Important legal notice

61985C0342

JOINED OPINION OF MR ADVOCATE GENERAL VILACA DELIVERED ON 17 SEPTEMBER 1987. - ITALIAN REPUBLIC V COMMISSION OF THE EUROPEAN COMMUNITIES. - CLEARANCE OF EAGGF ACCOUNTS - 1980 FINANCIAL YEAR. - CASE 342/85.

European Court reports 1987 Page 04677

Opinion of the Advocate-General

Mr President, Members of the Court, 1 . I - The Italian Republic has asked the Court to declare partly void Commission Decisions 85/459/EEC and 85/460/EEC of 28 August 1985 ( 1 on the clearance of the accounts of expenditure to be financed by the European Agricultural Guidance and Guarantee Fund ( EAGGF ), Guarantee Section, presented by the Italian Republic for 1980 and 1981 respectively inasmuch as they refuse to charge to the EAGGF certain sums paid by way of aid for skimmed-milk powder in intervention, aid for the consumption of olive oil, financial compensation for withdrawal from the market of fishery products and monetary compensatory amounts .

II - A - Aid for skimmed-milk powder

2 . Since there were no stocks of skimmed-milk powder in Italy in 1978 the Council decided by means of Regulation No 1763/78 of 25 July 1978 ( 2 to transfer to the Italian intervention agency part of the stocks held by the intervention agencies in other Member States, to be made into animal feed .

3 . The transfer was accomplished in two stages, the second being governed by Commission Regulation No 516/80 of 29 February 1980, ( 3 amended for the last time by Regulation No 3314/80 of 19 December 1980.*(4 )

4 . It is the final amount of the aid payable, and therefore eligible for financing by the EAGGF, which is the subject of these applications, at this stage .

5 . In order to settle the dispute it is necessary to consider the relationship between the various provisions governing aid for skimmed milk .

6 . Regulation No 804/68 of the Council of 27 June 1968 ( 5 ) established a common organization of the market in milk and milk products; Article 10 provided that aid was to be granted for skimmed milk and skimmed-milk powder used for animal feedingstuffs .

8 . The general rules governing the amount of the aid ( whether for purchases on the open market or purchases from an intervention agency, and in both cases whether made in the trader' s country or in another Member State ) are to be found in Commission Regulation No 1725/79 of 26 July 1979 ( 7 ) which replaced Regulation No 990/72 of 15 May 1972 . ( 8 Article 9*(1 ) of Regulation No 1725/79 provided that "the amount of aid shall be that applicable on the day on which the skimmed milk or skimmed-milk powder is denatured or on the day on which it is processed into compound feedingstuffs ".

9 . According to the general rule laid down in Article 3*(1 ) of Regulation No 986/68, aid is to be paid in principle by the Member State in whose territory the skimmed milk was denatured or processed and subject to proof of completion of that process ( Art . 3*(2 )*).

10 . However, in the case of skimmed-milk powder produced in one Member State and denatured or processed into compound animal feedingstuffs in another Member State ( whether purchased on the open market or from the relevant intervention agency ) Commission Regulation No 1624/76 of 2 July 1976 ( 9 ) established special arrangements : the amount of the aid - to be paid by the consignor Member State subject to production of proof that the milk has been subjected to customs or administrative control, and to the lodging of a security - is to be, in principle, that applicable on the day the customs formalities for export are completed ( Article 8*(1 )*); however, the trader may obtain a supplementary payment if the amount of aid applicable on the day of processing or denaturing was greater than that paid by the consignor Member State ( Article 8*(2 )*).

11 . The Commission maintains that that special rule was introduced in order to deal particularly with the situation in Italy, which was at that time the only country with inadequate stocks of skimmed-milk powder, obliging traders to have recourse to importation and thus subjecting them, under the general rules, to the difficulties inherent in the administrative delays in paying aid in Italy .

12 . The result of the two sets of rules taken together is that, in general, the amount of the aid is to be calculated at the time of processing or denaturing - and not the time of purchase or any other earlier event - in the following cases :

purchase in the trader' s own country;

purchase by the trader in another Member State when the amount of aid applicable at the time of processing was greater than that applicable at the time of export .

13 . Other special arrangements were laid down to govern the case - and that is what concerns us here - of powdered milk being transferred from an intervention agency in one Member State to the Italian intervention agency in order to compensate for the absence of stocks in Italy . It was Regulation No 516/80, as amended by Regulation No 1146/80 of 7 May 1980, ( 10 ) which defined in relation to the transaction at issue here the conditions in which the Italian agency was to sell the milk made available to it .

14 . Article 3a of Regulation No 516/80 refers generally to the provisions of Commission Regulation No 2213/76 of 10 September 1976 ( 11 ( as last amended by Regulation No 90/80 of 17 January 1980 ( 12 )) which lays down the general rules applicable to the sale of skimmed-milk powder from public storage, in particular as regards prices .

15 . In addition to that, Article 3a lays down a number of special conditions, including ( paragraph 3 ) one to the effect that "at the time of payment of the purchase price, that price shall be reduced by the amount of the aid referred to in Article 10 of Regulation ( EEC ) No 804/68 ".

16 . The purpose and the extent of that reduction is what lies, ultimately, at the root of the dispute between the applicant and the defendant as regards this part of the application .

18 . For those reasons, since there had been an increase in the amount of aid between the time of sale and that of processing the milk, the Italian intervention agency decided to pay traders the relevant difference in accordance with the procedure laid down in Article 8*(2 ) of Regulation No 1624/76 .

19 . The Commission did not accept that interpretation, and refused to charge the difference to the EAGGF on the ground that the amount of aid payable was simply that applicable on the day on which the contract of sale was concluded .

20 . The Commission maintains that in the absence of an express exemption, that is the natural consequence of the application of the principle tempus regit actum .

21 . The Commission also maintains that since the detailed rules for granting and paying the aid vary according to the way in which the purchase was made ( purchase on the open market, purchase on the open market with denaturing or processing in the territory of another Member State and purchase from intervention agencies ), the reduction afforded by Article 10 cannot include all the rules adopted in order to implement it . It cannot, in particular, embrace the special case which is sub judice of purchases by traders from the intervention agency in their own country of skimmed-milk powder coming from intervention stocks in another Member State .

22 . I cannot endorse the Commission' s interpretation .

23 . In the first place, I consider - as does the Italian Government - that since Article 10 of Regulation No 804/68 fixes directly neither the amount nor the detailed rules and conditions for granting the aid to which it refers, the aid can only be determined in accordance with the rules for implementing it provided for in Article 10*(2 ) and ( 3 ) which are, moreover, referred to in paragraph 10*(1 ).

24 . As we have seen, however, the general rule for determining the amount of the aid is the one which requires the amounts applicable on the date of processing or denaturing to be taken into account .

25 . Now there is not a trace of any legal provision applicable to sales, by an intervention agency, of milk transferred to it from another intervention agency, which indicates clearly that in such cases that general rule does not apply . Regulation No 516/80 contains no such provision, nor do any of the others which govern such transfers .

26 . The rules of good interpretation would therefore seem to require in such a case the application in principle of the common rules governing the determination of the amount of the aid, and not the application of an exception for which, as regards the case in hand, no clear support is to be found in any of the legal texts .

27 . By contrast, the Commission' s argument ( referred to in the Summary Report on the clearance of the EAGGF accounts ) concerning the absence of a provision corresponding to that which appears in Article 8 of Regulation No 1624/76, providing for identical rules to govern transfers of milk between intervention agencies, cannot be valid .

28 . In the case of the exceptional rules for early payment by the consignor Member State provided for in Article 2 of that regulation, it was necessary ( even if that was not the sole purpose of the provision ) to state which intervention agency was to pay the difference in the amount of the aid and on what conditions, given that the processing took place in another Member State . Article 8*(2 ) describes those rules in terms which indicate, moreover, that the legislature regarded payment of the difference as being based on other, earlier, provisions, in particular Regulation No 990/72, to which it expressly refers .

29 . The application of the general rule tempus regit actum should not affect the interpretation which has just emerged : we are not concerned here with the application of any rule which came into existence after the act of purchase, but with the determination and interpretation of a group of rules which were already in existence and in force at that time and which require a date subsequent to the purchase to be taken into account for fixing the amount of the aid .

30 . Nor do I consider that it can be challenged ( see the Summary Report ) on the basis of Article 1*(2)*(b ) of Regulation No 1725/79 : "The skimmed milk and skimmed-milk powder ... may qualify for aid only if ... they have not qualified and are not likely to qualify for aid or a reduction in prices by virtue of other Community provisions ". One cannot rely on that provision when what is to be determined is only the final amount of the same aid, in accordance with the provisions of that regulation .

31 . Similarly, the reference made by the Commission, in its reply to the questions put by the Court, to the special conditions of sale laid down in Commission Regulations Nos 368/77 of 23 February 1977 ( 14 ) and 443/77 of 2 March 1977 ( 15 ) does not appear to me to be relevant; those regulations laid down special conditions of sale and price-fixing ( sale by tender and sale at a fixed price respectively ) and cannot, in my opinion, serve to support any argument regarding the mode of calculating the amount of the aid, when such aid is payable .

32 . The fact is that in the case of sale by tender the sale is made at a very reduced price so that it is not necessary, in order to make the product competitive and ensure its disposal on the market, to grant the aid provided for in Article 10 of Regulation No 804/68 ( fifth recital in the preamble and Article 19*(b ) of Regulation No 368/77 ); as regards the conditions governing sale at a fixed price, Regulation No 443/77 states that the price must be fixed in such a way as to give priority to sale by tender ( second recital in the preamble ) and stipulates that the sales to which it refers must be governed by, inter alia, Article 19 of Regulation No 368/77 which provides that aid is not payable .

33 . Were there not, however, - as the Commission alleges - sufficiently strong reasons to justify abandoning the application of the general rule in this case?

34 . In connection with that argument, the Commission refers to a number of economic considerations which, in its view, justify a different approach .

35 . In particular, the Commission draws attention to the fact that where traders purchase from the Italian intervention agency milk coming from intervention in another Member State, they do not have to bear the costs of transporting the milk to Italy, as they do when purchases are made under the provisions of Regulation No 1624/76 .

36 . Secondly, again according to the Commission, traders benefit in that case from immediate payment of the aid whereas under Regulation No 1725/79 they must first pay the full price and await the time of processing in order to be able, not in fact to receive, but to apply for the aid .

37 . Finally, ( and this argument is relied on solely in the Summary Report ) the Commission referred to the fact that only under the system introduced by Regulation No 1624/76 is there a fixed period within which processing must be carried out ( six months after completion of the customs formalities ), whereas in the case of transfers between intervention agencies traders are free to choose the best moment for processing in order to receive the highest level of aid .

38 . In my view those considerations are not capable of invalidating the conclusions I have reached concerning the interpretation of the existing rules . Since there is no provision which clearly supports the approach favoured by the Commission, I do not regard the arguments adduced by it as sufficiently strong to support it, in the light of an interpretation based on the logic and equilibrium of the rules in force .

39 . I am not swayed by the consideration that if the purchases had been made from the Italian intervention agency otherwise than in connection with transfers from other intervention agencies or if they were made on the open market in Italy, the amount of aid applicable would be that applicable on the day of processing, even if transport costs had not been incurred . It may be said, as the Commission pointed out, that that difference in treatment is a corollary of the traders' option to choose between various ways of purchasing, each having its own advantages and disadvantages .

40 . That argument can in fact serve to support the opposite conclusion that the system challenged is not the same as the others and may entail advantages not conferred by others or avoid disadvantages which others do not .

41 . What cannot be overlooked, however, is the discrimination which exists between Italian traders and traders in other Member States who purchase from their own intervention agencies . The latter receive the amount of aid applicable on the day of processing; the former receive only the amount of aid applicable on the day of purchase, and are thus penalized by comparison with all the others .

42 . Now, I do not consider such discrimination acceptable, at least when it is the consequence, as it is here, of a derogation from the general rules not expressly intended by the legislature .

43 . In addition, I do not support the argument that Italy had benefited sufficiently from the special rules designed to compensate for the structural deficiencies traditionally to be found there : the rules in question also serve the interests of other Member States, enabling them to dispose of surpluses, as is stated in the first and second recitals in the preamble to Regulation No 1763/78, and that is sufficient to separate the question of transport costs ( which is governed by Community rules ) from that of the amount of the aid .

44 . On the other hand, the fact that Italian traders benefit from receiving the larger part of the aid before they undertake processing is also evident in the provisions of Regulation No 1624/76, in which it is also provided that payment must be made of the difference between the amount paid and that applicable at the time of processing .

B- Aid for olive oil consumption

C- Financial compensation connected with market withdrawal of fishery products

D- The monetary compensatory amounts relating to intra-Community trade

(*)Translated from the Portuguese.

(1)Official Journal, L 267, 9.10.1985, pp. 33 and 35.

(2)Official Journal, L 204, 28.7.1978, p.*8.

( 3 )Official Journal, L 58, 1.3.1980, p.*51 .

( 4 )Official Journal, L 345, 20.12.1980, p.*12 .

( 5 )Official Journal, English Special Edition 1968 ( I ), p.*176 .

( 6 )Official Journal, English Special Edition 1968 ( I ), p.*260 .

( 7 )Official Journal, L 199, 7.8.1979, p.*1 .

( 8 )Official Journal, L 115, 17.5.1972, p.*1 .

( 9 )Official Journal, L 180, 6.7.1976, p.*9 .

( 10 )Official Journal, L 117, 8.5.1980, p.*18 .

( 11 )Official Journal, L 249, 11.9.1976, p.*6 .

( 12 )Official Journal, L 13, 18.1.1980, p.*15 .

( 13 )Official Journal, L 339, 8.12.1976, p.*18 .

( 14 )Official Journal, L 52, 24.2.1977, p.*19 .

( 15 )Official Journal, L 58, 3.3.1977, p.*16 .

( 16 )Official Journal, English Special Edition 1972 ( I ), p.*90 .

( 17 )Official Journal, L 369, 29.12.1978, p.*12 .

( 18 )Official Journal, L 73, 24.3.1979, p.*13 .

( 19 )Official Journal, L 331, 9.12.1980, p.*27 .

( 20 )Official Journal, English Special Edition 1970 ( I ), p.*218 .

( 21 )Official Journal, L 200, 1.8.1980, p.*82 .

( 22 )Judgments of 28 January 1986 in Cases 129 and 130/84 Italian Republic v Commission (( 1986 )) ECR 309, at p.*343 .

( 23 )Official Journal, L 20, 28.1.1976, p.*39 .

( 24 )Official Journal, L 20, 28.1.1976, p.*1 .

( 25 )Official Journal, L 379, 31.12.1981, p.*1 .

( 26 )Official Journal, L 175, 12.7.1979, p.*1 .