), as last amended by Council Regulation (EEC) No 2026/83 (OJ 1983 L 199, p. 12).

5 – Emphasis added.

6 – Case C-321/91 Tara Meat Packers [1993] ECR I-2811, paragraph 19.

7 – Case 89/83 Dimex [1984] ECR 2815, paragraphs 8 and 9.

8 – See Dimex, paragraph 16.

9 – According to Anglo Irish Beef, that assertion holds true a fortiori where it is the Community itself which prevents the goods from reaching their destination. On that point, however, I need only repeat the following observation: the national court makes it clear that the goods were detained in Turkey by the Turkish authorities on account of the United Nations embargo. In that respect, Regulation No 2340/90 is irrelevant.

10 – Case C-18/93 Corsica Ferries [1994] ECR I-1783, paragraph 14, and the case-law cited therein.