1. 

Two French companies which produce animal feed on the basis inter alia of cereals and which also to a certain extent trade in cereals have brought proceedings before the Tribunal de Grande Instance de Pau against the French tax authorities for the repayment of a parafiscal charge paid by them over the period from 1 July 1986 to 31 May 1988. The companies have claimed that that charge is incompatible with Community law.

The charge in question is one that has already been the subject of a question referred for a preliminary ruling by another French court. The Court of Justice gave a ruling on that question in Case C-235/90 Aliments Morvan v Directeur des Services Fiscaux du Finistère [1991] ECR I-5419.

2. 

The Court is thus already acquainted with the charge and I may therefore merely summarize the main characteristics of the charge as follows:

The rate of the charge has since been progressively reduced and for the 1990/91 marketing year it is FF 0.

The question referred to the Court of Justice for a preliminary ruling in Morvan was couched in very general terms. The Court of Justice was asked by the national court to interpret those provisions of Community law that were necessary in order to decide whether the French charge was compatible with Community law. Like the plaintiffs in these cases, the plaintiff in Adornan had sought the reimbursement of the charge paid over the period from 1 July 1986 to 31 May 1988.

In the observations submitted to the Court of Justice in Morvan, the national court's question is considered in particular in the light of the organization of the market for cereals and Article 9 together with Article 95 of the EEC Treaty. Advocate General Mischo, who delivered his Opinion on the case on 11 June 1991, also considered the charge in the light of Articles 16 and 92 of the Treaty. The Court confined its answer to the question to the relevant organization of the agricultural market. The Court held:

‘Community law, and in particular the machinery of the common agricultural policy laid down for the cereals sector in, inter alia Regulation (EEC) No 2727/75 of the Council of 29 October 1975 on the common organization of the market in cereals, precludes a Member State from levying a charge on a limited number of agricultural products over a prolonged period where that charge is likely to encourage economic agents to alter the structure of their production or consumption. It is for the national court to determine whether the charge at issue in a dispute before it has had such effects.’

3. 

In this case the Tribunal de Grande Instance de Pau has referred three questions to the Court of Justice.

The first question concerns the interpretation of the EEC Treaty ban on charges having an equivalent effect to customs duties and on discriminatory internal charges.

The second relates to the interpretation of the Community rules in the agricultural sector.

The third concerns the interpretation of the EEC Treaty rules on State aid.

The plaintiffs in the main proceedings, the French Government and the Commission, which have submitted observations in this case, have largely put forward views corresponding to those expressed in Morvan.

4. 

I can thus largely confine my observations to reference to:

5.

This question can clearly be answered in the same way as the question in Morvan.

6.

I can essentially refer to the Opinion of Advocate General Mischo. He suggested that the Court should answer the national court's question regarding that prohibition as follows:

‘Community law must be interpreted as meaning that it precludes a charge such as the one at issue in the main proceedings where:

...’.

However the observations submitted in this case by the Commission and the plaintiff companies prompt a number of additional comments.

As regards the use to which the revenue from the charge is applied, it is appropriate to point out that the Court has recently confirmed its case-law in this field in its judgment of 11 March 1992 in Joined Cases C-78 to 83/90 Société Commerciale de l'Ouest v Receveur Principal des Douanes de La Palike Port [1992] ECR I-1847 which concerned French parafiscal charges on petroleum products (see paragraphs 24 to 27).

As regards the rules on the time when the charge is levied, Advocate General Mischo discussed whether there was a difference in treatment since in the case of imports the charge was levied at the time of importation whereas in the case of domestic products it was levied either on resale or on processing. He concluded that there was no difference in treatment since, in his view: ‘As regards domestic and imported products alike, the charge is imposed on the product at the time when it is released for consumption’. The plaintiffs in the main proceedings have claimed that in reality the charge on imports is levied at an earlier stage than the charge on domestic products. Even if the question is not entirely free from doubt, I consider that in fact Advocate General Mischo was right in his conclusion. As mentioned, the charge is levied on domestic products at the processing stage and also on resale, that is to say when a buyer sells cereals to processing undertakings or to other dealers. In my view it may be assumed that the importation of cereals into France in practice may be regarded as corresponding to the resale of domestic cereals. In practice the exporter should be regarded as equivalent to the domestic undertaking which has purchased the cereals from the producer.

As regards the scope of application of the charge both the plaintiffs in the main proceedings and the Commission have contended that there exists a particular problem in so far as the French charge also comprises a charge on products derived and processed from cereals (hereinafter referred to as ‘derived products’). The nub of the problem is that the charge on imported derived products is intended to offset the burden of the charge which indirectly falls on French derived products as a result of the charge paid on the cereals that are used for the production of the derived products. The charge is levied on imported derived products without corresponding domestic products being direcdy subject to a charge and the payment of the charge cannot be regarded from the importer's point of view as constituting consideration for a benefit the importer has received from the administration. In those circumstances I consider that the charge must in this respect too be regarded as in breach of the prohibition under Article 9 of the Treaty. There are similarities between the rules at issue here and those that were the subject matter of the judgment of the Court in Case 132/78 Denkavit Loire v France (Customs Authorities) [1979] ECR1923. In paragraph 8 of that judgment the Court held:

‘It is however appropriate to emphasize that in order to relate to a general system of internal dues, the charge to which an imported product is subject must impose the same duty on national products and identical imported products at the same marketing stage and that the chargeable event giving rise to the duty must also be identical in the case of both products. It is therefore not sufficient that the objective of the charge imposed on imported products is to compensate for a charge imposed on similar domestic products — or which has been imposed on those products or a product from which they are derived — at a production or marketing stage prior to that at which the imported products are taxed. To exempt a charge levied at the frontier from the classification of a charge having equivalent effect when it is not imposed on similar national products or is imposed on them at different marketing stages or, again, on the basis of a different chargeable event giving rise to duty, because that charge aims to compensate for a domestic fiscal charge applying to the same products — apart from the fact that this would not take into account fiscal charges which had been imposed on imported products in the originating Member State — would make the prohibition on charges having an effect equivalent to customs duties empty and meaningless.’

7.

The plaintiffs in the main proceedings have further claimed that the refund of the charge that is made on the export of, in any event, certain derived products is incompatible with the provision in Article 96 of the Treaty that when products are exported to the territory of a Member State, any repayment of internal taxation must not exceed the internal taxation imposed on them whether direcdy or indirectly. In support of that view the plaintiffs in the main proceedings have contended inter alia that the refund on exports is greater than the charge that is levied on the importation of corresponding products. It is plain that that argument is not directly relevant to the application of the prohibition under Article 96 which relates to the refund on exports of internal charges in excess of the amount that whether directly or indirectly was imposed on the exported products. The argument may, however, perhaps be used as indirect support for the view that the refund of the charge on exports is incompatible with Article 96. It is for the national court to determine whether the facts of the case are such as to constitute an infringement of Article 96.

It follows from the foregoing that various aspects of the French rules on the charge may be incompatible with Articles 9, 95 and 96 of the Treaty. But it is important to emphasize that a finding of such incompatibility does not signify that the rules on the charge as a whole are incompatible with Community law. The levying of a charge applying to cereals which are produced in France and are resold and processed in France is thus not affected by the Community rules referred to above.

8.

The national court raises the question to what extent the charge must be regarded as unlawful State aid under Article 92 of the Treaty having regard to the use to which the revenue is put and the rules on refunds.

At the outset it is important to establish that Article 92 of the Treaty does not create rights for individuals which they can invoke directly before the national courts. This has been established by the Court, most recently in the abovementioned judgment in Joined Cases C-78 to 83/90 Société Commerciale de l'Ouest, in which the Court held, inter alia,

‘However, the Court has held that the incompatibility of State aids with the common market is neither absolute nor unconditional. The intention of the Treaty, in providing through Article 93 for aid to be kept under constant review and supervised by the Commission, is that the finding that an aid may be incompatible with the common market is to be determined, subject to review by the Court, by means of an appropriate procedure which it is the Commission's responsibility to set in motion. Individuals cannot therefore simply, on the basis of Article 92 alone, challenge the compatibility of an aid with Community law before the national courts or ask them to decide as to any incompatibility which may be the main issue in actions before them or may arise as a subsidiary issue (judgments in Case 74/76 Iannelli and Volpi, cited above and Case 78/76 Steinike und Weinlig [1977] ECR 595)’ (paragraph 33).

Any substantive incompatibility with Article 92 may be sanctioned by a national court, however, when such incompatibility has been established by the Commission in accordance with its powers under Articles 92 and 93. It is plain that the Commission has not taken any such decision concerning the rules at issue here.

According to the Court's case-law the national court may also ensure that national aid falling under Article 92 was introduced in accordance with the requirement of notification to the Commission of new State aid pursuant to Article 93(3). ( 1 ) An infringement of Article 93(3) may be invoked by individuals before national courts.

The Treaty rules on State aid can accordingly only be relevant to the decision on the issue in the main proceedings if the French rules on the charge constitute, wholly or in part, State aid falling under Article 92 and if they were introduced in infringement of the rules in Article 93(3) of the Treaty.

There is no information in this case as to whether the French rules on the charge which were originally introduced in 1953 and have since been amended on a number of occasions, before and during the period material to the decision in the main proceedings, have been notified to the Commission in accordance with the rules in Article 93.

On that basis it is in principle necessary for the Court to rule on the extent to which the French rules on the charge contain elements of State aid falling under Article 92. The Commission and the plaintiffs in the main proceedings have claimed that the rules on the charge contain elements of aid while Advocate General Mischo in his Opinion in Morván came to the opposite conclusion.

I do not consider that the very concise arguments relied on by the Commission in support of its position or the plaintiffs' views give sufficient basis to depart from the view expressed by Advocate General Mischo in his Opinion.

In this context too, it may be appropriate to point out that a finding that one or more elements of the French rules on the charge may constitute State aid introduced in breach of Article 93(3) of the Treaty would not signify that the French rules on the charge as a whole are incompatible with Community law.

9.

On the basis of the foregoing I would suggest that the Court give the following answer to the questions referred to it by the Tribunal de Grande Instance de Pau:

Community law must be interpreted as precluding a charge such as that at issue in the main proceedings to the extent that:

There are no grounds for assuming that a charge such as that at issue in this case falls under Article 92 of the EEC Treaty; furthermore a national court is not competent to decide on a claim that existing State aid which has not been the subject of a decision by the Commission requiring the Member State in question to abolish or alter the aid or new aid which has been introduced in accordance with Article 93(3) of the Treaty should be declared incompatible with Community law.