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

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Agriculture ° Common organization of the markets ° Milk and milk products ° Butter in public storage ° Sale at reduced prices to processing undertakings ° System of lodging security ° Force majeure ° Concept ° Failure to respect the time-limit for the production of proof of processing in another Member State owing to the inertia of the authorities of the latter ° Case of force majeure ° Condition ° Exercise of all due care by the trader ° Failure to make application for other documents to be accepted as equivalent ° Effect to be assessed in terms of the usefulness of such action
(Commission Regulations Nos 1687/76, Art. 14 and 262/79, Art. 22(4))

Since the concept of force majeure must be understood in the sense of abnormal and unforeseeable circumstances, beyond the control of the trader concerned, the consequences of which could not have been avoided despite the exercise of all due care, a case of force majeure can be held to exist within the meaning of Article 22(4) of Regulation No 262/79 on the sale of butter at reduced prices for use in the manufacture of pastry products, ice-cream and other foodstuffs where the failure to respect the time-limit for the production of proof of the processing of the butter in another Member State is due to the delay taken by the administrative authorities of that State in verifying processing and returning the control document to the authorities in the country of origin if the trader concerned exercised or caused to be exercised all possible care in requesting the administrative authorities of the country in which the butter was processed to complete those operations.
The fact that the trader failed to make application for other documents to be accepted as equivalent pursuant to Article 14 of Regulation No 1687/76 laying down common detailed rules for verifying the use and/or destination of products from intervention can be relied on against him only if the actual conduct of the administration concerned did not prevent him from protecting his rights by means of that procedure.

In Case C-50/92,
REFERENCE to the Court under Article 177 of the EEC Treaty by the Verwaltungsgericht Frankfurt am Main (Federal Republic of Germany) for a preliminary ruling in the proceedings pending before that court between
Molkerei-Zentrale Sued GmbH & Co. KG
and
Bundesanstalt fuer landwirtschaftliche Marktordnung (BALM),
on the interpretation of Article 22(4) of Commission Regulation (EEC) No 262/79 of 12 February 1979 on the sale of butter at reduced prices for use in the manufacture of pastry products, ice-cream and other foodstuffs (OJ 1979 L 41, p. 1) as amended by Commission Regulation (EEC) No 3021/85 of 30 October 1985 (OJ 1985 L 289, p. 14),
THE COURT (Second Chamber),
composed of: J.L. Murray, President of the Chamber, G.F. Mancini and F.A. Schockweiler, Judges,
Advocate General: C.O. Lenz,
Registrar: L. Hewlett, Administrator,
after considering the written observations submitted on behalf of:
° Molkerei-Zentrale Sued GmbH & Co. KG, by Barbara Festge, Rechtsanwaeltin Hamburg;
° the Commission of the European Communities, by Dierk Booss, Legal Adviser, acting as Agent, assisted by Walter G. Grupp, of the Brussels Bar,
having regard to the Report for the Hearing,
after hearing the oral observations of Molkerei-Zentrale Sued GmbH & Co. KG and the Commission at the hearing on 10 December 1992,
after hearing the Opinion of the Advocate General at the sitting on 9 February 1993,
gives the following
Judgment

1 By order of 28 January 1992, received at the Court Registry on 20 February 1992, the Verwaltungsgericht (Administrative Court) Frankfurt am Main referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty two questions concerning the interpretation of Article 22(4) of Commission Regulation (EEC) No 262/79 of 12 February 1979 on the sale of butter at reduced prices for use in the manufacture of pastry products, ice-cream and other foodstuffs (OJ 1979 L 41, p. 1) as amended by Commission Regulation (EEC) No 3021/85 of 30 October 1985 (OJ 1985 L 289, p. 14).
2 Those questions arose in the course of proceedings between Molkerei-Zentrale Sued GmbH & Co. KG (hereinafter "Molkerei-Zentrale") and Bundesanstalt fuer landwirtschaftliche Marktordnung (the national intervention agency for the Common Agricultural Policy, hereinafter the "Bundesanstalt") regarding the refund of a security for the processing of butter.
3 Article 16(2) of Regulation No 262/79 provides that a tenderer for butter must lodge a security to ensure that the product is processed. Under Article 22(4) of that regulation, except in cases of force majeure, the security is to be forfeit in proportion to the quantities for which proof of processing has not been produced within 18 months, calculated from the final day for submission of tenders. However, if proof is furnished within the next 18 months, 85% of the amount forfeited is to be refunded.
4 Commission Regulation (EEC) No 1687/76 of 30 June 1976 laying down common detailed rules for verifying the use and/or destination of products from intervention (OJ 1976 L 190, p. 1) establishes customs or administrative control of the butter between its removal from stock and its processing in a Member State other than that in which it was sold by means of a T5 document, which has to be returned to the customs office of departure or to the central body in the country of origin of the product.
5 Under Article 14 of that regulation, where a control copy is not returned owing to circumstances beyond the control of the trader concerned, the latter may make application to the competent authorities for other documents to be accepted as equivalent, stating the grounds for such application and furnishing confirmation from the customs office of the Member State in which the goods were processed that the use and/or destination specified has been complied with.
6 On 22 September 1987 Molkerei-Zentrale tendered for a consignment of butter and lodged a processing security. After initial processing in Germany, part of the consignment was exported to Italy by an intermediary appointed by Molkerei-Zentrale for final processing.
7 As the Italian authorities did not release the T5 control document until 31 March 1989, that is to say after expiry of the 18-month period prescribed by Article 22(4) of Regulation No 262/79, the Bundesanstalt, which did not receive proof of processing until 6 April 1989, declared 15% of the security forfeit.
8 Molkerei-Zentrale brought an action for annulment of that decision and refund of the part of the security declared forfeit before the Verwaltungsgericht Frankfurt am Main, which decided to stay the proceedings until the Court had given a preliminary ruling on the following questions:
"1. Is there a case of force majeure within the meaning of Article 22(4) of Commission Regulation (EEC) No 262/79 ... when:
(a) the failure to respect the time-limit for the production of proof is due to the fact that the administrative authorities of another Member State have delayed so long in verifying that the butter has been used in conformity with the regulation, issuing the confirmation on the control copy and returning the control copy to the customs office of departure or the corresponding central body that the eight-month time-limit laid down by the legislator for the confirmation of the processing by the administrative authorities is exceeded to a significant extent, and
(b) the agent established in the other Member State of the export undertaking mandated by the purchaser of the intervention goods to effect the transaction has repeatedly, from a time some eight months before the expiry of the time-limit for producing proof, and at weekly intervals for part of that period, requested the administrative authorities of the other Member State to confirm the utilization of the goods in conformity with the regulation and to return the control copy, and
(c) the purchaser of the intervention goods has failed to make application as provided for in detail in Article 14 of Commission Regulation (EEC) No 1687/76 ... for other documents to be accepted as equivalent following the non-return of the control copy to the customs office of departure or the corresponding central body within three months of the expiry of the time-limit fixed for the completion of the transaction in question?
If the first question is answered in the negative:
2. Is Article 22(4) of Commission Regulation (EEC) No 262/79 ... invalid in so far as it provides that, except in cases of force majeure, the processing security is to be forfeited even where the failure to respect the time-limit for producing proof is to be ascribed to reasons beyond the control of the successful tenderer?"
9 Reference is made to the Report for the Hearing for a fuller account of the facts, the procedure and the written observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.
10 In its first question, the national court seeks essentially to establish whether there can be held to be a case of force majeure within the meaning of Article 22(4) of Regulation No 262/79, cited above, where the failure to respect the time-limit for the production of proof of the processing of the butter in another Member State is due to the delay taken by the administrative authorities of that State in verifying processing and returning the control document to the authorities in the country of origin if the trader concerned exercised or caused to be exercised all possible care in requesting the administrative authorities of the country in which the butter was processed to complete those operations, even though it failed to make application for other documents to be accepted as equivalent under Article 14 of Regulation No 1687/76, cited above.
11 In order to reply to that question, it should be noted that, as the Court has consistently held, the concept of force majeure must be understood as meaning abnormal and unforeseeable circumstances beyond the control of the trader concerned whose consequences could not have been avoided despite the exercise of all due care (see Case C-338/89 Organisationen Danske Slagterier [1991] ECR I-2315 and Case 266/84 Denkavit France v Forma [1986] ECR 149).
12 The delay taken by an administration of a Member State in verifying the processing of the butter and returning the control document to the authorities in the country of origin constitutes a circumstance beyond the control of the trader inasmuch as the latter has no power to intervene in the performance of those operations.
13 The requirement for the circumstances from which the damaging consequences for the trader stem to be abnormal and unforeseeable is satisfied where, in the context of a system for the management of agricultural markets, the conduct of an administration whose services the trader is required to use makes it impossible for the latter to perform his obligations under the Community rules.
14 The fact that Community rules ° such as Regulation No 1687/76 in the main proceedings ° give the trader the right to make application for other documents to be accepted as equivalent in the event of delays ascribable to the administration cannot be relied upon to contest the abnormal and unforeseeable nature of the deficient working of that administration, but has some relevance in establishing whether the trader concerned could have avoided the damaging consequences of the administration' s deficiency.
15 As regards the latter requirement of force majeure, it is for the national court to determine the materiality of the care actually exercised by the trader concerned.
16 In that regard it should, however, be noted that that requirement is fulfilled where it is established that the trader took regular action, in person or through the intermediary of an agent, so as to request the competent administration to perform the requisite operations.
17 The failure to apply for other documents to be accepted as equivalent can be relied on against the trader only if the actual conduct of the administration concerned did not prevent him from protecting his rights by means of that procedure.
18 It must be held in this regard that the conditions for the application of Article 14 of Regulation No 1687/76 were not fulfilled; that provision requires the production of confirmation from the customs office of the Member State in which the products were processed that the specified use and/or destination have been complied with and the trader was unable to obtain such confirmation owing to the actual conduct of that administration.
19 Accordingly, the reply to the first question should be that a case of force majeure within the meaning of Article 22(4) of Regulation No 262/79 can be held to exist where the failure to respect the time-limit for the production of proof of the processing of the butter in another Member State is due to the delay taken by the administrative authorities of that State in verifying processing and returning the control document to the authorities in the country of origin if the trader concerned exercised or caused to be exercised all possible care in requesting the administrative authorities of the country in which the butter was processed to complete those operations. The fact that the trader failed to make application for other documents to be accepted as equivalent pursuant to Article 14 of Regulation No 1687/76 can be relied on against him only if the actual conduct of the administration concerned did not prevent him from protecting his rights by means of that procedure.
20 In view of the reply given to the first question, there is no need to reply to the second.

Costs
21 The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, 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 Verwaltungsgericht Frankfurt am Main by order of 28 January 1992, hereby rules:
A case of force majeure within the meaning of Article 22(4) of Commission Regulation (EEC) No 262/79 of 12 February 1979 on the sale of butter at reduced prices for use in the manufacture of pastry products, ice-cream and other foodstuffs can be held to exist where the failure to respect the time-limit for the production of proof of the processing of the butter in another Member State is due to the delay taken by the administrative authorities of that State in verifying processing and returning the control document to the authorities in the country of origin if the trader concerned exercised or caused to be exercised all possible care in requesting the administrative authorities of the country in which the butter was processed to complete those operations. The fact that the trader failed to make application for other documents to be accepted as equivalent pursuant to Article 14 of Commission Regulation (EEC) No 1687/76 of 30 June 1976 laying down common detailed rules for verifying the use and/or destination of products from intervention can be relied on against him only if the actual conduct of the administration concerned did not prevent him from protecting his rights by means of that procedure.