Court of Justice of the European Communities (including Court of First Instance Decisions)

1 . AGRICULTURE - MONETARY COMPENSATORY AMOUNTS - APPLICATION - PRODUCTS AFFECTED - PRODUCTS WHOSE PRICE DEPENDS ON THE PRICE OF PRODUCTS COVERED BY INTERVENTION ARRANGEMENTS - DEPENDENCE OF PRICES
( REGULATION NO 974/71 OF THE COUNCIL , ART . 1 ( 2 ) ( B ))
2 . AGRICULTURE - MONETARY COMPENSATORY AMOUNTS - APPLICATION TO POWDERED WHEY - ARTICLE 1 OF REGULATION NO 539/75 OF THE COMMISSION- INVALIDITY

1 . THE PRICE OF A PRODUCT WHICH IS COVERED BY THE COMMON ORGANIZATION OF THE MARKETS DEPENDS WITHIN THE MEANING OF ARTICLE 1 ( 2 ) ( B ) OF REGULATION NO 974/71 ON THE PRICE OF A PRODUCT COVERED BY INTERVENTION ARRANGEMENTS UNDER THE COMMON ORGANIZATION OF AGRICULTURAL MARKETS IF THE FORMER PRICE FLUCTUATES APPRECIABLY OWING TO THE INCIDENCE OF THE VARIATIONS IN THE LATTER PRICE .

2 . ARTICLE 1 OF REGULATION ( EEC ) NO 539/75 OF THE COMMISSION OF 28 FEBRUARY 1975 IS INVALID IN SO FAR AS IT FIXES COMPENSATORY AMOUNTS IN RESPECT OF TRADE IN POWDERED WHEY .

IN CASE 131/77
REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE FINANZGERICHT DES SAARLANDES ( FINANCE COURT OF THE SAARLAND ) FOR A PRELIMINARY RULING IN THE ACTION PENDING BEFORE THAT COURT BETWEEN
FIRMA MILAC , GROSS- UND AUSSENHANDEL ARNOLD NOLL
AND
HAUPTZOLLAMT ( PRINCIPAL CUSTOMS OFFICE ) SAARBRUCKEN

CONCERNING THE VALIDITY AND THE INTERPRETATION OF ARTICLE 1 OF REGULATION ( EEC ) NO 539/75 OF THE COMMISSION OF 28 FEBRUARY 1975 ( OFFICIAL JOURNAL L 57 OF 3 MARCH 1975 , P . 2 ),

1THE FINANZGERICHT DES SAARLANDES BY AN ORDER OF 15 SEPTEMBER 1977 WHICH WAS RECEIVED AT THE COURT REGISTRY ON 28 OCTOBER 1977 , SUBMITTED , UNDER ARTICLE 177 OF THE EEC TREATY , TWO PRELIMINARY QUESTIONS ON THE VALIDITY OF ARTICLE 1 OF REGULATION ( EEC ) NO 539/75 OF THE COMMISSION OF 28 FEBRUARY 1975 FIXING THE MONETARY COMPENSATORY AMOUNTS AND CERTAIN RATES FOR THEIR APPLICATION ( OFFICIAL JOURNAL L 57 OF 3 MARCH 1975 , P . 2 ) AND ON THE INTERPRETATION OF THE PROVISIONS OF REGULATION ( EEC ) NO 974/71 OF THE COUNCIL OF 12 MAY 1971 ON CERTAIN MEASURES OF CONJUNCTURAL POLICY TO BE TAKEN IN AGRICULTURE FOLLOWING THE TEMPORARY WIDENING OF THE MARGINS OF FLUCTUATION FOR THE CURRENCIES OF CERTAIN MEMBER STATES ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1971 ( I ), P . 257 ), READ TOGETHER WITH ARTICLE 1 OF REGULATION NO 539/75 .
2THOSE QUESTIONS WERE RAISED IN THE CONTEXT OF A DISPUTE CONCERNING A REQUEST FOR THE CANCELLATION OF NOTICES OF ASSESSMENT WHICH ARE REPRODUCED IN THE DECISION ON THE OBJECTION DELIVERED ON 20 AUGUST 1975 AND WHICH FIXED MONETARY COMPENSATORY AMOUNTS AT A TOTAL SUM OF DM 6 927.30 AS CHARGES IMPOSED UNDER THE COMMON ORGANIZATION OF THE AGRICULTURAL MARKETS PURSUANT TO REGULATIONS NOS 974/71 AND 539/75 ON THE OCCASION OF THE IMPORTATION FROM FRANCE INTO GERMANY OF 129 000 KG OF POWDERED WHEY HAVING A WATER CONTENT NOT EXCEEDING 33 % AND COMING UNDER HEADING 04.02 OF THE COMMON CUSTOMS TARIFF .

THE PLAINTIFF IN THE MAIN ACTION MAINTAINS THAT THE CHARGING OF MONETARY COMPENSATORY AMOUNTS FOR POWDERED WHEY IS CONTRARY TO ARTICLE 1 ( 2 ) ( B ) OF REGULATION NO 974/71 SINCE THAT PROVISION AUTHORIZES THE CHARGING OR GRANTING OF COMPENSATORY AMOUNTS ONLY IN RESPECT OF PRODUCTS WHOSE PRICE DEPENDS ON THE PRICE OF PRODUCTS COVERED BY INTERVENTION ARRANGEMENTS UNDER THE COMMON ORGANIZATION OF AGRICULTURAL MARKETS AND WHICH ARE GOVERNED BY THE COMMON ORGANIZATION WHILST THE PRICE OF POWDERED WHEY IS IN NO WAY DEPENDENT EITHER ON THE PRICE OF MILK OR ON THE PRICE OF SKIMMED- MILK POWDER , THE ONLY PRODUCTS TO WHICH POWDERED WHEY MAY BE RELATED IN ORDER TO COMPARE PRICES PURSUANT TO THE PROVISIONS IN FORCE .

THE PRICE OF POWDERED WHEY , IT IS ALLEGED , CANNOT BE RELATED EITHER TO THE PRICE OF MILK OR TO THE PRICE OF SKIMMED-MILK POWDER SINCE THE VALUE OF THE MILK IN POWDERED WHEY , A BY-PRODUCT OF THE MANUFACTURE OF CHEESE AND CONSIDERED AS WASTE BEFORE THE ENACTMENT OF THE LEGISLATION OF MEMBER STATES ON THE CONSERVATION OF THE ENVIRONMENT , IS CONSIDERED AS NIL OR AT THE MOST AMOUNTING AT TIMES TO DM 0.05 PER LITRE .

IT FOLLOWS , ACCORDING TO THE PLAINTIFF , THAT THE PRICES OF POWDERED WHEY ARE DETERMINED EXCLUSIVELY ON THE MARKET AND THAT THEY DEPEND WHOLLY ON SUPPLY AND DEMAND .

CONSEQUENTLY IT IS ARTIFICIAL TO CLASSIFY POWDERED WHEY AMONGST THE PRODUCTS COMING UNDER THE MILK OR MILK PRODUCTS SECTOR AND TO APPLY TO IT MONETARY COMPENSATORY AMOUNTS PURSUANT TO REGULATION NO 539/75 .
3THE NATIONAL COURT , WHICH IS CHARGED WITH APPRAISING THE FACTS , HAS FOR ITS PART FOUND THAT WHEY IS A DERIVED PRODUCT OF THE PROCESSING OF MILK WHICH UNTIL RECENTLY WAS DISCHARGED AS WASTE INTO RUNNING WATER .

THE NATIONAL COURT CONCLUDED ON THE BASIS OF THOSE FINDINGS THAT THE PRICE OF SKIMMED-MILK POWDER IN NO WAY EXERCISED A DECISIVE INFLUENCE ON THE MARKET PRICE OF POWDERED WHEY AND THAT THE PRICE OF POWDERED WHEY ACCORDINGLY DOES NOT DEPEND ON THE PRICE OF SKIMMED-MILK POWDER .

IN THOSE CIRCUMSTANCES THE NATIONAL COURT FELT DOUBT WHETHER REGULATION NO 534/75 WAS VALID , AND REFERRED THIS FIRST PRELIMINARY QUESTION TO THE COURT :
' ' DOES ARTICLE 1 OF REGULATION ( EEC ) NO 539/75 OF THE COMMISSION OF 28 FEBRUARY 1975 INFRINGE ARTICLE 1 ( 2 ) ( B ) OF REGULATION ( EEC ) NO 974/71 OF THE COUNCIL OF 12 MAY 1971 IN SO FAR AS IT FIXES COMPENSATORY AMOUNTS FOR THE IMPORT OF POWDERED WHEY , BECAUSE THE PRICE OF POWDERED WHEY DOES NOT DEPEND UPON THE PRICE OF SKIMMED-MILK POWDER?
' '
4THE PROBLEM IN THE PRESENT CASE TURNS ON WHETHER THE PRICE OF POWDERED WHEY DEPENDS ON THE PRICE OF SKIMMED-MILK POWDER .

5THE PRICE OF A PRODUCT DEPENDS WITHIN THE MEANING OF ARTICLE 1 ( 2 ) ( B ) OF REGULATION NO 974/71 ON THE PRICE OF A PRODUCT COVERED BY INTERVENTION ARRANGEMENTS UNDER THE COMMON ORGANIZATION OF AGRICULTURAL MARKETS AND WHICH IS GOVERNED BY THE COMMON ORGANIZATION OF THE MARKETS IF THE FORMER PRICE FLUCTUATES APPRECIABLY OWING TO THE INCIDENCE OF VARIATIONS IN THE LATTER PRICE .

6ACCORDING TO A TABLE DRAWN UP BY THE COMMISSION THE CURVES REPRESENTING THE VARIATIONS IN THE INTERVENTION PRICES FOR SKIMMED-MILK POWDER AND THE MARKET PRICES IN GERMANY FOR POWDERED WHEY CLEARLY DIVERGE .

IN FACT WHEN THE INTERVENTION PRICE FOR SKIMMED-MILK POWDER WAS 66 UNITS OF ACCOUNT PER QUINTAL IN 1974 THE MARKET PRICE IN GERMANY FOR POWDERED WHEY WAS 20.68 UNITS OF ACCOUNT PER QUINTAL , WHILST IN 1975 THE INTERVENTION PRICE FOR THE FORMER PRODUCT INCREASED APPRECIABLY TO 88.70 UNITS OF ACCOUNT AS COMPARED WITH THE APPRECIABLE FALL , TO 15 UNITS OF ACCOUNT , IN THE PRICE OF THE LATTER PRODUCT .

IN 1971 THE PRICE OF POWDERED WHEY ON THE GERMAN MARKET AMOUNTED TO ONE THIRD OF THE INTERVENTION PRICE OF SKIMMED-MILK POWDER WHILST IN 1977 THE RELATIONSHIP HAD DIMINISHED TO A LITTLE LESS THAN ONE FIFTH .

THESE FIGURES CONFIRM THE ANALYSIS OF THE NATIONAL COURT AND IT MUST BE REGARDED AS A FACT THAT THE PRICE OF POWDERED WHEY DOES NOT DEPEND ON THE PRICE OF SKIMMED-MILK POWDER .

7ACCORDING TO THE SIXTH RECITAL IN THE PREAMBLE TO REGULATION NO 974/71 MONETARY COMPENSATORY AMOUNTS SHOULD BE LIMITED TO THE AMOUNTS STRICTLY NECESSARY TO COMPENSATE THE INCIDENCE OF THE MONETARY MEASURES ON THE PRICES OF BASIC PRODUCTS COVERED BY INTERVENTION ARRANGEMENTS AND IT IS APPROPRIATE TO APPLY THEM ONLY IN CASES WHERE THIS INCIDENCE WOULD LEAD TO DIFFICULTIES .

THIS OBJECTIVE IS EMBODIED IN PARTICULAR IN ARTICLE 1 ( 2 ) AND ( 3 ) OF THE SAID REGULATION .

ACCORDING TO THE WORDING OF ARTICLE 1 ( 2 ) ( B ) THE CHARGING OR GRANTING OF COMPENSATORY AMOUNTS IS AUTHORIZED ONLY FOR PRODUCTS WHICH FULFIL TWO CONDITIONS :
( A ) THEIR PRICE MUST DEPEND ON THE PRICE OF PRODUCTS COVERED BY INTERVENTION ARRANGEMENTS UNDER THE COMMON ORGANIZATION OF AGRICULTURAL MARKETS , AND
( B ) THE PRODUCTS MUST IN ADDITION BE GOVERNED BY A COMMON ORGANIZATION OF THE MARKETS .

IT IS CLEAR THAT POWDERED WHEY DOES NOT FULFIL THE FIRST OF THOSE CONDITIONS .

CONSEQUENTLY THE MONETARY COMPENSATORY AMOUNTS PROVIDED FOR IN ARTICLE 1 OF REGULATION NO 974/71 COULD NOT APPLY TO POWDERED WHEY .

8IT IS THEREFORE NECESSARY TO DECLARE THAT ARTICLE 1 OF REGULATION ( EEC ) NO 539/75 OF THE COMMISSION OF 28 FEBRUARY 1975 IS INVALID IN SO FAR AS IT FIXES COMPENSATORY AMOUNTS IN RESPECT OF TRADE IN POWDERED WHEY .

9IT IS ACCORDINGLY UNNECESSARY TO ANSWER THE SECOND QUESTION SUBMITTED BY THE NATIONAL COURT .

COSTS
10THE COSTS INCURRED BY THE COMMISSION OF THE EUROPEAN COMMUNITIES , WHICH HAS SUBMITTED OBSERVATIONS TO THE COURT , ARE NOT RECOVERABLE .

AS THESE PROCEEDINGS ARE , IN SO FAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED , IN THE NATURE OF A STEP IN THE ACTION PENDING BEFORE THE NATIONAL COURT , COSTS ARE A MATTER FOR THAT COURT .

ON THOSE GROUNDS ,
THE COURT ,
IN ANSWER TO THE QUESTION SUBMITTED TO IT BY THE FINANZGERICHT DES SAARLANDES BY AN ORDER OF 15 SEPTEMBER 1977 , HEREBY RULES :
ARTICLE 1 OF REGULATION ( EEC ) NO 539/75 OF THE COMMISSION OF 28 FEBRUARY 1975 IS INVALID IN SO FAR AS IT FIXES COMPENSATORY AMOUNTS IN RESPECT OF TRADE IN POWDERED WHEY .