Opinion of the Advocate-General

I – Legal background

3. The detailed arrangements for applying Regulation No 805/68 were laid down by Commission Regulation No 615/98.

4. Article 1 of the latter regulation makes it clear that the payment of export refunds for live bovine animals is subject, in particular, to compliance with Council Directive 91/628/EEC during transport of the animals to the first place of unloading in the third country of final destination.

‘The export refund shall not be paid for animals which died during transport or for animals for which the competent authority considers, in the light of the documents referred to in paragraph 2, the reports on the checks referred to in Article 4 and/or all other elements at its disposal concerning compliance with Article 1, that the Directive on the protection of animals during transport, was not complied with.’

II – The facts, the request for a ruling and procedure before the Court of Justice

10. In March 1999, the company Viamex Agrar Handels (‘Viamex’) declared to the Hauptzollamt (Principal Customs Office) Emdem the export to Lebanon of 35 bovine animals aboard the vessel Al Hajj Moustafa II.

11. By notice of 1 February 2001, the Hauptzollamt Hamburg-Jonas (‘the Hauptzollamt’) rejected Viamex’s application for export refunds under Article 5(3) of Regulation No 615/98 because, in its view, Viamex had transported the animals in breach of the Community animal welfare legislation. In particular, the Hauptzollamt observed that the animals in question had been shipped to Lebanon on a vessel which, having been included on 28 February 1997 in a Commission ‘negative list’, was in its opinion to be regarded as not meeting the requirements of Directive 91/628 at the time of export and was not therefore suitable for the carriage of live animals.

12. Viamex sought reversal of that refusal. Its application was rejected by the Hauptzollamt by decision of 18 May 2001.

13. Viamex appealed against that decision to the Finanzgericht (Finance Court) Hamburg, contending that in this case there had been no infringement of the Community legislation on refunds, in particular Directive 91/628, since there was no provision in the Community legislation to the effect that a vessel must be authorised for the carriage of live animals; accordingly, the refund could not be refused on the sole ground that the vessel used for the export operation appeared on a Commission negative list and, a fortiori, refusal was inappropriate since the vessel had been included on that list on the basis of an inspection carried out by a Commission expert on 18 and 19 February 1997, a good two years before the transport operation in question, and the application for an export refund was accompanied by the following documents evidencing the work carried out on the vessel:

(a) a written declaration from the master of the vessel made on 16 October 1997 and countersigned by the chief frontier veterinary officer at Koper (Slovenia) and

(b) a report from the average adjusters Kälher & Prinz.

14. The Hauptzollamt, for its part, observed that in the present case the inclusion of the means of transport used on a Commission negative list was a sufficient basis for concluding that Directive 91/628 had not been complied with and therefore for withholding payment of the export refund under Regulation No 615/98.

‘(1) Does Article 5(3) of Regulation No 615/98 constitute an exclusion, with the consequence that the burden of proof in respect of the requirements of Article 5(3) of Regulation No 615/98 is on the Principal Customs Office?

(2) If the first question is answered in the affirmative: In order to conclude under Article 5(3) of Regulation No 615/98 that the directive has not been complied with, is it necessary to have proof that there has been an infringement of Directive 91/628 in the particular case, or does the competent authority discharge its burden of proof if it relies on and provides evidence of circumstances which in an overall view indicate a material probability that the directive on the protection of animals during transport has not been complied with (also) in relation to the export consignment in question?

(3) Irrespective of the answers to questions 1 and 2: May the competent authority refuse to pay (all of) the export refund to the exporter under Article 5(3) of Regulation No 615/98 where there are no indications that the (potential) infringement of Directive 91/628 has in fact been deleterious to the wellbeing of the animals during transport in relation to the export consignment in question?’

16. Under Article 23 of the Statute of the Court of Justice, written observations were submitted by the Hauptzollamt and the Commission. At the hearing, which was held at the same time as that in Cases C-37/06 and C-58/06, oral argument concerning the present case was presented by Viamex, the German Government and the Commission.

III – Legal analysis

17. I would observe, first of all, that, if the Court accepts the solution proposed by me in Cases C-37/06 and C-58/06 (to the effect that the reference which, for the purpose of the grant of export refunds, Article 1 of Regulation No 615/98 makes to Directive 91/628 cannot be regarded as valid, since it is contrary to the principle of proportionality), that regulation will be inapplicable to the present case and no answer concerning the interpretation of any of its provisions should therefore be given to the questions submitted to the Court in these proceedings. However, I shall analyse the questions set out above in case the Court, in Cases C‑37/06 and C-58/06, rules that Regulation No 615/98 is valid and conforms to the principle of proportionality.

A – The first and second questions

18. By its first and second questions, which I shall consider together in so far as they are clearly connected, the national court essentially seeks clarification from the Court of Justice as to whether, on the basis of Article 5(3) of Regulation No 615/98, the national administrative authority, although having in its possession a certificate issued by a veterinary official of a Member State at the point where the bovine animals left the Community to the effect that the means used to transport the animals to a non-member country was, when the certificate was issued, compliant with the requirements of Directive No 91/628, may withhold payment of an export refund on the basis of elements which, although not directly relating to the transport operation in question, raise a strong presumption that the said directive has not been complied with, or whether, on the other hand, that authority is required to state its reasons and provide evidence of failure to comply with the directive specifically in relation to the operation in question.

19. The answer to the questions submitted, as indicated earlier, requires examination of the relationship allegedly existing between paragraphs 2 and 3 of Article 5 of Commission Regulation No 615/98 for the purposes of the rules on refunds for the export of bovine animals.

21. In its order for reference, the national court clearly asks the Court of Justice to examine the acceptability of the arguments which, it expressly states, prompt it to prefer the second solution. The arguments it puts forward in that regard are as follows:

(a) Article 5(2) of Regulation No 615/98 specifically provides that the exporter is to provide proof of compliance with Article 1 of that regulation and therefore also with Directive 91/628 by means of the duly completed document referred to in Article 2(3) of that regulation;

(b) Commission Regulation (EC) No 639/2003 of 9 April 2003 laying down detailed rules pursuant to Council Regulation (EC) No 1254/1999 as regards requirements for the granting of export refunds related to the welfare of live bovine animals during transport replaced, as indicated in the second recital in its preamble, Regulation No 615/98 ‘in the interests of clarity’; to that end, it eliminated any possibility that Article 5(2) and (3) of that regulation should be regarded as steps in a single procedure for payment, the completion of which required first an application accompanied by proof of less than absolute value provided by the exporter and then, possibly, a second phase characterised by analysis of evidence raising substantial doubts which it is the responsibility of the exporter, as the person seeking the refund, to overturn by providing further evidence;

(c) The Community legislature did not draft Article 5(3) of Regulation No 615/98 in the subjunctive, envisaging the possibility that the authority, on the basis of any other information available to it regarding compliance with Article 1 of Regulation No 615/98, might consider that the requirements of Directive 91/628 may not have been satisfied, the consequence being that a refusal to grant the export refund on the basis of Article 5(3) is conditional upon proof, to be provided by the competent authority, that Directive 91/628 was not in fact complied with in relation to the transport operation in question;

(d) Only infringements established and then specifically proved could in themselves justify, inter alia from the standpoint of proportionality, total withholding of the export refund from an exporter, even if he had provided proof of compliance with Article 1 of Regulation No 615/98 by producing the documents or reports indicated in the second subparagraph of Article 5(2) of Regulation No 615/98;

(e) Article 5(3) of Regulation No 615/98 sets out four alternative circumstances in which the export refund must be withheld; since it must be considered that those alternatives are not of equal importance but also apply separately and carry the same weight, the ‘other elements’ at the disposal of the authority mentioned as a fourth alternative must be of equal weight and quality to the preceding alternatives to justify complete loss of the right to a refund. Doubts and probabilities should not be regarded as sufficient to amount to that alternative.

22. The arguments thus put forward by the national court in support of the solution which it proposes to the problem embodied in the first two questions appear, all in all, to be decidedly sustainable. Moreover, they are supplemented by other and certainly no less important arguments concerning the obligations that Articles 8 and 18 of Council Directive 91/628 impose on the Member States, which the Commission was not entitled to overlook in adopting Regulation No 615/98 and which, in any event, cannot be overlooked when that regulation is interpreted.

23. According to Article 8 of Directive 91/628, ‘Member States shall ensure that, in accordance with the principles and rules of control laid down in Directive 90/425/EEC, the competent authorities check that the requirements of this Directive have been complied with, by carrying out non-discriminatory inspections of:

…

(c) means of transport … at places of departure ...’

24. It is in relation to that obligation that Regulation No 615/98 provides in Article 2(2), under the heading ‘Checks within the Community’, as follows:

‘An official veterinarian at the exit point shall verify and certify in accordance with the provisions of Council Directive 96/93/EC that:

– the means of transport by which the live animals are to leave the customs territory of the Community complies with Directive 91/628/EEC’. And Article 2(3) provides that ‘if the official veterinarian at the exit point is satisfied that the requirements of paragraph 2 are met, he shall certify this by the entry...

– “Checks pursuant to Article 2 of Regulation (EC) No 615/98 satisfactory”’

25. Article 18 of Directive 91/628, for its part, provides that ‘Member States shall take the appropriate specific measures’.

26.The fact that the document issued by the official veterinarian at the exit point from the Community does not merely represent a service provided to the exporter by the veterinarian but is a certificate recording a check which the relevant Community legislation requires Member States to carry out cannot fail to have an important impact on the evidential value which Regulation No 615/98 attributes to that document.

27.It cannot be inferred that the conclusion reached in the foregoing point does not apply in a situation, of the kind existing in this case, in which the check on the compliance of the means of transport with Directive 91/628 is carried out in a Member State other than the one in which the export refund is applied for and it is the competent authority of that State, and not of the latter State, which issues the document referred to in Article 2(3) of Regulation No 615/98. That hypothesis is excluded by the logic of the legal system of which that regulation forms part.

28.That system, in fact, in order to attain the objectives of animal protection and harmonious operation of the common market organisations for animals and animal products, has led to the creation of a Community network whose functioning, as far as attainment of the internal market is concerned, necessarily implies cooperation between the Member States based on the principle of mutual recognition.

29.It is by virtue of the enhancement of the evidential value attributed to the document in question by Article 5(2) of Regulation No 615/98, deriving not only from the obligation imposed on the Member States by Article 8 of Council Directive 91/628 but also from the principle of mutual recognition, that the possibility must be excluded that an authority called on to pay an export refund may invoke to the opposite effect, affording it prevalence, an item of evidence contradicted by data to the opposite effect provided by the exporter and contending peremptorily that the last-mentioned data are not relevant.

30.That is so because the fact of not paying sufficient attention to data provided by the exporter (a) does not reflect a balanced assessment of the burden of proof that is incumbent on the administration by virtue of the autonomous application of Article 5(3) of Regulation No 615/98 which is quite properly proposed by the national court and (b), in essence, amounts to a complete reversal of the onus of proof, whereby it is transferred outright to the exporter.

31.It can but follow from the information given to the Court of Justice in the order for reference that, in the circumstances set out in that order, the claim put forward by the Hauptzollamt Hamburg is irreconcilable with the value attributed to the document mentioned in Article 5(2) of Regulation No 615/98, as described in point 29 above.

32.The national court states that:

– The authority called on to pay export refunds expressed doubts as to the compliance with the directive of the means of transport used, relying (a) on the fact that on 18 and 19 February 1997 a Commission veterinary expert inspected at the port of Koper the vessel used in March 1999 for the transport operation at issue in this case, establishing that, in various respects, the vessel did not meet the requirements of Directive 91/628 and (b) only following an inspection of the same vessel made by French veterinarians in November 1999 was it no longer listed as unsuitable for the carriage of animals;

– in view of that information the exporter, as indicated in point 12 above, contended that the check made by the French veterinarians in November 1999 was preceded (a) by works designed to remedy the inadequacies noted on 18 and 19 February 1997, attested to by a written statement made by the master of the vessel on 16 October 1997 and countersigned by the chief frontier veterinary officer at Koper (Slovenia) and (b) by a report from the average adjusters Kähler & Prinz;

– the German administrative authority treated those data as irrelevant, even though they could be regarded as confirmed by the results of the check carried out by the French veterinarians in November 1999.

33.There is no doubt that by concluding, in the face of the data referred to in the foregoing point, that the conditions were fulfilled for application of Article 5(3) and forfeiture of the right to the refund, the administrative authority peremptorily altered the onus of proof incumbent on it and for the most part placed it upon the exporter. Although that authority might reasonably and categorically contend that the written declaration of 16 October 1997 from the master of the vessel concerning the work carried out emanated from a person within the sphere of influence of the applicant in the main proceedings, it could not take the same approach regarding countersignature of that statement by the chief frontier veterinarian at Koper and the expert’s report by the Kähler & Prinz average adjuster dated 22 September 1998. And it must be concluded that it did follow that course if it is borne in mind that, according to a balanced assessment of how the burden of proof should be shared, the German administrative authority was only under a duty to prove circumstances which, viewed as a whole, ‘indicate a material probability that the directive on the protection of animals during transport has not been complied with’. It must indeed be concluded that the fact of attaching importance to the inspection of 18 and 19 February 1997 and not to the other elements referred to above does not reflect a proper overall assessment of the circumstances.

34.Further and equally valid confirmation of the solution to the first and second questions advocated in the order for reference can be found in Article 18(1) of Council Directive 91/628, according to which, ‘Member States shall take the appropriate specific measures to penalise any infringement of this directive’ (including those deriving from failure to use ‘for the transport of animals … means of transport that will ensure compliance with … the requirements laid down in the annex’) ‘by natural or legal persons’. (7)

35.It is evident that, by means of that provision, the Community legislature applied a very clear principle derived from the tradition of the European States and forming an integral part of the Community legal system, namely the principle upheld on more than one occasion by the Court whereby sanctions which have an impact on the rights or freedoms of legal and natural persons may be imposed only if they rest on a clear and unambiguous legal basis (8) and if they are seen to be proportionate to the infringements for which they are imposed. (9)

36.The Council, as indicated in point 34 above, has made it clear that, when implementing the directive of which the abovementioned Article 18 forms part, that principle must be respected by the Member States.

37.In the Wilfried Monsees case, (10) the Court emphatically reiterated that principle, expressly stating that, in assessing the legitimacy of a measure brought into being by a Member State to implement Directive 91/628, that principle can also be applied in the light of Directive 95/29, even if the latter is applicable as from a time postdating the facts involved in the case in question. Clearly considering that the second-mentioned directive involves an assessment and a judgment of a general nature directly expressed by the Community legislature, in paragraph 30 it stated that ‘measures appropriate to the objective of protecting the health of animals and less restrictive of the free movement of goods’ than those contemplated by Directive 91/628 ‘were conceivable, as the provisions contained in Directive 95/29 demonstrate’.

38.The approach followed and the principle applied by the Court, as I observed in the Opinion I delivered on 13 September 2007 in Joined Cases C‑37/06 and C-58/06, could not, with greater reason, fail to be followed by the Commission when adopting Regulation No 615/98, since,

(a) first, the assessment and judgment which the Community legislature expressed by means of Article 18 of Directive 91/628 gave rise to a criterion – the criterion whereby the available sanctions must consist of adequate specific measures – which the Commission could not evade when adopting a regulation intended to give effect to that directive, and

(b) second, it being possible to use a parameter defined by the Community legislature in a directive in the context of an assessment of the proportionality of measures adopted by a Member State to implement an earlier directive, that parameter can, with greater reason, be used when expressed in a Council directive for the purpose of interpreting a Commission regulation which purports to implement it.

39.It follows that the Finanzgericht’s request for clarification from the Court involves examination of the compatibility with the principle of proportionality of the reference made by Regulation No 615/98 to Directive 91/628, and when such an examination is carried out the only possible course is to seek an appropriate balance between ensuring that the Community policies with which the regulation is concerned are pursued and ensuring legal protection for the persons to whom it is addressed.

40.In that connection, it must be borne in mind that the directive provides that the responsibility for the protection of animal health attaches not solely to the exporter or his representative but also to the Member States; as we have seen, pursuant to Article 8 of the directive, they are obliged to make certain that ‘the requirements of this directive have been complied with, by carrying out non-discriminatory inspections of

…

(c) means of transport … at places of departure …’.

41.In view of that shared responsibility for ensuring the protection of the health of bovine animals, it cannot be concluded that the principle of proportionality is observed where an administrative authority called on to grant export refunds may put forward an interpretation of Article 5(2) of the kind set out in points 11 and 13 above. Such an interpretation would clearly be disproportionate in that it would have a radical impact on the exporter’s right without taking account of the breach of the obligation to check the means used for transporting the animals which Article 8 of Directive 91/628 imposes on the Member State from which that means of transport leaves the customs territory, a breach which the authority called on to pay the refund would deem to have taken place if it refused to accept as proof the document referred to in Article 5(2) of Regulation No 615/98 and exercised the power vested in it by Article 5(3). That would be even more disproportionate since, again according to the thesis put forward by the Hauptzollamt on the basis of a merely formal reading of the provision, that power can be exercised on the basis of a doubt or a supposition deriving from a single element examined separately from other elements peremptorily and incorrectly treated as irrelevant.

42.Everything said in the foregoing points, in particular points 40 and 41, can only be confirmed by Council Regulation No 1/2005, adopted on the basis of a Commission recommendation that an amendment should be made to the Community legislation deriving from Directive 91/628, as amended by Directive 95/29, likewise adopted by the Council, in order to take account of the experience acquired by the Member States in applying that legislation. That regulation, in fact:

(a) in recital 16, emphasises that the carriage of animals involves categories of operator other than transporters, with the result that ‘some obligations regarding the welfare of animals should be extended to any operator involved in the transport of animals’; and

(b) in recital 22, it states that ‘Member States should lay down rules on penalties applicable to infringements’ of its provisions and ensure that they are ‘proportionate’.

B –The third question

43.By its third question, the referring court essentially asks the Court of Justice whether, on the basis of Article 5(3) of Regulation No 615/98, the payment of export refunds may be withheld where there is a breach of Directive 91/628, even if there is nothing to indicate that the welfare of the animals carried has been specifically compromised as a result of failure to comply with that directive.

44.It is clear from a reading of Article 5(3) of Regulation No 615/98 that the Commission intended to make payment of the export refunds conditional solely upon compliance with Directive 91/628, regardless of any ascertainment of specific injury suffered by the animals carried through failure to comply with the conditions laid down by the directive in question. In fact, whilst the abovementioned article provides that the competent authorities are not to pay the export refunds either for animals that have died during transport or those for which they conclude that the directive was not complied with, there is no provision for any specific ascertainment of any harm suffered by the animals as a result of breach of the Community provisions concerning animal welfare.

45.It is clear that it is extremely difficult to detect signs of injury suffered during the transport of the animals concerned and therefore to identify elements which demonstrate the harm suffered by them, or at least the fact of their welfare being jeopardised.

46.However, nothing stated in points 44 and 45 detracts from the fact that the conditions for withholding the refund must be established on the basis of the answer given above for the first and second questions jointly – in points 18 to 42 – and that, in any event, the system of penalties provided for by Regulation No 615/98 may be applied only where to do so is considered consonant with the principle of proportionality.

IV –Conclusion

47.In the light of the foregoing considerations, I propose that the Court of Justice give the following ruling in response to the questions submitted by the Finanzgericht Hamburg:

It cannot be considered that Article 5(3) of Commission Regulation (EC) No 615/98 of 18 March 1998 laying down specific detailed rules of application for the export refund arrangements as regards the welfare of live bovine animals during transport relates to a second part of the evidence which an applicant for an export refund in respect of bovine animals must provide in order to obtain payment. Council Directive 91/628/EEC of 19 November 1991 on the protection of animals during transport imposes obligations to ensure compliance not only on the exporter but also on the Member States and their authorities. Where an application for payment is made, accompanied by the evidence provided for in Article 5(2) of the abovementioned regulation, the principle of proportionality is not observed where Article 5(3) is interpreted in such a manner as to authorise the authority responsible for the payment of such refund to withhold it on the basis of a doubt or a presumption of failure to comply with the directive during transport, and that is so regardless of the fact that that authority is not under a duty to demonstrate the specific harm suffered by the animals during the transport operation in question.

(1) .

(2) – Regulation of 18 March 1998 laying down specific detailed rules of application for the export refund arrangements as regards the welfare of live bovine animals during transport (OJ 1998 L 82, p. 19).

(3) – OJ English Special Edition 1968 (I), p. 187.

(4) – Council Regulation of 18 December 1997 amending Regulation (EEC) No 805/68 on the common organisation of the market in beef and veal (OJ 1997 L 356, p. 13).

(5) – Directive of 19 November 1991 on the protection of animals during transport and amending Directives 90/425/EEC and 91/496/EEC (OJ 1991 L 340, p. 17), as amended by Council Directive 95/29/EC of 29 June 1995 (OJ 1995 L 148, p. 52). That directive was repealed by Council Directive (EC) No 1/2005 of 22 December 2004 on the protection of animals during transport and related operations and amending Directives 64/432/EEC and 93/119/EC and Regulation (EC) No 1255/97 (OJ 2005 L 3, p. 1). Article 33 of that regulation provides for repeal of the abovementioned directive only from 5 January 2007.

(6) – OJ 2003 L 93, p. 10.

(7) – Article 18(1) and (5), part A(1)(c).

(8) – See, for example, Case 137/85 Maizena [1987] ECR 4587, paragraph 15, and Case C-172/89 Vandermoortele v Commission [1990] ECR I-4677, paragraph 9.

(9) – See Maizena , paragraph 15, and Case C-210/00 Käserei Champignon Hofmeister [2002] ECR I-6453, paragraph 59.

(10) – Case C-350/97 Wilfried Monsees [1999] ECR I-2921.