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

(Reference for a preliminary ruling Regulation (EEC) No 3665/87 Export refunds Article 5(3) Conditions for granting Exception Force majeure Products which perished in transit)

In Case C-218/09,

REFERENCE for a preliminary ruling under Article 234 EC from the Hof van beroep te Brussel (Belgium), made by decision of 4 June 2009, received at the Court on 15 June 2009, in the proceedings

SGS Belgium NV

v

Belgisch Interventie- en Restitutiebureau,

Firme Derwa NV,

Centraal Beheer Achmea NV

and

Firme Derwa NV,

Centraal Beheer Achmea NV

v

SGS Belgium NV,

Belgisch Interventie- en Restitutiebureau,

composed of J.'C. Bonichot, President of the Chamber, C. Toader (Rapporteur), K. Schiemann, P. Klūris and L. Bay Larsen, Judges,

Advocate General: V. Trstenjak,

Registrar: R. Grass,

having regard to the written procedure,

after considering the observations submitted on behalf of:

SGS Belgium NV, by M. Storme, avocat,

Firme Derwa NV, by L. Misson and L. Wysen, avocats,

the Belgian Government, by J.'C. Halleux, acting as Agent,

the European Commission, by B. Burggraaf, Z. Malůšková and E. Tserepa'Lacombe, 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 interpretation of Article 5(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 1384/95 of 19 June 1995 (OJ 1995 L 134, p. 14).
2. The reference has been made in the context of proceedings concerning an export refund paid for meat discovered damaged on arrival, first, between SGS Belgium NV ('SGS Belgium'), a company specialising in control and supervision, on the one hand, and Belgisch Interventie- en Restitutiebureau (the Belgian Office for Intervention and Export Refunds, 'BIRB'), Firme Derwa NV ('Firme Derwa'), an export firm, and Centraal Beheer Achmea NB ('Centraal Beheer Achmea'), an insurance company, on the other hand, and, second, between Firme Derwa and Centraal Beheer Achmea, on the one hand, and SGS Belgium and BIRB, on the other hand.

Legal context

3. Regulation No 3665/87 provides for the possibility for operators exporting beef outside the territory of the European Community to benefit from export refunds.
4. Under Article 4(1) of Regulation No 3665/87, '... the refund shall be paid only upon proof being furnished that the products for which the export declaration was accepted have, within 60 days from the date of such acceptance of the export declaration, left the customs territory of the Community in the unaltered state.'
5. Article 5 of Regulation No 3665/87 provides:

'1. Payment of the differentiated or non'differentiated refund shall be conditional not only on the product having left the customs territory of the Community but also save where it has perished in transit as a result of force majeure on its having been imported into a non'member country and, where appropriate, into a specific non'member country within 12 months following the date of acceptance of the export declaration:

...

However that period may be extended under the conditions laid down in Article 47.

...

In addition, the competent authorities of the Member States may require that additional evidence be provided such as to satisfy them that the product has actually been placed on the market in the non'member country of import in the unaltered state.

...

3. If the product, after leaving the customs territory of the Community, has perished in transit as a result of force majeure, the amount paid shall be:

in the case of a refund which varies according to destination, the part thereof specified in Article 20,

in the case of a refund which does not so vary, the total amount thereof.'

6. Article 13 of Regulation No 3665/87 provides that '[n]o refund shall be granted on products which are not of sound and fair marketable quality, or on products intended for human consumption whose characteristics or condition exclude or substantially impair their use for that purpose.'
7. Under Article 17(3) of that regulation, a product is to be considered to have been imported when it has been cleared through customs for release for consumption in the non'member country concerned.
8. Article 18 of Regulation No 3665/87 provides:

'1. Proof that the product has been cleared through customs for release for consumption shall, at the exporter's choice, be furnished by production of one of the following documents:

(a) the customs document or a copy or photocopy thereof; ...

(b) a certificate of unloading and release for consumption drawn up by an international control and supervisory agency approved by a Member State. ...

2. If the exporter cannot obtain the document chosen in accordance with paragraph 1(a) or (b) even after taking the appropriate steps or if there are doubts as to the authenticity of the document furnished, proof that the product has been cleared through customs for release for consumption may be deemed to have been furnished by the production of one or more of the following documents:

...

(c) a certificate of unloading drawn up by an international control and supervisory agency approved by a Member State, certifying also that the product has left the port zone or at least that, to its knowledge, the product has not subsequently been loaded for re-export;

...'

9. Article 20 of Regulation No 3665/87 provides:

'1. By way of derogation from Article 16 and without prejudice to Article 5, a part of the refund shall be paid upon proof being furnished that the product has left the customs territory of the Community.

...

2. The part of the refund referred to in paragraph 1 shall be equal to the amount of the refund which the exporter would receive if his product reached a destination for which the lowest rate of refund had been fixed, the non-fixing of a rate being regarded as the lowest rate.

...'

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

10. During 1996, Firme Derwa exported a consignment of beef to Lebanon. On 24 June 1996, the corresponding export declaration was accepted by the customs authorities. On 19 July 1996, BIRB paid in advance to Firme Derwa an export refund of BEF 1 301 696 (EUR 32 268.20).
11. On 9 July 1996, that consignment of meat arrived in Beirut where, in accordance with customs regulations, the veterinary services took samples for the purpose of carrying out checks. In those samples, they discovered a bacterium. The entire consignment was accordingly declared unfit for human consumption, rejected by its consignee, and subsequently destroyed.
12. For it to be definitively entitled to the refund received, Firme Derwa had to furnish, in the twelve months following the date of acceptance of the export declaration, proof of import of the consignment into Lebanon in an unaltered state. On 3 June 1997, Firme Derwa asked BIRB for an extension of time in which to submit the supporting documentation.
13. As Firme Derwa did not have the required document, Centraal Beheer Achmea, as the insurer of the goods, asked, on 14 April 1997, SGS Belgium to approach its correspondents in Beirut to draw up a certificate pursuant to Article 18(1)(b) of EEC Regulation 3665/87. On 17 June 1997, SGS Lebanon replied by fax to SGS Belgium that those goods had not been declared as released for consumption.
14. However, on 19 July 1997, SGS Belgium nevertheless confirmed that the goods had been released for consumption by the customs authorities in Lebanon.
15. Consequently, on 8 October 1997, BIRB released the security provided by Firme Derwa. However, since it had been late in providing proof of import of those goods for consumption in Lebanon, it had to refund a portion of the export refund received.
16. In the course of an investigation conducted during 1998 and 1999, the Economic Inspection Board of the Belgian Ministry of Economic Affairs, discovered, on SGS Belgium's premises, the fax which had been sent by SGS Lebanon on 17 June 1997 contradicting the confirmation of the release for consumption of the exported meat.
17. On 21 April 1999, BIRB informed SGS Belgium of the results of that investigation.
18. On 1 February 2001, BIRB informed SGS Belgium that in those circumstances, pursuant to Article 13 of Regulation No 3665/87, the right to a refund had lapsed, the amount paid in error was to be increased by 15% because the refund had been paid in advance, a penalty of 200% was to be imposed because incorrect facts had been provided intentionally and interest would be calculated from the time of the release of the bank guarantee on 8 October 1997. The amount claimed by BIRB amounted to BEF 3 829 628 (EUR 94 934).
19. On 11 April 2001, BIRB brought an action against SGS Belgium for payment of the amount of BEF 3 829 628 (EUR 94 934), plus default interest and judicial interest.
20. On 21 September 2001, SGS Belgium joined as third parties and guarantors Firme Derwa and Centraal Beheer Achmea.
21. On 8 August 2002, Firme Derwa and Centraal Beheer Achmea brought proceedings against BIRB.
22. On 11 April 2003, the Rechtbank van eerste aanleg te Antwerpen (Court of First Instance, Antwerp) held that it had been proved incontrovertibly that the customs formalities governing release for consumption of the meat at issue in the main proceedings had not been complied with, which meant that the conditions for the payment of a differentiated refund had also not been met. The Rechtbank van eerste aanleg te Antwerpen therefore ordered SGS Belgium to pay BIRB the sum of BEF 3 829 628, plus default interest and judicial interest.
23. By the same judgment, Firme Derwa and Centraal Beheer Achmea were ordered jointly and severally to indemnify SGS Belgium fully. The actions brought by Firme Derwa and Centraal Beheer Achmea were declared to be unfounded.
24. On appeal, the Hof van beroep te Antwerpen (Court of Appeal, Antwerp) held, by judgment of 21 December 2004, that SGS Belgium could not be held responsible for any wrongdoing, since the declaration of 19 July 1997, made pursuant to Article 18(1)(b) of EEC Regulation No 3665/87, in fact contained a material error and that that declaration could count as a certificate of unloading within the meaning of Article 18(2)(c) of Regulation No 3665/87, entitling Firme Derwa to an export refund.
25. According to the Hof van beroep te Antwerpen, it followed that the export refund had not been wrongly paid to Firme Derwa and therefore SGS Belgium had not committed any irregularity or participated in the commission of an irregularity which adversely affected the general budget of the Communities or the budgets controlled by the Communities.
26. BIRB appealed in cassation against that judgment.
27. On 16 March 2007, the Hof van Cassatie (Court of Cassation) ruled that a certificate of unloading, as referred to in Article 18(2)(c) of Regulation No 3665/87, manifestly constituted rebuttable evidence of the fact that the goods had actually reached the market of the country of destination and had been placed on the market there. The Hof van Cassatie held that the Hof van Beroep, Antwerp, had erred in ruling that, once the certificate of unloading was issued, the conditions for a differentiated refund had to be deemed to be met, as though that certificate were an irrebuttable presumption. The Hof van Cassatie therefore set aside the judgment of the Hof van beroep te Antwerpen of 21 December 2004 and referred the case to the Hof van beroep te Brussel (Court of Appeal, Brussels).
28. Before the Hof van beroep te Brussel, SGS Belgium then claimed that, when the export operations took place, the goods at issue in the main proceedings were of sound and fair marketable quality and fit for human consumption and that they therefore had to be regarded as having perished in transit as a result of force majeure within the meaning of Article 5(3) of Regulation No 3665/87.
29. The BIRB criticised that change of position by SGS Belgium, which had maintained, since the beginning of the proceedings, that the goods had actually been imported into Lebanon and released for consumption. In any event, BIRB contends that the verb 'to perish' used in that provision cannot mean 'to damage'. For the exporter to be entitled to benefit from the provisions of Article 5(3) of Regulation No 3665/87, the goods themselves would have to have perished, that is, the exporter must have lost possession of them, with the result that they were no longer able to reach their destination.
30. The Hof van beroep te Brussel concedes that there is a contradiction in SGS Belgium's change of position. However, according to that court, that does not preclude the right of that exporter to rely on force majeure.
31. In the light of a Lloyds report, which Centraal Beheer Achmea produced in evidence, that court found that the meat at issue in the main proceedings had been transported in a refrigerated container and in suitable packaging, and that such refrigerated containers are used precisely to prevent meat from being damaged. During transportation, the temperature of the goods was also correctly maintained at 0°C. Lastly, it also follows from the report that, at the time of export, the goods were of sound and fair marketable quality and fit for human consumption but that they were already damaged on their arrival in Beirut.
32. In those circumstances the Hof van Cassatie decided to stay the proceedings and to refer the following question to the Court for a preliminary ruling:

'Must the term 'force majeure' in Article 5(3) of [Regulation No 3665/87] be interpreted as meaning that damage to beef while being transported in the correct packaging and in a refrigerated container continuously maintained at the prescribed temperature, in principle constitutes force majeure?'

Consideration of the question referred

Observations submitted to the Court

33. SGS Belgium and Firme Derwa are of the opinion that the question referred must be answered in the affirmative. Although the Dutch version of Article 5(3) of Regulation No 3665/87 uses the term 'verloren' (in English 'lost'), the concept of 'loss' in that provision also covers 'damage', as is apparent from other language versions of that provision. Thus, the English and French versions use 'perished' and 'péri' respectively, rather than 'lost' or 'perdue'. In addition, Article 114 of Appendix I to the Convention on a common transit procedure of 20 May 1987 between the Republic of Austria, the Republic of Finland, the Republic of Iceland, the Kingdom of Norway, the Kingdom of Sweden and the Swiss Confederation and the European Economic Community (OJ 1987 L 226, p. 2), as amended by Decision No 1/2000 of the EC'EFTA Joint Committee on common transit of 20 December 2000 (OJ 2001 L 9, p. 1), explains in that regard that '[g]oods are deemed to be irretrievably lost when they are rendered unusable'.
34. SGS Belgium maintains that precautions going beyond the legislative requirements were taken for the transport of the goods at issue in the main proceedings, in particular with regard to the refrigeration of the meat at a constant temperature. If a bacterium appears, it is, therefore, an unforeseeable event and, in that regard, the fact that it is possible to take out an insurance policy covering that type of damage is not capable of calling that assertion into question.
35. The Belgian Government and the European Commission submit that the question should be answered to the effect that such damage to goods does not, in principle, constitute force majeure, within the meaning of Article 5(3) of Regulation No 3665/87. Only where the cause and the circumstances of the damage are known and it appears that such damage constitutes an abnormal and unforeseeable circumstance extraneous to the exporter, the consequences of which, in spite of the exercise of all due care, could not have been avoided by him, is there a case of force majeure.
36. The Commission adds that the risk of bacterial infection is, in some ways, one of the business risks inherent in the export of perishable commodities. Therefore, a bacterial infection cannot generally be considered to constitute an abnormal and unforeseeable circumstance for the exporter. Only where there are additional and exceptional circumstances is it possible for a different conclusion to be reached. In that regard, the Commission has only scant factual information to enable it to give a view in the present case. In particular, it points, first, to the lack of evidence regarding the adequacy and general state of the container used for the transport. The Commission also notes that 16 days elapsed between the date of acceptance of the export declaration and the discovery of the bacterium, and no one knows what really happened during that period. Lastly, according to that institution, whether or not there was insurance or a contractual term relating to the risk of damage to the meat could prove useful for the purposes of the analysis.
37. With regard to the measures taken by the exporter in the case in the main proceedings, the Belgian Government states that it follows from the report drawn up in Beirut by Lloyds that the bacterial infection found could have been caused by a break in the chain of refrigeration during the storage of the meat. Lastly, since the actual cause of damage to the goods has not really been established, the exporter cannot be considered to have taken all due care to prevent that damage. According to the Belgian Government, it is probable that an interruption in the refrigeration of the beef at issue in the main proceedings occurred during transport or after its unloading in the port of Beirut. Such an event is normal and foreseeable and the exporter can insure against it or try to prevent it: it does not, therefore, constitute force majeure.

The Court's answer

38. The Court has consistently held that the system of differentiated export refunds is intended to gain and maintain access for Community exports to the markets of the non'member countries concerned and the differentiation in the refund is based on the desire to take account of the particular characteristics of each import market in which the Community wishes to play a part (see C-347/93 Boterlux [1994] ECR I-3933, paragraph 18 and the case'law cited).
39. It is clear from that case-law that, if it sufficed, in order to qualify for payment of the refund, for the goods exported in the unaltered state simply to be unloaded in the non-member country, the raison d'être of the differentiated system would be disregarded (see, to that effect, Boterlux, paragraph 19).
40. That is why the first paragraph of Article 5(1) of Regulation No 3665/87 provides that payment of the refund is to be conditional not only on the product having left the customs territory of the European Union but also on its having been imported into an non'member country. In that regard, Article 17(3) of that regulation states that a product is to be considered to have been imported when it has been cleared through customs for release for consumption in the non'member country concerned.
41. Moreover, under Article 13 of Regulation No 3665/87, no refund is to be granted on products which are not of sound and fair marketable quality or on products intended for human consumption whose characteristics or condition exclude or substantially impair their use for that purpose.
42. Thus, as regards a differentiated refund, Article 20(1) and (2) of Regulation No 3665/87 provides for payment of the basic refund, calculated according to the lowest rate of the refund applicable on the day of export, as soon as the exporter has provided proof that the product has left the customs territory of the Community. Payment of the differentiated part of the refund is itself subject to the additional conditions set out in Articles 17 and 18 of that regulation. The exporter must prove, within 12 months following the date of acceptance of the export declaration, that the product has been imported into the non'member country or one of the non'member countries for which the refund is prescribed by providing proof that the product has been cleared through customs for release for consumption in that country (see Case C-77/08 Dachsberger & Söhne [2009] ECR I-0000, paragraph 28).
43. However, by way of derogation, Article 5(3) of Regulation No 3665/87 provides that the payment of a refund is none the less assured if the product, after leaving the customs territory of the Community, has perished in transit as a result of force majeure, so that it was not able to be released for consumption in the non'member country of import.
44. It follows from settled case-law that the concept of force majeure must be understood, in general, in the sense of abnormal and unforeseeable circumstances, outside the control of the party relying thereupon, the consequences of which, in spite of the exercise of all due care, could not have been avoided (see, inter alia, Case 145/85 Denkavit Belgià« [1987] ECR 565, paragraph 11, and Case C-377/03 Commission v Belgium [2006] ECR I-9733, paragraph 95).
45. As to the provisions of Regulation No 3665/87 concerning force majeure, it is also settled case-law that, since that concept does not have the same scope in the various spheres of application of European Union law, its meaning must be determined by reference to the legal context in which it is to operate (see, in particular, Case C-12/92 Huygen and Others [1993] ECR I-6381, paragraph 30, and Case C-263/97 First City Trading and Others [1998] ECR I-5537, paragraph 41).
46. In that regard, it must be pointed out that Article 5(3) of Regulation No 3665/87 constitutes an exception to the normal export refund procedure and, consequently, that provision must be interpreted strictly. Since the existence of force majeure is an essential condition of being able to claim payment of refunds for exported goods which have not been released for consumption in the non'member country of import, it follows that that term must be interpreted in such a way that the number of cases capable of benefiting from such payment remains limited (see, by analogy, Case C-38/07 P Heuschen & Schrouff Orià«ntal Foods Trading v Commission [2008] ECR I-8599, paragraph 60).
47. In general, it is not uncommon for bacteria to appear in consignments of beef. Despite strict health requirements, such as the preventative medical treatment of bovine animals, refrigeration of meat, its traceability and the implementation of control and supervision by health authorities, consignments of meat marketed in the territory of the Union are subject to recall by retail outlets when bacteria are detected.
48. Such a risk of bacterial infection is particularly likely to be present the export of beef since, before reaching their destination, consignments of meat may be subject to numerous cargo'handling operations for the purposes of loading and unloading between the various means of transport employed. Moreover, long'distance transportation, particularly by sea, may involve significant variations in outside temperature and thus place additional technical demands on the refrigeration equipment necessary for such transportation.
49. As regards the question whether the operator took adequate steps to avoid contamination, it is for the national court to establish the exact conditions of transportation, storage and unloading of the goods at issue in the main proceedings and to verify whether, despite the examination which the heath authorities carried out in the exporting Member State, the bacterium could already have been present when the goods were loaded. Nevertheless, it must be observed that if transportation of the meat in the correct packaging and in a refrigerated container continuously maintained at the required temperature was unable to prevent the appearance and/or proliferation of the bacterium, it is probable that it was in fact already there in the consignment of meat when it left the territory of the Union that is, before its transportation to the non'member country at a level which had not been detected by the heath authorities of the exporting Member State or was not susceptible of detection.
50. Consequently, where such damage occurs, it can be considered to be one of the business risks inherent in such operations, that is, as a circumstance that cannot be termed 'unusual' or even 'improbable' in the context of those business operations for a prudent businessman exercising all due care (see, to that effect, Case 4/68 Schwarzwaldmilch [1968] ECR 377, 386).
51. Moreover, as the Belgian Government and the Commission have rightly pointed out, the fact that bacterial infection affecting the exported consignments may be the subject, as in the case in the main proceedings, of a specific insurance policy goes to demonstrate that such a circumstance cannot be considered to be unforeseeable in the context of export operations.
52. The answer to the question referred is therefore that Article 5(3) of Regulation No 3665/87 must be interpreted as meaning that damage to a consignment of beef in the conditions described by the national court does not constitute force majeure within the meaning of that provision.

Costs

53. 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 (Fourth Chamber) hereby rules:

Article 5(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, as amended by Commission Regulation (EC) No 1384/95 of 19 June 1995, must be interpreted as meaning that damage to a consignment of beef in the conditions described by the national court does not constitute force majeure within the meaning of that provision.

[Signatures]

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* Language of the case: Dutch.