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

(Milk and milk products Additional levy Slight delay in observing the time-limit for communication of the summary of statements Financial penalty Regulation (EEC) No 536/93 as amended by Regulation (EC) No 1001/98 Article 3(2), second subparagraph Regulation (EC) No 1392/2001 Article 5(3) Regulation (EC, Euratom) No 2988/95 Article 2(2), second sentence Principle of retroactive application of the less severe penalty)

In Case C-45/06,

REFERENCE for a preliminary ruling under Article 234 EC by the Finanzgericht des Landes Brandenburg (Germany), made by decision of 9 November 2005, received at the Court on 30 January 2006, in the proceedings

Campina GmbH & Co., formerly TUFFI Campina emzett GmbH

v

Hauptzollamt Frankfurt (Oder),

composed of R. Schintgen, President of the Chamber, M. Ilešič (Rapporteur) and E. Levits, Judges,

Advocate General: P. Mengozzi,

Registrar: R. Grass,

having regard to the written procedure,

after considering the observations submitted on behalf of:

the Greek Government, by G. Kanellopoulos and S. Papaioannou, acting as Agents,

the Commission of the European Communities, by J. Schieferer and C. Cattabriga, acting as Agents,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

1. This reference for a preliminary ruling concerns the proportionality of the second subparagraph of Article 3(2) of Commission Regulation (EEC) No 536/93 of 9 March 1993 laying down detailed rules on the application of the additional levy on milk and milk products (OJ 1993 L 57, p. 12), as amended by Commission Regulation (EC) No 1001/98 of 13 May 1998 (OJ 1998 L 142, p. 22) ('Regulation No 536/93').
2. The reference was made in the context of proceedings between Campina GmbH & Co., formerly TUFFI Campina emzett GmbH ('Campina'), as universal successor to the milk processing and purchasing undertaking Meierei-Zentrale GmbH ('MZ'), and the Hauptzollamt Frankfurt (Oder), regarding a slight delay in observing the time'limit for communication of a summary of the statements ('the communication').

Community legal context

3. The first subparagraph of Article 3(2) of Regulation No 536/93 provides:

'Before 15 May each year, the purchasers shall forward to the competent authority of the Member State a summary of the statements drawn up for each producer or, where appropriate, by decision of the Member State, the total quantity, the quantity corrected in accordance with Article 2(2) and average fat content of the milk and/or milk equivalent delivered to it by producers and the sum of the individual reference quantities and the average representative fat content of such producers' production.'

4. The second subparagraph of Article 3(2) of Regulation No 536/93 in its original version stated:

'Where that time'limit is not observed, the purchaser shall be liable to a penalty equal to the amount of the levy due for a 0.1% overrun on the quantities of milk and milk equivalent delivered to them by producers. Such penalty may not exceed ECU 20 000.'

5. That provision was declared to be disproportionate by the judgment in Case C-356/97 Molkereigenossenschaft Wiedergeltingen [2000] ECR I-5461).
6. In the meantime, the Commission adopted Regulation No 1001/98, Article 1 of which provides:

'Article 3(2), second subparagraph, of Regulation (EEC) No 536/93, is hereby replaced by the following:

Where that time'limit is not observed, the purchaser shall be liable to a penalty calculated as follows:

if the communication referred to in the first subparagraph is made before 1 June, the penalty shall be equal to the amount of the levy due for a 0.1% overrun on the quantities of milk and milk equivalent delivered to them by producers. Such penalty may not be less than ECU 500 nor more than ECU 20 000,

...'

7. Article 5 of Commission Regulation (EC) No 1392/2001 of 9 July 2001 laying down detailed rules for applying Council Regulation (EEC) No 3950/92 establishing an additional levy on milk and milk products (OJ 2001 L 187, p. 19) states:

'...

3. ... purchasers who fail to comply with the time'limit referred to in paragraph 2 shall be required to pay an amount equal to the levy due for a 0.01% overrun of the quantities of milk and milk equivalent delivered to them by producers for each calendar day of delay. ... That amount may not be less than EUR 100 nor more than EUR 100 000.

...'

8. The second sentence of Article 2(2) of Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European Communities' financial interests (OJ 1995 L 312, p. 1), provides:

'In the event of a subsequent amendment of the provisions which impose administrative penalties and are contained in Community rules, the less severe provisions shall apply retroactively.'

The main proceedings and the reference for a preliminary ruling

9. By form signed on 17 May 1999 and received the same day at the Hauptzollamt Cottbus ('the HZA'), MZ submitted the communication on the quantities of milk which had been delivered to it by producers during the period 1998 to 1999.
10. The back of the form carried instructions specifying that that communication had to arrive at the HZA by 14 May at the latest. The HZA received the communication three days late and decided, on the basis of the second subparagraph of Article 3(2) of Regulation No 536/93, that the failure to observe the time-limit thus set required the imposition of a penalty of an amount equal to the levy due for a 0.1% overrun of the quantities of milk and milk equivalent delivered to them by producers. On the basis of the information provided by MZ on the quantity of milk delivered, and in view of the upper limit of ECU 20 000, a penalty amounting to DEM 39 116.60 was therefore imposed.
11. MZ lodged an objection to that decision and an application for a stay of execution. MZ maintains that the employee to whom it entrusted the preparation and dispatch of the communications was overloaded with work on 14 May 1999 because he also had to meet a number of other important deadlines. As 14 May 1999 was a Friday, the communication was submitted to the HZA on the next working day, Monday, 17 May 1999.
12. Therefore, according to MZ, even if the HZA did not receive the communication on the date provided, the delay was trivial, as the HZA was unable to act earlier than 17 May 1999 and, consequently, the delay had no effect. MZ concluded from this that the penalty imposed on it was disproportionate in relation to the delay which had occurred.
13. The HZA refused to grant a stay of execution of its decision and suspended the objection procedure until such time as the Court of Justice of the European Communities gave judgment in Molkereigenossenschaft Wiedergeltingen.
14. By decision of 4 July 2001, the HZA then dismissed MZ's objection as unfounded. Basing itself on the second subparagraph of Article 3(2) of Regulation No 536/93, the HZA pointed out, first, that within the meaning of that provision, for communications made after 14 May 1999 and before 1 June 1999, the penalty was equal to 0.1% of the quantities of milk and milk equivalent delivered by producers provided however that that penalty was not less than ECU 500 or more than ECU 20 000 and, secondly, that, according to the wording of Regulation No 536/93, any fault on the part of MZ was not a relevant factor.
15. Campina brought an action for annulment of that decision.
16. As to the HZA's argument on the basis of the second subparagraph of Article 3(2) of Regulation No 536/93, Campina maintains that that regulation is invalid and therefore without effect in that it does not provide a mechanism for taking into account the extent of the delay and the fault of the undertaking concerned where a penalty provided for in that regulation is imposed. That is precisely what the Court criticised in the original version of that provision in its judgment in Molkereigenossenschaft Wiedergeltingen.
17. The Hauptzollamt Frankfurt (Oder) submitted that the action should be dismissed, maintaining that, as the second subparagraph of Article 3(2) of Regulation No 536/93 grades the penalties according to the length of the delay, it already takes the length of overrun sufficiently into account. It stated that the wording of the regulation does not concern itself with fault or objective damage.
18. The national court considers that the system of financial penalties provided for by the second subparagraph of Article 3(2) of Regulation No 536/93 is disproportionate because, in the case of a slight delay, it treats the purchaser of milk no better than the second subparagraph of Article 3(2) of Regulation No 536/93 which was declared invalid by the Court of Justice in Molkereigenossenschaft Wiedergeltingen.
19. It states that the period from 15 May to 1 June is, at the least, too long and leads to disproportionate effects, since it leads to the imposition of a financial penalty at the full rate even for delays which do not exceed one working day, as in the present case, and which have no apparent effect on the payment of the additional levy which the purchaser must make before 1 September under Article 3(4) of Regulation No 536/93. It adds that, moreover, the dairy at issue does not have any additional levy to pay.
20. Finally, the national court finds that the financial penalty fails to take into account the question whether the late submission of the communication has had any effect on the administrative procedure, and especially on the payment on 1 September. To that effect, it states that the Court has already pointed out that a slight delay in meeting the deadline of 15 May would not jeopardise the payment of the additional levy before 1 September (see Molkereigenossenschaft Wiedergeltingen, paragraph 41).
21. In those circumstances, the Finanzgericht des Landes Brandenburg decided to stay the proceedings and refer the following question to the Court for a preliminary ruling:

'Does the system of penalties laid down in the second subparagraph of Article 3(2) of [Regulation No 536/93] contravene the principle of proportionality in cases in which the delay in observing the deadline is only slight and has, moreover, had no noticeable effect?'

The question referred for a preliminary ruling

Observations submitted to the Court

22. The Greek Government maintains that compliance with the deadline of 15 May is necessary in the main proceedings for the proper functioning of the system of additional levies and of the common organisation of the market in milk and milk products, since the calculation of that levy is jeopardised by delays in the communication of the data referred to in the first subparagraph of Article 3(2) of Regulation No 536/93.
23. The government states that the financial penalties provided for in the second subparagraph of Article 3(2) of Regulation No 536/93 vary according to the length of the delay and the seriousness of the infringement, which makes it possible, first, for purchasers to be encouraged to observe the deadline of 15 May and, second, for dairies which are not subject to the additional levy to be prevented from failing to comply with the time-limit. Finally, the period of approximately 15 days provided for in the second subparagraph of Article 3(2) of Regulation No 536/93 does not appear to the Greek Government to be a manifestly inappropriate measure for achieving the object pursued.
24. According to the Commission, in accordance with the principle of the retroactive application of financial penalties which penalise in a less severe manner the infringement at issue in the main proceedings, Regulation No 1392/2001 must be applied.
25. It points out that that regulation has, first, set the percentage at 0.01% for each calendar day of lateness as opposed to 0.1% provided for by Regulation No 536/93 and, second, reduced the minimum penalty to EUR 100. According to the Commission, the applicability of Regulation No 1392/2001 is not affected by the fact that the financial penalty based on Regulation No 536/93 has already been imposed on the applicant in the main proceedings, since the decision in the main proceedings imposing that penalty has been contested. The penalty thus imposed does not therefore constitute a settled legal situation.
26. As to the principle of proportionality in respect of the provisions of the second subparagraph of Article 3(2) of Regulation No 536/93, the Commission draws attention to the broad discretion which it enjoys in agricultural policy.
27. By virtue of that discretion, it was not required to provide for a daily grading of the amount of financial penalties and, consequently, was able to adopt the system at issue in the main proceedings on the basis of which purchasers who failed to comply with the deadline of 15 May were thus encouraged to make the communication before the beginning of the following period, so as to avoid a higher penalty. The Commission considers that it did not manifestly exceed the limits of its discretion in choosing to adopt a period of approximately 15 days for each stage of delay in meeting the deadline for that communication.
28. Moreover, the imposition of a financial penalty pursuant to the second subparagraph of Article 3(2) of Regulation No 536/93 does not go beyond what is necessary and appropriate to achieve the desired objective, namely urging purchasers to send their communications in good time.
29. Finally, the Commission maintains that any delay in observing the time'limit by purchasers leads to a reduction of the period which the competent national authorities have to calculate the amount of the additional levy and therefore jeopardises the good functioning of that system. Consequently, a duty to establish whether the overrun of the time'limit has had an effect on the administrative procedure would jeopardise the dissuasive effect and the effectiveness of the financial penalties.

The Court's answer

30. In the procedure laid down by Article 234 EC providing for cooperation between national courts and the Court of Justice, it is for the latter to provide the national court with an answer which will be of use to it and enable it to determine the case before it. To that end, the Court may have to reformulate the questions referred to it (Case C-286/05 Haug [2006] ECR I-4121, paragraph 17 and the case'law cited).
31. Moreover, it must be recalled that the Court has a duty to interpret all provisions of Community law which national courts need in order to decide the actions pending before them, even if those provisions are not expressly indicated in the questions referred to the Court of Justice by those courts (Case C-42/96 Immobiliare SIF [1997] ECR I-7089, paragraph 28 and the case'law cited).
32. It must be noted that the principle of the retroactive application of the more lenient penalty forms part of the constitutional traditions common to the Member States and, accordingly, must be considered to be one of the general principles of Community law, which the Court ensures are respected and which national courts are required to abide by (see, to that effect, Joined Cases C-387/02, C-391/02 and C-403/02 Berlusconi and Others [2005] ECR I-3565, paragraphs 67 to 69).
33. That principle is more specifically laid down in the second sentence of Article 2(2) of Regulation No 2988/95, according to which the competent authorities are obliged to apply retroactively penalties provided for by sectoral rules to practices on the ground that those penalties are less severe (see, to that effect, Case C-295/02 Gerken [2004] ECR I-6369, paragraph 61).
34. It is apparent from the order for reference that the main proceedings concern a slight delay in observing the deadline of 15 May, since the communication reached the competent national authorities on the next working day.
35. In order to provide the referring court with a useful answer, it must therefore be established whether, in a particular situation such as that at issue in the main proceedings, characterised by a slight delay in observing the deadline of 15 May, Regulation No 1392/2001 is to be considered as providing for a system of financial penalties which is less severe than that imposed by Regulation No 536/93.
36. As set out in Article 5(3) of Regulation No 1392/2001, the financial penalty for a failure to observe the deadline of 15 May such as that at issue in the main proceedings is, first, set at an amount equal to the levy due for a 0.01% overrun for each calendar day of delay of the reference quantity for direct sales which the purchaser has at his disposal and, second, may not be less than EUR 100 nor more than EUR 100 000.
37. By contrast, pursuant to the first indent of the second subparagraph of Regulation No 536/93, the financial penalty for a failure to respect the deadline of 15 May such as that at issue in the main proceedings, first, corresponds to 0.1% of the quantities of milk and milk equivalent delivered to the purchaser by the producers and, second, may not be less than ECU 500 nor more than ECU 20 000.
38. It therefore follows, as the Commission has rightly pointed out in its observations, that in the case of a slight delay in observing the deadline of 15 May, such as in the case at issue, the system of financial penalties under Article 5(3) of Regulation No 1392/2001 is less severe than that provided for by the first indent of the second subparagraph of Article 3(2) of Regulation No 536/93.
39. In the light of that interpretation, there is no need to adjudicate on the proportionality of the system of financial penalties provided for by the second subparagraph of Article 3(2) of Regulation No 536/93.
40. Having regard to all of the foregoing, the answer to the question referred must be that

the principle of retroactive application of the more lenient penalty must be respected by national courts when they have to penalise practices which do not comply with rules laid down by Community legislation;

in the case of a slight delay in observing the deadline such as that at issue in the main proceedings, the system of financial penalties provided for by Article 5(3) of Regulation No 1392/2001 is less severe than that provided for by the first indent of the second subparagraph of Article 3(2) of Regulation No 536/93.

Costs

41. 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. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Fifth Chamber) hereby rules:

1. The principle of retroactive application of the more lenient penalty must be respected by national courts when they have to penalise practices which do not comply with rules laid down by Community legislation.

2. In the case of a slight delay in observing the deadline such as that at issue in the main proceedings, the system of financial penalties provided for by Article 5(3) of Commission Regulation (EC) No 1392/2001 of 9 July 2001 laying down detailed rules for applying Council Regulation (EEC) No 3950/92 establishing an additional levy on milk and milk products is less severe than that provided for by the first indent of the second subparagraph of Article 3(2) of Commission Regulation (EEC) No 536/93 of 9 March 1993 laying down detailed rules on the application of the additional levy on milk and milk products, as amended by Commission Regulation (EC) No 1001/98 of 13 May 1998.

[Signatures]

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* Language of the Case: German.