OPINION OF ADVOCATE GENERAL

delivered on 3 February 2005 (1)

Société d’Exportation des Produits Agricoles SA (SEPA)

(Reference for a preliminary ruling from the Bundesfinanzhof)

(Agriculture – Export refunds – Regulation (EEC) No 3665/87 – Article 13 – Concept of fair marketable quality – Meat from animals which have undergone emergency slaughtering – Meat fit for human consumption – Meat authorised for human consumption in the Community only on the local market – Principle of legal certainty)

1. This case concerns the interpretation of the concept of ‘fair marketable quality’ contained in Article 13 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. (2)

2. The Court of Justice is called upon to give a ruling on whether beef and veal from animals which have undergone special emergency slaughtering within the meaning of Directive 64/433/EEC (3) which has been declared fit for human consumption can be treated as being of fair marketable quality and qualifying for an export refund even where, within the Community, it can only be sold on the ‘local market’. The referring court also enquires whether the concept of fair marketable quality is subject to the requirement that the product in question must be of average quality.

I – Legal framework

A – Community legislation

3. In the context of the common agricultural policy (CAP), beef and veal, together with many other agricultural products, have been subject to a common organisation of the market designed primarily to achieve the objectives set out in Article 33 EC, and in particular, to stabilise the market in those products and to ensure a fair standard of living for the agricultural community concerned. To that end, a single trading system with third countries was created for beef and veal consisting, notably, of export refunds.

4. The purpose of those export refunds is to cover the difference between the prices of beef and veal on the world market and the highest prices for those products within the Community. (4) They are financed out of the Community budget, specifically by the European Agricultural Guidance and Guarantee Fund (EAGGF). The refunds are the same for all Community producers of a particular product, but they may vary according to the destination country of that product. (5) Such export refunds also serve to safeguard Community participation in international trade in beef and veal. (6)

5. The Commission of the European Communities has regulated the common detailed rules for the application of export refunds for agricultural products. Those provisions have undergone frequent amendment. At the time of the facts in the main proceedings, the applicable provision was Regulation No 3665/87.

6. According to the ninth recital to Regulation No 3665/87, in order to qualify under the export refund system, the products ‘must be of such a quality that they can be marketed on normal terms’.

7. Article 13 of Regulation No 3665/87, which is the subject-matter of the request for interpretation in these proceedings, provides that:

‘No refund shall be granted on products which are not of sound and fair marketable quality, or on products intended for human consumption whose characteristics or condition exclude or substantially impair their use for that purpose.’

8. Subsequently to the facts in the main proceedings, Regulation No 3665/87 was repealed and replaced by Regulation (EC) No 800/1999, (7) to which the referring court and the parties make reference. Article 21(1) of Regulation No 800/1999 reads as follows:

‘No refund shall be granted on products which are not of sound and fair marketable quality on the date on which the export declaration is accepted. Products shall be deemed to meet the requirement laid down in the first subparagraph if they can be marketed on the Community’s territory in normal conditions under the description appearing in the refund application and if, where such products are intended for human consumption, their use for that purpose is not excluded or substantially impaired by reason of their characteristics or condition. The conformity of the products with the requirements laid down in the first subparagraph shall be examined in accordance with the standards or practices in force in the Community.’

9. Article 21(1) of Regulation No 800/1999 embodies the objective expressed in the 28th recital to the Regulation, according to which ‘products should be of a quality such that they can be marketed on normal terms in the Community …’.

10. Also noteworthy, in terms of the changes to Community law occurring after the facts of the dispute in the main proceedings but which may be relevant to the present proceedings, is Regulation (EC) No 450/2000, (8) which concerns particularly export refunds for beef and veal. The third recital to that Regulation states that ‘[r]efunds should be granted only on products that are allowed to move freely within the Community’, and Article 1 provides that the products eligible for refunds are those bearing the health marking referred to in Chapter XI of Annex I to Directive 64/433.

11. In order to establish a single market within the Community for the meat from certain species of animal, in particular beef and veal, the Community standardised the health requirements to be complied with in slaughterhouses and cutting rooms and during storage and transportation.

12. The measures relevant to the case in the main proceedings are those contained in Directive 64/433. The concept of ‘special emergency slaughtering’ is defined in Article 2(n) of that Directive as ‘any slaughtering ordered by a veterinary surgeon as the result of an accident or serious physiological and functional problems’. Article 2(n) also provides that the emergency slaughtering may take place outside the slaughterhouse where the veterinary surgeon considers that transport of the animal would be impossible or would subject the animal to unnecessary suffering.

13. According to Article 6(1)(e) of Directive 64/433, Member States shall ensure that meat from animals which have undergone special emergency slaughtering is only authorised for human consumption on ‘the local market’ and only if the conditions set out in that article are fulfilled. There is a requirement, in particular, that the animal, once slaughtered, bled and possibly eviscerated on the spot in the presence of a veterinary surgeon, must be transported as soon as possible to an approved slaughterhouse, accompanied by a certificate issued by the veterinary surgeon who ordered the slaughtering, corresponding to a model drawn up at Community level. The carcase of the animal must then undergo a post mortem inspection by an official veterinarian under the conditions prescribed by Directive 64/433, supplemented, where applicable, by a bacteriological inspection, so that it can be identified as wholly or partly fit for human consumption. The Directive does not define the concept of a ‘local market’.

14. Article 6(1)(h) of Directive 64/433 requires the meat to be marked with a national stamp which cannot be confused with the Community stamp.

B – National legislation

15. Article 13 of the Fleischhygienegesetz (German Law on Meat Hygiene) (9) provides that animals which have to be slaughtered on special emergency grounds or which excrete pathogens can only be slaughtered in special slaughterhouses (‘isolation slaughterhouses’), and that meat from animals slaughtered in that way can only be put on the market as food by sales agencies of those slaughterhouses which are specially approved and supervised for that purpose by the competent authority. Such meat must be identifiable as having been slaughtered in that way.

16. The Fleischhygieneverordnung (German Meat Hygiene Regulation), (10) which lays down the practical details for implementation of the Law in question, provides that meat from isolation slaughterhouses can only be put on the market if it is from an animal which has undergone a health inspection and has been found to be fit for human consumption. It provides also that such meat can only be sold to end consumers.

17. Those provisions were adopted in order to transpose Directive 64/433.

II – Facts in the main proceedings

18. In November 1997, the Société d’Exportation des Produits Agricoles (11) submitted an export declaration relating to 222 cartons of frozen beef acquired from an ‘isolation slaughterhouse’. The meat which SEPA exported under that declaration had been deemed fit for human consumption by the competent veterinary surgeon.

19. The administrative authority with competence in the matter and, subsequently, the Finanzgericht (Finance Court), found that SEPA did not qualify for an export refund in respect of that meat on the grounds that it was not of fair marketable quality within the meaning of Article 13 of Regulation No 3665/87. Those bodies based their finding on the fact that, in their view, according to German legislation, the meat in question cannot be marketed throughout the Community but only in Germany and subject to numerous restrictions.

20. The applicant appealed against the decision of the Finanzgericht to the Bundesfinanzhof.

III – The questions referred for a preliminary ruling

21. By its order for reference, the Bundesfinanzhof points out, first, that products intended for human consumption must not only be of sound quality, but must also be of fair marketable quality. In the submission of the referring court, according to the case-law of this Court (12) and using the formula contained in the ninth recital to Regulation No 3665/87 and in Article 21 of Regulation No 800/1999, the concept of fair marketable quality means that the product in question must be capable of being marketed within the Community on normal terms and under the description given in the refund application. The referring court then states that it has encountered the following two areas of doubt.

22. First, it seems to that court questionable whether the concept of ‘fair marketable quality’ excludes from its ambit products which are subject to specific restrictions, such as inspection requirements or a restriction of sales to certain distribution channels.

23. In the view of the referring court, neither the provisions of Community law nor those of German legislation on meat from animals slaughtered on special emergency grounds are intended to prohibit trade in the meat in question, and in its view one therefore cannot infer from them any prohibition on the export of such meat where it is found to be fit for human consumption. Nor, in its submission, is any such prohibition discernable from Article 6 of Directive 64/433, which provides that meat from animals which have undergone special emergency slaughtering can only be authorised for human consumption on the local market and on the conditions set out in that article. It considers that Directive 64/433 is not designed to regulate the Community’s external trade and offers no reason to extend to third countries the restriction on trade imposed within the Community.

24. To disqualify the meat in question, which is fit for human consumption, from eligibility for an export refund likewise, in the view of the referring court, runs counter to the case-law of this Court, according to which the concept of fair marketable quality is dependent on it being possible to market the goods in question. Nor, in the view of that court, does such a disqualification serve the interest of the Community, since the meat in question is marketable on one part of the Community market.

25. Secondly, the referring court is doubtful whether the concept of fair marketable quality calls for a specific average quality and excludes products of inferior quality which, none the less, are capable of being sold under the description appearing in the refund application. It points out, in that regard, that the export refund legislation in principle lays down single refund rates which do not take into account the quality of the product. The referring court observes, however, that in France v Commission the Court of Justice declined to find as being of fair marketable quality a product which had a latent defect, even though it was not established that, as a result of that defect, the product was not marketable.

26. In the light of the foregoing, the Bundesfinanzhof stayed its proceedings and referred the following questions to this Court for a preliminary ruling:

‘(1) Does the concept of “fair marketable quality” in Article 13 of Regulation No 3665/87 require that the manufacture and distribution of the products in question be subject only to generally valid legal conditions as they apply to any product of that type, and does Article 13 consequently disqualify from the grant of an export refund a product to which special restrictions apply, in particular as regards its production, treatment or distribution, such as, for example, the ordering of a specific inspection as to fitness for human consumption or a restriction to certain distribution channels?

(2) Does the concept of “fair marketable quality” in Article 13 of Regulation No 3665/87 require that the product to be exported be of average quality, and does Article 13 therefore disqualify from the grant of an export refund a product of inferior quality which, however, habitually appears under the description of the object of trade given in the refund application? Is that also the case where the inferior quality has in no way affected the completion of the commercial transaction?’

IV – Assessment

A – The first question referred for a preliminary ruling

27. By its first question referred for a preliminary ruling, the referring court is, in essence, enquiring whether Article 13 of Regulation No 3665/87 must be interpreted as meaning that meat which is fit for human consumption cannot be deemed to be of fair marketable quality and eligible for an export refund when its marketing for human consumption within the Community is restricted to the local market because it is from an animal which has undergone special emergency slaughtering within the meaning of Directive 64/433.

28. The Commission takes the view that such meat cannot be treated as being of sound and fair marketable quality because it can only be authorised for human consumption in the Community on the local market and with specific marking indicating its origin. It asserts that the reason for the restriction in question is not that the meat is less healthy. According to the Commission, the restriction is imposed on account of the possible fragility of the meat which, because of the circumstances in which it was obtained, is potentially at greater risk. The Community legislature, it asserts, limited the distribution of such meat to the local market as a precaution, in order to prevent it from being transported large distances and consumed after too long a period of time. The Commission is of the view that, although Article 6 of Directive 64/433, which concerns solely intra-Community trade, does not preclude the export of such meat, it would none the less be paradoxical to encourage its sale in third countries by means of export refunds.

29. The Commission therefore contends that such meat cannot be regarded as being marketed on ‘normal terms’ within the meaning of the ninth recital to Regulation No 3665/87, which reiterates the grounds of the judgment in Muras. The Commission points out in that regard that Article 21 of Regulation No 800/1999 merely reproduces that case-law, but does not change the requirements it imposes for the grant of export refunds.

30. Although the referring court did not raise the issue, the Commission submits, furthermore, that nor does meat from animals which have undergone special emergency slaughtering meet the second requirement of Article 13 of Regulation No 3665/87, which specifies that where the product in question is intended for human consumption its use for that purpose must not be excluded or substantially impaired. The referring court considers that the restriction of sale of the meat to the local market and its special marking constitute a significant restriction on its use for human consumption.

31. The Hauptzollamt Hamburg-Jonas makes the same argument as the Commission, and adds that Article 13 of Regulation No 3665/87 aims also at relieving the Community market of overproduction of beef and veal. It therefore makes no sense, in its view, to grant export refunds on meat which can only be sold on the local market.

32. Attractive though the arguments of the Commission and the Hauptzollamt Hamburg-Jonas may seem, I cannot, after consideration, propose that this Court should endorse them. In common with the Greek Government and SEPA, I am of the view that Article 13 of Regulation No 3665/87, in its present wording, cannot preclude meat which can be marketed for human consumption within the Community only on the local market from being regarded as of ‘fair marketable quality’ within the meaning of that article and therefore from qualifying for export refunds. Before setting out the grounds on which I directly found my analysis, it is necessary to call to mind the basic premiss underlying the question referred to this Court.

33. It is common ground that, first of all, in accordance with the wording of Article 13 of Regulation No 3665/87, a product can only be eligible for an export refund if it is of sound quality, that is to say, if it is fit for human consumption. As regards, in the present case, the meat in respect of which SEPA submitted its export declaration, it is clearly apparent from the particulars provided by the referring court that it was declared fit for human consumption by the competent veterinary surgeon. That premiss is confirmed in the terms of the preliminary question under analysis, since the referring court asks only whether such meat can be treated as being of ‘fair marketable quality’, thus taking the view that there is no dispute that it is ‘sound’ for the purposes of eligibility for an export refund under Regulation No 3665/87.

34. Next, it is important to point out that meat from animals which have undergone special emergency slaughtering may only be declared fit for human consumption in compliance with the requirements set out in Article 6(e) of Directive 64/433, which harmonised the requirements enabling meat to be declared fit for human consumption in all Member States. The Community legislature did not lay down any less strict requirements in terms of the safeguards against the meat presenting any risk to the health of consumers where it is intended for local consumers rather than for all consumers in the Community. Accordingly, Article 6(1)(e) of Directive 64/433 stipulates that the health inspection according to the outcome of which meat from animals which have undergone special emergency slaughtering can be declared fit for human consumption must be carried out in compliance with Article 3(1)(A)(d) of that Directive, that is to say, under the same conditions as those required for an animal slaughtered under normal conditions in an approved slaughterhouse, the meat from which can be marketed throughout the Community.

35. As the Commission states in its observations, the meat at issue, although it can only be authorised for human consumption in the Community on the local market, is no less healthy than that from animals slaughtered under normal conditions in an approved slaughterhouse and which has likewise been declared fit for human consumption, in accordance with the inspection established in Article 3(1)(A)(d) of Directive 64/433, for the purposes of sale in all Member States.

36. Finally, despite the fact that the concept of sound quality is a legal concept, the referring court’s finding, that the meat in question should be regarded as being of sound quality, emerges from an assessment of the facts in the main proceedings which is a matter within its own jurisdiction. There is settled case-law that, within the framework of proceedings brought under Article 234 EC, which is based on a clear division of functions between national courts and the Court of Justice, the assessment of the facts in the main proceedings in the light of which Community law must be interpreted is the province of the national court. (13) Similarly, the question as to whether or not the method of freezing the meat at issue, which SEPA exported to Gabon and the Comoros Islands, is such as to eliminate any risk of its health quality deteriorating before its arrival on the market of the countries of destination as the result of any fragility affecting that meat by reason of the circumstances in which it was obtained is, likewise, a matter for the unfettered discretion of the competent national authorities and the referring court.

37. That is why I take the view that analysis of the first question raised for a preliminary ruling should start from the premiss that it is common ground that the meat at issue was declared fit for human consumption, that it can be authorised for human consumption on the local market in a Member State and that the referring court also found it to be of sound quality for the purposes of export to a third country and for eligibility for an export refund under Regulation No 3665/87.

38. The nub of these proceedings, therefore, is whether such meat can be regarded as being of ‘fair marketable quality’ within the meaning of Article 13 of Regulation No 3665/87. In other words, the issue is whether or not the fact that, so far as the Community is concerned, the sale for human consumption of the meat in question is restricted to the local market and the fact that it must display a specific marking indicating its origin are sufficient to exclude the possibility of it being of ‘fair marketable quality’ within the meaning of that article, as the Commission and the Hauptzollamt Hamburg-Jonas maintain.

39. It is perhaps necessary to clarify at the outset that, as the referring court and all the parties state, no such exclusion can arise from application of Article 6(1)(e) of Directive 64/433, according to which meat from a special emergency slaughtering can only be authorised as fit for human consumption on the local market, since it is not the purpose of that Directive to harmonise the trade in fresh meat between the Community and third countries. Any such exclusion could only be founded on Article 13 of Regulation No 3665/87. So, I share the view of the Greek Government and SEPA that one cannot, on the basis of Article 13, as currently worded, endorse the interpretation advanced by the Commission and the Hauptzollamt Hamburg-Jonas, save in contravention of the principle of legal certainty.

40. That principle is, one will recall, a fundamental principle of Community law. (14) It means that Community legislation must be certain and its application foreseeable by those subject to it. It is also a matter of settled case-law that the requirement for Community rules to be certain and foreseeable must be observed all the more strictly where, as in the present case, they are rules liable to entail financial consequences. (15)

41. This Court has frequently applied that principle in the field of the CAP, in the context of actions brought against decisions of the Commission which, in connection with the clearance of EAGGF accounts, refuse to charge to the EAGGF expenditure incurred by a Member State. It has found that a Commission decision based on a provision which the parties concerned did not know in due time did infringe the principle. Accordingly, it held that where, when granting export refunds in the fishing sector, a Member State was not in a position to know or to foresee with certainty rules which were adopted only after the financial year had come to an end and which retroactively fixed fishing quotas, the Commission could not rely on disregard of those rules in order to refuse to charge the refunds in question to the EAGGF. (16) Similarly, in the context of the operation of a scheme for birth premiums for calves, the Court held that if the Commission decides to attach financial consequences to failure by the national authorities to process within a reasonable period applications submitted by economic agents in order to obtain those premiums, it must inform all the Member States of that deadline in time. (17)

42. This Court has likewise held that the principle in question precludes a concept contained in the applicable Community law from being interpreted in a manner which, departing from the habitual meaning of the words used, is not dictated by that habitual meaning. In that vein, in Denmark v Commission, (18) the question arose of the construction to be given to a rule setting export refunds for preparations and preserves containing bovine meat on the basis of the percentage of meat, excluding fat and offal. The Court took the view that, in the absence of a definition in Community law of the terms ‘meat’ and ‘fat’ or any clear contrary intention in the applicable provision, the expression ‘meat’ should have the meaning it has in everyday language. (19) It then drew the inference that the expression could not be interpreted as excluding any proportion of fat which may be inside the muscle tissue but which cannot be physically detached from the piece of meat used and is not apparent to the naked eye. (20) The Court stated that the fact that a subsequent law attributed a different scope to the text in force at the material time could not influence the interpretation of that text. (21)

43. That application of the principle of legal certainty also operated, in particular, in relation to Article 9 of Regulation (EEC) No 859/89 (22) on the tender system for buying in beef and veal which established, in Article 9(1), that the ‘tenderer’ must undertake to comply with all the provisions relating to the purchases concerned and, in Article 9(2), that ‘interested parties’ may submit one tender only per category in response to each invitation to tender. The Court therefore held that, by virtue of the principle of legal certainty, the wording of Article 9 could not serve to support a construction according to which, on account of the difference in meaning between the words ‘interested parties’ and ‘tenderers’, the latter could submit one tender only in response to an invitation to tender where they were part of a single group. (23) The Court indicated that such an interpretation would be tantamount to applying retroactively a subsequent text which introduced into Community law provisions on interconnections between tenderers. (24)

44. I am of the view that the case-law referred to should apply to the dispute under examination for the following reasons.

45. Bearing in mind the wording of Article 13 of Regulation No 3665/87, it has been seen that it confines itself to establishing that no refund will be granted where the products are not of sound and fair marketable quality and, if those products are intended for human consumption as foodstuffs, their characteristics or condition exclude or substantially impair their use for that purpose.

46. Article 13 of Regulation No 3665/87 therefore does not establish that the grant of export refunds is also subject to the requirement that the product in question, in addition to being of sound and fair marketable quality, must be capable of being marketed for human consumption throughout the Community. (25)

47. Likewise, it is scarcely possible, in my submission, to infer any such requirement from the words ‘fair and marketable’. The adjectives ‘loyale’ and ‘marchande’ in French mean respectively ‘compliant with the law’ and ‘fit for sale’. The expression ‘qualité loyale et marchande’, enshrined in commercial relations, means that the thing sold has the qualities which the law or commercial practice demands. (26) As SEPA asserts, those adjectives therefore refer to the intrinsic characteristics of the product in question and do not encompass any specific requirement as regards the geographical area in which it can be marketed. No other interpretation of its meaning has emerged from examination of the majority of the other language versions of the expression in Regulation No 3665/87. (27)

48. Unlike the Commission, I do not believe either that the second requirement referred to in Article 13 of Regulation No 3665/87, that where the products in question are intended for human consumption their ‘characteristics or condition [must not] exclude or substantially impair their use for that purpose’, necessarily has to be construed as meaning that a restriction on the sale of those products in the Community to the local market, with an indication of their origin, constitutes a substantial impairment of their use. The requirement in question can equally be read as envisaging only the detailed provisions for the consumption or use of the products as human foodstuffs, without reference to the geographical area in which they are sold.

49.The ninth recital to Regulation No 3665/87 which, as such, has no regulatory force, but which sets out the intention of the Community legislature in enacting Article 13 and can therefore be taken into consideration for the purposes of interpreting that article, likewise offers no conclusive indications for determining of the question at issue. It merely states that ‘products should be of a quality such that they can be marketed on normal terms’, but does not define the concept of ‘normal terms’.

50.Nor do the structure or objectives of Regulation No 3665/87 offer any persuasive indication that the interpretation advanced by the Commission and the Hauptzollamt Hamburg-Jonas is well-founded. As regards, in particular, the objectives of the Regulation, it is, admittedly, possible to argue, as those parties have done, that, since export refunds are financed out of the Community budget, they should only be granted for the products which ‘most deserve’ them, which are products found to be fit for sale throughout the Community. However, against that argument one can counter the fact that, as the Bundesfinanzhof states, meat from animals which have undergone special emergency slaughtering is also in competition, on the local market, with meat which can be sold throughout the Community, with the effect that to finance its export to those third countries could indeed contribute to achieving the objective of the export refund scheme, that of stabilising the Community market.

51.I therefore consider, in the light of the foregoing considerations, that Article 13 of Regulation No 3665/87, in its current wording, did not entitle operators to take the view that the grant of export refunds for meat was subject to the condition that the meat in question should be capable of being sold for human consumption throughout the Community.

52.Nor, having regard to those facts, do I consider that Article 21 of Regulation No 800/1999, to the extent that it expressly provides that products of sound and fair marketable quality are those which ‘can be sold on normal terms within the Community’, has to be treated in that respect as merely clarifying Article 13 of Regulation No 3665/87. If Article 21 had to be construed, as the parties have argued and as I too am inclined to think, as expressly requiring products qualifying for export refunds to be capable of being sold throughout the Community, it in my view introduces a requirement which Regulation No 3665/87 did not contain. That additional requirement cannot in my view be applied retroactively to facts which occurred prior to the entry into force of Regulation No 800/1999.

53.Regulation No 450/2000 on export refunds on beef and veal, the third recital to which states that ‘[r]efunds should be granted only on products that are allowed to move freely within the Community’, and which, in Article 1, therefore amended Regulation (EC) No 2698/1999, (28) I believe further confirms my analysis of Article 13 of Regulation No 3665/87. The fact that, as the Commission stated at the hearing, Regulation No 450/2000 proved necessary as a result of the differences of interpretation to which the previous legislation, in particular Article 21 of Regulation No 800/99, gave rise, demonstrates all the more that Article 13 of Regulation No 3665/87 was not sufficiently clear and precise to be understood by the persons concerned as rendering the grant of export refunds subject to a requirement that the products in question should be capable of being sold for human consumption throughout the Community.

54.For those reasons I take the view that the correct interpretation of Article 13 of Regulation No 3665/87 is that which best accords with the principle of legal certainty.

55.In the light of the foregoing considerations, I propose that this Court should reply to the first question raised for a preliminary ruling that Article 13 of Regulation No 3665/87 must be interpreted as not precluding meat fit for human consumption from being treated as being of fair marketable quality and eligible for export refunds when its sale for human consumption within the Community is restricted to the local market because it is from an animal which has been subject to special emergency slaughtering within the meaning of Directive 64/433.

B – The second question referred for a preliminary ruling

56.By its second question, the referring court enquires whether by virtue of Regulation No 3665/87 the grant of export refunds is subject only to the requirement that the meat in question should correspond to the description appearing in the refund application or if it is also necessary for it to be of average quality, in the subjective or commercial sense of the term.

57.The referring court is therefore asking, in essence, whether the concept of fair marketable quality referred to in Article 13 of Regulation No 3665/87 must be construed as meaning that the products exported have to be of average quality, with the effect that export refunds cannot be granted where the products are of inferior quality, even if they can be sold under the description contained in the refund application.

58.In common with all the parties in the proceedings, I am of the view that the concept of fair marketable quality referred to in Article 13 of Regulation No 3665/87 does not require the product in question to be of average quality in the commercial sense of the term. As this Court held in Muras, the expression ‘sound and fair marketable quality’ constitutes a general, objective condition for the grant of a refund, whatever the requirements as to category and quality laid down by the regulations fixing the amounts of the refunds for each product. (29)

59.Nor does the same concept, contained in Article 13 of Regulation No 3665/87, encompass any different meaning in that regard. As the referring court states, the concept requires that the products can be sold on normal commercial terms under the description given in the export refund application. It does not require the products in question to have a particular level of quality in the subjective or commercial sense of the term. That analysis is also in line with the export refund system which, as with beef and veal, sets single refund rates for products described in accordance with the headings and subheadings of a nomenclature known as the ‘Combined Nomenclature’ used to classify products for the Common Customs Tariff. (30)

60.In contrast to the doubts expressed by the referring court, this Court’s position in France v Commission was not in my submission in conflict with the foregoing analysis. In that case the French Government was challenging the Commission’s decision to exclude EAGGF funding for the export by the Bel cheese company of 76 500 kg of processed cheese to Saudi Arabia. The Government asserted that the cheese in question did in fact reach the country of destination and that it was only whilst it was being sold that the importer, taking the view that the texture of the cheese was too soft having regard to the product’s usual standards, decided to withdraw it from sale.

61.This Court upheld the Commission’s decision on the grounds that on the day of export the product in question had a latent defect, the result of which was that it was not of sound and fair marketable quality within the meaning of Article 13 of Regulation No 3665/87. (31) It added that to find otherwise would be tantamount to obliging the general public to bear the consequences of the manufacturer’s failure to fulfil its contractual obligations to deliver the product as specified.

62.In that case, the reason for the refusal to grant an export refund was therefore not merely the fact that the product in question was of a quality inferior to the usual commercial quality, but that at the time of its export it had a latent defect, such that it could not be used for its intended purpose.

63.Having regard to the foregoing, I propose that the reply to the second question referred for a preliminary ruling should be that the concept of fair marketable quality in Article 13 of Commission Regulation No 3665/87 should be interpreted as not requiring the product to be exported to be of average quality, with the effect that a product would be disqualified from the grant of an export refund where it was of inferior quality, even if it could be sold under the description given in the refund application.

V – Conclusion

64.In the light of the foregoing, I propose that this Court should respond as follows to the questions raised by the Bundesfinanzhof:

(1)Article 13 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 should be interpreted as not precluding meat fit for human consumption from being treated as being of fair marketable quality and from qualifying for export refunds where its sale for human consumption within the Community is restricted to the local market because it is from an animal which has been subject to special emergency slaughtering within the meaning of Council Directive 64/433/EEC of 26 June 1964 on health problems affecting intra-Community trade in fresh meat as last amended by Council Directive 95/23/EC of 22 June 1995.

(2)The concept of ‘fair marketable quality’ in Article 13 of Commission Regulation No 3665/87 must be interpreted as not requiring that the product exported be of average quality, with the effect that a product of inferior quality would be disqualified from the grant of an export refund, even if it could be sold under the description contained in the refund application.

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1 – Original language: French.

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2 – OJ 1987 L 351, p. 1.

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3 – Council Directive of 26 June 1964 on health problems affecting intra-Community trade in fresh meat (OJ 1964 L 121, p. 2012), as amended and codified by Council Directive 91/497/EEC of 29 July 1991, amending and codifying Directive 64/433 to extend it to the production and placing on the market of fresh meat (OJ 1991 L 268, p. 69) and as amended by Council Directive 95/23/EC of 22 June 1995 (OJ 1995 L 243, p. 7), ‘Directive 64/433’.

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4 – Article 18 of Council Regulation (EEC) No 805/68 of 27 June 1968 on the common organisation of the market in beef and veal (OJ, English Special Edition 1968(I), p. 187).

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5 – Ibid.

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6 – 10th recital to Regulation No 805/68.

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7 – Commission Regulation of 15 April 1999 on the common rules for application of the system of export refunds for agricultural products (OJ 1999 L 102, p. 11).

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8 – Commission Regulation of 28 February 2000, amending Regulation (EC) No 2698/1999 fixing the export refunds on beef and veal (OJ 2000 L 55, p. 24).

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9 – Law of 19 January 1996 (BGB1. 1996 I, p. 59).

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10 – BGB1. 1997 I, p. 1138.

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11 – ‘SEPA’.

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12 – The referring court cites Case 12/73 Muras [1973] ECR 963 and Case C-235/97 France v Commission [1998] ECR I-7555.

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13 – See, in particular, Case 36/79 Denkavit Futtermittel [1979] ECR 3439, paragraph 12, and Case C-326/00 IKA [2003] ECR I-1703, paragraph 27.

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14 – See, in particular, Case C-354/95 National Farmers’ Union and Others [1997] ECR I-4559, paragraph 57, and Case C-177/96 Banque Indosuez and Others [1997] ECR I-5659, paragraph 27.

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15 – Case 326/85 Netherlands v Commission [1987] ECR 5091, paragraph 24, and Case C-30/89 Commission v France [1990] ECR I-691, paragraph 23. For a recent interpretation, see Case C‑236/02 Slob [2004], ECR I-1861, paragraph 37.

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16 – Case 237/86 Netherlands v Commission [1987] ECR 5251, paragraphs 19 and 20.

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17 – Case C-10/88 Italy v Commission [1990] ECR I-1229.

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18 – Case 349/85 Denmark v Commission [1988] ECR 169.

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19 – Paragraphs 9 to 13.

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20 – Paragraph 14.

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21 – Paragraph 15.

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22 – Commission Regulation of 29 March 1989 laying down detailed rules for the application of intervention measures in the beef and veal sector (OJ 1989 L 91, p. 5).

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23 – Case C-209/96 United Kingdom v Commission [1998] ECR I-5655, paragraphs 35 and 36.

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24 – Ibid., paragraph 37.

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25 – The wording of Article 13 of Regulation No 3665/87 therefore differs from that of Article 6 of Commission Regulation No 1041/67/EEC of 21 December 1967 on detailed rules for the application of export refunds in the sector of products subject to single pricing (OJ English Special Edition 1967, p. 323), which provided that ‘[a] a refund shall be granted only in respect of products in free circulation within the Community which are of sound and fair marketable quality and, in the case of products intended for human consumption, which have characteristics or are in a condition such as do not exclude or substantially impair their use for that purpose’ (emphasis added). Consequently, the interpretation of Article 6 in Muras, in which it was held that a product ‘which could not be marketed within the Community’ under normal conditions would not meet the requirements as to quality conferring entitlement to export refunds (paragraph 12), cannot in my view be transposed, on that specific point, to Article 13 of Regulation No 3665/87.

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26 – Cornu, G., Vocabulaire juridique, Presses Universitaires de France, Paris, 1998, p. 508.

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27 – The expression in question is expressed as follows: ‘fair marketable quality’ in English, ‘handelsüblisher Qualität’ in German, ‘leale e mercantile’ in Italian, ‘cabal y comercial’ in Spanish and ‘handelskwaliteit’ in Dutch.

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28 – Commission Regulation of 17 December 1999 fixing the export refunds on beef and veal (OJ 1999 L 326, p. 49).

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29 – Paragraph 12.

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30 – In relation to beef and veal, see Council Regulation (EEC) No 3905/87 of 22 December 1987, amending Regulation No 805/68 (OJ L 370, p. 7).

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31 – France v Commission, paragraph 79.