JUDGMENT OF THE COURT (Sixth Chamber)
22 October 1998 (1)
(Common agricultural policy Administrative fees Charging to beneficiaries)
In Joined Cases C-36/97 and C-37/97,
REFERENCES to the Court under Article 177 of the EC Treaty by the Schleswig-Holsteinisches Verwaltungsgericht (Germany) for a preliminary ruling in the
proceedings pending before that court between
Hilmar Kellinghusen
and
Amt für Land- und Wasserwirtschaft Kiel,
Joined party: Ministerium für ländliche Räume, Landwirtschaft, Ernährung und
Tourismus des Landes Schleswig-Holstein,
and between
Ernst-Detlef Ketelsen
and
Amt für Land- und Wasserwirtschaft Husum,
Joined party: Ministerium für ländliche Räume, Landwirtschaft, Ernährung und
Tourismus des Landes Schleswig-Holstein ,
on the interpretation and validity, in Case C-36/97, of Article 15(3) of Council
Regulation (EEC) No 1765/92 of 30 June 1992 establishing a support system for
producers of certain arable crops (OJ 1992 L 181, p. 12), and, in Case C-37/97, of
Article 30a of Regulation (EEC) No 805/68 of the Council of 27 June 1968 on the
common organisation of the market in beef and veal (OJ, English Special Edition
1968 (I), p. 187), as amended by Council Regulation (EEC) No 2066/92 of 30 June
1992 amending Regulation No 805/68 and repealing Regulation (EEC) No 468/87
laying down general rules applying to the special premium for beef producers and
Regulation (EEC) No 1357/80 introducing a system of premiums for maintaining
suckler cows (OJ 1992 L 215, p. 49),
THE COURT (Sixth Chamber),
composed of: P.J.G. Kapteyn (Rapporteur), President of the Chamber, G. Hirsch,
G.F. Mancini, H. Ragnemalm and R. Schintgen, Judges,
Advocate General: F.G. Jacobs,
Registrar: H.A. Rühl, Principal Administrator,
after considering the written observations submitted on behalf of:
Mr Kellinghusen and Mr Ketelsen, by Stephan Gersteuer, Assessor in the
Bauernverband Schleswig-Holstein e.V., Rendsburg,
the Amt für Land- und Wasserwirtschaft Kiel, the Amt für Land- und
Wasserwirtschaft Husum and the Ministerium für ländliche Räume,
Landwirtschaft, Ernährung und Tourismus des Landes Schleswig-Holstein,
by Jürgen Gündisch, Rechtsanwalt, Hamburg,
the German Government, by Ernst Röder, Ministerialrat in the Federal
Ministry of Economic Affairs, and Bernd Kloke, Oberregierungsrat in that
Ministry, acting as Agents,
the Greek Government, by Ioannis Chalkias, Deputy Legal Adviser to the
State Legal Council, and Elli-Markela Mamouna, lawyer in the Special
Legal Service for the European Communities of the Ministry of Foreign
Affairs, acting as Agents,
the Swedish Government (C-37/97), by Erik Brattgård, Departementsråd,
acting as Agent,
the Council of the European Union, by Jan-Peter Hix and Lauri Railas, of
its Legal Service, acting as Agents,
the Commission of the European Communities, by Klaus-Dieter Borchardt,
of its Legal Service, acting as Agent,
having regard to the Report for the Hearing,
after hearing the oral observations of Mr Kellinghusen and Mr Ketelsen,
represented by Stephan Gersteuer, of the Amt für Land- und Wasserwirtschaft
Kiel, the Amt für Land- und Wasserwirtschaft Husum and the Ministerium für
ländliche Räume, Landwirtschaft, Ernährung und Tourismus des Landes Schleswig-Holstein, represented by Jürgen Gündisch, of the German Government,
represented by Claus-Dieter Quassowski, Regierungsdirektor in the Federal
Ministry of Economic Affairs, acting as Agent, of the Greek Government,
represented by Ioannis Chalkias, of the Swedish Government, represented by Erik
Brattgård, of the Council, represented by Jan-Peter Hix, and of the Commission,
represented by Klaus-Dieter Borchardt, at the hearing on 26 March 1998,
after hearing the Opinion of the Advocate General at the sitting on 28 May 1998,
gives the following
Judgment
- 1.
- By orders of 18 October 1996, received at the Court on 27 January 1997, the
Schleswig-Holsteinisches Verwaltungsgericht (Schleswig-Holstein Administrative
Court) referred to the Court for a preliminary ruling under Article 177 of the EC
Treaty two questions on the interpretation and validity, in Case C-36/97, of Article
15(3) of Council Regulation (EEC) No 1765/92 of 30 June 1992 establishing a
support system for producers of certain arable crops (OJ 1992 L 181, p. 12), and,
in Case C-37/97, of Article 30a of Regulation (EEC) No 805/68 of the Council of
27 June 1968 on the common organisation of the market in beef and veal (OJ,
English Special Edition 1968 (I), p. 187), as amended by Council Regulation (EEC)
No 2066/92 of 30 June 1992 amending Regulation No 805/68 and repealing
Regulation (EEC) No 468/87 laying down general rules applying to the special
premium for beef producers and Regulation (EEC) No 1357/80 introducing a
system of premiums for maintaining suckler cows (OJ 1992 L 215, p. 49).
- 2.
- Those questions were raised in proceedings brought before the Verwaltungsgericht
by Mr Kellinghusen and Mr Ketelsen against decisions taken respectively by the
Amt für Land- und Wasserwirtschaft Kiel (Office for Agriculture and Water, Kiel)
and the Amt für Land- und Wasserwirtschaft Husum (Office for Agriculture and
Water, Husum), concerning the grant of direct income subsidies to agricultural
producers.
The legal framework
- 3.
- Regulation No 1765/92 establishes a system of compensatory payments to
producers of certain arable crops. Article 2(1) of that regulation provides that
Community producers of arable crops may, under certain specified conditions,
claim a compensatory payment.
- 4.
- Article 15(3) of Regulation No 1765/92 provides:
'The payments referred to in this Regulation are to be paid over to the
beneficiaries in their entirety.
- 5.
- Article 30a of Regulation No 805/68, which was inserted in that regulation by point
5 of Article 1 of Regulation No 2066/92, is worded as follows:
'The amounts to be paid pursuant to this Regulation shall be paid in full to the
beneficiaries.
- 6.
- The Land Schleswig-Holstein charges administrative fees in consideration of the
payment of direct income subsidies to producers. Those fees are charged pursuant
to the Landesverordnung über Verwaltungsgebühren (Land Regulation on
Administrative Fees), tariff headings 15.15 to 15.17 of which, inserted by the
Landesverordnung of 29 October 1993 (hereinafter 'the Land regulation), extend
the charging of administrative fees to certain areas, with effect from 1 January
1994.
- 7.
- Those tariff headings are worded as follows:
'15.15 Grant of a compensatory payment pursuant to Article 2(1) of Regulation
(EEC) No 1765/92 ...
a) Basic fee (in DM)
for an area under arable crops of
a maximum of 2 hectares 30
for an area under arable crops of
between 2 and 13.51 hectares 50
for an area under arable crops of
more than 13.51 hectares 80
b) plus, per hectare of the area under
arable crops, except for smallholdings
under Article 8(2), (in DM) 3
...
15.16 Grant of a special premium for beef producers pursuant to Article 4b(1) of
Regulation (EEC) No 805/68 of the Council, as amended by Regulation (EEC) No
2066/92 ...
a) Basic fee (in DM)
maximum of 10 bovine animals 30
between 10 and 30 bovine animals 50
more than 30 bovine animals 80
b) plus, per bovine animal, (in DM) 2
...
15.17 Grant of a premium for maintaining suckler cows pursuant to Article 4d(1)
of Regulation (EEC) No 805/68 of the Council, as amended by Regulation (EEC)
No 2066/92 ...
a) Basic fee (in DM)
maximum of 10 suckler cows 30
between 10 and 30 suckler cows 50
more than 30 suckler cows 80
b) plus, per suckler cow, (in DM) 2.
The main proceedings
- 8.
- By decisions of 30 September 1994, 30 November 1994 and 31 March 1995, the
Amt für Land- und Wasserwirtschaft Kiel (hereinafter 'the Amt in Kiel) granted
Mr Kellinghusen, as applied for, compensatory payments for the marketing year
1994/1995 of a total of DM 175 945.07 for a total area of 236.5 hectares and for
growing cereals, protein crops and oil seeds and for economic set-aside. By
separate decision of 30 September 1994, the Amt in Kiel also charged him an
administrative fee of DM 788 therefor, in accordance with tariff heading 15.15 of
the Land regulation, made up of a basic fee of DM 80 and an additional amount
of DM 3 per hectare of the area under crops.
- 9.
- By decision of 31 March 1995, the Amt für Land- und Wasserwirtschaft Husum
granted Mr Ketelsen, for the calendar year 1994 and as applied for, the special
premium for beef producers of DM 23 305.92 for 67 cows. By separate decision of
31 March 1995, it charged him a fee of DM 214 for the administrative work
connected with the grant of the premium.
- 10.
- After unsuccessfully lodging complaints against those decisions on fees, Mr
Kellinghusen and Mr Ketelsen brought proceedings before the Schleswig-Holsteinisches Verwaltungsgericht on 20 January 1995 and 28 December 1995
respectively.
- 11.
- The Verwaltungsgericht is of the opinion that the level of the fees fixed in tariff
headings 15.15 to 15.17 of the Land regulation is determined in such a way that
there is a reasonable relationship between the level of the administrative expenses
incurred, on the one hand, and the economic value or other benefit of the
administrative action for the person liable for the fees, on the other (principle of
'equivalence). Those fees are also, according to the Verwaltungsgericht, in
accordance with the principle of covering costs, according to which the fees must
be determined in such a way that receipts cover, but do not exceed, the
administrative resources deployed. The Verwaltungsgericht wonders, however,
whether the charging of administrative fees is compatible with Article 15(3) of
Regulation No 1765/92, or Article 30a of Regulation No 805/68, as inserted by
Regulation No 2066/92.
- 12.
- In those circumstances the Verwaltungsgericht decided to stay proceedings and
seek a preliminary ruling from the Court on the following questions:
Case C-36/97
'(1) Is Article 15(3) of Council Regulation (EEC) No 1765/92 of 30 June 1992
establishing a support system for producers of certain arable crops (OJ 1992
L 181, p. 12) to be interpreted as prohibiting the authorities in the Member
States from charging applicants administrative fees for processing their
applications for support payments, if those administrative fees correspond
to the rates which are otherwise usual in national law and are so low that
they are not capable of deterring applicants from applying for support
payments?
(2) If Question 1 is answered in the affirmative:
Does Article 15(3) of the said Council Regulation infringe higher-ranking
Community law, in particular the principle of cooperation in good faith
under Article 5 of the EC Treaty, the principle of proportionality under the
third paragraph of Article 3b of the EC Treaty, and the principle of
subsidiarity under the second paragraph of Article 3b of the EC Treaty?
Case C-37/97
'(1) Is Article 30a of Council Regulation (EEC) No 2066/92 of 30 June 1992
amending Regulation (EEC) No 805/68 on the common organisation of the
market in beef and veal and repealing Regulation (EEC) No 468/87 laying
down general rules applying to the special premium for beef producers and
Regulation (EEC) No 1357/80 introducing a system of premiums for
maintaining suckler cows (OJ 1992 L 215, p. 49) to be interpreted as
prohibiting the authorities in the Member States from charging applicants
administrative fees for processing their applications for aid, if those
administrative fees correspond to the rates which are otherwise usual in
national law and are so low that they are not capable of deterring applicants
from applying for aid?
(2) If Question 1 is answered in the affirmative:
Does Article 30a of the said Council Regulation infringe higher-ranking
Community law, in particular the principle of cooperation in good faith
under Article 5 of the EC Treaty, the principle of proportionality under the
third paragraph of Article 3b of the EC Treaty, and the principle of
subsidiarity under the second paragraph of Article 3b of the EC Treaty?
- 13.
- By order of the President of the Court of 18 March 1997, those two cases were
joined for the purposes of the written and oral procedure and the judgment.
The first question
- 14.
- The plaintiffs in the main proceedings, the German Government and the
Commission submit that, having regard to their wording and purpose, the provisions
in issue prohibit not only a direct deduction from the compensatory payments, but
also an indirect reduction consisting, in particular, of the charging of administrative
fees.
- 15.
- On the other hand, the defendants in the main proceedings and the Greek and
Swedish Governments contend that the provisions in issue do not prohibit the
levying of administrative fees, but merely demand that the payments should be
made in full.
- 16.
- It should first be borne in mind that the provisions of Community regulations must
be uniformly applied in all the Member States and have, so far as possible, the
same effect throughout the territory of the Community (see Case 819/79 Germany
v Commission [1981] ECR 21, paragraph 10).
- 17.
- According to the actual wording of Article 15(3) of Regulation No 1765/92, and
Article 30a of Regulation No 805/68, as inserted by Regulation No 2066/92, the
amounts to be paid shall be paid 'in their entirety and 'in full to the
beneficiaries.
- 18.
- Furthermore, as the Court noted in Case C-132/95 Jensen and Korn- og
Foderstofkompagniet v Landbrugsministeriet EF-Direktoratet [1998] ECR I-2975,
paragraph 59, it is expressly stated in the second recital in the preamble to
Regulation No 1765/92 that the object of the compensatory payments is to
compensate the loss of income caused by the reduction of the institutional prices
as part of a new support system for the producers of certain arable crops as a
result of reform of the common agricultural policy. According to the third recital
of Regulation No 2066/92, the object of the system of premiums envisaged is to
grant substantial compensation for the consequences for producers of the reduction
of the intervention price in the beef and veal sector.
- 19.
- As the Commission has correctly pointed out, the objective of compensating the
loss of income caused by the reduction of the institutional prices can be achieved
only if the compensatory aid is paid in full to the farmers affected by the
consequences of the reform of the common agricultural policy.
- 20.
- In fact, to allow Member States the freedom to reduce the levels of compensatory
aid by making a deduction of or charging fees for administrative expenses would
lead to different compensation for the loss of income of the farmers in one
Member State and between the farmers of different Member States, which could
interfere with the uniform application of Community law, which is necessary in
order to avoid unequal treatment of producers and traders (Jensen and Korn- og
Foderstofkompagniet, paragraph 49).
- 21.
- Accordingly, Article 15(3) of Regulation No 1765/92, and Article 30a of Regulation
No 805/68, as inserted by Regulation No 2066/92, prohibit the authorities in the
Member States from making a deduction from the payments made or from
demanding the payment of administrative fees charged for processing applications
and having the effect of reducing the amount of the aid.
- 22.
- In support of their argument that those provisions of the regulations do not
prohibit the deduction of administrative costs from the amount of aid granted, the
defendants in the main proceedings and the Greek and Swedish Governments
contended that the Court had accepted such a practice in Case 233/81 Denkavit
Futtermittel v Germany [1982] ECR 2933, paragraph 10, which concerned the
interpretation of Article 10 of Commission Regulation (EEC) No 1725/79 of 26 July
1979 on the rules for granting aid to skimmed milk processed into compound
feedingstuffs and skimmed-milk powder intended for feed for calves (OJ 1979 L
199, p. 1).
- 23.
- In that respect, it should be pointed out that, whereas Regulations No 1765/92 and
No 805/68, as amended, provide for the payment in full of the aid, Regulation No
1725/79 made no provision as to the costs of the inspections to be carried out by
the Member States (see Denkavit Futtermittel, paragraph 7). Since the wording of
Regulation No 1725/79 did not prevent Member States either from carrying out
such inspections free of charge or from requiring the undertakings in question to
reimburse the expenditure which such inspections entail, the Court therefore
concluded, at paragraphs 8 and 9 of the judgment in Denkavit Futtermittel, that the
rules in question left Member States free to resolve the problem of financing the
controls.
- 24.
- The defendants in the main proceedings then submitted that the provisions relating
to full payment in issue in this case could not be interpreted to mean a prohibition
on charging administrative fees, since those provisions are not explained in the
recitals of Regulations No 1765/92 and No 2066/92. According to the defendants,
the lack of reasoning in that respect militates against such an interpretation, since
a prohibition on charging administrative fees constitutes an important derogation
from the general principle that the Member States are entitled to impose charges
for administrative costs.
- 25.
- In that context, it is sufficient to state, as the Advocate General, Mr Jacobs,
pointed out at paragraph 19 of his Opinion, that the defendants in the main
proceedings have in no way established the existence of such a general principle in
Community law.
- 26.
- Lastly, the defendants submitted that their interpretation of the provisions found
support in the fact that not all the regulations of the Council in the 1992 reform
of the common agricultural policy contain provisions corresponding to Article 15(3)
of Regulation No 1765/92, and Article 30a of Regulation No 805/68, as inserted by
Regulation No 2066/92. They thus infer that those provisions are purely declaratory
and do not extend to fees for administrative costs.
- 27.
- It should be pointed out that Article 15(3) of Regulation No 1765/92, and Article
30a of Regulation No 805/68, as inserted by Regulation No 2066/92, cannot be
interpreted in the light of regulations not containing a provision requiring the full
payment of aid to beneficiaries.
- 28.
- Consequently, that argument cannot be accepted either.
- 29.
- The answer to the first question must therefore be that Article 15(3) of Regulation
No 1765/92, and Article 30a of Regulation No 805/68, as inserted by Regulation No
2066/92, prohibit the authorities in the Member States from charging applicants
administrative fees for processing their applications for aid even if the
administrative fees fixed by those authorities correspond to the rates which are
otherwise usual in national law and those fees are so low that they are not capable
of deterring applicants from applying for aid.
The second question
- 30.
- As to Article 5 of the Treaty, it should be borne in mind that, according to the
case-law of the Court, the relations between the Member States and the
Community institutions are governed, under that provision, by a principle of sincere
cooperation. That principle not only requires the Member States to take all the
measures necessary to guarantee the application and effectiveness of Community
law, but also imposes on the Community institutions reciprocal duties of sincere
cooperation with the Member States (see, in particular, the order in Case C-2/88
Imm. Zwartveld and Others [1990] ECR I-3365, paragraph 17).
- 31.
- As the Court pointed out in paragraph 19 of this judgment, the objective pursued
by Regulations No 1765/92 and No 2066/92 of compensating the loss of income
caused by the reduction of the institutional prices can be achieved only if the
compensatory aid is paid in full to the farmers affected by the consequences of the
reform of the common agricultural policy, thus ensuring the uniform application of
Community law and the equal treatment of the beneficiaries of that aid.
- 32.
- It therefore follows that, in adopting the said regulations, the Council did not
infringe Article 5 of the Treaty.
- 33.
- As to the alleged breach of the principle of proportionality, it must be pointed out
that, according to the case-law of the Court, in order to establish whether a
provision of Community law complies with that principle, it must be ascertained
whether the means which it employs are suitable for the purpose of achieving the
desired objective and whether they do not go beyond what is necessary to achieve
it (see, in particular, Case C-233/94 Germany v Parliament and Council [1997] ECR
I-2405, paragraph 54).
- 34.
- In that context, it is sufficient to observe that the objective pursued by Regulations
No 1765/92 and No 2066/92 of compensating the loss of income caused by the
reduction of the institutional prices can only be achieved by the obligation to pay
the compensatory aid in full to the farmers concerned.
- 35.
- Lastly, as to the breach of the principle of subsidiarity, it should be stated that the
second paragraph of Article 3b of the Treaty was not yet in force when Regulations
No 1765/92 and No 2066/92 were adopted and that provision cannot have
retroactive effect.
- 36.
- The answer to the second question must therefore be that consideration of the
questions referred has disclosed no factor of such a kind as to affect the validity of
Regulations No 1765/92 and No 2066/92.
Costs
- 37.
- The costs incurred by the German, Greek and Swedish Governments and by the
Council and the Commission, which have submitted observations to the Court, are
not recoverable. Since these proceedings are, for the parties to the main
proceedings, a step in the actions pending before the national court, the decision
on costs is a matter for that court.
On those grounds,
THE COURT (Sixth Chamber),
in answer to the questions referred to it by the Schleswig-Holsteinisches
Verwaltungsgericht by orders of 18 October 1996, hereby rules:
- 1.
- Article 15(3) of Council Regulation (EEC) No 1765/92 of 30 June 1992
establishing a support system for producers of certain arable crops, and
Article 30a of Regulation (EEC) No 805/68 of the Council of 27 June 1968
on the common organisation of the market in beef and veal, as inserted by
Council Regulation (EEC) No 2066/92 of 30 June 1992 amending
Regulation (EEC) No 805/68 and repealing Regulation (EEC) No 468/87
laying down general rules applying to the special premium for beef
producers and Regulation (EEC) No 1357/80 introducing a system of
premiums for maintaining suckler cows, prohibit the authorities in the
Member States from charging applicants administrative fees for processing
their applications for aid even if the administrative fees fixed by those
authorities correspond to the rates which are otherwise usual in national
law and those fees are so low that they are not capable of deterring
applicants from applying for aid.
- 2.
- Consideration of the questions referred has disclosed no factor of such a
kind as to affect the validity of Regulations No 1765/92 and No 2066/92.
KapteynHirsch
Mancini
Ragnemalm Schintgen
|
Delivered in open court in Luxembourg on 22 October 1998.
R. Grass
P.J.G. Kapteyn
Registrar
President of the Sixth Chamber