Danisco Sugar AB v Allmänna ombudet.

• Jurisdiction: European Union
• Celex Number: 61996CC0027
• ECLI: ECLI:EU:C:1997:304
• Docket Number: C-27/96
• Court: Court of Justice (European Union)
• Procedure Type: Reference for a preliminary ruling
• Date: 17 June 1997

Important legal notice

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61996C0027

Opinion of Mr Advocate General La Pergola delivered on 17 June 1997. - Danisco Sugar AB v Allmänna ombudet. - Reference for a preliminary ruling: Länsrätt i Jönköpings län - Sweden. - Accession of the Kingdom of Sweden - Agriculture - Sugar - National levy on sugar stocks. - Case C-27/96.

European Court reports 1997 Page I-06653

Opinion of the Advocate-General

I - The questions referred for a preliminary ruling and their legislative background

1 By this reference for a preliminary ruling, the Länsrätt i Jönköpings Län (Jönköping County Administrative Court) is asking the Court to provide such guidance to interpretation as is necessary in order to decide whether it is compatible with Community law for Member States to introduce domestic taxes similar in object and purpose to the levy on sugar and rice stocks introduced by the Kingdom of Sweden on the eve of the entry into force of the Treaty of Accession to the European Union (hereinafter `the EU').

To be precise, the national court asks, primarily:

`(1) On a true construction of the Act of Accession of Sweden, Finland and Austria, in particular of Articles 137(2), 145(2) and 149(1), are decisions taken at national level concerning levies on normal transitional stocks of sugar as set out in the Swedish Sugar Law, as amended, to be regarded as unlawful transitional measures?';

and, secondarily, in the event of a negative answer:

`(2) On a true construction of the European Community organization of the market in sugar, in particular of Articles 39 and 40 of the EEC Treaty, Council Regulation (EEC) No 1785/81 and Commission Regulation (EC) No 3300/94, are decisions taken at national level concerning levies on normal transitional stocks of sugar as set out in the Swedish Sugar Law, as amended, to be regarded as unlawful interference in the organization of the market?'

2 As will become clear in the course of this Opinion, these questions touch on the delicate matter of the residual role retained by Member States in sectors covered by the common organization of the markets where, once `the ground has been seized', (1) the Community institutions are as a rule attributed exclusive jurisdiction.

The Sugar Law was adopted by Sweden before (albeit by only one day) the Treaty of Accession entered into force. The questions put by the national court specifically concern the limits within which the Member States which most recently acceded to the EU may enact legislation, in the period prior to accession, in respect of sectors of agricultural production which, at Community level, are covered by the common organization of the markets.

3 The Treaty on the accession of Austria, Finland and Sweden to the EU entered into force on 1 January 1995; it was signed on 24 June 1994 and ratified by Sweden on 15 December 1994, in keeping with the results of the national referendum on accession, which had been held on 13 November 1994.

4 By contrast with earlier accessions to the Community (in 1973, (2) 1981 (3) and 1986 (4)), the Act concerning the conditions of accession of the Republic of Austria, the Republic of Finland and the Kingdom of Sweden and the adjustments to the Treaties on which the European Union is founded (hereinafter `the Act of Accession') (5) did not prescribe a transitional period to enable the new Member States to proceed in gradual stages with the alignment of prices, rates of customs duty or levels of aid granted under the national arrangements for organization of the markets.

Although the Act of Accession made provision for the adoption - in accordance with the management committee procedure (6) - of ad hoc transitional measures to facilitate the transition from the national regime to that resulting from application of the common organization of the markets (see Article 149), (7) it laid down the general principle that rights and obligations resulting from the common agricultural policy were applicable immediately and in full in Austria, Finland and Sweden (see Article 137(2)).

5 Moreover, as on earlier occasions when the Community gained new members, (8) the contracting parties had expressly identified in the Act of Accession the risk of possible disturbance to the normal functioning of the Community agricultural markets represented by the possibility that, on the date of accession, there would be stocks of products in free circulation within the territory of the new Member States exceeding the quantity constituting a normal carryover of stock (see Article 145(2) of the Act of Accession). (9)

The precautions therefore adopted are easily understandable. Whenever the Community intervention guarantees (including the common pricing systems) in respect of a particular product are more attractive than those available under the national arrangements in force in a new Member State before its accession, the producers operating in that State are strongly tempted to hoard - on various grounds and the most ill-assorted pretexts - vast stocks of that product until the date of accession, since it thereupon acquires the status of `product originating in the Community' and entitlement to the related guarantees. (10)

Article 145(2) of the Act of Accession prescribes the same solution as that adopted on the occasion of earlier accessions, that is to say, it requires new Member States to eliminate - at their own expense and without any financial commitment on the part of the EU - any excess stocks of agricultural products.

6 In accordance with that provision, in December 1994 the Commission introduced legislation to give effect to the remedial measures already provided for in the Act of Accession, inter alia with respect to the risk of excess stocks on the `enlarged' internal market in sugar.

With specific reference to Sweden, there appeared to be a very real and imminent danger that Swedish traders would engage in the wide-scale importation of sugar for speculative purposes, with the intention of hoarding it, then re-selling it on the Community market after accession. Not surprisingly, in the months preceding the Treaty's entry into force, this attracted the attention of both the Commission and the Swedish Government.

It is common ground that the sugar reference price fixed by the Swedish Government before accession was approximately 35% lower than the Community intervention price. Market prices in Sweden differed from market prices in the Community by approximately the same amount - the latter being higher, as we know, than the `official' prices.

7 In order to determine the quantities of sugar (and isoglucose) to be eliminated from the market, Commission Regulation No 3300/94 of 21 December 1994 (11) defined, for each new Member State and in respect of each product, the normal carry-over stock considered necessary, allowing for consumption, production, traditional exports and operating stocks for refineries. Under Article 5 thereof, the normal carry-over stock for Sweden in respect of sugar was fixed at 304 792 tonnes.

Austria, Finland and Sweden were thus required to undertake a survey of sugar (and isoglucose) stocks in free circulation in their respective territories at midnight on 1 January 1995. By the same token, any person holding, in whatever capacity, stocks of sugar (or isoglucose) of at least three tonnes was under a duty to declare it to the competent national authorities.

8 Since the Community sugar market was characterized by overall surplus production, any excess quantities - whether of sugar in the natural state or in the form of processed products - had to be disposed of by being exported from the Community without Community intervention. Accordingly, Regulation No 3300/94 required the new Member States to take all measures necessary by 1 January 1996 to discharge that obligation (see Article 11).

On the other hand, in the case of quantities which were not exported - to be regarded as disposed of on the internal market - Austria, Finland and Sweden were to have paid an amount equal to the import levy in force on 1 January 1996, the final day of the period prescribed for exportation.

9 The Community rules for the disposal of the excess sugar stocks existing on the date of accession were taken into account by the Swedish legislature when introducing the tax challenged in the main proceedings, which was payable by any person holding sugar (or rice) stocks in excess of three tonnes.

According to the order for reference, the tax in question was introduced by Law No 1704 of 1994 (hereinafter `the Sugar Law'), which was passed by the Swedish Parliament on 20 December 1994 and which entered into force on 31 December 1994, that is to say, only one day before Sweden's accession to the EU.

10 According to statements made by the Swedish Government in the course of these proceedings, the amount made payable by way of sugar tax (different rates being fixed for refined and raw sugar, respectively) exactly matched the expected increase in the market price following Sweden's accession to the EU.

It is clear from the related travaux préparatoires that the Sugar Law had a threefold objective: (i) to prevent speculative imports of sugar to Sweden; (ii) to tax the profits made by the traders concerned solely as a result of the transition from the national market arrangements to the Community system; and (iii) to raise for Sweden the funds needed for the disposal on the internal market (through payment of the charges provided for by Regulation No 3300/94) of any quantities of sugar in excess of the normal carry-over stocks which had not been disposed of through exportation.

11 One last detail completes this sketch of the legislative background to the questions referred for a preliminary ruling. The Sugar Law was amended by Law No 329 of 1995, which entered into force on 1 April 1995, reducing the amount payable by sugar producers who had also paid the storage...