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

1 . AGRICULTURE - COMMON ORGANIZATION OF THE MARKETS - SUGAR - LEVY - BASIS OF CALCULATION - SUCROSE CONTENT OF CERTAIN PRODUCTS - DETERMINATION - FLAT-RATE METHODS - LAWFULNESS - CONDITIONS
( REGULATION NO 1009/67 OF THE COUNCIL , ART . 14 ( 5 ) AND COUNCIL REGULATION NO 3330/74 , ART . 15 ( 5 ); REGULATION NO 837/68 OF THE COMMISSION , ART . 7 ( 2 ))
2 . MEASURES ADOPTED BY AN INSTITUTION - REGULATION - DUTY TO PROVIDE A STATEMENT OF REASONS - LIMIT
( EEC TREATY , ART . 190 )

1 . THE USE OF FLAT-RATE METHODS TO ASCERTAIN THE SUCROSE CONTENT TO BE TAKEN AS A BASIS FOR THE CALCULATION OF THE LEVY APPLICABLE TO CERTAIN PRODUCTS COVERED BY THE COMMON ORGANIZATION OF THE MARKETS IN SUGAR IS VALID SUBJECT TO THE TWO CONDITIONS THAT THE SUCROSE CONTENT INCLUDING OTHER SUGARS EXPRESSED AS SUCROSE REMAINS THE PRINCIPAL FACTOR IN THE CALCULATION OF THE LEVY AND THAT SUCH METHODS ARE NEITHER INAPPROPRIATE NOR GIVE RISE TO INSTANCE OF DEMONSTRABLE UNFAIRNESS .

2 . THE EXTENT OF THE DUTY TO PROVIDE A STATEMENT OF REASONS PRESCRIBED IN ARTICLE 190 OF THE TREATY DEPENDS ON THE NATURE OF THE MEASURE IN QUESTION . IN THE CASE OF A REGULATION THE PREAMBLE THERETO MAY BE CONFINED TO INDICATING THE GENERAL SITUATION WHICH LED TO ITS ADOPTION AND THE GENERAL OBJECTIVES WHICH IT IS INTENDED TO ACHIEVE . CONSEQUENTLY IT IS NOT POSSIBLE TO REQUIRE THAT IT SHOULD SET OUT THE VARIOUS FACTS , WHICH ARE OFTEN VERY NUMEROUS AND COMPLEX , ON THE BASIS OF WHICH THE REGULATION WAS ADOPTED , OR A FORTIORI THAT IT SHOULD PROVIDE A MORE OR LESS COMPLETE EVALUATION OF THOSE FACTS .

IN CASE 87/78
REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE IVTH SENATE OF THE FINANZGERICHT ( FINANCE COURT ) HAMBURG FOR A PRELIMINARY RULING IN THE ACTION PENDING BEFORE THAT COURT BETWEEN
FIRMA WELDING & CO ., HAMBURG
AND
HAUPTZOLLAMT ( PRINCIPAL CUSTOMS OFFICE ) HAMBURG-WALTERSHOF

ON THE VALIDITY AND INTERPRETATION OF THE SECOND SUBPARAGRAPH OF ARTICLE 7 ( 2 ) OF REGULATION ( EEC ) NO 837/68 OF THE COMMISSION OF 28 JUNE 1968 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1968 ( I ), P . 221 ), AS AMENDED BY REGULATION ( EEC ) NO 878/69 OF THE COMMISSION OF 12 MAY 1969 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1969 ( I ), P . 216 ), ON DETAILED RULES FOR THE APPLICATION OF LEVIES ON SUGAR .

1BY AN ORDER OF 15 MARCH 1978 WHICH WAS RECEIVED AT THE COURT ON 29 MARCH 1978 THE FINANZGERICHT HAMBURG REFERRED TO THE COURT , PURSUANT TO ARTICLE 177 OF THE EEC TREATY , FOR A PRELIMINARY RULING A QUESTION ON THE VALIDITY OF THE SECOND SUBPARAGRAPH OF ARTICLE 7 ( 2 ) OF REGULATION NO ( EEC ) 837/68 OF THE COMMISSION OF 28 JUNE 1968 ON DETAILED RULES FOR THE APPLICATION OF LEVIES ON SUGAR ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1968 ( I ), P . 221 ) AS AMENDED BY REGULATION ( EEC ) NO 878/69 OF THE COMMISSION OF 12 MAY 1969 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1969 ( I ), P . 216 ).

2THAT REFERENCE WAS MADE IN THE COURSE OF A DISPUTE BETWEEN THE HAUPTZOLLAMT HAMBURG AND THE WELDING UNDERTAKING CONCERNING THE METHOD OF CALCULATING THE DRY MATTER CONTENT EXPRESSED AS SUCROSE CONTAINED IN MALTRIN 10 AND MALTRIN 20 WHICH DETERMINES THE AMOUNT OF THE LEVY PAYABLE IN RESPECT OF CUSTOMS CLEARANCE ON THE IMPORTATION OF THESE PRODUCTS .

3THE DEFENDANT , IN CALCULATING THE AMOUNT OF THE LEVY , EMPLOYED THE METHOD PRESCRIBED BY THE SECOND SUBPARAGRAPH OF ARTICLE 7 ( 2 ) OF REGULATION NO 837/68 AS AMENDED BY REGULATION NO 878/69 WHEREBY THE SUCROSE CONTENT , INCLUDING OTHER SUGARS EXPRESSED AS SUCROSE , OF PRODUCTS CONTAINING LESS THAN 85% SUCROSE AND INVERT SUGAR EXPRESSED AS SUCROSE , IS DETERMINED BY ASCERTAINING THE DRY MATTER CONTENT ; THIS LATTER CONTENT IS DETERMINED ACCORDING TO THE SPECIFIC GRAVITY OF THE SOLUTION DILUTED IN A PROPORTION OF ONE TO ONE BY WEIGHT AND , FOR SOLID PRODUCTS , BY DRYING AND WHEN EXPRESSED AS SUCROSE BY MULTIPLYING BY THE COEFFICIENT 1 .
4THE NATIONAL COURT HAS DOUBTS REGARDING THE VALIDITY OF THE METHOD OF DETERMINING THE CRITERIA ADOPTED FOR CALCULATING THE LEVY WHICH ENTAILS EXTENDING THE LEVY APPLICABLE TO SUGAR TO THE CONSTITUENTS OF A PRODUCT OTHER THAN THOSE MENTIONED IN THE ENABLING PROVISION IN ARTICLE 14 ( 5 ) OF REGULATION NO 1009/67/EEC OF THE COUNCIL OF 18 DECEMBER 1967 ON THE COMMON ORGANIZATION OF THE MARKET IN SUGAR ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1967 , P . 304 ) AS AMENDED BY ARTICLE 15 , ( 5 ) OF REGULATION NO 3330/74 OF THE COUNCIL OF 19 DECEMBER 1974 ( OFFICIAL JOURNAL L 359 , P . 1 ) WHICH PROVIDES THAT THE LEVY SHALL BE CALCULATED , WHERE APPROPRIATE , AT A STANDARD RATE ON THE BASIS OF THE SUCROSE CONTENT ( INCLUDING OTHER SUGARS EXPRESSED AS SUCROSE ) OF THE PRODUCT CONCERNED .

THE NATIONAL COURT DEDUCED FROM THIS THAT SINCE , ACCORDING TO ARTICLE 155 OF THE TREATY , THE COMMISSION CAN EXERCISE ONLY THE POWERS CONFERRED UPON IT BY THE COUNCIL FOR THE IMPLEMENTATION OF THE RULES LAID DOWN BY THE LATTER , THE COMMISSION MAY HAVE EXCEEDED ITS POWERS BY SUBSTITUTING ITS METHOD OF CALCULATING THE LEVY FOR THAT CLEARLY ESTABLISHED BY THE COUNCIL .

THE NATIONAL COURT FURTHER REMARKS THAT THE APPLICATION OF A LEVY ON SUGAR TO GOODS COMPOSED CHIEFLY OF A PRODUCT WHICH IS NOT SUBJECT TO THAT LEVY COULD BE CONSIDERED AS A VIOLATION OF THE PRINCIPLE OF EQUALITY AND AS CONSTITUTING DISCRIMINATION WITHIN THE MEANING OF THE SECOND SUBPARAGRAPH OF ARTICLE 40 ( 3 ) OF THE EEC TREATY .

FINALLY THAT COURT ENTERTAINS DOUBTS AS TO THE VALIDITY OF THE SECOND SUBPARAGRAPH OF ARTICLE 7 ( 2 ) OF REGULATION NO 837/68 SINCE NO REASONS ARE GIVEN FOR THE DEROGATION FROM THE RULES IN THE FIRST SUBPARAGRAPH .

THESE ARE THE CIRCUMSTANCES WHICH LED IT TO SUBMIT THE FOLLOWING QUESTION :
' ' IS THE SECOND SUBPARAGRAPH OF ARTICLE 7 ( 2 ) OF REGULATION ( EEC ) NO 837/68 OF THE COMMISSION OF 28 JUNE 1968 AS AMENDED BY REGULATION ( EEC ) NO 878/69 OF THE COMMISSION OF 12 MAY 1969 INVALID BECAUSE , BY WAY OF DEROGATION FROM THE FIRST SUBPARAGRAPH OF ARTICLE 7 ( 2 ) OF REGULATION ( EEC ) NO 837/68 THE SUCROSE CONTENT , INCLUDING OTHER SUGARS EXPRESSED AS SUCROSE , OF PRODUCTS CONTAINING LESS THAN 85% SUCROSE AND INVERT SUGAR EXPRESSED AS SUCROSE IS TO BE DETERMINED WITH REGARD TO THE ACTUAL SUCROSE CONTENT INCLUDING OTHER SUGARS EXPRESSED AS SUCROSE BY ASCERTAINING THE DRY MATTER CONTENT?
' '
5ACCORDING TO THE PROVISIONS IN FORCE SINCE PRODUCTS SUCH AS ' ' MALTRIN 10 ' ' AND ' ' MALTRIN 20 ' ' HAVE A MALTOSE , REDUCING SUGAR , CONTENT EXCEEDING 10% THEY FALL , ACCORDING TO THE SECOND SENTENCE OF NOTE 2 TO CHAPTER 35 OF THE COMMON CUSTOMS TARIFF , IN HEADING 17.02 AND NOT IN HEADING 35.05 WHICH COVERS PRODUCTS HAVING A REDUCING SUGAR CONTENT NOT EXCEEDING 10% .

THIS MEANS THAT ' ' MALTRIN 10 ' ' AND ' ' MALTRIN 20 ' ' MUST BE TREATED AS SUGAR AND THE APPROPRIATE LEVY TO BE APPLIED MUST BE CALCULATED IN ACCORDANCE WITH THE PRINCIPLE AT PRESENT LAID DOWN IN ARTICLE 15 ( 5 ) OF REGULATION ( EEC ) NO 3330/74 OF THE COUNCIL AND THE METHODS DETERMINED EARLIER BY ARTICLE 7 OF REGULATION ( EEC ) NO 837/68 OF THE COMMISSION WHICH CONSTITUTES A PROVISION IN IMPLEMENTATION OF THE SAID PARAGRAPH 5 .
6SINCE ARTICLE 15 ( 5 ) OF REGULATION ( EEC ) NO 3330/74 PROVIDES THAT ' ' THE LEVY ON THE PRODUCTS LISTED IN ARTICLE 1 ( 1 ) ( D ) SHALL BE CALCULATED , WHERE APPROPRIATE , AS A FLAT RATE ON THE BASIS OF THE SUCROSE CONTENT ( INCLUDING OTHER SUGARS EXPRESSED AS SUCROSE ) OF THE PRODUCT CONCERNED AND THE LEVY ON WHITE SUGAR ' ' THE USE OF THE WORDS ' ' ON THE BASIS OF ' ' SHOWS THAT THE COUNCIL HAS RULED OUT THE NEED , IN ALL CASES , FOR THE ACTUAL SUCROSE CONTENT OF THE VARIOUS PRODUCTS TO CORRESPOND EXACTLY TO THE AMOUNT OF THE LEVY APPLICABLE TO THEM .

ARTICLE 15 THUS PERMITS THE ADOPTION OF OTHER CRITERIA FOR THE PRODUCTS LISTED IN ARTICLE 1 ( 1 ) ( D ) THAN THOSE PRESCRIBED FOR THE OTHER SUGARS .

THE APPLICATION OF SUCH CRITERIA , WHICH IS UNAVOIDABLE IN A FLATE-RATE METHOD , MAY PROVE NECESSARY WITH REGARD TO CERTAIN PRODUCTS IN SO FAR AS IT IS IMPOSSIBLE FOR TECHNICAL OR PRACTICAL REASONS PRECISELY TO DETERMINE THE COMPOSITION OF SUCH PRODUCTS .

THE USE OF SUCH METHODS OF CALCULATION IS VALID SUBJECT TO TWO CONDITIONS : FIRST , THAT THE SUCROSE CONTENT INCLUDING OTHER SUGARS EXPRESSED AS SUCROSE REMAINS THE PRINCIPAL FACTOR IN THE CALCULATION OF THE LEVY AND SECONDLY THAT SUCH METHODS ARE EITHER INAPPROPRIATE NOR GIVE RISE TO INSTANCES OF DEMONSTRABLE UNFAIRNESS .

IN FACT THE USE OF ANY FLAT-RATE METHOD PRESUPPOSES BY ITS VERY NATURE A DEGREE OF APPROXIMATION .

IT IS SUFFICIENT THAT THE EXISTENCE OF SUCH A DEGREE OF APPROXIMATION DOES NOT GIVE RISE TO DISCRIMINATION CAPABLE OF DISTURBING THE MARKET OF THE PRODUCTS IN QUESTION .

7IN THE PRESENT CASE THE SECOND SUBPARAGRAPH OF ARTICLE 7 ( 2 ) OF REGULATION NO 837/68 PROVIDES THAT THE CALCULATION OF THE LEVY ON PRODUCTS CONTAINING LESS THAN 85% SUCROSE SHALL BE BASED ON THE ASCERTAINMENT OF THE SUCROSE CONTENT , INCLUDING OTHER SUGARS EXPRESSED AS SUCROSE .

SINCE THE DRY MATTER CONTENT CORRESPONDS ALMOST EXACTLY TO THE TOTAL SUGAR CONTENT THIS PROVISION REMAINS WITHIN THE FRAMEWORK ESTABLISHED BY THE BASIC REGULATION .

THE FIRST CONDITION IS ACCORDINGLY FULFILLED .

FURTHERMORE NO PROOF SUFFICIENT IN LAW HAS BEEN PROVIDED THAT THE FLAT-RATE METHOD HAS GIVEN RISE TO SERIOUS DISCRIMINATION AND THAT SIGNIFICANT DISTURBANCES OF THE MALTO-DEXTRIN MARKET HAVE BEEN CAUSED .

IT HAS NOT EVEN BEEN ALLEGED THAT THE OPERATION FOR MANY YEARS OF THE METHOD IN DISPUTE HAS GIVEN RISE TO ANY DIFFICULTY WHATEVER .

THUS THE SECOND CONDITION IS ALSO FULFILLED .

THESE CONSIDERATIONS SHOW THAT THE ADOPTION OF THE METHOD IN QUESTION FOR THE CALCULATION OF THE LEVY APPLICABLE TO THE RELEVANT PRODUCTS DOES NOT ENTAIL ANY INFRINGEMENT OF THE RESTRICTIONS ON THE POWERS DELEGATED BY THE COUNCIL .

8WITH REGARD TO THE COMPLAINT OF INFRINGEMENT OF THE SECOND SUBPARAGRAPH OF ARTICLE 40 ( 3 ) OF THE TREATY , ON THE GROUND THAT TRADERS WHO IMPORT THE CONSTITUENTS OF THE PRODUCT SEPARATELY , THAT IS TO SAY DEXTRIN AND MALTOSE , PAY LOWER DUTIES THAN TRADERS WHO IMPORT THE SAID CONSTITUENTS READY MIXED , IT MUST BE OBSERVED ON THE ONE HAND THAT SUCH ALLEGED UNFAVOURABLE TREATMENT OF IMPORTERS OF MALTO-DEXTROSE IN RELATION TO THOSE WHO IMPORT MALTOSE OR DEXTRIN SEPARATELY DOES NOT CONSTITUTE A DISCRIMINATION AT THE EXPENSE OF SPECIFIED PERSONS OR OF A GROUP OR CATEGORY AND THAT ANYONE MAY FREELY CHOOSE TO IMPORT THE TWO SUBSTANCES SEPARATELY AND ON THE OTHER THAT THE RESULT COMPLAINED OF DOES NOT ORIGINATE FROM THE SECOND SUBPARAGRAPH OF ARTICLE 7 ( 2 ) OF REGULATION ( EEC ) NO 837/68 BUT FROM THE DEFINITION OF DEXTRIN ACCORDING TO THE COMMON CUSTOMS TARIFF .

IT FOLLOWS THAT THE PROHIBITION OF DISCRIMINATION LAID DOWN IN THE SECOND SUBPARAGRAPH OF ARTICLE 40 ( 3 ) FOR THE TREATY HAS NOT BEEN INFRINGED .

9THE NATIONAL COURT LASTLY EXPRESSES DOUBTS ON THE VALIDITY OF THE SECOND SUBPARAGRAPH OF ARTICLE 7 ( 2 ) OF REGULATION ( EEC ) NO 837/68 SINCE NO REASONS ARE STATED FOR THE DEROGATION WHICH THIS PROVISION ENTAILS FROM THE RULES CONTAINED IN THE FOREGOING SUBPARAGRAPH .

10THE EXTENT OF THE DUTY TO PROVIDE A STATEMENT OF REASONS PRESCRIBED IN ARTICLE 190 OF THE TREATY , DEPENDS ON THE NATURE OF THE MEASURE IN QUESTION .

THESE REQUIREMENTS ARE MET SINCE THE REASONS STATED PROVIDE AN EXPLANATION OF THE ESSENTIAL FEATURES OF THE MEASURES ENACTED BY THE INSTITUTIONS .

11THE PRESENT CASE CONCERNS THE IMPLEMENTATION OF AN EXISTING REGULATION ON DETAILED RULES FOR THE APPLICATION OF LEVIES ON SUGAR .

THE COMMISSION HAS MET THE REQUIREMENTS OF ARTICLE 190 BY STATING AS ITS REASONS FOR THE CONTENT OF THE SECOND SUBPARAGRAPH OF ARTICLE 7 ( 2 ) OF REGULATION ( EEC ) NO 837/68 OF THE COMMISSION THE CONSIDERATIONS THAT ' ' THE SUCROSE CONTENT USED TO CALCULATE THE LEVY CAN BE FIXED AT A LEVEL WHICH WOULD CORRESPOND IN GENERAL TO THE NATURAL CONTENT OF SUCH PRODUCTS IN THE COMMUNITY ' ' ( FIFTH RECITAL ) AND THAT ' ' TO AVOID DISTORTIONS OF COMPETITION , IT IS NECESSARY TO SPECIFY IN RESPECT OF THOSE PRODUCTS THE METHOD BY WHICH SUCROSE CONTENT , INCLUDING OTHER SUGARS EXPRESSED AS SUCROSE , IS TO BE DETERMINED ' ' .

SPECIFIC REASONS CANNOT BE REQUIRED FOR ALL THE DETAILS WHICH MAY BE FOUND IN SUCH A MEASURE SINCE THEY FORM PART OF THE SYSTEMATIC FRAMEWORK OF THE ENACTMENT OF THE DETAILED RULES FOR THE APPLICATION OF THE LEVIES ON SUGAR , A FACT WHICH CANNOT BE CONTESTED IN THE PRESENT CASE SINCE THE OBJECTIVE OF THE SAID MEASURE WAS TO CLOSE A GAP GIVING RISE TO UNCERTAINTY REGARDING THE METHOD OF CALCULATING THE LEVY ON CERTAIN PRODUCTS TO WHICH THE BASIC PROVISION APPLIED AND SINCE THE STATEMENT OF ALL THE REASONS FOR CHOOSING SPECIFIC METHODS WOULD HAVE REQUIRED A DETAILED SCIENTIFIC TREATISE .

IT IS A QUESTION IN THE PRESENT CASE OF A REGULATION , THAT IS TO SAY , A MEASURE INTENDED TO HAVE GENERAL APPLICATION , THE PREAMBLE TO WHICH MAY BE CONFINED TO INDICATING THE GENERAL SITUATION WHICH LED TO ITS ADOPTION , ON THE ONE HAND , AND THE GENERAL OBJECTIVES WHICH IT IS INTENDED TO ACHIEVE ON THE OTHER .

CONSEQUENTLY IT IS NOT POSSIBLE TO REQUIRE THAT IT SHOULD SET OUT THE VARIOUS FACTS , WHICH ARE OFTEN VERY NUMEROUS AND COMPLEX , ON THE BASIS OF WHICH THE REGULATION WAS ADOPTED , OR A FORTIORI THAT IT SHOULD PROVIDE A MORE OR LESS COMPLETE EVALUATION OF THOSE FACTS .

ACCORDINGLY THE VALIDITY OF REGULATION ( EEC ) NO 837/68 CANNOT BE CALLED IN QUESTION ON THE GROUND OF FAILURE TO SPECIFY THE REASONS ON WHICH IT IS BASED .

12FURTHERMORE IT DOES NOT APPEAR FROM THE FILE THAT THE COURT OF JUSTICE SHOULD OF ITS OWN MOTION FIND ANY OTHER GROUND OF INVALIDITY AND CONSIDERATION OF THE FILE HAS DISCLOSED NO FACTOR OF SUCH A KIND AS TO AFFECT THE VALIDITY OF ARTICLE 7 ( 2 ) OF REGULATION ( EEC ) NO 837/68 OF THE COMMISSION OF 28 JUNE 1968 ON DETAILED RULES FOR THE APPLICATION OF LEVIES ON SUGAR AS AMENDED BY REGULATION ( EEC ) NO 878/69 OF THE COMMISSION OF 12 MAY 1969 .
13SINCE THE REPLY TO THE FIRST QUESTION SUBMITTED BY THE FINANZGERICHT HAMBURG IS IN THE NEGATIVE THERE IS NO OCCASION TO REPLY TO THE SECOND QUESTION .

COSTS
14THE 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 FINANZGERICHT HAMBURG , THE DECISION ON COSTS IS A MATTER FOR THAT COURT .

ON THOSE GROUNDS ,
THE COURT ( SECOND CHAMBER )
IN ANSWER TO THE QUESTIONS REFERRED TO IT BY THE FINANZGERICHT HAMBURG BY AN ORDER OF 15 MARCH 1978 HEREBY RULES :
CONSIDERATION OF THE SECOND SUBPARAGRAPH OF ARTICLE 7 ( 2 ) OF REGULATION ( EEC ) NO 837/68 OF THE COMMISSION OF 28 JUNE 1968 ON DETAILED RULES FOR THE APPLICATION OF LEVIES ON SUGAR ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1968 ( I ), P . 221 ), AS AMENDED BY REGULATION ( EEC ) NO 878/69 OF THE COMMISSION OF 12 MAY 1969 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1969 ( I ), P . 216 ) HAS DISCLOSED NO FACTORS OF SUCH A KIND AS TO AFFECT THE VALIDITY OF THAT PROVISION .