CJEC, October 13, 1982, No 213-81

THE COURT OF JUSTICE OF THE EUROPEAN COMMUNITIES,

1. By three orders dated 25 June 1981, which were received at the Court on 20 July 1981, the Hessischer Verwaltungsgerichtshof (higher administrative Court, Hesse) referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a number of questions on the interpretation of Article 3 (1) of Council Regulation (EEC) No 2956-79 of 20 December 1979 opening, allocating and providing for the administration of a Community tariff quota for frozen beef and veal falling within subheading 02.01 a II (b) of the common customs tariff (Official Journal 1979, L 336, p. 3) and Article 7 (1) of Regulation (EEC) No 805-68 of the Council of 27 June 1968 on the common organization of the market in beef and veal (Official Journal, English special edition 1968 (I), p. 187). Since the questions submitted in the three orders were worded identically the Court decided by order of 16 September 1981 to join the three cases for the purposes of the procedure and the judgment.

2. The questions were submitted in connection with three actions between the Bundesanstalt fur landwirtschaftliche Marktordnung (federal office for the organization of agricultural markets) and three German undertakings which import frozen beef and veal from non-member countries.

3. Regulation No 2956-79 opened for 1980 a Community tariff quota for 50 000 tonnes of frozen boned or boneless beef and veal. Article 2 of the Regulation allocates that quantity between the Member States and allots the Federal Republic of Germany a quota share of 9 660 tonnes.

4. Whereas under the legislation in force until 1979 in the Federal Republic of Germany national shares in quotas opened by Community Regulations were almost entirely reserved for undertakings which habitually imported beef and veal from non-member countries, a new system of allocation, introduced by an order of the Ministry of Finance of 19 December 1979, provided that in 1980:

(a) 75% of the German quota share would be allocated between traders on the basis of their imports and 85% of that amount would be reserved for importers of meat from non-member countries and 15% for importers of meat from the Community;

(b) a further quantity of 15% of the German quota would be allocated on the basis of exports to countries both within and outside the Common Market;

(c) the final 10% of the German quota would be allocated according to the amounts of beef and veal purchased from the German intervention agency; and

(d) the reference years in every case would be 1977, 1978 and 1979.

5. After the introduction of the new system the quota shares of the undertakings will, Trawako and Gedelfi, which as habitual importers of frozen beef and veal from non-member countries had been allotted part of the German quota share in previous years, were reduced because the number of participants had increased. All three undertakings considered that the new system did not comply with Community law and brought actions before the Verwaltungsgerichtshof (administrative Court) Frankfurt am Main to obtain quota certificates for a quantity greater than that which they had been allotted. The Hessischer Verwaltungsgerichtshof, to which they appealed after their actions had been dismissed at first instance, submitted the following questions to the Court of Justice for a preliminary ruling:

' ' 1. Is Article 3 (1) of Council Regulation (EEC) No 2956-79 of 20 December 1979 opening, allocating and providing for the administration of a Community tariff quota for frozen beef and veal falling within subheading 02.01 a II (b) of the common customs tariff (1980) (Official Journal 1979, L 336, p. 3) to be interpreted as meaning that the equal treatment of the ' persons concerned ' established in the various Member States of the European Communities is suspended as far as the allocation of the respective shares of the 1980 Community tariff quota for frozen beef and veal by the individual Member States is concerned?

2. Must Article 7 (1) of Regulation (EEC) No 805-68 of the Council of 27 June 1968 on the common organization of the market in beef and veal (Official Journal, English special edition 1968 (I), p. 187) be interpreted as meaning that the general equal treatment of all persons buying goods from the national intervention agencies is to be ensured until the completion of the individual transaction? Or does that provision permit purchasers of intervention products in a particular Member State later to be granted, in the form of a share in the Community tariff quota, advantages which such purchasers in another Member State do not receive?

3. Is the allocation of a share in the 1980 Community tariff quota for frozen beef and veal to German importers who imported beef and veal from Member States of the European Communities and to German exporters, in particular those who exported beef and veal to Member States of the European Communities, compatible with Regulation No 2956-79 or does it, in particular, constitute aid granted through state resources?

4. Does the term ' persons concerned ' within the meaning of Article 3 (3) of Regulation No 2956-79 include a person who buys up beef and veal in a Member State and then disposes of it abroad?

' '

The first question

6. The first question asks whether, by requiring Member States to guarantee only persons concerned ' ' established within their territories ' ' free access to the quota shares allocated to them, Article 3 (1) of Regulation No 2956-79 ends equal treatment of persons established in the various Member States of the Community inasmuch as it distinguishes between persons established in one Member State, who have access to the quota share allocated to that Member State, and persons established in the other Member States, who do not.

7. Article 3 (1) of Regulation No 2956-79 provides that: ' ' the Member States shall take all appropriate steps to guarantee all persons concerned, established within their territories, free access to the quota shares (in the Community tariff quota for beef and veal) allocated to them. ' ' It is explained in the fourth recital in the preamble to that Regulation that, since the tariff quota in question is relatively small, it ought to be possible to provide for a system of allocation based on a single apportionment between the Member States, without thereby derogating from its Community nature, and ' ' to leave to each Member State the choice of the management system for its share of the quota, so that it may ensure an allocation which is appropriate from an economic viewpoint ' '.

8. First of all, it should be recalled that in 1962 the Community undertook, under the general agreement on tariffs and trade (Gatt), to open each year a Community tariff quota for frozen beef and veal from non-member countries, which since 1980 has been fixed at 50 000 tonnes. The quotas in question are opened each year by Council Regulations which determine their apportionment between the Member States and, using broadly similar terms, leave the management of the quota shares to the authorities of the Member States.

9. In its judgments of 12 December 1973 (Case 131-73 Grosoli (1973) ECR 1555) and 23 January 1980 (Case 35-79 Grosoli v Ministry of Foreign Trade (1980) ECR 177) the Court has already had occasion to state that the management of the shares was left to the Member States, who might apportion them according to their own administrative provisions, but that reference by the Regulations to such provisions could not be interpreted as going beyond the scope of technical and procedural rules designed to ensure compliance with the general terms of the quota and with the principle of equal treatment for those entitled to take advantage of it.

10. That interpretation, which sets out the limits of the power delegated to Member States to adopt administrative measures, is also valid for Regulation No 2956-79, which opened the tariff quota for 1980 and contained the usual provisions on the administration of the quota shares by the Member States.

11. It is on that basis, therefore, that the question submitted by the Hessischer Verwaltungsgerichtshof should be answered. Although the limits of a Member State ' s administrative powers are exceeded if it subjects the use of the tariff quota to conditions designed to pursue objectives of economic policy which are not laid down in the provisions adopted by the Community, neither the letter nor the spirit of Regulation No 2956-79 nor the Community nature of the tariff quota in question prevents a Member State from regulating, within the limits of its administrative powers, access by the persons concerned to the quota share which it has been allocated. The administration of that share may, under the specific conditions prevailing on the market for frozen beef and veal within the territory of a Member State, reasonably involve the expediency, or even the necessity, of defining the different categories of persons concerned and of determining in advance the total quantity to which each of those categories may lay claim.

12. As the Court stated in Grosoli v Ministry of Foreign Trade, such a system does not exceed the limits of the administrative powers left to the Member State concerned, so long as it does not deprive some persons concerned of access to the share allocated to that state and so long as the different categories of traders and the total quantities to which those categories have access are not determined in an arbitrary manner. In order to comply with those requirements the Member State concerned may find itself obliged to resort to a number of criteria.

13. Those criteria, which are intended to ensure an allocation which is ' ' appropriate from an economic viewpoint ' ', may vary from one Member State to another, depending on the economic situation in each state. It follows that the prohibition of all discrimination between traders in the Community, since it can only apply to comparable situations, relates in this case solely to the persons concerned who are ' ' established ' ' within the territory of the Member State which has chosen this system of administration.

14. The reply to the first question must therefore be that Article 3 (1) of Regulation No 2956-79 must be interpreted as meaning that a system of administering a national share of the Community tariff quota for frozen beef and veal which is based on a number of criteria in order to define the different categories of persons concerned does not end equal treatment of those persons if the system is applied by the states concerned ' ' to all persons established within their territories ' '.

Second question

15. Article 7 (1) of Regulation No 805-68 of the Council of 27 June 1968, to which the second question submitted by the national Court refers, provides that: ' ' disposal of the products bought in by the intervention agencies... Shall take place in such a way as to avoid any disturbance of the market and to ensure equal access to goods and equal treatment of purchasers. ' ' The plaintiffs in the main action maintain that the new system adopted by the Federal Republic of Germany to allocate the share of the Community quota which it has been allotted is in breach of that provision inasmuch as it allows buyers of meat held in stock by intervention agencies, more precisely buyers from the German intervention agency, to have a 10 % share in the quota.

16. The first argument of the plaintiffs in the main action is that that system causes a disturbance of the market because undertakings established in the Federal Republic of Germany which have bought meat held in intervention derive a pecuniary advantage from participating in the tariff quota, whereas any other undertaking established within the territory of another Member State is excluded from such advantages.

17. That argument cannot be accepted. The German rules governing the allocation of the national share of the quota do not cause any disturbance of the market; on the contrary, by widening access to the quota they prevent the creation of privileged positions which might indeed have the effect of disturbing the market. Nor is equality of access to goods held in intervention affected as such. The fact that a buyer based in the Federal Republic of Germany might derive an additional advantage over his competitors based in other Member States by having a share in the quota is an inevitable consequence of the structure of the system and is, moreover, counterbalanced by other advantages which may accrue to traders based in other Member States under the systems of allocation which those states adopt.

18. The plaintiffs in the main action further contend that the German system is in breach of the principle of equal treatment of traders in the Community inasmuch as shares in the tariff quota are allocated only on the basis of purchases from the German intervention agency.

19. In this regard it should be observed that under Community law purchases from, and sales to, the intervention agencies for beef and veal should be open to all traders in the Community. It would therefore appear impermissible to make a financial advantage based on a Community quota dependent on purchases from a specific intervention agency, such as the German intervention agency in this case.

20. The reply to the second question should therefore be that it is not contrary to Article 7 (1) of Regulation No 805-68 for a Member State to take account, to a limited extent, of purchases of beef and veal held by intervention agencies as a criterion for allocating its share of the Community tariff quota. However, it is not proper to take account solely of purchases from a particular intervention agency.

The third question

21. By the third question the national Court asks in substance whether, by allowing German importers who have imported beef and veal from Member States and German exporters who have exported beef and veal to Member States to have a share in the quota, the German system is in breach of the principles of the common organization of the markets and the prohibition of state aid laid down in Article 92 et seq. of the EEC Treaty.

22. The question whether the system in question is compatible with the common organization of the market in beef and veal is best examined in connection with the fourth question submitted by the national Court. As regards the alleged breach of the prohibition of state aids, it must be noted that Articles 92 to 94 of the EEC Treaty cover ' ' aid granted by a Member State or through state resources in any form whatsoever ' '. The financial advantage which traders derive from receiving a share in the quota is not granted through state resources but through Community resources because the levy which is waived is part of Community resources. Although the term ' ' aid granted through state resources ' ' is wider than the term ' ' state aid ' ', the first term still presupposes that the resources from which the aid is granted come from the Member State.

23. Therefore any incorrect application of Community law, even if taking the form of an incorrect allocation of a tariff quota, may only be dealt with as a breach of the relevant provisions of Community law; it may not be regarded as state aid or aid granted through state resources.

24. The reply to the third question should accordingly be that measures adopted by a Member State which do no more than merely allocate a Community tariff quota do not constitute aid granted by a Member State or through state resources within the meaning of Articles 92 to 94 of the EEC Treaty.

The fourth question

25. By the fourth question the national Court wishes to know, in substance, how the term ' ' persons concerned ' ' in Article 3 (1) of Regulation No 2956-79 must be understood and whether it includes persons who participate in intra-Community trade or export to countries outside the Common Market.

26. The Court has already held, in Grosoli v Mnistry of Foreign Trade, that the term ' ' persons concerned ' ', used in all the Community Regulations in this field since the time of Regulation No 2861-77, has a wider scope than the term ' ' importers concerned ' ', which was used in the previous Regulations, and that whilst regular importers of frozen beef and veal cannot be disqualified from access to the national share of the quota they are not necessarily the only traders interested in the importation of meat on favourable terms.

27. In fact, any person who buys beef and veal wholesale, either in order to sell it as a trader or to use it in a processing business or for direct consumption, has an interest in acquiring a share in the quota. The interest which the provision in question has in view is therefore an interest existing at the present time.

28. Although previous transactions are a good indication of a person ' s interest and should be taken into account both in order to maintain the previous patterns of trade and to prevent the acquisition of shares in the quota from deteriorating into mere financial speculation, they are not the only evidence of such an interest and by themselves are insufficient.

29. In that respect the allocation of part of the German share of the Gatt quota to meat exporters, whether they export to non-member countries or to other Member States of the Community, is not incompatible with Community law. The same considerations also hold true of traders who have imported beef and veal from Member States.

30. The aim of the new German system is to increase the number of persons having a share in the quota and to prevent the financial advantage from being concentrated in the hands of firms which import beef and veal from non-member countries. That aim does not conflict with Regulation No 2956-79 or with other provisions of Community law. In fact, a wider distribution of the advantages gained from having a share in the quota will tend to foster equal conditions of competition rather than distort competition within or outside the Common Market.

31. The reply to the fourth question should accordingly be that it is not contrary to Council Regulation No 2956-79 for a Member State to take account of imports and exports of beef and veal in other Member States and exports of beef and veal to non-member countries when allocating its share of the Community tariff quota for frozen beef and veal.

Costs

32. The costs incurred by the Government of the Federal Republic of Germany and by the commission of the European Communities, which have submitted observations to the Court, are not recoverable. As the proceedings are, as far as the parties to the main proceedings are concerned, in the nature of a step in the proceedings before the national Court, the Decision as to costs is a matter for that Court.

On those grounds,

THE COURT,

In answer to the questions submitted to it by the Hessischer Verwaltungsgerichtshof by orders of 25 June 1981, hereby rules:

1. Article 3 (1) of Council Regulation No 2956-79 of 20 December 1979 must be interpreted as meaning that a system of administering a national share of the Community tariff quota for frozen beef and veal which is based on a number of criteria in order to define the different categories of persons concerned does not end equal treatment of those persons if the system is applied by the states concerned ' ' to all persons established within their territories ' '.

2. It is not contrary to Article 7 (1) of Regulation No 805-68 of the Council of 27 June 1968 for a Member State to take account, to a limited extent, of purchases of beef and veal held by intervention agencies as a criterion for allocating its share of the Community tariff quota. However, it is not proper to take account solely of purchases from a particular intervention agency.

3. Measures adopted by a Member State which do no more than merely allocate a Community tariff quota do not constitute aid granted by a Member State or through state resources within the meaning of Articles 92 to 94 of the EEC Treaty.

4. It is not contrary to Council Regulation No 2956-79 for a Member State to take account of imports and exports of beef and veal in other Member States and exports of beef and veal to non-member countries when allocating its share of the Community tariff quota for frozen beef and veal.