OPINION OF ADVOCATE GENERAL

delivered on 11 June 1992 (*1)

Mr President,

Members of the Court,

1.The reference for a preliminary ruling which is the subject of these proceedings is for the interpretation of a number of provisions of Community legislation on the grant of subsidies for oil seeds harvested and processed in the Community. In this Opinion, I shall be confining myself to the aspects of that legislation which are the most relevant for present purposes.

The grant of the subsidy for oil seeds harvested and processed in the Community is provided for by Regulation No 136/66/EEC of the Council of 22 September 1966 on the establishment of a common organization of the market in oils and fats (1) (Article 27). Subsequently, Regulation of the Council (EEC) No 2114/71 of 28 September 1971 on the subsidy for oil seeds (2) defined the principles underlying the grant of the subsidy itself by providing in particular for the control of seeds at the oil mill (Article 2(1)) and the introduction of a Community subsidy certificate intended to provide proof that the seeds have been placed under control (Article 4). That certificate is to be issued ‘on the day on which the Member State concerned takes over control of the seeds at the oil mill in which these are processed’ (second paragraph of Article 6).

The detailed rules for the application of the subsidy system were laid down by the Commission in Regulation (EEC) No 1204/72 of 7 June 1972. (3) According to Article 3(1) of that regulation, the control is to be exercised ‘from the time the seeds enter the oil mill until they are processed’. Article 5 of that regulation further provides that the Community subsidy certificate is to consist of, in particular, ‘one part, designated ID, certifying that the quantity of seeds harvested in the Community which is identified is subject to the control’. The application for the ID part is to be ‘considered only if the seeds entered the oil mill at the latest on the day on which it was submitted’ (Article 6(2)) and the relevant certificate is to be regarded as issued ‘on the day on which the application is lodged’ (Article 12). Lastly, Article 10 provides that the ‘ID part of the certificate makes it obligatory to process the identified quantity within a period of 270 days after its day of issue’.

2.I shall now turn to the facts which gave rise to these proceedings. In 1980, the company Comptoir National Technique Agricole (‘CNTA’) processed two lots of sunflower seeds. The application for the ID part of the certificate, however, was not lodged until after the seeds had been processed (owing, apparently, to organizational problems resulting from a fire which had occurred in the plant a few months before).

Despite the late application for the ID part of the certificate, the national authority responsible for implementing the subsidy system, Société Interprofessionnelle des oléagineux (‘SIDO’), agreed to pay the subsidy, although it made payment conditional on the lodging of a security, which was provided by the Etoile commerciale company. This was done in case the European Agricultural Guidance and Guarantee Fund, Guarantee Section, (‘the EAGGF’) refused to recognize the amount of the subsidy paid as chargeable to it, which is in fact precisely what it subsequently did, resulting in the security being forfeited to SIDO.

3.In the face of the Commission's refusal to charge the subsidy in question to the EAGGF, Etoile commerciale and CNTA brought two actions before the Court of Justice for the annulment of the relevant Commission decision and for compensation for the loss sustained. The applications were declared inadmissible by judgment of 7 July 1987. (5)

4.CNTA took the view that the Commission was wrong not to charge the subsidies already paid by SIDO to the EAGGF and that the decision should have been challenged by French Government — traders being precluded from doing so. CNTA therefore brought proceedings in the Tribunal administratif de Paris (Administrative Court, Paris) for the annulment of the Ministry of Agriculture's refusal to grant compensation for the losses which it had sustained as a result of the fact that the amount of the subsidy in question was returned to SIDO.

5.I shall say straight away that CNTA's argument that its failure to apply for the ID part of the certificate until after the seeds had been crushed is not in breach of the relevant Community legislation, but at most contrary to a mere administrative practice of SIDO, does not strike me as tenable.

In that connection, I would observe in the first place that, under the second paragraph of Article 6 of Regulation No 2114/71, the subsidy certificate, the ID part of which proves that the seeds have been placed under control, is to be issued on the very day on which the Member State concerned takes over control of the seeds, and that, under Article 12 of Regulation No 1204/72, it is regarded as having been issued on the day on which the application is lodged. As it cannot reasonably be supposed that the certificate would be issued before the relevant application was lodged and as the control must be exercised from the time when the seeds enter the oil mill (Article 3(1) of Regulation No 1204/72), it follows — obviously — that the seeds must be placed under control and the application lodged in the course of the same day, (6) that is to say, the very day on which the seeds enter the seed mill. There is therefore no doubt that there was an infringement of the qualifying Community provisions on CNTA's part.

On top of this, under Article 25(2) of Regulation No 1204/72, the subsidy is to be paid on presentation of the ID part of the certificate and after certification by the authority responsible for controlling the processing of the seeds identified in the certificate during the period referred to in Article 10(1) of that regulation, that is to say, within the 270 days for which the certificate is valid. To my mind, that provision is only too clear in providing that the seeds may never be processed before the certificate has been issued and that the grant of the subsidy is conditional on compliance with that requirement.

6.CNTA maintains, however, that application for the ID part of the certificate is not a precondition for the grant of the subsidy, but merely the reference point for the purpose of calculating its amount. This is because the fact that the seeds have been placed under control — the function of which is precisely that of identifying the seeds eligible for the Community subsidy — is proved by the ‘entry documents’ relating to the entry of the seeds into the plant and not by the ID part of the certificate, whereas applying for the certificate is simply an administrative formality the aim of which is to certify after the event that the seeds have already been placed under control.

In that connection, I would note in the first place that it seems, however, to appear from the general legislative context, as outlined above, that application for the ID part of the certificate is equivalent, as far as the competent authority is concerned, to a request to have the seeds placed under control. (7)

Moreover, as appears from the fourth recital in the preamble to Regulation No 2114/71, the subsidy certificate was introduced in order to ensure ‘uniform and effective control of the seeds harvested within the Community’. From that perspective, the fact that ‘entry documents’ for seeds entering the oil mill could possibly prove that the control was carried out is absolutely irrelevant for the purposes of the grant of the subsidy: those documents are connected with a purely internal practice.

In contrast, as Article 4 of Regulation No 2114/71 and Article 5 of Regulation No 1204/72 make clear, the ID part of the certificate is the only document capable of certifying that the seeds have been placed under control and therefore are eligible for the Community subsidy. Accordingly, the application for the ID part of the certificate must necessarily be lodged on the very day on which the seeds are placed under control and before they are processed. In the final analysis, this is an essential pre-condition for the actual grant of the subsidy.

7.Having said that, it should be noted that the amount of the subsidy is that valid on the day on which the application for the ID part of the certificate is lodged (first paragraph of Article 35 of Regulation No 1204/72), that is to say, the day on which the seeds are placed under control (Article 3 of Regulation No 2114/71) and therefore the day on which they entered the seed mill. Moreover, since it is clear that the main aim of having these operations take place virtually concurrently is to avoid speculation, (8) it follows that failure to comply with the obligation in question would be liable to distort the operation of the system as a whole. To leave traders free to choose on which day to lodge their applications could have the effect of encouraging them to await the most propitious time, thereby obtaining an unwarranted profit.

The above confirms that it is necessary for there to be strict compliance with the prescribed time for placing seeds under control — that is to say, as soon as they enter the oil mill — and therefore with that for lodging the ID part of the certificate, in order to ensure the proper functioning of the system in question. As the Court has held in cases involving similar facts, (9) the consequence of a failure to observe the time-limits prescribed — even if there are no specific provisions to that effect — is loss of entitlement to the aid.

8.Nor do I consider, as CNTA argues, that such an interpretation of the legislation in question would be contrary to the principle of proportionality as formulated on many occasions by the Court, (10) on the basis of which it is necessary to establish whether the means employed to achieve the intended aim correspond to the importance of that aim and whether they are necessary for its achievement.

As I have already observed, compliance with the obligation in question is essential in order to secure the sound functioning of the subsidy system as laid down by the Community institutions, in so far as it ensures that the seeds in question qualify for the subsidy and, at the same time, obviates any speculation. It follows that the sanction of loss of entitlement to the subsidy for failure to comply with this obligation does not constitute a disproportionate sacrifice for persons subject to the system.

9.In the light of the foregoing, I therefore propose that the Court's reply to the question referred by the Tribunal administratif de Paris should be as follows:

The grant of the subsidy for oil seeds as provided for in Regulation (EEC) No 2114/71 of the Council is subject, in accordance with the detailed implementing rules laid down in Regulation (EEC) No 1204/72 of the Commission, to the condition that the application for the ID part of the certificate must be lodged on the same day as the seeds are placed under control and before they are processed.

*1 Origina! language: Italian.

1 OJ, English Special Edition 1965-1966, p. 221.

2 OJ, English Special Edition 1971 (III), p. 826.

3 OJ, English Special Edition 1972 (II), p. 493.

4 As amended by Commission Regulation (EEC) No 2980/78 (OJ 1978 L 355, p. 17).

5 Judgment in Joined Cases 89 and 91/86 Etoile commerciale and CNTA v Commission [1987] ECR 3005.

6 The fact that the day on which the application is lodged is the same as that on which the seeds are placed under control is confirmed, moreover, by the provisions relating to the determination of the amount of the subsidy (see Article 3 of Regulation No 2114/71 and Article 35 of Regulation No 1204/72).

7 That this — in die Commission's view at least — is the significance to be attached to lodging the application for the certificate clearly emerges from the third recital in the preamble to Regulation No 2980/78, which amended Regulation No 1204/72, cited above, in which it is stated that ‘... the party concerned requests that the oil seeds be placed under control at the oil mill by lodging his application for the ID part of the certificate’.

8 In the same context, Article 6(2) of Regulation No 1204/72 provides that the application may be lodged no earlier than the day on which the seeds enter the oil mill.

9 See the judgments in Case C-357/S8 Hoparmann I [1990] ECR I-1669, paragraph 12, and in Case C-358/88 Hopermann II [1990] ECR I-1687, paragraphs 10 and 11.

10 See, most recently, the judgment in Case C-319/90 Pressler [1992] ECR I-203, paragraph 12.