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Promptly to Pay to Exporters the Refunds On COMMISSION ν ITALY Costs 24 Under Article 69 (2) of the Rules of Procedure the unsuccessful party shall be ordered to pay the costs. The applicant has failed in all its submissions. On those grounds, Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the parties ; Upon hearing the opinion of the Advocate-General ; Having regard to the Treaty establishing the European Economic Community, especially Articles 40 and 169; Having regard to the Protocol on the Statute of the Court of Justice ofthe European Economic Community; Having regard to the Rules of Procedure of the Court of Justice of the European Communities, THE COURT hereby: 1. Dismisses the application; 2. Orders the Commission of the European Communities to pay the costs. Lecourt Monaco Donner Strauß Mertens de Wilmars Delivered in open court in Luxembourg on 17 February 1970. A. Van Houtte R. Lecourt Registrar President OPINION OF MR ADVOCATE-GENERAL GAND DELIVERED ON 29 JANUARY 19701 Mr President, the European Communities asks you to Members of the Court, rule that the Republic of Italy, 'by failing promptly to pay to exporters the refunds on By an application made under Article 169 products coming under the common of the Treaty of Rome the Commission of organization of the market established 1 — Translated from the French. 35 OPINION OF MR GAND — CASE 31/69 after 1 July 1967', has failed to fulfil an the opinion of the Management Committee obligation under the provisions of the concerned, the duty periodically to fix the Community regulations establishing a amount of the refund. The refund is the common organization of the agricultural same for the whole Community but it may markets. be varied according to the destination. It It must immediately be said that this case is granted at the request of the exporter. It appears to me to be a delicate one; thus, is paid when proof has been produced that before considering the arguments of the the products have been exported from the parties, I should like to recall briefly the Community; where the rate is varied reasons for and the content of the Commu­ according to the destination of the exported nity provisions which, according to the products, proof must be furnished that the Commission, the Italian Republic has failed product has reached the destination for to observe. which the refund was fixed. Regulation No 1041/67 of the Commission I of 21 December 1967 (OJ 1967, Special Edition, p. 323), which entered into force The implementation of the agricultural on 1 February 1968, lays down more pre­ policy involves the establishment of a cisely the detailed rules for the application Community market within which prices are of those provisions for all the products guaranteed to producers and are protected subject to a single price system. It specifies by a common customs barrier separating what is to be understood by export from that market from the world market on the geographical territory ofthe Community which prices are in general lower than and by 'date of exportation'; it lays down European prices. It is thus important that the model of the export certificate and the stabilizing machinery provided for in indicates the supporting documents re­ Article 40 of the Treaty should come into quired if the refund is varied according to play in trade with third countries. With the destination. Finally, it provides that regard to exports, for example, refunds the Member States may pay the exporter in make up the difference between the prices advance all or part of the amount of the on the world market and those in the refund as soon as the customs export forma-­ Community and make it possible for lities are completed, provided that certain Community exporters to operate on a com­ guarantees are given. petitive footing on the world market. It is clear that the system thus established This system only gradually emerged. In its obliges the Member State in whose territory initial stage — that of a gradual alignment the customs formalities were completed to of markets — the payment of refunds and pay the refund fixed by the Community the fixing of their amounts were left to the authorities; similarly, it implies the ex­ discretion ofthe Member States, which were porter's right to collect this refund on the then reimbursed on the basis of what is double condition that he claims payment known as the lowest average refund. of the refund within the period fixed by Nevertheless the system had of necessity to Regulation No 1041/67 and furnishes the change on the transition from the gradual appropriate proof that the export has left alignment of the market to the common the geographical territory ofthe Community organization of a single market. This or that it has reached its destination. The transition took place, for example, on 1 July Italian Republic does not and never has 1967 in the case ofcereals, eggs, poultrymeat disputed this. and pigmeat, on 1 September 1967 with regard to rice, on 1 July 1968 with regard to II sugar and on 29 July 1968 with regard to milk products. A full Community system What the Commission alleges against it and of refunds thus came about. Each of the what it considers as a failure to fulfil an basic regulations of the Council on the obligation under the Community regula­ products which I have indicated confers on tions establishing the common organization the Commission, acting in accordance with of the agricultural markets is the failure of 36 COMMISSION ν ITALY the Italian Republic to pay the refunds lay down the administrative procedures to promptly. It is this delay in payment which allow exporters to receive the payments in justifies the application of the procedure advance referred to in Article 9 of Regula­ under Article 169. In fact, one is concerned tion No 1041/67. This was dealt with in the with regulations which, as such, are binding Ministerial Decree of 24 April 1968. and directly applicable in all the Member Those proceedings were still unofficial. But States, and the detailed rules of which have the situation was changed when by letter been fixed by the Council and by the of 12 July 1968 the Commission decided to Commission with sufficient clarity for their initiate the procedure of Article 169 of the practical application merely to require the Treaty. In fact, as far as it could see refunds States to adopt administrative measures had only then been paid in respect of very which can be taken within very short periods. small quantities of the products subject to The Commission states that this has the single market system. It quotes as an occasioned no difficulty for the other States. example a firm exporting wheat flour which In Italy, on the other hand, there have been was owed 2 367 million lire for the period persistent delays the duration of which it from 1 July to 30 November 1967. Ac­ enumerates and to which I shall return later. cording to the Commission, the delay thus This has caused serious difficulties in the caused in payment of the refunds consti­ administration of the Community market, tuted an infringement of the provisions of as a refund has a different economic effect Article 7 of Regulation No 139/67 on depending on whether it is paid quickly or cereals and the similar provisions in the after a long delay. It is also harmful to other sectors subject to the single market, Italian exporters who are obliged to seek and it called upon Italy to submit its credit at high rates pending the reimburse­ observations within a period of one month. ment of the sums to which they are entitled. Then, when no reply was received, on 30 Finally, it entails risks of distortion since January 1969 it delivered a reasoned those exporters are encouraged to export opinion couched in terms almost identical through ports in other States such as with the application at present before you. Marseilles or Rotterdam. Here it is stated in particular that the letter The Commission has maintained this view of 22 April 1968 from the Italian Govern­ constantly throughout the discussions which ment confirms the failure to pay the refunds it had with the Italian authorities before it from 1 July 1967 and that this situation was made its application. In a letter of 27 not significantly altered after the Commis­ February 1968 its Representative wrote to sion sent its letter of 12 July 1968. This the Minister for Agriculture that according letter is worded in the usual way, inviting the to the information in his possession the Italian Republic to take the 'necessary refunds had not yet been paid in Italy 'with measures' within a period of two months regard to any product coming under the which might be prolonged 'so far as is single market system exported after 1 July necessary for the observations of the 1967', which does not seem however to have parliamentary procedures required by the been entirely true if reference is made to the national laws in force'. figures which the Commission supplied at If I have reviewed at some length the course your request. He declared furthermore that of the proceedings out of court, this is in he was of the view that it would be possible order to emphasize that the Commission's for the Italian Government 'swiftly to take complaint relates essentially to. the delay the measures necessary for a proper appli­ occurring in practice in disbursing sums the cation of the Community provisions'. payment of which is laid down by Commu­ The Minister replied to this on 22 April 1968 nity provisions.
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