1 BY ORDER DATED 28 JUNE 1972, RECEIVED AT THE REGISTRY ON 3 AUGUST 1972, THE HESSISCHES FINANZGERICHT REFERRED TO THE COURT FOR A PRELIMINARY RULING THE QUESTION OF THE VALIDITY OF THE EEC COMMISSION' S DECISIONS PUBLISHED IN THE EEC OFFICIAL JOURNAL, AGRICULTURAL SUPPLEMENT NO 1 OF 12 JANUARY 1966 ( PAGE 16/66 B ), NO 4 OF 2 FEBRUARY 1966 ( PAGE 118/66 B ), NO 7 OF 23 FEBRUARY 1966 ( PAGE 214/66 B ), NO 8 OF 2 MARCH 1966 ( PAGE 250/66 B ) AND NO 9 OF 9 MARCH 1966 ( PAGE 283/66 B ( SIC )) DETERMINING THE FREE-AT-FRONTIER PRICE FOR IMPORTING INTO THE FEDERAL REPUBLIC OF GERMANY MAIZE COMING FROM ITALY .
2 IT IS APPARENT BOTH FROM THE FILE AND FROM THE PROCEEDINGS BEFORE THE COURT THAT THREE GROUNDS OF COMPLAINT HAVE BEEN RAISED AGAINST THOSE DECISIONS, CONCERNING :
( A ) THE CHOICE OF THE PRICE OF MAIZE IMPORTED FROM THE UNITED STATES AS THE BASIS OF CALCULATION FOR DETERMINING THE FREE-AT-FRONTIER PRICE OF MAIZE FROM ITALY IMPORTED INTO GERMANY,
( B ) THE CHOICE OF PADUA AS THE MOST REPRESENTATIVE MARKET WITHIN THE MEANING OF ARTICLE 3 OF COMMISSION REGULATION NO 89 OF THE COMMISSION AND
( C ) THE EXCHANGE RATE APPLIED WHEN CALCULATING THE FREE-AT-FRONTIER PRICE .
THE FIRST GROUND OF COMPLAINT
3 UNDER THE TERMS OF ARTICLE 2 OF REGULATION NO 89 OF THE COMMISSION OF 25 JULY 1962 ( OJ 1962, P . 1899 ), THE FREE-AT-FRONTIER PRICE IS DETERMINED ON THE BASIS OF THE PRICE MOST FAVOURABLE TO THE IMPORTING MEMBER STATE .
UNDER THE TERMS OF ARTICLE 1 OF REGULATION NO 86 OF THE COMMISSION OF 25 JULY 1962 ( OJ 1962, P . 1894 ), INTRA-COMMUNITY LEVIES ARE IMPOSED ON CEREALS HARVESTED IN THE EXPORTING MEMBER STATE, THE LEVY IN RESPECT OF THIRD COUNTRIES ONLY BEING CHARGED IF THE PRODUCTS HAVE NOT BEEN HARVESTED IN THE EXPORTING MEMBER STATE .
UNDER THE TERMS OF ARTICLES 2 AND 9 OF REGULATION NO 19 OF THE COUNCIL OF 4 APRIL 1962 ( OJ 1962, P . 933 ) THE AMOUNT OF INTRA-COMMUNITY LEVIES MUST BE DETERMINED ACCORDING TO THE DIFFERENCE BETWEEN THE FREE-AT-FRONTIER PRICE AND THE THRESHOLD PRICE OF THE IMPORTING MEMBER STATE, WITH DEDUCTION OF A FLAT-RATE AMOUNT .
4 THE CUMULATIVE EFFECT OF THESE PROVISIONS IS THAT THE FREE-AT-FRONTIER PRICE MUST BE CALCULATED ON THE BASIS OF THE MOST FAVOURABLE PRICE OF THE PRODUCT HARVESTED IN THE EXPORTING MEMBER STATE .
SUPPORT FOR THIS CONCLUSION CAN BE FOUND IN THE 9TH RECITAL IN THE PREAMBLE TO REGULATION NO 19, WHICH STATES THAT " THE SYSTEM TO BE ESTABLISHED MUST ALLOW FOR THE MAINTENANCE IN FAVOUR OF MEMBER STATES OF THE PREFERENCE WHICH FOLLOWS FROM THE APPLICATION OF THE TREATY " .
5 FROM 10 DECEMBER 1965 THE COMMISSION NO LONGER CALCULATED THE FREE-AT-FRONTIER PRICE OF MAIZE IMPORTED FROM ITALY INTO GERMANY ON THE BASIS OF THE MOST FAVOURABLE PRICE OF THE PRODUCT HARVESTED IN ITALY, BUT ON THE BASIS OF THE MOST FAVOURABLE PRICE OF IMPORTED MAIZE, WHICH, AT THAT TIME, WAS ABOUT 3 000 LIRE LOWER THAN THE PRICE OF ITALIAN MAIZE .
THE COMMISSION HAS MAINTAINED THAT IT WAS FORCED TO MAKE SUCH A DEPARTURE FROM THE GENERAL RULE BY THE FACT THAT LARGE QUANTITIES OF MAIZE COMING FROM THIRD COUNTRIES, FALSELY DECLARED AS MERCHANDISE HARVESTED IN ITALY, WERE BEING EXPORTED TO GERMANY AND THAT, BY DETERMINING THE FREE-AT-FRONTIER PRICE ON THE BASIS OF THE MOST FAVOURABLE PRICE OF IMPORTED MAIZE, A STOP COULD BE PUT TO THIS PRACTICE .
6 DEPARTURE FROM THE RULE BY WHICH THE FREE-AT-FRONTIER PRICE MUST BE CALCULATED FROM THE PRICE OF THE HOME-GROWN PRODUCT IS ONLY POSSIBLE ON THE CONDITION THAT HOME-GROWN AND IMPORTED PRODUCTS ARE COMPLETELY INTERCHANGEABLE AND OFFERED FOR SALE AT A UNIFORM MARKET PRICE .
CALCULATION OF THE FREE-AT-FRONTIER PRICE ON THE BASIS OF THE MARKET PRICE OF AN IMPORTED MAIZE, THE PRICE OF WHICH IS LESS THAN THAT OF HOME-GROWN MAIZE, HAS THE EFFECT OF IMPEDING EXPORTS OF HOME-GROWN MAIZE BY VIRTUE OF THE FACT THAT THE ADVANTAGE ARISING FROM THE APPLICATION OF THE FLAT-RATE AMOUNT REFERRED TO IN ARTICLE 2 OF REGULATION NO 19 AND THE EXISTENCE OF THE PROFIT MARGIN REFERRED TO IN ARTICLE 4 OF REGULATION NO 89 WOULD BE SERIOUSLY REDUCED OR EVEN NULLIFIED .
SUCH METHOD OF CALCULATION IS THEREFORE INCOMPATIBLE WITH THE EXPRESSED AIM OF REGULATION NO 19 .
7 THE DECISIONS IN QUESTION ARE THEREFORE INVALID INSOFAR AS, IN DETERMINING THE FREE-AT-FRONTIER PRICE, THEY WERE BASED ON THE MOST FAVOURABLE PRICE RULING FOR MAIZE IMPORTED FROM A THIRD STATE .
THE SECOND GROUND OF COMPLAINT
8 UNDER THE TERMS OF ARTICLE 3 OF REGULATION NO 89, THOSE MARKETS SHALL BE DEEMED THE MOST REPRESENTATIVE FROM WHICH THE PRODUCT CAN BE EXPORTED AT THE MOST FAVOURABLE PRICE TO THE IMPORTING MEMBER STATE .
THE CONDITIONS LAID DOWN BY THIS PROVISION ARE SATISFIED WHEN THE MARKET FROM WHICH THE PRODUCT CAN BE EXPORTED AT THE MOST FAVOURABLE PRICE TO THE IMPORTING MEMBER STATE CAN BE CONSIDERED AS A MARKET OF IMPORTANCE COMPARED TO OTHER REPRESENTATIVE MARKETS .
9 BECAUSE OF THE QUANTITIES OF BOTH ITALIAN AND IMPORTED MAIZE DEALT WITH ON THE PADUA MARKET, THE COMMISSION WAS ENTITLED TO CONSIDER THAT THAT MARKET IS IMPORTANT IN INTERNATIONAL TRADE IN THIS CEREAL COMPARED TO THE OTHER PRINCIPAL MARKETS OF NORTHERN ITALY .
MOREOVER, IT IS NOT DISPUTED THAT THE MOST FAVOURABLE PRICES FOR THE EXPORT OF MAIZE FROM ITALY TO GERMANY ARE THOSE QUOTED ON THE PADUA EXCHANGE .
10 THE GROUND OF COMPLAINT CONCERNING THE CHOICE OF PADUA AS THE MOST REPRESENTATIVE MARKET WITHIN THE MEANING OF ARTICLE 3 OF REGULATION NO 89 IS THEREFORE REJECTED . THE THIRD GROUND OF COMPLAINT
11 UNDER ARTICLE 2 ( 1 ) OF REGULATION NO 129 OF THE COUNCIL OF 23 OCTOBER 1962 ( OJ 1962, P . 2553 ), THE COMMISSION MUST APPLY THE EXCHANGE RATES DECLARED TO THE INTERNATIONAL MONETARY FUND WHEN CALCULATING THE VARIOUS PRICES WITHIN THE FRAMEWORK OF THE COMMON AGRICULTURAL POLICY .
UNDER THE TERMS OF ARTICLE 2 ( 62 ) OF THAT REGULATION, THE APPLICATION OF THE EFFECTIVE EXCHANGE RATES MAY BE AUTHORIZED IN EXCEPTIONAL CASES WHERE THE FUNCTIONING OF THE COMMON AGRICULTURAL SYSTEM IS PUT IN JEOPARDY .
12 THE DATA SUBMITTED BY THE APPLICANT IN THE MAIN ACTION CONCERNING THE SLIGHT VARIATIONS IN THE EFFECTIVE EXCHANGE RATE OF THE LIRA DURING THE 1965/66 WINTER IS NOT SUCH AS TO MAKE THE LIKELIHOOD OF A DISTURBANCE IN THE MAIZE MARKET A PLAUSIBLE POSSIBILITY .
THE MARGIN OF 0.45 TO 0.75 U . A . PER METRIC TON IN THE FACTORS FOR CALCULATING AGRICULTURAL PRICES ALLOWED FOR BY ARTICLE 1 ( 2 ) OF REGULATION NO 67 OF THE COMMISSION OF 11 JULY 1962 ( OJ 1962, P . 1860 ), DEFINES THE LIMITS OF VARIATION IN THE EXCHANGE RATES BETWEEN WHICH, IN ANY CASE, NO REVISION OF THE RATE OF LEVY SHALL BE MADE .
IT CANNOT BE DEDUCED FROM THIS THAT ANY VARIATION BEYOND THOSE LIMITS BY ITSELF CONSTITUTES AN INDICATION OF SUCH SERIOUS DISTURBANCE AS TO COMPROMISE THE EFFECTIVENESS OF THE MECHANISM OF THE COMMON ORGANIZATIONS OF THE MARKET OR THE IMPLEMENTATION OF THE COMMON AGRICULTURAL POLICY .
13 THE GROUND OF COMPLAINT IS THEREFORE REJECTED .
14 THE COSTS INCURRED BY THE COMMISSION OF THE EUROPEAN COMMUNITIES, WHICH HAS SUBMITTED OBSERVATIONS TO THE COURT, ARE NOT RECOVERABLE, AND AS THESE PROCEEDINGS ARE, INSOFAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED, A STEP IN THE ACTION PENDING BEFORE A NATIONAL COURT, THE DECISION ON COSTS IS A MATTER FOR THAT COURT .
THE COURT,
IN ANSWER TO THE QUESTION REFERRED TO IT BY THE HESSISCHES FINANZGERICHT BY ORDER OF THAT COURT DATED 28 JUNE 1972, HEREBY RULES :
THE DECISIONS OF THE COMMISSION DATED 7 JANUARY 1966, 28 JANUARY 1966, 18 FEBRUARY 1966, 28 FEBRUARY 1966 AND 4 MARCH 1966 DETERMINING THE FREE-AT-FRONTIER PRICE FOR IMPORTING INTO THE FEDERAL REPUBLIC OF GERMANY MAIZE COMING FROM ITALY ARE INVALID INSOFAR AS, IN DETERMINING THE FREE-AT-FRONTIER PRICE, THEY WERE BASED ON THE MOST FAVOURABLE PRICE RULING FOR MAIZE IMPORTED FROM A THIRD STATE .
