JUDGMENT OF THE COURT OF FIRST INSTANCE (First Chamber)

17 September 1998 (1)

(Action for annulment — Importation of high-quality beef ('Hilton beef‘) —Regulation (EEC) No 1430/79 — Article 13 — Commission decision refusingremission of import duties — Rights of the defence — Manifest error ofassessment)

In Case T-50/96,

Primex Produkte Import-Export GmbH & Co. KG, a company incorporated underGerman law, established in Bad Homburg (Germany),

Gebr. Kruse GmbH, a company incorporated under German law, established inHamburg (Germany),

Interporc Im- und Export GmbH, a company incorporated under German law,established in Hamburg,

represented by Georg M. Berrisch, Rechtsanwalt, Hamburg and Brussels, with anaddress for service in Luxembourg at the Chambers of Guy Harles, 8-10 RueMathias Hardt,

applicants,

supported by

United Kingdom of Great Britain and Northern Ireland, represented initially byStephanie Ridley, of the Treasury Solicitor's Department, acting as Agent, andsubsequently by John E. Collins, of the Treasury Solicitor's Department, acting asAgent, and by David Anderson, Barrister, with an address for service inLuxembourg at the British Embassy, 14 Boulevard Roosevelt,

intervener,

v

Commission of the European Communities, represented by Götz zur Hausen,Legal Adviser, acting as Agent, with an address for service in Luxembourg at theoffice of Carlos Gómez de la Cruz, of its Legal Service, Wagner Centre, Kirchberg,

defendant,

APPLICATION for annulment of the Commission decision of 26 January 1996(Document K(96) 180 final) addressed to the Federal Republic of Germany andconcerning the remission of import duties,

THE COURT OF FIRST INSTANCE

OF THE EUROPEAN COMMUNITIES (First Chamber),

composed of: B. Vesterdorf, President, R.M. Moura Ramos and P. Mengozzi,Judges,

Registrar: A. Mair, Administrator,

having regard to the written procedure and further to the hearing on 31 March1998,

gives the following

Judgment

Legal background

1.

    Article 13(1) of Council Regulation (EEC) No 1430/79 of 2 July 1979 on therepayment or remission of import or export duties (OJ 1979 L 175, p. 1), as

amended by Article 1(6) of Council Regulation (EEC) No 3069/86 of 7 October1986 (OJ 1986 L 286, p. 1), provides:

'Import duties may be repaid or remitted in special situations ... which result fromcircumstances in which no deception or obvious negligence may be attributed to theperson concerned.‘

2.

    According to Article 4(2)(c) of Commission Regulation (EEC) No 3799/86 of 12December 1986 laying down provisions for the implementation of Articles 4a, 6a,11a and 13 of Council Regulation (EEC) No 1430/79 (OJ 1986 L 352, p. 19),'production, even in good faith, for the purpose of securing preferential tarifftreatment of goods entered for free circulation, of documents subsequently foundto be forged, falsified or not valid for the purpose of securing such preferentialtariff treatment‘ is not by itself a special situation within the meaning of Article 13of Regulation No 1430/79.

3.

    Article 5(2) of Council Regulation (EEC) No 1697/79 of 24 July 1979 on the post-clearance recovery of import duties or export duties which have not been requiredof the person liable for payment on goods entered for a customs procedureinvolving the obligation to pay such duties (OJ 1979 L 197, p. 1) provides:

'The competent authorities may refrain from taking action for the post-clearancerecovery of import duties or export duties which were not collected as a result ofan error made by the competent authorities themselves which could not reasonablyhave been detected by the person liable, the latter having for his part acted in goodfaith and observed all the provisions laid down by the rules in force as far as hiscustoms declaration is concerned ...‘

4.

    On 12 October 1992 the Council adopted Regulation (EEC) No 2913/92establishing the Community Customs Code (OJ 1992 L 302, p. 1, hereinafter 'theCustoms Code‘), which entered into force on 1 January 1994. Article 251(1) of theCustoms Code repealed, inter alia, Regulations Nos 1430/79 and 1697/79.

5.

    Regulation No 3799/86 was repealed by Article 913 of Commission Regulation(EEC) No 2454/93 of 2 July 1993 laying down provisions for the implementationof Regulation No 2913/92 (OJ 1993 L 253, p. 1), with effect from 1 January 1994,the date on which Regulation No 2454/92 entered into force.

6.

    Article 907 of Regulation No 2454/93 provides:

'After consulting a group of experts composed of representatives of all MemberStates, meeting within the framework of the Committee to consider the case inquestion, the Commission shall decide whether or not the special situation whichhas been considered justifies repayment or remission.

That decision shall be taken within six months of the date on which the casereferred to in Article 905(2) is received by the Commission. Where theCommission has found it necessary to ask for additional information from theMember State in order to reach its decision, the six months shall be extended bya period equivalent to that between the date the Commission sent the request foradditional information and the date it received that information.‘

7.

    Article 909 of the regulation states:

'If the Commission fails to take a decision within the time-limit set in Article 907,or fails to notify a decision to the Member State in question within the time-limitset in Article 908, the decision-making customs authority shall grant theapplication.‘

8.

    Article 904 provides:

'Import duties shall not be ... remitted where the only grounds relied on in theapplication for ... remission are, as the case may be:

...

(c)    presentation, for the purpose of obtaining preferential tariff treatment ofgoods declared for free circulation, of documents subsequently found to beforged, falsified or not valid for that purpose, even where such documentswere presented in good faith.‘

Background to the dispute

9.

    In 1991 and 1992, imports of high-quality beef from Argentina were subject tocustoms duty at the rate of 20%, within the framework of the Common CustomsTariff [see Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff andstatistical nomenclature and on the Common Customs Tariff (OJ 1987 L 256, p. 1),as subsequently amended].

10.

    An import levy also applied in addition to that customs duty. The amount of thelevy was fixed at regular intervals by the Commission, in accordance with Article12 of Council Regulation (EEC) No 805/68 of 27 June 1968 on the commonorganisation of the market in beef and veal (OJ, English Special Edition 1968 (I)p. 107, as subsequently amended). At the time when the imports at issue tookplace, it was in the region of DM 10 per kilogram.

11.

    Since 1980, the Community had been required, under the General Agreement onTariffs and Trade (GATT), to open an annual Community tariff quota exemptfrom import levies in respect of beef and veal from, inter alia, Argentina.

12.

    Pursuant to those obligations, the Council adopted Regulations (EEC) No 3840/90of 20 December 1990 (OJ 1990 L 367, p. 6) and No 3668/91 of 11 December 1991(OJ 1991 L 349, p. 3) opening a Community tariff quota for high-quality, fresh,chilled or frozen meat of bovine animals (so-called 'Hilton beef‘) falling within CNcodes 0201 and 0202 and for products falling within CN codes 0206 10 95 and0206 29 91 (hereinafter 'Hilton beef‘) in respect of 1991 and 1992. Only theapplicable Common Customs Tariff rate of 20% was payable in respect of meatimported under that quota (hereinafter 'the Hilton quota‘) (Article 1(2) of bothregulations).

13.

    In respect of the same two years, the Council also adopted Regulations (EEC) No2329/91 of 25 July 1991 (OJ 1991 L 214, p. 1) and No 1158/92 of 28 April 1992 (OJ1992 L 122, p. 5) opening, as an autonomous measure, a special import quota forhigh-quality, fresh, chilled or frozen meat of bovine animals falling within CN codes0201 and 0202 as well as products falling within CN codes 0206 10 95 and0206 29 91. Those regulations increased the quantities which could be importedunder the Hilton quota.

14.

    Finally, for the same period, the Commission adopted Regulation (EEC) No3884/90 of 27 December 1990 laying down detailed rules for the application of theimport arrangements provided for by Council Regulations (EEC) No 3840/90 and(EEC) No 3841/90 in the beef and veal sectors (OJ 1990 L 367, p. 129) andRegulation (EEC) No 3743/91 of 18 December 1991 laying down detailed rules forthe application of the import arrangements provided for by Council Regulations(EEC) No 3668/91 and (EEC) No 3669/91 in the beef and veal sectors (OJ 1991L 352, p. 36) (hereinafter 'the implementing regulations‘).

15.

    Under the Hilton quota, certain quantities of Hilton beef could thus be importedinto the Community from Argentina free of levies. Grant of that benefit wassubject to production, at the time of importation, of a certificate of authenticityissued by the competent body in the exporting country.

16.

    Until the end of 1991, the Junta Nacional de Carnes (National Meat Board) wasresponsible for issuing certificates of authenticity in Argentina. In late 1991/early1992, responsibility for issuing certificates of authenticity was transferred to theSecretaría de Agricultura, Ganadería y Pesca (Department for Agriculture,Livestock and Fisheries). Only beef exporters recognised by the Argentineauthorities received such certificates of authenticity.

17.

    The Commission was informed, in 1993, of the possibility that certificates ofauthenticity were being falsified and initiated investigations in cooperation with theArgentine authorities.

18.

    On several occasions, Commission officials visited Argentina to carry outinvestigations, in cooperation with national officials.

19.

    The first mission took place from 8 to 19 November 1993. The results of thatmission were recorded in a report dated 24 November 1993 (hereinafter 'the 1993report‘), which confirmed the existence of irregularities.

20.

    According to that report, the Argentine authorities raised the question why thoseirregularities had not been detected when the Hilton beef was imported into theCommunity. Point 11 of the report stated: '... the Argentine authoritiesemphasised that, for many years, they had submitted to the Commission[Directorate-General for Agriculture] (DG VI) on a more or less regular basis, alist of all the certificates of authenticity for [Hilton beef] issued in the preceding 10days setting out certain particulars such as the Argentine exporter, the recipient inthe Community, the gross and net weight etc. According to the personsinterviewed, it would easily have been possible, on the basis of such a list, tocompare the data with the details on the certificates produced when the goods atissue were imported and to identify those which did not correspond with the dataon the list.‘

21.

    A second mission to Argentina took place from 19 April to 6 May 1994. Accordingto the report of that mission, dated 17 August 1994 (hereinafter 'the summaryreport‘), more than 460 Argentine certificates of authenticity presented in 1991 and1992 had been falsified.

22.

    The applicants Primex Produkte Import-Export GmbH & Co. KG (hereinafter'Primex‘), Gebr. Kruse GmbH (hereinafter 'Gebr. Kruse‘) and Interporc Im- undExport GmbH (hereinafter 'Interporc‘) are German companies operating, interalia, in the field of the importation of meat and meat products. For a number ofyears they have also been importing meat under the Hilton quota.

23.

    When the beef imported by the applicants was put into free circulation in theCommunity, it was granted an exemption from levies under the tariff quotasopened on presentation of the certificates of authenticity.

24.

    After the aforementioned falsifications were detected, the German authoritiessought post-clearance payment of the import duties by the applicants. Between 3March and 10 June 1994, the applicants received demands for payment totallingDM 90 975.30 (Primex), DM 174 286.46 (Gebr. Kruse) and DM 99 966.63(Interporc) respectively.

25.

    By letters of 1 February, 24 February and 22 March 1995, the applicants thereuponsubmitted applications to the competent German customs authorities for remissionof the import duties (hereinafter 'the applications for remission‘). The reasons forthe applications were set out in statements dated 6 April 1995. In accordance withnational law they also applied for, and were granted, an extension of the time-limitfor payment.

26.

    The applications for remission were submitted to the Federal Ministry of Finance,which asked the Commission to decide whether grant of remission of import dutieswas justified pursuant to Article 13 of Regulation No 1430/79. Its request wassubmitted in the form of letters received by the Commission on 1 August (CaseREM 8/95 Primex) and 21 August 1995 (Cases REM 11/95 Gebr. Kruse, and REM12/95 Interporc) respectively.

27.

    On 4 December 1995 a group of experts composed of representatives of all theMember States met in order to give an opinion on whether the applications forremission of import duties were well founded in accordance with Article 907 ofRegulation No 2454/93.

28.

    By decision of 26 January 1996 addressed to the Federal Republic of Germany, theCommission considered that the applications for remission were not justified(hereinafter 'the contested decision‘). The applicants were informed of thatdecision on 7 February 1996.

Procedure and forms of order sought by the parties

29.

    By application lodged at the Registry of the Court of First Instance on 12 April1996, the applicants brought an action for the annulment of the contested decision.

30.

    By a separate document lodged at the Registry of the Court of First Instance on25 June 1996, they asked the Court to order the Commission to produce certaindocuments considered relevant for the outcome of the proceedings, pursuant toArticles 64(4) and 114 of the Rules of Procedure.

31.

    By a document lodged at the Registry of the Court of First Instance on 4 July 1996,the Commission asked the Court to dismiss the application for measures of inquiry.

32.

    Meanwhile, by letter dated 23 February 1996, Interporc applied to the Commissionfor access to certain documents concerning the supervision of imports of Hiltonbeef pursuant to Commission Decision 94/90/ECSC, EC, Euratom of 8 February1994 on public access to Commission documents (OJ 1994 L 46, p. 58).

33.

    The Directors-General of DG VI and DG XXI (Customs and Indirect Taxation)largely rejected the application for access to the documents by letters of 22 and 25March 1996. By letter of 27 March 1996, Interporc confirmed its application of 23February 1996. By decision of 29 May 1996, the Secretary-General of theCommission rejected that confirmatory application.

34.

    By application lodged at the Registry of the Court of First Instance on 9 August1996, Interporc brought an action for the annulment of the decision of 29 May1996. By judgment of 6 February 1998 (Case T-124/96 Interporc v Commission

[1998] ECR II-231), the Court of First Instance annulled the Commission's decisionof 29 May 1996 on the ground that the statement of reasons was inadequate.

35.

    By application lodged at the Registry of the Court of First Instance on 8 October1996, the United Kingdom of Great Britain and Northern Ireland sought leave tointervene in support of the applicants. By order of 30 January 1997, the Presidentof the Third Chamber granted that request.

36.

    By decision of the Court of First Instance of 2 July 1997, the Judge-Rapporteur wasassigned to the First Chamber and the case was, consequently, assigned to thatchamber.

37.

    Upon hearing the report of the Judge-Rapporteur, the Court of First Instance(First Chamber) decided to open the oral procedure without any preparatoryinquiry. By letter of 15 December 1997, however, it requested the parties toproduce certain documents and to reply to certain questions in writing. TheCommission and the applicants complied with that request by letters lodged at theRegistry of the Court of First Instance on 13 and 14 January 1998 respectively.

38.

    The applicants claim that the Court should:

—    annul the contested decision;

—    order the Commission to pay the costs.

39.

    The Commission contends that the Court should:

—    dismiss the application;

—    order the applicants to pay the costs.

40.

    The United Kingdom, the intervener, claims that the Court should annul thecontested decision.

Substance

41.

    In support of their application, the applicants essentially raise five pleas in lawalleging, first, breach of the rights of the defence, second, breach of essentialprocedural requirements, in so far as the Commission failed to grant therepresentative of the Federal Republic of Germany the opportunity to express hisviews orally during the meeting of the group of experts composed ofrepresentatives of the Member States on 4 December 1995, third, infringement ofArticle 13 of Regulation No 1430/79, fourth, breach of the principle ofproportionality and, fifth, inadequate statement of reasons. At the hearing, they

withdrew a further plea, initially relied upon, alleging that the Commission hadbased the contested decision on an incorrect legal basis.

The first plea, alleging breach of the rights of the defence

Arguments of the parties

42.

    The applicants claim that the contested decision is vitiated by a procedural flaw inthat they were not given the opportunity to be heard and to defend themselvesdirectly before the Commission.

43.

    It is clear from the case-law that respect for the rights of the defence, in allproceedings which are initiated against a person and are liable to culminate in ameasure adversely affecting that person, is a fundamental principle of Communitylaw which must be guaranteed, even in the absence of any rules governing theprocedure in question (Case C-135/92 Fiskano v Commission [1994] ECR I-2885,paragraph 39).

44.

    Furthermore, the rights of the defence comprise not only the right of the personconcerned to make known his views, but also the right to be informed, before theadoption of the decision, of all the important facts (Case C-49/88 Al-Jubail Fertilizerv Council [1991] ECR I-3187) and of the legal considerations on which theCommission intends to base its decision. In the present case, the summary reportwas communicated only after the administrative procedure was closed, even thoughit appears that the Commission based its finding that the applicants had failed toact with due care on that report.

45.

    The Commission fails to appreciate the purpose of the procedural guarantees whenit observes that the sole purpose of those guarantees is to bring to the attention ofthe decision-making authority the facts and arguments considered relevant by theapplicant. It is also essential that the applicants should be fully aware of therelevant facts, in order to be able effectively to support their applications forremission.

46.

    It is true that the Court has held compatible with Community law the old rules ofprocedure, which did not provide any opportunity for the persons liable to be heardby the Commission, (Joined Cases 98/83 and 230/83 Van Gend & Loos andExpeditiebedrijf Wim Bosman v Commission [1984] ECR 3763). None the less,Article F(2) of the Treaty on European Union, which has since been adopted,provides, inter alia, that the Union is to respect fundamental rights, as guaranteedby the European Convention for the Protection of Human Rights and FundamentalFreedoms of 4 November 1950. The procedure in the present case is notconsistent with Article 6 of that Convention, in particular paragraph 3(c), accordingto which every person has the right 'to defend himself‘. In that context, the

Commission is wrong to rely on the judgments in Cases C-121/91 and C-122/91 (CTControl (Rotterdam) and JCT Benelux v Commission [1993] ECR I-3873, paragraph52) since that case-law no longer corresponds to the current state of Communitylaw.

47.

    Respect for the rights of the defence is all the more important in circumstancessuch as those of the present case where the Commission is alleged to have actedas both judge and party. It carried out its own assessment of the extent to whichit acted improperly and the consequences thereof.

48.

    The Commission denies infringing the rights of the defence. It recalls that theprocedural rules do not currently provide for participation of the person liable inthe administrative procedure before the Commission. In that respect, it should benoted that, in its judgment in Case T-346/94 France-Aviation v Commission [1995]ECR II-2841, the Court of First Instance did not criticise the provisions ofRegulation No 2454/93 or even consider them to be inadequate.

49.

    As the Court of Justice held in CT Control (Rotterdam) and JCT Benelux vCommission (paragraph 52), the procedure applicable with regard to anti-dumpingduties differs considerably from that followed with regard to the remission ofimport duties. Reference cannot therefore be made to procedural rights in respectof anti-dumping proceedings in order to criticise the rules which apply to theprocedure in the present case.

50.

    That being so, the Commission considers that, in contrast to the situationconsidered in France-Aviation v Commission, cited above, the contested decisionwas based on a complete file. Both the Commission and the members of the groupof experts provided for by Article 907 of Regulation No 2454/93 had at theirdisposal not only the file submitted by the Member State but also the applicationsfor remission, and the reasons for them.

51.

    In accordance with the requirements laid down in the case-law, all the informationwhich the applicants themselves considered essential was on the file at the timewhen the contested decision was adopted (Case 294/81 Control Data Belgium vCommission [1983] ECR 911, Van Gend & Loos and Expeditiebedrijf Wim Bosmanv Commission, cited above, paragraph 9, and CT Control (Rotterdam) and JCTBenelux v Commission, cited above, paragraph 48).

52.

    According to the Commission, in this plea, the applicants fail to appreciate thepurpose of the procedural guarantees concerning remission of import duties. Thesole purpose of those guarantees is to bring to the attention of the Commission thefacts and arguments considered relevant by the applicant in order to determinewhether its application for remission is well founded, and not to inform the personconcerned of the reasons on which the Commission might subsequently base itsdecision.

53.

    It is true that the person liable must be given an opportunity to put his case on thedocuments relied on by the Community institution (Case C-269/90 TechnischeUniversität München [1991] ECR I-5469, paragraph 25, and France-Aviation vCommission, cited above, paragraph 32). That does not, however, mean that heshould also be able to put his case on documents other than those relied upon bythe Commission in adopting the contested decision.

54.

    As regards the argument that the Commission acts as both judge and party, theinstitution submits that it is entirely normal for an administrative authority to decidewhether duties should be recovered.

55.

    Finally, the Commission points out that the applicants' lawyer discussed the casewith it on several occasions before the adoption of the contested decision.

56.

    This plea should therefore be rejected.

Findings of the Court

57.

    First, it should be pointed out that the administrative customs procedure for theremission of import duties involves two separate stages. The first is at nationallevel. The person liable must submit his application for remission to the nationaladministration. If the national administration considers that the remission shouldnot be granted, it may, according to the rules, adopt a decision to that effectwithout submitting the application to the Commission. Such a decision may bereviewed by the national courts. In contrast, if the national administration eitherhas doubts concerning the remission, or believes that the remission should begranted, it must submit the application to the Commission for a decision. Thesecond stage of the procedure is thus at Community level and the nationalauthorities submit the file relating to the person liable to the Commission. Afterconsulting a group of experts composed of representatives of all the MemberStates, the Commission then decides whether the application for remission isjustified.

58.

    Regulation No 2454/93 provides only for contact to take place between the personconcerned and the national administration, on the one hand, and between thenational administration and the Commission, on the other (France-Aviation vCommission, cited above, paragraph 30). Thus, according to the rules in force, theMember State concerned is the Commission's only interlocutor. In particular, theprocedural provisions in Regulation No 2454/93 do not confer any right on theperson liable to be heard during the administrative procedure before theCommission.

59.

    However, according to settled case-law, respect for the rights of the defence in allproceedings which are initiated against a person and are liable to culminate in a

measure adversely affecting that person is a fundamental principle of Communitylaw which must be guaranteed, even in the absence of any rules governing theprocedure in question (Case C-32/95 P Commission v Lisrestal and Others [1996]ECR I-5373, paragraph 21, Joined Cases C-48/90 and C-66/90 Netherlands andOthers v Commission [1992] ECR I-565, paragraph 44, and Fiskano v Commission,cited above, paragraph 39).

60.

    In view of the margin of assessment enjoyed by the Commission in adopting adecision pursuant to the general equitable provision contained in Article 13 ofRegulation No 1430/79, it is all the more important that respect for the right to beheard is guaranteed in procedures for the remission or repayment of import duties(France-Aviation v Commission, cited above, paragraph 34, and, to the same effect,Technische Universität München, cited above, paragraph 14).

61.

    The principle of respect for the rights of the defence requires that any person whomay be adversely affected by a decision should be placed in a position in which hemay effectively make his views known, at least as regards the matters taken intoaccount by the Commission as the basis for its decision (see, to this effect,Commission v Lisrestal and Others, cited above, paragraph 21, and Fiskano vCommission, cited above, paragraph 40).

62.

    In competition matters, it is settled case-law that access to the file is itself closelybound up with the principle of respect for the rights of the defence. Indeed, accessto the file is one of the procedural guarantees intended to protect the right to beheard (Joined Cases T-10/92, T-11/92, T-12/92 and T-15/92 Cimenteries CBR andOthers v Commission [1992] ECR II-2667, paragraph 38, and Case T-36/91 ICI vCommission [1995] ECR II-1847, paragraph 69).

63.

    That case-law can be applied to the present case. The principle of respect for therights of the defence thus requires not only that the person concerned should beplaced in a position in which he may effectively make known his views on therelevant circumstances, but also that he should at least be able to put his own caseon the documents taken into account by the Community institution (TechnischeUniversität München, cited above, paragraph 25, and France-Aviation v Commission,cited above, paragraph 32).

64.

    Furthermore, since the applicants allege that the Commission committed seriousbreaches of its obligations to monitor the Hilton quota, the Court considers that inorder for the right to be heard to be exercised effectively the Commission mustprovide access to all non-confidential official documents concerning the contesteddecision, if requested to do so. Indeed, documents which the Commission does notconsider to be relevant may well be of interest to the applicants. If theCommission could unilaterally exclude from the administrative proceduredocuments which might be detrimental to it, that could constitute a serious breachof the rights of the defence of a person seeking remission of import duties (see, tothe same effect, ICI v Commission, cited above, paragraph 93).

65.

    In the present case, the Federal Ministry of Finance concluded in its opinion on theapplications for remission, issued when the files were submitted to the Commission,that there was neither negligence nor deception on the part of the applicants.

66.

    It is alleged for the first time in the contested decision that the applicants failed toexercise due care by omitting to adopt all the necessary safeguards concerning theircontractors and intermediaries in Argentina. In particular, the applicants did notthemselves check the circulation of the certificates of authenticity issued to them(22nd recital in the preamble to the decision) even though they had the resourcesto take precautions (16th recital).

67.

    In that respect it should be recalled that, in paragraph 36 of its judgment in France-Aviation v Commission, cited above, the Court considered that when theCommission contemplated diverging from the position taken by the competentnational authorities on whether the person concerned was guilty of obviousnegligence, it had a duty to arrange for the applicant to be heard. Such a decisioninvolves a complex legal appraisal which can be effected only on the basis of all therelevant facts.

68.

    That case-law can be applied to the present case, even though it is only alleged thatthe applicants failed to act with due care. Indeed, the Commission relied, inter alia,on that allegation in rejecting the applications for remission pursuant to Article 13of Regulation No 1430/79 which, however, requires the absence of any 'obviousnegligence‘ by the person concerned.

69.

    It is apparent from the documents on the file that during the procedure before it,the Commission did not give the applicants an opportunity to put their own caseand effectively make their views known on the allegations concerning the lack ofdue care.

70.

    Although the applicants' lawyer did have discussions with the Commission, thosediscussions did not concern the allegations raised in the 16th and 22nd recitals inthe preamble to the contested decision. In response to a question from the Courton that point, the applicants stated, without being contradicted by the Commission,that the questions concerning the lack of care or obvious negligence by theapplicants or by importers in general were not addressed during those discussions.

71.

    It follows that the contested decision was adopted following an administrativeprocedure which was vitiated by a breach of essential procedural requirements.

72.

    The first plea, alleging breach of the rights of the defence, is therefore wellfounded.

The third plea, alleging infringement of Article 13 of Regulation No 1430/79

Arguments of the applicants and the intervener

73.

    The applicants claim that the Commission infringed Article 13 of Regulation No1430/79 by considering that there was no 'special situation‘ within the meaning ofthat provision. In adopting the contested decision, the institution failed, inter alia,to appreciate the extent of its own serious misconduct as regards the supervisionof imports under the Hilton quota and the legal consequences thereof.

74.

    To the extent that Article 13 of Regulation No 1430/79 constitutes a generalequitable provision, the recovery of import duties should be limited to cases wherethe payment of those duties is justified and is compatible with fundamental legalprinciples (Case C-250/91 Hewlett Packard France [1993] ECR I-1819, paragraph46). The Commission has no discretion in the application of Article 13 (see, asregards Article 5(2) of Regulation No 1697/79, Case 314/85 Foto-Frost [1987] ECR4199, paragraph 23).

75.

    The Commission was under an obligation to monitor the imports made under theHilton quota. That obligation stemmed, in particular, from the implementingregulations. Article 6(1) of both regulations required the Member States tocommunicate to the Commission, on a regular basis, the imports made under theHilton quota. Only the Commission was in a position to determine the quantity ofHilton beef actually imported and to ensure that it did not exceed the quota.

76.

    The applicants allege that both the Argentine authorities and the Commissionfailed to discharge their obligations.

— Obligations allegedly not discharged by the Commission

77.

    The applicants allege, in particular, that the Commission failed to update thequantities which could be imported under the Hilton quota throughout the year andto compare the regular communications from the Member States relating toimports of Hilton beef with those of the Argentine authorities relating to exports.

78.

    Moreover, it failed to forward to the national authorities either the names andspecimen signatures of the persons empowered to issue certificates of authenticityor the details concerning the exports from Argentina. Those failures prevented thenational authorities from effectively checking the validity of the certificates ofauthenticity when the goods at issue were imported.

79.

    Furthermore, in 1989 the Commission was already able to establish that the quotawas being exceeded to a significant extent. If it had investigated those irregularitiesat that stage, it would have been possible to prevent the importation of excessquantities linked to the falsification of the certificates of authenticity in 1991 and1992.

80.

    Furthermore, the Commission itself acknowledged that there had been negligencein monitoring the quota. In support of that contention, the applicants rely, interalia, on the 1993 report and a note dated 8 April 1994 from the Director-Generalof DG VI to the Director-General of DG XXI, in which the shortcomings of theold system of monitoring were acknowledged.

81.

    The failures by the Commission created conditions which enabled the falsificationsto reach the level currently observed. They constitue a 'special situation‘ withinthe meaning of Article 13 of Regulation No 1430/79.

— Obligations allegedly not discharged by the Argentine authorities

82.

    The applicants claim that the Argentine authorities also committed errors insupervising and monitoring implementation of the Hilton quota. First, they usedforms which were not protected against falsification when drawing up certificatesof authenticity and, second, they provided Argentine exporters with blank forms. Furthermore, the transfer of authority from the Junta Nacional de Carnes to theSecretaría de Agricultura, Ganadería y Pesca resulted in confusion, lasting severalmonths, as to their respective powers and areas of responsibility, which facilitatedthe irregularities.

83.

    The Commission is responsible for the improper conduct of the Argentineauthorities, since it knowingly delegated responsibility for administering the Hiltonquota to them.

84.

    Contrary to its assertion, reference to Article 904(c) of Regulation No 2454/93 isnot relevant in the present case. The applicants are not relying solely on the factthat they submitted the falsified certificates in good faith; they also invoked anumber of other factors, in particular that the Commission acted improperly.

85.

    Normal commercial risk does not encompass the falsifications at issue. In thepresent case the Commission incorrectly relies on the judgment in Case 827/79Acampora [1980] ECR 3731. That case concerned a single import, and thus itwould not have been reasonable to criticise the Commission for failing to detect theirregularities in question. In the present case, by contrast, the failures on the partof the Commission enabled the process of falsification to continue for several years. For that reason, the falsifications detected go beyond normal commercial risk.

86.

    The applicants submit that, in its defence, the Commission attempts to introduceadditional grounds and/or to replace the statement of reasons in the contesteddecision by a new set of reasons. On the one hand, it puts forward new legalreasoning concerning the conditions which must be satisfied in order to obtainremission of duties pursuant to Article 13 of Regulation No 1430/79. On the other,it raises new allegations against the applicants concerning the existence of obvious

negligence within the meaning of that provision. Since those allegations do notappear in the contested decision, they should be rejected as inadmissible.

87.

    As to the substance, the applicants submit that the Commission is wrong toassimilate the concept of 'obvious negligence‘ within the meaning of Article 13 ofRegulation No 1430/79 with that of good faith referred to in Article 5(2) ofRegulation No 1697/79. It is true that the two provisions pursue the same aim. The aforementioned concepts are not, however, identical, if only in that the scopeof the former is considerably broader than that of the latter (see, in that respect,Case 283/82 Schoellershammer v Commission [1983] ECR 4219).

88.

    In any event, the applicants deny that there was any obvious negligence on theirpart. They had no doubts as to the validity of the certificates of authenticity. Nordid they have any reason to entertain such doubts, since there was nothing tosuggest that any irregularities had been committed. Furthermore, this is not somuch an isolated incident as falsification on a large scale. In that respect, theundertakings involved in the falsifications did not supply high quality meat only withfalsified certificates of authenticity. Most of the time they also supplied largequantities with valid certificates.

89.

    Contrary to the Commission's contention, the applicants were unable, in practice,to take any precautions or safeguards with regard to their contractual partners. Nor was it possible for the applicants, who were established in Europe, todetermine from whom the exporters had obtained the certificates of authenticity.

90.

    Although it is in possession of all the relevant documents, the Commission has notput forward any arguments which support its allegation that the applicants failedto exercise due care.

91.

    The applicants conclude that the recovery of the duties from them was not justified,since all the conditions for the application of Article 13 of Regulation No 1430/79were satisfied. The contested decision should therefore be annulled.

92.

    The United Kingdom claims that the Commission committed an error of law byconsidering that Article 13 of Regulation No 1430/79 was not applicable or, in thealternative, that it used the discretion granted to it under that provision in amanifestly erroneous manner.

93.

    The contested decision is undoubtedly vitiated, since the Commission failed to takesufficient account of the fact that it had itself contributed to the applicants'problems. The reasoning and the conclusions in the contested decision aremanifestly incorrect inasmuch as the Commission owed a duty to traders to detectfraud and had failed to discharge its duty of supervision under the implementingregulations.

94.

    In view of the responsibility assumed by the Commission in supervising andmonitoring the quota, and its failure to discharge its obligations in the exercise ofthat responsibility, there was no legal justification for the refusal to grant remission. The effect of that refusal was to penalise wholly innocent traders, which is directlycontrary to the general equitable purpose of Article 13 of Regulation No 1430/79.

Arguments of the defendant

95.

    The Commission contends that it had good reason to consider that the facts in thepresent case did not constitute a special situation justifying remission of the importduties.

96.

    It refers to the judgments in Hewlett Packard France, cited above (paragraph 46),and in Joined Cases C-153/94 and C-204/94 Faroe Seafood and Others [1996] ECRI-2465, paragraph 83, and claims that the conditions set out in Article 13 ofRegulation No 1430/79 must be assessed in the light of Article 5(2) of RegulationNo 1697/79.

97.

    It is clear that remission of import duties is justified only if the three cumulativeconditions set out in that provision are satisfied: the duties must not have beencollected as a result of an error made by the competent authorities, the personliable must have acted in good faith — that is to say, he could not reasonably havedetected the error made by the competent authorities — and he must have observedall the provisions laid down by the rules in force as far as his customs declarationis concerned (see also Article 220(2)(b) of the Customs Code). In that context,contrary to the opinion of the applicants, those two provisions are altogethercomparable since they pursue the same aim (Hewlett Packard France, cited above,paragraph 46), or are even interchangeable (Case T-75/95 Günzler Aluminium[1996] ECR II-497, paragraph 55).

98.

    Those conditions must be interpreted strictly in order to ensure the uniformapplication of Community law (Case C-348/89 Mecanarte [1991] ECR I-3277,paragraph 33).

99.

    As regards the allegation of an error on the part of the competent authorities, theCommission submits that the arguments relating to that plea are inadmissible sincethey were put forward for the first time in the reply.

100.

    Furthermore the competent authorities did not make any error within the meaningof Article 5(2) of Regulation No 1697/79. The legitimate expectations of theperson liable attract protection only if the competent authorities themselves createdthe basis for his expectations. The error must be attributable to acts of thecompetent authorities (Hewlett Packard France, cited above, paragraph 16; FaroeSeafood and Others, cited above, paragraph 91; and Mecanarte, cited above,

paragraph 23). That is not the case where the competent authorities have beenmisled by incorrect declarations by the exporter whose validity they do not have tocheck or assess.

101.

    That conclusion also follows from Article 4(2)(c) of Regulation No 3799/86 andArticle 904(c) of Regulation No 2454/93. According to those provisions, thepresentation in good faith of falsified documents does not in itself constitute aspecial circumstance justifying remission. The fact that the German customsauthorities initially accepted the certificates of authenticity as valid could not haveled the applicants to entertain legitimate expectations (Faroe Seafood and Others,cited above, paragraph 93).

102.

    The Commission goes on to point out that it is clear from the case-law, on the onehand, that the Community does not have to bear the adverse consequences of thewrongful acts of the suppliers of its nationals and, on the other, that in calculatingthe benefits from trade in goods likely to enjoy tariff preferences, a prudent traderaware of the rules must be able to assess the risks inherent in the market which itis considering and accept them as normal trade risks (Acampora, cited above,paragraph 8). In claiming that the Commission acted improperly, the applicantsare thus wrongly attempting to avoid the consequences of that case-law.

103.

    The grounds of challenge relied on by the applicants are not such as to eliminateor restrict the commercial risk to which they are exposed (see, in particular, VanGend & Loos and Expeditiebedrijf Wim Bosman v Commission, cited above,paragraphs 16 and 17). The sole aim of the system of supervision was to ensurethat only meat imported within the quotas benefited from the exemption fromlevies. In so far as there was no threat to the Community beef market, the factthat the quota was exceeded did not necessarily result in the Commission adoptingmeasures in that regard immediately.

104.

    The aim of the system of supervision was, in particular, not so much to inform thepersons concerned about possible fraud, or even to protect them, as to ensure thatthe quotas were properly applied. The Commission was therefore under noobligation towards the persons concerned.

105.

    The Commission's conduct in supervising the use of the Hilton quota, which iscriticised by the applicants, cannot be considered to be a special situation within themeaning of the relevant rules. The Commission expressly rejects the allegationsthat it was itself responsible for enabling the certificates of authenticity to befalsified. Nor is there any causal link between its conduct and the origin of theimport levies.

106.

    In response to the allegations that it failed to do all that it could to preventirregularities, the Commission contends that it is not required to take financialresponsibility for falsifications which might have been avoided, had the competentauthorities acted faster in adopting more stringent measures. In virtually every

sector there are rules requiring the competent authorities to carry out certainsupervisory duties. The risk of being placed at a disadvantage in ways which mightnot have become apparent if the supervision had been entirely effective, is howeveralways borne by the person concerned.

107.

    Moreover, under the system in force during the period in question, the Commissionwas not informed of the number of certificates of authenticity issued by theArgentine authorities until the end of the calendar year. Therefore, any excessover the quotas could only have been detected towards the end of the year inquestion or at the beginning of the following year, and could no longer have beenprevented.

108.

    Furthermore, a comparison would not have been easy. On the one hand, exportsdid not necessarily take place at the same time as the notification was made by theArgentine authorities. On the other, the indication on the certificate of theanticipated importing Member State was not binding, meaning that goods wereoften imported into a Member State other than that indicated on the certificate.

109.

    Quotas were indeed exceeded in 1989. However, that could have been due toconfusion with certificates of authenticity relating to other imports of meat. Whenthe Commission received information, in 1993, concerning falsification ofcertificates of authenticity, it reacted immediately. There can therefore be noquestion of gross negligence on its part. Furthermore, the quotas were only slightlyexceeded in 1991 and 1992.

110.

    In the absence of error by the competent authorities, therefore, the first of thethree cumulative conditions set out in Article 5(2) of Regulation No 1697/79 is notsatisfied.

111.

    The second condition, namely that the person liable acted in good faith, is notsatisfied either. The Commission points out that although the contested decisiondoes not accuse the applicants of 'obvious negligence‘, it none the less mentionsa lack of care (see the 16th and 22nd recitals in the preamble). The 22nd recitalstates that the applicants themselves omitted to adopt all the necessary safeguardsconcerning their contractors and intermediaries in Argentina and, in particular, didnot themselves check the channels through which they received the certificates ofauthenticity.

112.

    In view of their familiarity with the quota system as well as their trade experience,the applicants were in a position to take steps to prevent the use of falsifiedcertificates of authenticity. They failed to do so, even though they should havebeen aware of the risk of manipulation, in the light of the financial interests atstake. They relied largely on intermediaries in Argentina to carry out theirtransactions. In that respect, the involvement of an additional trading partner,

between the slaughterhouse and the importer, should thus have prompted the latterto be more vigilant.

113.

    The falsification of the certificates of authenticity could have been detected if theapplicants had examined them carefully. The applicants obtained the originalcertificates of authenticity. If there was any doubt as to their validity, they had aduty to ascertain that they were valid (Hewlett Packard France, cited above,paragraph 24, and Faroe Seafood and Others, cited above, paragraph 100).

114.

    The Commission contends that this plea should be rejected, since the conditions forremission of import duty laid down in Article 13 of Regulation No 1430/79 werenot satisfied in the present case inasmuch as the competent authorities had notmade any error within the meaning of Article 5(2) of Regulation No 1697/79 andthe applicants had not acted in good faith.

Findings of the Court

115.

    According to settled case-law, Article 13 of Regulation No 1430/79 constitutes ageneral equitable provision designed to cover situations other than those whicharose most often in practice and for which special provision could be made whenRegulation No 1430/79 was adopted (Joined Cases 244/85 and 245/85Cerealmangimi and Italgrani v Commission [1987] ECR 1303, paragraph 10, andCase C-446/93 SEIM [1996] ECR I-73, paragraph 41). It is intended to apply, interalia, where the circumstances characterising the relationship between a trader andthe administration are such that it would be inequitable to require the trader tobear a loss which it normally would not have incurred (Case 58/86 CoopérativeAgricole d'Approvisionnement des Avirons [1987] ECR 1525, paragraph 22).

116.

    The Commission must therefore assess all the facts in order to determine whetherthey constitute a special situation within the meaning of that provision (see, to thateffect, Case 160/84 Oryzomyli Kavallas and Others v Commission [1986] ECR 1633,paragraph 16). Although it enjoys a margin of assessment in that respect (France-Aviation v Commission, cited above, paragraph 34), it is required to exercise thatpower by actually balancing, on the one hand, the Community interest in ensuringthat the customs provisions are respected and, on the other, the interest of theimporter acting in good faith not to suffer harm beyond normal commercial risk. Consequently, when examining whether an application for remission is justified, itcannot simply take account of the conduct of importers. It must also assess theimpact of its own conduct — and possible fault — on the resulting situation.

117.

    Provided that the two conditions laid down in Article 13 of Regulation No 1430/79are satisfied, namely the existence of a special situation and the absence of anydeception or obvious negligence by the person concerned, the person liable isentitled to reimbursement or remission of the import duties, since to hold otherwisewould deprive that provision of its effectiveness (see, as regards the application of

Article 5(2) of Regulation No 1697/79, Mecanarte, cited above, paragraph 12; CaseC-292/91 Weis [1993] ECR I-2219, paragraph 15; and Faroe Seafood and Others,cited above, paragraph 84).

118.

    Therefore, the Court must reject the Commission's argument that remission ofimport duties is justified only if the three cumulative conditions laid down in Article5(2) of Regulation No 1697/79 are satisfied, namely that the duties must not havebeen collected as a result of an error made by the competent authorities, that theperson liable must have acted in good faith — that is to say, he could not reasonablyhave detected the error made by the competent authorities — and that he musthave observed all the provisions laid down by the rules in force as far as hiscustoms declaration is concerned.

119.

    Although the Court held that Article 13 of Regulation No 1430/79 and Article 5(2)of Regulation No 1697/79 pursue the same aim, namely to limit the post-clearancepayment of import or export duties to cases where such payment is justified andis compatible with a fundamental principle such as the protection of legitimateexpectations (Hewlett Packard France, cited above, paragraph 46), it did notconsider that the two provisions could be equated.

120.

    It simply considered that the question whether the error by the competentauthorities was capable of being detected within the meaning of Article 5(2) ofRegulation No 1697/79 was linked to the existence of obvious negligence ordeception within the meaning of Article 13 of Regulation No 1430/79, and that theconditions laid down by the latter provision must therefore be assessed in the lightof those laid down in Article 5(2).

121.

    Even if the competent authorities did not make an error within the meaning ofArticle 5(2) of Regulation No 1697/79, therefore, that does not automaticallypreclude the person concerned from relying, in the alternative, on Article 13 ofRegulation No 1430/79 and claiming that there is a special situation justifyingremission of the import duties.

122.

    The Commission's argument disregards the purpose of the two provisions. WhilstArticle 5(2) of Regulation No 1697/79 is intended to protect the legitimateexpectation of the person liable that all the information and criteria on which thedecision whether or not to proceed with recovery of customs duties is based arecorrect (Faroe Seafood and Others, cited above, paragraph 87), Article 13 ofRegulation No 1430/79 constitutes a general equitable provision, as recalled above. That article would cease to be a general equitable provision if the conditions laiddown in Article 5(2) had to be satisfied in every case.

123.

    In order to determine whether the Commission committed a manifest error ofassessment by considering that the conditions laid down in Article 13 of RegulationNo 1430/79 were not satisfied in the present case, it is first necessary to examine

the second condition concerning the absence of any deception and obviousnegligence by the applicants, and then the first condition concerning the existenceof a special situation.

— Absence of any deception and obvious negligence

124.

    The applicants are not accused of any deception or obvious negligence within themeaning of Article 13 of Regulation No 1430/79 in either the contested decision orthe Commission's written submissions. In response to a question from the Court,the Commission expressly confirmed at the hearing that it was not its contentionthat the applicants were guilty of obvious negligence.

125.

    In addition, contrary to the Commission's submission, it cannot even be held in thepresent case that the applicants failed to exercise due care.

126.

    In the first place, it is apparent from the documents on the file that the applicantswere not aware of the falsifications or irregularities in the certificates of authenticityuntil the Commission initiated investigations in 1993 (see paragraph 17 above).

127.

    Next, as regards the manner in which the certificates were falsified, it should benoted, as already stated in Case T-42/96 Eyckeler & Malt v Commission [1998] ECRII-401, paragraphs 143 and 144, that, as a general rule, two versions of thecertificate of authenticity were drawn up in respect of any given export, bothbearing the same serial number. In accordance with Article 4 of the twoimplementing regulations, both bore a signature and a stamp, apparently from thesame competent issuing authority, either the Junta Nacional de Carnes, or theSecretaría de Agricultura, Ganadería y Pesca.

128.

    Furthermore, a comparison of the signatures on the different versions of a givencertificate shows that they are, at first sight, identical, or at least very similar.

129.

    Finally, the two versions contained identical information concerning the date andplace of issue, the Argentine exporter, the recipient in the Community and thevessel on which the goods were to be exported. The only difference in theinformation on the two versions related to the weight indicated. The versionentitled 'duplicado‘, which was intended for the Argentine authorities, showed asubstantially lower weight than the original certificate delivered to the importer. Whilst the 'duplicado‘ version referred to weights in the order of 600 to 2 000 kg,the weight indicated on the original, which corresponded to the quantities actuallyexported to the Community, was in the region of 10 000 kg. In that respect, theCourt notes that, during the period in question, Hilton beef was normallytransported in containers with a capacity of approximately 10 000 kg.

130.

    According to the summary report drawn up by the Commission, 'the fact that theforms were not numbered in advance, that the number of forms was not taken into

account and that exporters completed the forms themselves encouraged‘falsification of the documents. In addition, according to the 1993 report, during aperiod of several months following the replacement of the Junta Nacional deCarnes by the Secretaría de Agricultura, Ganadería y Pesca as the competent bodyfor issuing certificates of authenticity (see paragraph 16 above), some traders tookadvantage of the fact that the powers and procedures were not clearly set out byabusing the provisions in force.

131.

    Various details in the documents before the Court therefore suggest that thecompetent Argentine authority drew up a certificate bearing a serial number fora low weight, filed that certificate and delivered a certificate bearing the samenumber, together with the stamps and signature, but no mention of the quantity,to some Argentine slaughterhouses. The slaughterhouses were then able to inserthigher quantities corresponding to the tonnage actually exported. The summaryreport also concluded that employees of the Argentine customs and veterinaryservices must have 'closed their eyes‘ when the goods were being loaded.

132.

    In the circumstances of the present case, it must be acknowledged that theapplicants could not reasonably have detected the falsifications in question, sincethey were unable to carry out such a check. As they have rightly pointed out, thefalsified certificates of authenticity were incapable of being recognised as such. Furthermore, there is nothing in the documents before the Court to suggest thatthe applicants had any reason to entertain doubts as to the validity of thecertificates of authenticity.

133.

    Finally, two observations are called for concerning the prices paid by the applicantsfor the meat at issue.

134.

    In the first place, it is not disputed that, since no import levies were payable underthe Hilton quota, the prices paid for the Hilton beef were higher than those forbeef sold without a certificate of authenticity. In that respect, the applicantsclaimed, without being contradicted by the Commission, that the difference betweenthe prices for the two sorts of meat corresponded approximately to the leviespayable on the importation of beef other than Hilton beef.

135.

    Second, the Commission did not challenge the applicants' claim that the prices paidfor the beef imported with certificates of authenticity later found to be falsifiedwere of approximately the same level as those paid for Hilton beef accompaniedby valid certificates.

136.

    Those findings demonstrate the good faith of the applicants at the time of thecontested imports.

137.

    Since the manner in which they entered into purchase contracts and carried out theimportations at issue formed part of standard trade practice, it was for theCommission to prove that the applicants were guilty of obvious negligence.

138.

    However, the Commission did not even attempt to furnish such proof. Indeed, inreply to a question raised by the Court to that effect at the hearing, it merelyrepeated the allegations contained in the contested decision, that the applicants hadfailed to act with due care by omitting to take all necessary measures with regardto their contractual partners and their intermediaries in Argentina and by notthemselves checking the circulation of the certificates of authenticity received bythem.

139.

    In view of all the foregoing, it must be held that the applicants' conduct did notconstitute either a lack of care, or deception or obvious negligence, within themeaning of Article 13 of Regulation No 1430/79.

— Existence of a special situation

140.

    According to the relevant rules and settled case-law, the presentation, for thepurpose of obtaining preferential tariff treatment of goods declared for freecirculation, of documents subsequently found to be falsified, does not in itselfconstitute a special situation justifying remission of import duties even where suchdocuments were presented in good faith [Articles 4(2)(c) of Regulation No 3799/86and 904(c) of Regulation No 2454/93; Van Gend & Loos and Expeditiebedrijf WimBosman v Commission, cited above, paragraph 16; Acampora, cited above,paragraph 8; and Case C-97/95 Pascoal & Filhos [1997] ECR I-4209, paragraphs57 to 60].

141.

    In the present case, however, the applicants do not merely claim that, at the timeof the importations at issue, they presented falsified documents in good faith. Theybase their applications for remission primarily on serious failures by theCommission among others in supervising application of the Hilton quota, whichfacilitated the falsifications.

142.

    It follows that, contrary to the Commission's contention, the aforementionedprovisions do not preclude remission of import duties.

143.

    Pursuant to Article 155 of the Treaty and the principle of good administration, theCommission was obliged to ensure the proper application of the Hilton quota andmake sure that it was not exceeded (see, to this effect, Case 175/84 Krohn vCommission [1987] ECR 97, paragraph 15).

144.

    That duty of supervision also derived from the implementing regulations. Article6(1) of both regulations provided that: 'The Member States shall communicate tothe Commission, in respect of each period of 10 days, not later than 15 days after

that period, the quantities of products referred to in Article 1 that have been putinto free circulation, broken down by their country of origin and combinednomenclature code‘. Such a requirement would have been meaningless if it couldnot be regarded as being coupled with the obligation, on the Commission, to checkthat the quota was properly applied.

145.

    Furthermore, it is apparent from the documents produced by the Commission atthe request of the Court that, in 1991 and 1992, the Argentine authorities sent tothe Commission, on a regular basis, lists of the certificates of authenticity issuedduring a period of 10 days before they were sent, setting out, inter alia, the numberof the certificate, the Argentine exporter, the recipient in the Community and thenet weight of the goods exported. The Argentine authorities also sent theCommission the names and specimen signatures of Argentine officials empoweredto sign the certificates of authenticity.

146.

    It must therefore be held that only the Commission had the necessary data in ordereffectively to monitor use of the Hilton quota. In those circumstances, theobligation to ensure that the quota was properly applied was even greater.

147.

    It is clear, however, from the documents on the file that serious failures by theCommission in monitoring application of the Hilton quota occurred during theperiod at issue.

148.

    In the first place, for 1991 and 1992, the Commission failed regularly and properlyto check the information provided by the Argentine authorities concerning thevolumes of goods exported under the quota and the certificates of authenticityissued against equivalent information sent to it by the Member States. If theCommission had carried out such a check, the existence of the fraud could probablyhave been detected much earlier.

149.

    In reality, importations were only monitored by the Commission in an approximateand incomplete manner.

150.

    Thus, it was only at the beginning of the following year that the Commissionsummarised on lists the information which had been sent to it so that differencesin quantities and, where appropriate, any excess over the quotas could only bedetected at that time. For that reason, in any given year, it was unable to informthe Member States that the quota for that year might have been exhausted.

151.

    Furthermore, the lists were only handwritten. The Commission would have beenable to monitor the data provided much more effectively if it had processed themby computer. Moreover, without any particular difficulty, it could have overcomethe problems linked to the fact that the indication, on the certificates ofauthenticity, of the anticipated importing Member State was not binding, so that

the goods could be exported to a Member State other than that shown on thecertificate.

152.

    Second, the Commission omitted to circulate to the Member States the specimensignatures of the Argentine officials authorised to sign the certificates ofauthenticity or to publish them in the Official Journal of the European Communities. The national authorities were therefore denied a potentially effective means ofdetecting falsifications in good time.

153.

    Third, the Commission failed to react to findings that the Hilton quota hadpreviously been exceeded.

154.

    In that respect, it is clear from the summary report that the investigation carriedout in Argentina in 1993 revealed that more than 460 certificates of authenticitypresented in 1991 and 1992 had been falsified. Consequently, during those twoyears, 4 500 tonnes of beef entered the Community with forged certificates and theuncollected levies on those imports amounted to some ECU 18 million.

155.

    It is not disputed that the Commission had become aware of a comparable excessover the quota as early as 1989. As is clear from paragraph 178 of Eyckeler & Maltv Commission, the Commission acknowledged that, in that year alone, the Hiltonquota had been exceeded by more than 3 000 tonnes.

156.

    The failure to react to that finding constitutes a serious infringement by theinstitution. The irregularities detected should have drawn its attention to the needto carry out more detailed checks. From that time onwards, it should thereforehave carried out investigations in order to establish the precise reasons why thequotas were being exceeded.

157.

    If the Commission had used more effective methods of monitoring at theappropriate time in order to overcome the problems linked to the fact that thequota was exceeded in 1989, the falsifications which took place in 1991 and 1992would probably not have been able to reach the level subsequently detected, thatis to say, approximately 10% of the volume of the Hilton quota. Furthermore, thelosses incurred by the traders could therefore have been limited for certain.

158.

    Failure to implement an effective monitoring system, coupled with the otherfailures in respect of supervision of the Hilton quota, created conditions whichenabled the falsifications to persist and to reach the scale observed in the presentdispute.

159.

    At this stage, it should also be borne in mind, as already stated at paragraph 134above, that the market price for Hilton beef sold with a valid certificate ofauthenticity was normally significantly higher than that of meat sold without acertificate; the difference in price was explained by the fact that levies in the order

of DM 10 per kilogram had to be paid in respect of beef imported outside theHilton quota (see paragraph 10 above).

160.

    The Commission does not dispute that the prices paid by the applicants for thebeef imported with falsified certificates of authenticity were of approximately thesame level as those charged for Hilton beef accompanied by valid certificates (seealso paragraph 135 above).

161.

    The applicants therefore claim that, in financial terms, they have already paid aprice for the imports at issue which, broadly speaking, includes the contestedimport levy, because the purchase price for Hilton beef is higher; that is notdisputed by the Commission.

162.

    It is true that Community law does not normally protect the expectations of aperson liable as to the validity of a certificate of authenticity, which is found to havebeen forged when subsequently checked, since such a situation forms part ofcommercial risk (Van Gend & Loos and Expeditiebedrijf Wim Bosman vCommission, cited above, paragraph 17; Acampora, cited above, paragraph 8;Mecanarte, cited above, paragraph 24; and Pascoal & Filhos, cited above,paragraphs 59 and 60).

163.

    However, in the present case, the falsifications made it possible for the Hiltonquota to be exceeded to a significant extent only because the Commission hadfailed to discharge its duty of supervising and monitoring application of the quotain 1991 and 1992. In those circumstances, the falsifications, which, moreover, werecarried out in a very professional way, exceeded the normal commercial risk whichmust be borne by the applicants, in accordance with the case-law cited in thepreceding paragraph.

164.

    Since Article 13 of Regulation No 1430/79 is intended to be applied whencircumstances characterising the relationship between a trader and theadministration are such that it would be inequitable to require the trader to beara loss which he normally would not have incurred (Coopérative Agricoled'Approvisionnement des Avirons, cited above, paragraph 22), it must be held that,in view of all the foregoing, the circumstances of the present case amount to aspecial situation within the meaning of that provision and justify remission of theimport duties.

165.

    The Commission thus committed a manifest error of assessment in considering thatfailures in monitoring the application of the Hilton quota could not in anycircumstances constitute a special situation.

166.

    It follows from the foregoing that, like the first plea, the third plea, alleginginfringement of Article 13 of Regulation No 1430/79, is well founded.

167.

    Consequently, without it being necessary to rule on the second, fourth and fifthpleas, alleging breach of essential procedural requirements, breach of the principleof proportionality and breach of the obligation to state reasons, respectively, thecontested decision must be annulled.

Costs

168.

    Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to beordered to pay the costs, if they have been applied for in the successful party'spleadings. Since the Commission has been unsuccessful, it must be ordered to paythe costs in accordance with the form of order sought by the applicants.

169.

    The United Kingdom, which has intervened, must bear its own costs pursuant tothe first subparagraph of Article 87(4) of the Rules of Procedure.

On those grounds,

THE COURT OF FIRST INSTANCE (First Chamber)

hereby:

1.    Annuls the Commission's decision of 26 January 1996 addressed to theFederal Republic of Germany and concerning an application for remissionof import duties;

2.    Orders the Commission to pay the costs;

3.    Orders the United Kingdom of Great Britain and Northern Ireland to bearits own costs.

VesterdorfMoura Ramos Mengozzi

Delivered in open court in Luxembourg on 17 September 1998.

H. Jung

B. Vesterdorf

Registrar

President

1: Language of the case: German.

ECR