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

(Regulation (EC, Euratom) No 2988/95 Protection of the European Communities' financial interests Article 3 Recovery of an export refund Error on the part of the national authorities Limitation period)

In Case C-281/07,

REFERENCE for a preliminary ruling under Article 234 EC from the Bundesfinanzhof (Germany), made by decision of 27 March 2007, received at the Court on 13 June 2007, in the proceedings

Hauptzollamt Hamburg-Jonas

v

Bayerische Hypotheken- und Vereinsbank AG,

composed of C.W.A. Timmermans, President of the Chamber, J.'C. Bonichot, J. Makarczyk, P. Klūris and C. Toader (Rapporteur), Judges,

Advocate General: E. Sharpston,

Registrar: R. Grass,

having regard to the written procedure,

after considering the observations submitted on behalf of:

the Commission of the European Communities, by F. Erlbacher and Z. Malůšková, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 25 September 2008

gives the following

1. This reference for a preliminary ruling concerns the interpretation of the first subparagraph of Article 3(1) 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).
2. The reference was made in the context of proceedings between the Hauptzollamt Hamburg-Jonas ('the Hauptzollamt') and Bayerische Hypotheken- und Vereinsbank AG ('BHV') with respect to the recovery of an export refund.

Legal context

Community law

3. The first and fourth subparagraphs of Article 11(3) of Commission Regulation (EEC) No 3665/87 of 27 November 1987 laying down common detailed rules for the application of the system of export refunds on agricultural products (OJ 1987 L 351, p. 1), as amended by Commission Regulation (EC) No 2945/94 of 2 December 1994 (OJ 1994 L 310, p. 57), ('Regulation No 3665/87') are worded as follows:

'... where a refund is unduly paid, the beneficiary shall reimburse the amounts unduly received which includes any sanction applicable pursuant to the first subparagraph of paragraph 1 plus the interest calculated on the basis of the time elapsing between payment and reimbursement. ...

...

No interest shall be levied, or at the most an amount to be determined by the Member State corresponding to the undue profit, if the undue payment was an error of the competent authority.'

4. Article 1 of Regulation No 2988/95 states:

'(1) For the purposes of protecting the European Communities' financial interests, general rules are hereby adopted relating to homogenous checks and to administrative measures and penalties concerning irregularities with regard to Community law.

(2) 'Irregularity' shall mean any infringement of a provision of Community law resulting from an act or omission by an economic operator, which has, or would have, the effect of prejudicing the general budget of the Communities or budgets managed by them, either by reducing or losing revenue accruing from own resources collected directly on behalf of the Communities, or by an unjustified item of expenditure.'

5. Article 3(1) and (3) of Regulation No 2988/95 provides:

'(1) The limitation period for proceedings shall be four years as from the time when the irregularity referred to in Article 1(1) was committed. However, the sectoral rules may make provision for a shorter period which may not be less than three years.

...

(3) Member States shall retain the possibility of applying a period which is longer than that provided for in paragraph 1 ...'

National law

6. According to the information given by the referring court, at the material time there was no specific provision in Germany concerning the limitation periods applicable to administrative disputes relating to advantages unduly granted. However, the German authorities and the German courts applied by analogy the standard 30-year limitation period, as set out in Paragraph 195 of the German Civil Code (Bürgerliches Gesetzbuch). Since 2002, that limitation period has, however, been shortened to three years.

The dispute in the main proceedings and the questions referred for a preliminary ruling

7. It is apparent from the order for reference that, in the course of 1995, LAGRA Import Export GmbH ('LAGRA') declared to the Principal Customs Office ('the Hauptzollamt') that it intended to export 31 bovine animals to Turkey and applied for an export refund in respect of them. By letter of 17 January 1996, however, LAGRA informed those customs authorities that one of the bovine animals had died before it had left the European Community and, consequently, requested an amendment to its application for a refund. Without taking either that letter or the corresponding entries included in the T5 control copy into account, the Hauptzollamt granted the export refund by decision of 19 April 1996 for all 31 bovine animals.
8. Subsequently, the Hauptzollamt realised its mistake. It therefore claimed, by an amending notice of 5 August 1999, reimbursement of the export refund for the animal which had died, in the amount of DEM 1 137.57.
9. In July 2000, insolvency proceedings were commenced against LAGRA. Following the assignment of its assets to BHV, the latter became responsible for paying back the export refund unduly received by LAGRA. The Hauptzollamt thus attempted to obtain reimbursement from BHV of the amount unduly received, by means of a notice of liability dated 12 December 2001. There is, however, no proof that that notice was served on the latter before May 2004.
10. BHV contested the notice of liability before the Finanzgericht Hamburg, which ruled that the right of recovery under the fifth subparagraph of Article 11(3) of Regulation No 3665/87 was out of time by reason of the limitation period set out in the first subparagraph of Article 3(1) of Regulation No 2988/95.
11. The Hauptzollamt appealed on a point of law against the judgment of the Finanzgericht Hamburg to the Bundesfinanzhof. The latter court questions whether Regulation No 2988/95 is applicable since, in accordance with Article 1(2) thereof, only irregularities resulting from an act or omission by an economic operator fall within the scope of the regulation and not those resulting from an act or omission by the competent authority.
12. In those circumstances, the Bundesfinanzhof decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:

'(1) Must the first sentence of the first subparagraph of Article 3(1) of Regulation No 2988/95 be applied to a claim for recovery of an export refund wrongly granted to an exporter, even if the latter did not commit an irregularity?

If this question is to be answered in the affirmative:

(2) Must this provision be applied mutatis mutandis to a claim for recovery of such benefits from the party to which the exporter has assigned its claim to the export refund?'

The questions referred for a preliminary ruling

Question 1

13. By its first question, the referring court asks whether the limitation period of four years provided for in the first subparagraph of Article 3(1) of Regulation No 2988/95 should be applied to a claim for recovery of an export refund unduly granted to an exporter owing to an error on the part of the national authorities, where that exporter has not committed any irregularity.
14. As a preliminary point, it should be noted that Commission Regulation (EC) No 800/1999 of 15 April 1999 laying down common detailed rules for the application of the system of export refunds on agricultural products (OJ 1999 L 102, p. 11) provides for relevant rules on limitation, but that, in accordance with Article 54(1) thereof, Regulation No 3665/87, which is repealed, nevertheless continues to apply to exports, such as those at issue in the main proceedings, covered by export declarations accepted prior to the entry into force of Regulation No 800/1999, that is to say on 1 July 1999.
15. The first and fourth subparagraphs of Article 11(3) of Regulation No 3665/87 provide that, where a refund is unduly paid, the beneficiary is to reimburse the amounts unduly received, plus the interest, which is not however levied if the undue payment resulted from an error of the competent authority or, at the most, an amount to be determined by the Member State corresponding to the undue profit is levied.
16. As, however, Regulation No 3665/87 does not lay down rules concerning the limitation period applicable to an action for recovery of export refunds unduly received, it is appropriate to refer to the first subparagraph of Article 3(1) of Regulation No 2988/95.
17. In that regard, it should be noted that that provision is intended to apply to any irregularity as defined in Article 1(2) of Regulation No 2988/95.
18. It is true that the first subparagraph of Article 3(1) of Regulation No 2988/95 is applicable both to irregularities resulting in the imposition of an administrative fine within the meaning of Article 5 thereof and to those which entail an administrative measure within the meaning of Article 4 of that regulation, such measure involving the withdrawal of the wrongly obtained advantage without, however, constituting a penalty (see, to that effect, Case C-278/02 Handlbauer [2004] ECR I-6171, paragraphs 33 and 34).
19. However, the first subparagraph of Article 3(1) of Regulation No 2988/95 lays down a limitation period for proceedings which runs from the time when the irregularity was committed; such irregularity, according to Article 1(2) thereof covers 'any infringement of a provision of Community law resulting from an act or omission by an economic operator, which has, or would have, the effect of prejudicing the general budget of the Communities ...'.
20. As both the Commission of the European Communities and the Advocate General, at point 31 of her Opinion, pointed out, the 'irregularity', in the context of Regulation No 2988/95, implies that the infringement of a provision of Community law is to result from an act or omission by an economic operator.
21. It follows that when an export refund has been wrongly paid to an operator owing to an error on the part of the national authorities, such a situation is not an 'irregularity' within the meaning of Regulation No 2988/95.
22. Consequently, the rule concerning the limitation period laid down in the first subparagraph of Article 3(1) of that regulation is not intended to apply to proceedings in respect of irregularities resulting from errors on the part of the national authorities.
23. Therefore, in a situation such as that at issue in the main proceedings, the question of the limitation period for the recovery of amounts unduly paid is governed by the relevant rules of domestic law.
24. In the absence of provisions of Community law, disputes concerning the recovery of amounts wrongly paid under Community law must be decided by national courts in application of their own domestic law, subject, however, to the limits imposed by Community law, on the basis that the rules and procedures laid down by domestic law must not have the effect of making it practically impossible or excessively difficult to recover the aid not due and that the national legislation must be applied in a manner which is not discriminatory as compared to procedures for deciding similar national disputes (see Case C-336/00 Huber [2002] ECR I-7699, paragraph 55 and the case-law cited).
25. Furthermore, the Community's interest in recovering export refunds which have been received in breach of the conditions under which they were granted must be taken fully into consideration when defining the limitation periods applicable to such a recovery (see Huber, paragraph 57).
26. The answer to the first question is, therefore, that the limitation period of four years laid down in the first subparagraph of Article 3(1) of Regulation No 2988/95 is not applicable to a claim for recovery of an export refund unduly granted to an exporter as a result of an error on the part of the national authorities, where that exporter did not commit any irregularity within the meaning of Article 1(2) of that regulation.

Question 2

27. In view of the reply to the first question, there is no need to answer the second question.

Costs

28. 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 (Second Chamber) hereby rules:

The limitation period of four years laid down in the first subparagraph of Article 3(1) of Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European Communities' financial interests is not applicable to a claim for recovery of an export refund unduly granted to an exporter as a result of an error on the part of the national authorities, where that exporter did not commit any irregularity within the meaning of Article 1(2) of that regulation.

[Signatures]

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* Language of the case: German.