Internationale Handelsgesellschaft mbH v Einfuhr-und Vorratsstelle für Getreide und Futtermittel [1970]

European Law

Internationale Handelsgesellschaft mbH v Einfuhr-und Vorratsstelle für Getreide und Futtermittel
‘Wheat Field’ by Darko Topalski

In this instance the implementation of regulatory measures was questioned by the German courts when an import/export firm fell subject to forfeiture of a deposit under Community law. 

Under art.12(1) of Regulation 120/67/EEC the equilibrium of the European market is protected through the issuing of export and import licences, and so in order to allow for the stability of grains, cereals and rice values it was established by the European Council that traders wishing to operate in this specific field must obtain a time restricted licence clarifying the amounts and costs of those products.

The reason for this window was to enable the Commission to anticipate and adjust market prices in order to protect the Member States from over saturation of non-community products and to allow for the effects of art.40(3) and art.43 EC to be applied, while these principles followed the aims of art.39 EC inasmuch as it provided that Member States were to maintain and help stabilise agricultural markets in order to ensure fair living standards via reasonable pricing. 

In addition to this, art.40(3) EC further focussed on the need to apply certain measures where necessary, which on this occasion included the forfeiture of licence deposits where no planned exportation or importation had occurred during the licence period, and so after the claimant continued exporting maize beyond their licence expiration date a percentage of their deposit was forfeited by the Einfuhr-und Vorratsstelle für Getreide und Futtermittel under the terms of art.12(1) of Regulation 120/67/EEC. 

When later challenged in the national courts, uncertainty emerged when reconciling German law with the Treaty Regulations, therefore a preliminary ruling was sought under art.177 EC, whereupon two questions asked:

1. Whether the requirement to forfeit licence deposits subject to the terms of art.12(1) was legal?

2. Whether art.9 of Regulation 473/67/EEC (which had been adopted in conjunction with Regulation 120/67/EEC) was legal, in that it included the exclusion of forfeiture in matters subject to force majeure?

It was also argued that while the terms of Community law were inherent to the existence of a Member State, it was felt that the superiority of German constitutional law contradicted the presence of deposit forfeitures on grounds that such measures were considered penal as opposed to valuable to the aims of German freedom laws.

When evaluating the views of the court and the questions set down for clarification, it was first held by the European Court of Justice that under no circumstances did the forfeiture of deposits serve any other purpose than that of market stability, as outlined in art.40(3) EC, which translated that Regulation 120/67 was legal and thus did not interfere with the aims and objectives of arts.40 and 43 EC.

Secondly, with regard to the exemption of forfeiture under the presence of force majeure (frustrations beyond control of the licence holder) it was held that while the context of the exemption was subject to wider meaning, it was deliberate in that it allowed for a number of prevailing circumstances to determine whether in each instance the claimant had taken sufficient steps to apply for the licence before citing any inability to use it, which by extension allowed for full support of the aims prescribed in art.39 EC, while the Court further reminded the parties that:

“The legality of a Community measure can be judged only in the light of the ordinary law, whether written or unwritten, but never in the light of the national law, even if that is a constitutional law.”

Author: Neil Egan-Ronayne

Author, legal scholar and foodie...

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