Case C-464/06

Proceedings brought by

Avena Nordic Grain Oy

(Reference for a preliminary ruling from the Korkein hallinto-oikeus)

(Agriculture – System of export refunds on agricultural products – Regulation (EC) No 800/1999 – Article 5 – Lodging the export declaration – Transmission by fax)

Judgment of the Court (Third Chamber), 18 October 2007

Summary of the Judgment

Agriculture – Common organisation of the markets – Export refunds

(Commission Regulation No 800/1999, Art. 5)

Article 5 of Regulation No 800/1999 laying down common detailed rules for the application of the system of export refunds on agricultural products, as amended by Regulation No 90/2001, must be interpreted as not precluding the competent customs authorities from accepting an export declaration for agricultural products which was transmitted by fax, where that transmission took place before loading for export transport, where the declaration transmitted contains all the information necessary to enable physical checks to be carried out on the goods exported and the export operation concerned is not vitiated by any fraud or attempted fraud. Such is the case where the goods covered by the export declaration transmitted by fax have arrived in the third country of destination and the original declaration subsequently transmitted is identical to the declaration transmitted by fax. It is for the national court to ascertain whether those conditions are satisfied in the main proceedings.

(see para. 26, operative part)

JUDGMENT OF THE COURT (Third Chamber)

18 October 2007 ( * )

(Agriculture – System of export refunds on agricultural products – Regulation (EC) No 800/1999 – Article 5 – Lodging the export declaration – Transmission by fax)

In Case C‑464/06,

REFERENCE for a preliminary ruling under Article 234 EC, by the Korkein hallinto-oikeus (Finland), made by decision of 16 November 2006, received at the Court on 20 November 2006, in the proceedings

Avena Nordic Grain Oy

THE COURT (Third Chamber),

composed of A. Rosas, President of the Chamber, J. Klučka, A. Ó Caoimh (Rapporteur), P. Lindh and A. Arabadjiev, Judges,

Advocate General: V. Trstenjak,

Registrar: R. Grass,

having regard to the written procedure,

after considering the observations submitted on behalf of:

– Avena Nordic Grain Oy, by K. Viljanen, Director,

– the Finnish Government, by J. Heliskoski, acting as Agent,

– the Commission of the European Communities, by P. Aalto and F. Clotuche-Duvieusart, acting as Agents,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

Judgment

1 This reference for a preliminary ruling concerns the interpretation of Article 5 of Commission Regulation (EC) No 800/1999 of 15 April 1999 laying down common detailed rules for the application of the system of export refunds on agricultural products (OJ 1999 L 102, p. 11), as amended by Commission Regulation (EC) No 90/2001 of 17 January 2001 (OJ 2001 L 14, p. 22) (‘Regulation No 800/1999’).

2 The reference was made in the course of proceedings brought by Avena Nordic Grain Oy (‘ANG’) against a decision of the Maa- ja metsätalousministeriö (Ministry of Agriculture and Forestry) (‘the Ministry’), the authority which in Finland manages aid financed by the European Agricultural Guidance and Guarantee Fund (EAGGF), concerning the refusal to pay an export refund.

Legal context

Community legislation

Monitoring of agricultural products carried out at the time of export

3 Council Regulation (EEC) No 386/90 of 12 February 1990 on the monitoring carried out at the time of export of agricultural products receiving refunds or other amounts (OJ 1990 L 42, p. 6) provides in Article 2(a) that Member States are to carry out ‘physical checks on goods … at the time the customs export formalities are completed and before authorisation is given for the goods in question to be exported, on the basis of documents submitted in support of the export declaration’.

4 Commission Regulation (EC) No 2090/2002 of 26 November 2002 laying down detailed rules for applying Regulation No 386/90 as regards physical checks carried out when agricultural products qualifying for refunds are exported (OJ 2002 L 322, p. 4) states, in Article 5(1), that for the purposes of Article 2(a) of Regulation No 386/90 ‘physical check’ is to mean ‘verification that the export declaration, including documents submitted in support thereof, corresponds with the goods as regards quantity, nature and characteristics’.

The detailed rules for the application of the system of export refunds on agricultural products

5 The fourth, sixth and sixty-third recitals in the preamble to Regulation No 800/1999 state:

‘(4) Whereas, within the meaning of this Regulation, the day of export is that during which the customs authorities accept the act by which the declarant shows his willingness to carry out the export of the products for which he seeks the benefit of an export refund; whereas such act is intended to draw the attention, and in particular the attention of the customs authorities, to the fact that the operation under consideration is being carried out with the aid of Community funds, in order that those customs authorities shall carry out suitable checks; whereas at the time of acceptance, products are placed under customs supervision until their actual export; whereas the date serves as a reference for establishing the quantity, nature and characteristics of the product exported;

…

(6) Whereas, for the sake of the proper application of … Regulation … No 386/90 …, as last amended by Regulation (EC) No 163/94 [OJ 1994 L 24, p. 2], provision should be made so that verification of whether the export declaration matches the agricultural products is carried out at the time of loading of the container, lorry, vessel or other similar container;

…

(63) Whereas the Community rules provide for the granting of export refunds on the sole basis of objective criteria, in particular as to the quantity, nature and characteristics of the product exported, and its geographical destination; whereas, in the light of experience, measures to combat irregularities and notably fraud harmful to the Community budget should be intensified; whereas, to that end, provision should be made for the recovery of amounts over-paid and sanctions to encourage exporters to comply with Community rules’.

6 Article 5 of Regulation No 800/1999 is worded as follows:

‘1. “Day of export” means the day on which the customs authorities accept the export declaration stating that a refund is to be applied for.

2. The date of acceptance of the export declaration shall determine:

(a) the rate of refund applicable where the refund is not fixed in advance;

(b) any adjustments to be made to the rate of refund where it is so fixed in advance;

(c) the quantity, nature and characteristics of the product exported.

3. Any other act having the same effect in law as acceptance of the export declaration shall be deemed equivalent to such acceptance.

4. The document used on export to qualify for a refund shall include all information necessary to calculate the refund, and in particular:

(a) for products:

– a description, simplified where appropriate, of the products in accordance with the export refund nomenclature, together with the refund nomenclature code and, where necessary to calculate the refund, the composition of the products concerned or a reference thereto,

– the net mass of the products or, where applicable, the quantity expressed in the unit of measurement to be used when calculating the refund;

(b) in the case of goods, the provisions of [Commission Regulation (EC) No 1222/94 of 30 May 1994 laying down common detailed rules for the application of the system of granting export refunds on certain agricultural products exported in the form of goods not covered by Annex II to the Treaty, and the criteria for fixing the amount of such refunds] shall apply.

5. At the time of acceptance or of the act envisaged in paragraph 3, the products shall be placed under customs control … until they leave the customs territory of the Community.

…

7. All persons exporting products for which they claim a refund shall be required to:

(a) lodge the export declaration with the competent customs office in the place where the products are to be loaded for export transport;

(b) inform that customs office at least 24 hours prior to starting the loading operations and indicate the anticipated duration of loading.

…

…

The competent customs office may authorise the loading operations after having accepted the export declaration, before expiry of the time‑limit referred to in point (b).

The competent customs office must be able to make physical checks and identify the goods for transport to the office of exit from the customs territory of the Community.

…’

National law

7 In accordance with Paragraph 9 of the Law on electronic communication in the activities of public authorities (Laki sähköisestä asioinnista viranomaistoiminnassa (13/2003)) and Paragraph 18 of the Law on electronic signatures (Laki sähköisistä allekirjoituksista (14/2003)), administrative procedures may be initiated electronically.

8 However, the Ministry of Agriculture and Forestry Regulation on the implementation of the system of export refunds, of securities, and of import and export licences and advance fixing certificates for agricultural products (maataloustuotteiden vientituki- ja vakuus- sekä tuonti-, vienti- ja ennakkovahvistustodistusjärjestämän täytäntöönpanosta annettu maa- ja metsätalousministeriön asetus (1363/2002)) lays down in Paragraph 4 the requirement to transmit to the competent customs office referred to in Article 5(7), first subparagraph, (a) of Regulation No 800/1999 the original export declaration form.

The dispute in the main proceedings and the question referred for a preliminary ruling

9 On 14 June 2003, ANG exported two consignments of oats from Vaasa (Finland) to Canada. It is clear from the order for reference that the export declaration concerning those consignments was sent to the competent customs office before loading solely by fax, and that the original of that declaration was not sent until loading had taken place. According to the order for reference, it is not disputed that the original document is identical to the version sent by fax, that the use of that method of transmission was due to a misunderstanding between ANG’s forwarding agent and the competent customs authorities which arose during a conversation concerning loading, that the customs authorities had every opportunity to undertake the checks required, that the consignments concerned arrived at their port of destination, and that there is no evidence that ANG attempted to abuse the refund procedure or to act fraudulently.

10 On being questioned by the Ministry as regards the payment of a refund in such circumstances, the Commission of the European Communities indicated, by letters dated 23 May and 30 July 2004, that, in its opinion, ANG is not entitled to obtain such a refund for the operation at issue in the main proceedings.

11 By decision of 2 September 2004, the Ministry therefore refused payment of the refund requested by ANG for those consignments on the ground that the original of the export declaration was not available to the customs authorities prior to the time the check on the cargo was to have taken place.

12 ANG brought an action against that decision before the Korkein hallinto‑oikeus (Supreme Administrative Court). According to that court, it is clear from the judgments in Case C-27/94 Netherlands v Commission [1998] ECR I-5581 and Case C-278/98 Netherlands v Commission [2001] ECR I-1501 that the original of the export declaration must be transmitted in advance, and that a declaration sent by fax cannot, as a general rule, be regarded as satisfactory. If the customs check revealed inaccuracies the operator concerned might make another declaration giving the correct information. However, the Korkein hallinto-oikeus points out that in the main proceedings the export declaration transmitted by fax before loading is identical to the original export declaration transmitted subsequently and that the national authorities have no suspicions regarding the existence of potentially fraudulent conduct since the transmission by fax arose from a misunderstanding concerning advice given by the competent customs authorities. Therefore, if the main proceedings were determined in the light of national law, it is unlikely that ANG would be refused payment of the refund. Furthermore, the principles of proportionality and good administration, which constitute general principles of Community law, may have a bearing on the case in the main proceedings.

13 In those circumstances, the Korkein hallinto‑oikeus decided to stay proceedings and to refer the following question to the Court for a preliminary ruling:

‘Is Article 5 of [Regulation No 800/1999] to be interpreted, in the light of the principles of proportionality and good administration, as meaning that the competent national authority may accept an export declaration lodged by fax prior to loading in circumstances in which the authority has no concerns whatever that any fraudulent practices may have occurred, the defect in lodging the export declaration was the result of an error which arose in connection with the advice given by the authority, and the authority has been able to confirm that the original signed export declaration which was lodged subsequently was identical to the declaration lodged by fax?’

The question referred for a preliminary ruling

14 By its question, the national court asks whether Article 5 of Regulation No 800/1999 precludes the competent customs authorities from accepting an export declaration for agricultural products which was transmitted only by fax before those products were loaded, where that conduct did not arise from fraudulent intent, since the transmission of only a fax was the result of an error concerning advice given by the customs authorities, and the original declaration transmitted after loading is identical to the declaration transmitted by fax.

15 According to Article 5(7), first subparagraph, (a) of Regulation No 800/1999, all exporters of agricultural products are required to lodge an export declaration in respect of the products for which they claim a refund. As is clear from the third and fourth subparagraphs of Article 5(7), where that declaration is accepted, loading operations may be authorised by the competent customs authorities, which must have had the opportunity, as is also apparent from the fourth and sixth recitals in the preamble to Regulation No 800/1999 and from Article 2 of Regulation No 386/90 and Article 5 of Regulation No 2090/2002, to make physical checks of the agricultural products concerned in order to ascertain whether they correspond to the declaration at the time of loading.

16 According to Article 5(4) of Regulation No 800/1999, the export declaration must include all the relevant information necessary to establish entitlement to the refund and to determine its amount (see, to that effect, Case C-309/04 Fleisch-Winter [2005] ECR I-10349, paragraph 31, and Case C-27/05 Elfering Export [2006] ECR I-3681, paragraph 26).

17 Furthermore, under Article 5(5) of Regulation No 800/1999, at the time of acceptance of the declaration by the competent customs authorities, the products are to be placed under customs control until they leave the customs territory of the Community.

18 The overall effect of those provisions, even though they do not specifically state the form in which the export declaration must be lodged, is that, first, the declaration must be made in writing in order, in particular, for it to be possible to check whether the information given by the exporter corresponds to the goods presented for export and, second, it must be submitted before the goods have left the customs territory of the Community (see Case C-54/91 Commission v Germany [1993] ECR I-3399, paragraph 22 and Case C-27/94 Netherlands v Commission , paragraph 25).

19 Lodging an export declaration, which is capable of forming the legal basis of a refund ( Fleisch-Winter , paragraph 41), therefore constitutes an essential formality in the context of the cooperation established in that regard between the exporter and the competent customs authorities, which enables the latter to have available all the information necessary in order to carry out suitable physical checks on the goods concerned before loading, so as to exclude any risk of irregularities and abuse in the field of export refunds, in accordance with the sixty-third recital in the preamble to Regulation No 800/1999 (see, to that effect, Elfering Export , paragraph 31, and, as regards Commission Regulation (EEC) No 3665/87 of 27 November 1987 laying down common detailed rules for the application of the system of export refunds on agricultural products (OJ 1987 L 351, p. 1), Case C‑385/03 Käserei Champignon Hofmeister [2005] ECR I-2997, paragraphs 27 and 28).

20 As all the interested parties which have submitted observations to the Court have stated, the fact that a declaration is transmitted by fax involves lodging a written document which, provided that it was transmitted before the goods concerned were loaded and it contains all the information necessary for checking them, in no way prevents those checks from being carried out by the competent customs authorities.

21 It is true that the exporter should not be able to adapt his request for refund according to the result of any check which might take place ( Käserei Champignon Hofmeister , paragraph 28).

22 Thus, it has already been held that the competent customs authorities cannot accept retrospectively an export declaration submitted after export has taken place for the purpose of obtaining refunds (see, to that effect, Case C-101/99 British Sugar [2002] ECR I-205, paragraphs 68 and 73). Similarly, nor can they carry out checks on the basis of information communicated by fax rather than on the basis of the original of the payment declarations seeking pre-financing of refunds, if this results in a risk of unlawful payment of subsidies in that the trader might, after an inaccuracy had been found during a customs check made on the basis of that fax, lodge another declaration containing the correct information (Case C-278/98 Netherlands v Commission , paragraph 70).

23 However, such a risk is excluded where the export operation is not vitiated by any fraud or attempted fraud on the part of the exporter, since the goods covered by the export declaration transmitted by fax have arrived in the third country of destination and the original of the declaration which was sent after loading is identical to the declaration transmitted by fax prior to loading.

24 In such circumstances, the transmission of an export declaration by fax has no real effect on the correct functioning of the system of refunds.

25 It is for the national court to ascertain whether the conditions laid down in paragraph 23 of this judgment are satisfied in the main proceedings, in the light of the information in the file before it.

26 Therefore, the answer to the question referred for a preliminary ruling must be that Article 5 of Regulation No 800/1999 must be interpreted as not precluding the competent customs authorities from accepting an export declaration for agricultural products which was transmitted by fax, where that transmission took place before loading for export transport, where the declaration transmitted contains all the information necessary to enable physical checks to be carried out on the goods exported and the export operation concerned is not vitiated by any fraud or attempted fraud. Such is the case where the goods covered by the export declaration transmitted by fax have arrived in the third country of destination and the original declaration subsequently transmitted is identical to the declaration transmitted by fax. It is for the national court to ascertain whether those conditions are satisfied in the main proceedings.

Costs

27 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Third Chamber) hereby rules:

Article 5 of Commission Regulation (EC) No 800/1999 of 15 April 1999 laying down common detailed rules for the application of the system of export refunds on agricultural products, as amended by Commission Regulation (EC) No 90/2001 of 17 January 2001, must be interpreted as not precluding the competent customs authorities from accepting an export declaration for agricultural products which was transmitted by fax, where that transmission took place before loading for export transport, where the declaration transmitted contains all the information necessary to enable physical checks to be carried out on the goods exported and the export operation concerned is not vitiated by any fraud or attempted fraud. Such is the case where the goods covered by the export declaration transmitted by fax have arrived in the third country of destination and the original declaration subsequently transmitted is identical to the declaration transmitted by fax. It is for the national court to ascertain whether those conditions are satisfied in the main proceedings.

[Signatures]

* Language of the case: Finnish.