«(Fourth Directive 78/660/EEC – Annual accounts of certain types of companies – Jurisdiction of the Court to interpret Community law in a context where it is not directly applicable – Provisions for risk under a loan guarantee – Taking into account of the individual situation of the debtor and of its State of establishment – Date on which the risk may or must be evaluated and entered on the balance sheet)»

1.. Preliminary rulings – Jurisdiction of the Court – Interpretation of Community law in a context where it is not directly applicable – Admissibility, in this case, of the questions referred (Art. 234 EC; Council Directive 78/660)

2.. Freedom of movement for persons – Freedom of establishment – Companies – Directive 78/660 – Annual accounts of certain types of companies – Provision to cover the risk arising from a commitment appearing at the foot of the balance sheet – Whether possible to enter such risk on the liabilities side of the balance sheet – Condition – Valuation of asset and liability items – Whether possible to make a globalised assessment – Condition (Council Directive 78/660, Arts 14, 20(1), and 31(1)(e))

3.. Freedom of movement for persons – Freedom of establishment – Companies – Directive 78/660 – Annual accounts of certain types of companies – Principle of valuing asset and liability items at the balance-sheet date – Repayment after that date of a loan for which credit risk provision had been made – Retrospective revaluation – No obligation – Condition (Council Directive 78/660, Art. 31(1)(c)(bb))

see paras 78, 90-92, 94, operative part 1

JUDGMENT OF THE COURT 7 January 2003 (1)

((Fourth Directive 78/660/EEC – Annual accounts of certain types of companies – Jurisdiction of the Court to interpret Community law in a context where it is not directly applicable – Provisions for risk under a loan guarantee – Taking into account of the individual situation of the debtor and of its State of establishment – Date on which the risk may or must be evaluated and entered on the balance sheet))

In Case C-306/99,

REFERENCE to the Court under Article 234 EC by the Finanzgericht Hamburg (Germany) for a preliminary ruling in the proceedings pending before that court between

and

on the interpretation of the Fourth Council Directive 78/660/EEC of 25 July 1978 based on Article 54(3)(g) of the Treaty on the annual accounts of certain types of companies (OJ 1978 L 222, p. 11),

THE COURT,,

composed of: G.C. Rodríguez Iglesias, President, J.-P. Puissochet (President of Chamber), D.A.O. Edward (Rapporteur), A. La Pergola, P. Jann, V. Skouris, F. Macken, N. Colneric and S. von Bahr, Judges,

Advocate General: F.G. Jacobs,

after considering the written observations submitted on behalf of:

having regard to the Report for the Hearing,

after hearing the oral observations of the German Government, represented by H. Heitland, acting as Agent, and the Commission, represented by J. Sack, assisted by R. Karpenstein at the hearing on 3 July 2001,

after hearing the Opinion of the Advocate General at the sitting on 15 November 2001,

gives the following

Community legislation

National legislation

Transposition of the Fourth Directive

Specific provisions applicable to capital companies

The tax rules concerning the drawing up of the balance sheet

The requirements concerning the revaluation of provisions

Sub-participation in foreign loan risks

Balance-sheet treatment of the sub-participation

Does the Court of Justice have jurisdiction in the procedure for preliminary rulings under Article 177 of the EC Treaty (old version) (Article 234 EC in the version in force from 1 May 1999 under the Treaty of Amsterdam of 2 October 1997 (new version)) to interpret the Fourth Council Directive 78/660/EEC of 25 July 1978 on the annual accounts of certain types of companies (OJ 1978 L 222, p. 11, the Directive) not only where there is doubt as to the application in conformity with the Directive of the national commercial law on accounts of capital companies (in this case, Paragraph 264 et seq. of the German Handelsgesetzbuch (Commercial Code, the HGB)), but also:

Observations submitted to the Court

Findings of the Court

The possibility of entering on the liabilities side of the balance sheet a provision concerning a risk, such as country risk, affecting a commitment appearing at the foot of the balance sheet

The methods of valuation

On those grounds,

THE COURT,

in answer to the questions referred to it by the Finanzgericht Hamburg by order of 29 April 1999, hereby rules:

Rodríguez Iglesias

Puissochet

Edward

La Pergola

Jann

Skouris

Macken

Colneric

von Bahr

Delivered in open court in Luxembourg on 7 January 2003.

R. Grass

G.C. Rodríguez Iglesias

Registrar

President