Kommanditgesellschaft in der Firma Hans-Otto Wagner GmbH Agrarhandel v Bundesanstalt fuer landwirtschaftliche Marktordnung. [1983] EUECJ R-8/82 (23 February 1983)

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This electronic version is not authentic and is subject to amendment. 61982J0008 Judgment of the Court (First Chamber) of 23 February 1983. Kommanditgesellschaft in der Firma Hans-Otto Wagner GmbH Agrarhandel v Bundesanstalt für landwirtschaftliche Marktordnung. Reference for a preliminary ruling: Verwaltungsgericht Frankfurt am Main - Germany. Storage costs for sugar - Flat-rate reimbursement. Case 8/82. European Court reports 1983 Page 00371 1 . AGRICULTURE - COMMON ORGANIZATION OF THE MARKETS - SUGAR - OFFSETTING OF STORAGE COSTS - CONDITIONS - STORAGE IN AN APPROVED WAREHOUSE - CONCEPT - SUGAR IN TRANSIT BETWEEN TWO APPROVED WAREHOUSES - EXCLUDED ( COUNCIL REGULATION NO 1358/77 , ART . 3 ( 1 ) AND ( 2 ); COMMISSION REGULATION NO 1998/78 , ART . 11 ( 1 )) 2 . COMMUNITY LAW - PRINCIPLES - EQUAL TREATMENT - CONCEPT 3 . AGRICULTURE - COMMON ORGANIZATION OF THE MARKETS - SUGAR - DISCRIMINATION BETWEEN PRODUCERS OR CONSUMERS - OFFSETTING OF STORAGE COSTS FOR SUGAR - SUGAR IN TRANSIT BETWEEN APPROVED WAREHOUSES - DIFFERENT TREATMENT BASED ON LOCATION OF WAREHOUSES - DISCRIMINATION - NONE ( EEC TREATY , ART . 40 ( 3 ), SECOND PARA .; COUNCIL REGULATION NO 1358/77 , ART . 3 ( 1 ); COMMISSION REGULATION NO 1998/78 , ART . 11 ( 1 )) 1 . SUGAR WHICH IS IN TRANSIT BETWEEN ONE APPROVED WAREHOUSE AND ANOTHER DOES NOT FULFIL THE REQUIREMENT AS TO STORAGE IN A WAREHOUSE WITHIN THE MEANING OF ARTICLE 3 ( 1 ) OF REGULATION NO 1358/77 LAYING DOWN GENERAL RULES FOR OFFSETTING STORAGE COSTS FOR SUGAR . THE SPECIAL RULE CONTAINED IN ARTICLE 11 ( 1 ) OF REGULATION NO 1998/78 , WHICH PROVIDES THAT REIMBURSEMENT OF STORAGE COSTS SHALL BE GRANTED FOR SUGAR WHICH IS IN TRANSIT AT THE BEGINNING OF THE MONTH , MUST NOT BE REGARDED AS MERELY INTERPRETING THE ABOVE-MENTIONED ARTICLE 3 ( 1 ) TO THE EFFECT THAT SUGAR IN TRANSIT BETWEEN APPROVED WAREHOUSES FULFILS , IN PRINCIPLE , THE REQUIREMENT THAT THE PRODUCT BE STORED IN A WAREHOUSE . 2 . DISCRIMINATION CONSISTS IN TREATING DIFFERENTLY SITUATIONS WHICH ARE IDENTICAL , OR TREATING IN THE SAME WAY SITUATIONS WHICH ARE DIFFERENT . 3 . THE FACT THAT REIMBURSEMENT IS GRANTED IN RESPECT OF STORAGE COSTS FOR SUGAR WHICH , AT THE BEGINNING OF THE MONTH , IS IN TRANSIT BETWEEN TWO APPROVED WAREHOUSES SITUATED IN THE SAME MEMBER STATE BUT IS NOT GRANTED IN RESPECT OF SUGAR WHICH IS IN TRANSIT BETWEEN TWO APPROVED WAREHOUSES SITUATED IN DIFFERENT MEMBER STATES DOES NOT AMOUNT TO DISCRIMINATION PROHIBITED BY COMMUNITY LAW . THE DIFFERENCE OF TREATMENT IS BASED ON REQUIREMENTS OF SUPERVISION WHICH MAY BE JUSTIFIED OBJECTIVELY . IN CASE 8/82 REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE VERWALTUNGSGERICHT ( ADMINISTRATIVE COURT ) FRANKFURT AM MAIN FOR A PRELIMINARY RULING IN THE ACTION PENDING BEFORE THAT COURT BETWEEN KOMMANDITGESELLSCHAFT IN DER FIRMA HANS-OTTO WAGNER GMBH AGRARHANDEL , BAD HOMBURG , AND BUNDESANSTALT FUR LANDWIRTSCHAFTLICHE MARKTORDNUNG ( FEDERAL OFFICE FOR THE ORGANIZATION OF AGRICULTURAL MARKETS ), FRANKFURT AM MAIN , ON THE INTERPRETATION OF ARTICLE 3 OF COUNCIL REGULATION ( EEC ) NO 1358/77 OF 20 JUNE 1977 LAYING DOWN GENERAL RULES FOR OFFSETTING STORAGE COSTS FOR SUGAR AND REPEALING REGULATION ( EEC ) NO 750/68 ( OFFICIAL JOURNAL L 156 , P . 4 ) AND OF ARTICLE 40 ( 3 ) OF THE TREATY ON THE VALIDITY OF ARTICLE 11 OF COMMISSION REGULATION ( EEC ) NO 1998/78 OF 18 AUGUST 1978 LAYING DOWN DETAILED RULES FOR THE OFFSETTING OF STORAGE COSTS FOR SUGAR ( OFFICIAL JOURNAL L 231 , P . 5 ), 1 BY ORDER OF 8 OCTOBER 1981 , WHICH WAS RECEIVED AT THE COURT ON 8 JANUARY 1982 , THE VERWALTUNGSGERICHT ( ADMINISTRATIVE COURT ) FRANKFURT AM MAIN REFERRED TO THE COURT FOR A PRELIMINARY RULING PURSUANT TO ARTICLE 177 OF THE EEC TREATY FOUR QUESTIONS RELATING TO THE INTERPRETATION AND VALIDITY OF COUNCIL REGULATION ( EEC ) NO 1358/77 OF 20 JUNE 1977 LAYING DOWN GENERAL RULES FOR OFFSETTING STORAGE COSTS FOR SUGAR (. . .) ( OFFICIAL JOURNAL 1977 , L 156 , P . 4 ) AND COMMISSION REGULATION ( EEC ) NO 1998/78 OF 18 AUGUST 1978 LAYING DOWN DETAILED RULES FOR THE OFFSETTING OF STORAGE COSTS FOR SUGAR ( OFFICIAL JOURNAL 1978 , L 231 , P . 5 ), HAVING REGARD TO THE PROHIBITION OF DISCRIMINATION CONTAINED IN THE SECOND SENTENCE OF ARTICLE 40 ( 3 ) OF THE EEC TREATY . 2 THE QUESTIONS AROSE IN THE COURSE OF PROCEEDINGS BETWEEN HANS-OTTO WAGNER GMBH AGRARHANDEL AND THE BUNDESANSTALT FUR LANDWIRTSCHAFTLICHE MARKTORDNUNG ( FEDERAL OFFICE FOR THE ORGANIZATION OF AGRICULTURAL MARKETS , HEREINAFTER REFERRED TO AS ' ' THE FEDERAL OFFICE ' ' ), THE GERMAN INTERVENTION AGENCY . 3 ARTICLE 8 OF REGULATION ( EEC ) NO 3330/74 OF THE COUNCIL OF 19 DECEMBER 1974 ON THE COMMON ORGANIZATION OF THE MARKET IN SUGAR ( OFFICIAL JOURNAL 1974 , L 359 , P . 1 ) PROVIDES FOR THE FLAT-RATE REIMBURSEMENT BY THE MEMBER STATES OF STORAGE COSTS FOR CERTAIN TYPES OF SUGAR MANUFACTURED FROM BEET OR CANE HARVESTED IN THE COMMUNITY . REGULATION NO 1358/77 , WHICH REPLACED REGULATION ( EEC ) NO 750/68 OF THE COUNCIL OF 18 JUNE 1968 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1968 ( I ), P . 131 ), PROVIDES IN ARTICLE 3 ( 1 ) THAT REIMBURSEMENT IS TO BE MADE IN RESPECT OF SUGAR STORED IN A WAREHOUSE APPROVED BY THE MEMBER STATE IN WHOSE TERRITORY THE WAREHOUSE IS SITUATED . ARTICLE 3 ( 2 ) PROVIDES THAT IN SPECIAL CIRCUMSTANCES SPECIAL PROVISIONS MAY BE ADOPTED IN ACCORDANCE WITH THE PROCEDURE LAID DOWN IN ARTICLE 36 OF REGULATION NO 3330/74 ( KNOWN AS THE MANAGEMENT COMMITTEE PROCEDURE ) TO DEAL WITH SUGAR IN TRANSIT AT THE BEGINNING OF THE PERIOD REFERRED TO IN ARTICLE 4 ( 2 ). 4 ARTICLE 4 ( 1 ) PROVIDES THAT THE CALCULATION OF THE REIMBURSEMENT IS TO BE BASED ON MONTHLY RETURNS OF QUANTITIES IN STORE . ARTICLE 4 ( 2 ) PROVIDES THAT THE QUANTITY TO BE TAKEN INTO ACCOUNT IS TO BE EQUAL TO THE ARITHMETIC MEAN OF THE QUANTITIES HELD IN STORE AT THE BEGINNING AND AT THE END OF THE MONTH IN QUESTION . 5 ARTICLE 10 OF REGULATION NO 1998/78 PROVIDES AS FOLLOWS : ' ' ( 1 ) REIMBURSEMENT OF STORAGE COSTS SHALL BE GRANTED FOR CANE SUGAR ORIGINATING IN THE FRENCH OVERSEAS DEPARTMENTS WHICH IS IN SEA TRANSIT AT 00.00 HOURS ON THE FIRST DAY OF THE MONTH AND WHICH , ON ARRIVAL , IS STORED IN AN APPROVED WAREHOUSE . . . . ( 2)REIMBURSEMENT FOR THE SUGAR REFERRED TO IN PARAGRAPH 1 SHALL , HOWEVER , BE LIMITED TO A PERIOD EQUAL TO THREE QUARTERS OF ONE MONTH . ' ' 6 ARTICLE 11 OF THE SAME REGULATION PROVIDES AS FOLLOWS : ' ' ( 1 ) REIMBURSEMENT OF STORAGE COSTS SHALL BE GRANTED IN RESPECT OF RAW OR WHITE SUGAR WHICH AT 00.00 HOURS ON THE FIRST DAY OF A MONTH IS WITHIN A MEMBER STATE IN TRANSIT FROM AN APPROVED WAREHOUSE , OTHER THAN TRANSIT AS REFERRED TO IN ARTICLE 10 , AND WHICH , ON ARRIVAL , IS STORED IN ANOTHER APPROVED WAREHOUSE IN THE SAME MEMBER STATE . ( 2)FOR PURPOSES OF CALCULATING THE QUANTITY OF SUGAR QUALIFYING FOR THE REIMBURSEMENT OF STORAGE COSTS , AS REFERRED TO IN ARTICLE 4 ( 2 ) OF REGULATION ( EEC ) NO 1358/77 , THE SUGAR REFERRED TO IN PARAGRAPH 1 SHALL BE CONSIDERED AS STILL STORED IN THE DEPARTURE WAREHOUSE AT 24.00 HOURS ON THE LAST DAY OF A MONTH AND AS ALREADY STORED IN THE ARRIVAL WAREHOUSE AT 00.00 HOURS ON THE FIRST DAY OF THE FOLLOWING MONTH . ' ' 7 THE PLAINTIFF IN THE MAIN ACTION APPLIED FOR REIMBURSEMENT OF HIS STORAGE COSTS IN RESPECT OF QUANTITIES OF SUGAR PURCHASED FROM A FRENCH UNDERTAKING WHICH WERE IN TRANSIT FROM AN APPROVED WAREHOUSE IN FRANCE TO AN APPROVED WAREHOUSE IN THE FEDERAL REPUBLIC OF GERMANY ON THE LAST DAY OF THE MONTH IN QUESTION . THE RELEVANT GERMAN AUTHORITY , THE FEDERAL OFFICE , REJECTED THE APPLICATION ON THE GROUND THAT UNDER ARTICLE 11 OF REGULATION NO 1998/78 ONLY SUGAR TRANSPORTED BETWEEN APPROVED WAREHOUSES IN THE SAME MEMBER STATE COULD BE CONSIDERED . 8 THE DISPUTE WAS BROUGHT BEFORE THE VERWALTUNGSGERICHT FRANKFURT AM MAIN . THAT COURT , CONSIDERING THAT BY VIRTUE OF THE WORDING OF REGULATION NO 1358/77 , REIMBURSEMENT COULD BE MADE ONLY IN RESPECT OF SUGAR WITHDRAWN FROM THE MARKET IN CIRCUMSTANCES SIMILAR TO STORAGE BY THE STATE , REFERRED THE FOLLOWING QUESTIONS TO THE COURT FOR A PRELIMINARY RULING : ' ' 1 . DOES SUGAR WHICH IS IN TRANSIT FROM A WAREHOUSE APPROVED UNDER THE FIRST SENTENCE OF ARTICLE 3 ( 1 ) OF COUNCIL REGULATION ( EEC ) NO 1358/77 OF 20 JUNE 1977 LAYING DOWN GENERAL RULES FOR OFFSETTING STORAGE COSTS FOR SUGAR AND REPEALING REGULATION ( EEC ) NO 750/68 ( OFFICIAL JOURNAL L 156 , 25 . 6 . 1977 , P . 4 ) TO ANOTHER APPROVED WAREHOUSE CONSTITUTE SUGAR WHICH IS ' STORED IN A WAREHOUSE ' WITHIN THE MEANING OF THAT PROVISION EVEN IF THE TWO WAREHOUSES ARE SITUATED IN DIFFERENT MEMBER STATES? IF IT DOES NOT , 2. DOES THE GENERAL PROHIBITION OF ARBITRARINESS OR THE PROHIBITION OF DISCRIMINATION CONTAINED IN THE SECOND SUBPARAGRAPH OF ARTICLE 40 ( 3 ) OF THE EEC TREATY REQUIRE SIMILAR TREATMENT TO BE GRANTED TO THE TRADER DISCRIMINATED AGAINST , AT ANY RATE FOR AS LONG AS SUCH TREATMENT IS GRANTED UNLAWFULLY TO THE FAVOURED TRADER? IF IT DOES , 3. IS THE SPECIAL PROVISION OF ARTICLE 11 ( 1 ) OF COMMISSION REGULATION ( EEC ) NO 1998/78 OF 18 AUGUST 1978 LAYING DOWN DETAILED RULES FOR THE OFFSETTING OF STORAGE COSTS FOR SUGAR ( OFFICIAL JOURNAL L 231 , 23 . 8 . 1978 , P . 5 ) COVERED BY THE POWER CONFERRED IN ARTICLE 3 ( 2 ) OF COUNCIL REGULATION ( EEC ) NO 1358/77? IF IT IS NOT , 4. DOES THE RESULTANT UNLAWFUL PREFERENCE OF SUGAR TRANSPORTED BETWEEN APPROVED WAREHOUSES IN THE SAME MEMBER STATE OVER SUGAR TRANSPORTED BETWEEN APPROVED WAREHOUSES IN DIFFERENT MEMBER STATES CONSTITUTE DISCRIMINATION WITHIN THE MEANING OF THE SECOND SUBPARAGRAPH OF ARTICLE 40 ( 3 ) OF THE EEC TREATY , OR DOES IT AT ANY RATE OFFEND AGAINST THE GENERAL PROHIBITION OF ARBITRARINESS WHICH RESTS ON COMMON LEGAL PRINCIPLES? ' ' 9 THE FIRST QUESTION ASKS WHETHER SUGAR WHICH IS IN TRANSIT FROM ONE APPROVED WAREHOUSE TO ANOTHER FULFILS THE REQUIREMENT THAT IT BE STORED IN A WAREHOUSE WITHIN THE MEANING OF ARTICLE 3 ( 1 ) OF REGULATION NO 1358/77 . THE PLAINTIFF IN THE MAIN ACTION MAINTAINS THAT ARTICLE 11 ( 1 ) OF COMMISSION REGULATION NO 1998/78 IS NOT BASED ON ARTICLE 3 ( 2 ) OF COUNCIL REGULATION NO 1358/77 . THE LATTER PROVISION IS THE BASIS FOR ARTICLE 10 OF REGULATION NO 1998/78 , WHICH RELATES TO SUGAR ORIGINATING IN THE FRENCH OVERSEAS DEPARTMENTS , AND CANNOT THEREFORE BE THE BASIS OF ARTICLE 11 ( 1 ). IT IS CONSEQUENTLY OF THE OPINION THAT THE LATTER PROVISION SIMPLY GIVES AN INTERPRETATION OF ARTICLE 3 ( 1 ) OF REGULATION NO 1358/77 TO THE EFFECT THAT SUGAR IN TRANSIT BETWEEN APPROVED WAREHOUSES MEETS , IN PRINCIPLE , THE REQUIREMENT THAT THE PRODUCT BE STORED IN A WAREHOUSE . 10 IT IS TRUE THAT THE ELEVENTH RECITAL IN THE PREAMBLE TO REGULATION NO 1998/78 STATES THAT ARTICLE 3 ( 2 ) OF REGULATION NO 1358/77 PROVIDES THAT , IN SPECIAL CIRCUMSTANCES , SPECIAL PROVISIONS MAY BE ADOPTED TO DEAL WITH SUGAR IN TRANSIT AT THE BEGINNING OF A MONTH ; THAT SUCH SPECIAL CIRCUMSTANCES PREVAIL IN RESPECT OF RAW SUGAR PRODUCED IN THE FRENCH OVERSEAS DEPARTMENTS , INASMUCH AS PRACTICALLY NONE OF THE PRODUCTION IS CONSUMED ON THE SPOT ; THAT THE LONG DISTANCE BETWEEN THOSE DEPARTMENTS AND EUROPE MEANS THAT TRANSPORT TAKES SEVERAL WEEKS ; THAT , THEREFORE , AS A GENERAL RULE , IT IS UNAVOIDABLE THAT SUCH SUGAR SHOULD BE IN TRANSIT ON THE FIRST DAY OF A CALENDAR MONTH AND THAT IN THE CASE OF SUGAR TRANSPORTED FROM ONE APPROVED WAREHOUSE TO ANOTHER WITHIN THE SAME MEMBER STATE , A SYSTEM SHOULD BE PROVIDED WHICH IS ANALOGOUS MUTATIS MUTANDIS TO THAT APPLIED TO CANE SUGAR FROM THE FRENCH OVERSEAS DEPARTMENTS . THAT RECITAL MAY GIVE THE IMPRESSION THAT THE COMMISSION REGARDED REGULATION NO 1358/77 AS GRANTING IT THE POWER TO MAKE SPECIAL PROVISIONS ONLY IN RELATION TO SUGAR PRODUCED IN THE FRENCH OVERSEAS DEPARTMENTS , AND THAT IT CONSIDERED THAT IT MUST EXERCISE THAT POWER BY ANALOGY IN THE CASE OF SUGAR IN TRANSIT BETWEEN TWO APPROVED WAREHOUSES . 11 AN EXAMINATION OF THE EARLIER REGULATIONS SHOWS , HOWEVER , THAT THAT IS NOT THE CASE . REGULATION ( EEC ) NO 750/68 OF THE COUNCIL OF 18 JUNE 1968 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1968 ( I ), P . 131 ), LAID DOWN GENERAL RULES FOR OFFSETTING STORAGE COSTS FOR SUGAR . ARTICLE 3 ( 1 ) THEREOF PROVIDES THAT REIMBURSEMENT IS TO BE MADE IN RESPECT OF QUANTITIES OF SUGAR STORED IN A WAREHOUSE APPROVED BY THE MEMBER STATE ON WHOSE TERRITORY THE WAREHOUSE IS SITUATED . THE SECOND PARAGRAPH OF THAT PROVISION PROVIDES THAT IN SPECIAL CIRCUMSTANCES SPECIAL PROVISIONS MAY BE ADOPTED TO DEAL WITH SUGAR IN TRANSIT AT THE BEGINNING OF A MONTH . 12 THE LATTER PROVISION HAS GENERAL APPLICATION , LIKE THE SIMILAR PROVISION CONTAINED IN REGULATION NO 1358/77 , AND DOES NOT IN ANY WAY RESTRICT THE NATURE OF THE CIRCUMSTANCES WHICH ARE TO BE REGARDED AS SPECIAL . THE COMMISSION RELIED UPON THAT PROVISION IN REGULATION ( EEC ) NO 442/70 OF 9 MARCH 1970 LAYING DOWN DETAILED RULES FOR THE APPLICATION OF THE SYSTEM OF OFFSETTING STORAGE COSTS FOR SUGAR ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1970 ( I ), P . 140 ), WHEN IT ADOPTED IN ARTICLE 5 PROVISIONS SIMILAR TO THOSE OF ARTICLE 10 OF REGULATION NO 1998/78 . 13 IN THE RECITALS TO REGULATION ( EEC ) NO 1688/74 OF THE COMMISSION OF 28 JUNE 1974 ( OFFICIAL JOURNAL 1974 , L 176 , P . 5 ), THE COMMISSION STATED THAT FOR SUGAR WHICH WAS IN TRANSIT FROM AN APPROVED WAREHOUSE IN ONE OF THE MEMBER STATES AT 00.00 HOURS ON THE FIRST DAY OF A MONTH AND WHICH ON ARRIVAL WAS STORED IN AN APPROVED WAREHOUSE IN THE SAME MEMBER STATE , A SYSTEM SHOULD BE PROVIDED WHICH CORRESPONDED SUBSTANTIALLY TO THE PROVISIONS SET OUT IN REGULATION NO 442/70 IN RESPECT OF CANE SUGAR FROM THE FRENCH OVERSEAS DEPARTMENTS . REGULATION NO 1688/74 THEREFORE INSERTS INTO REGULATION NO 442/70 A NEW ARTICLE , ARTICLE 5A , WHICH HAS ESSENTIALLY THE SAME EFFECT AS ARTICLE 11 ( 1 ) OF REGULATION NO 1998/78 . 14 IT WOULD APPEAR THEREFORE THAT THE COMMISSION EXERCISED THE POWER REFERRED TO ABOVE FOR THE TWO PURPOSES DESCRIBED EVEN BEFORE THE COUNCIL EXPRESSLY AUTHORIZED IT TO TAKE SPECIAL MEASURES IN JUST THOSE TERMS IN REGULATION NO 1358/77 , AND IT MAY THUS BE CONCLUDED THAT THAT AUTHORIZATION SHOULD NOT BE INTERPRETED NARROWLY AS SUGGESTED BY THE PLAINTIFF IN THE MAIN ACTION , BUT SHOULD BE INTERPRETED IN SUCH A WAY AS TO BEAR OUT THE EFFECTS OF ARTICLES 10 AND 11 ( 1 ) OF REGULATION NO 1998/78 . 15 IT FOLLOWS THAT ARTICLE 11 ( 1 ) OF THAT REGULATION HAS ITS LEGAL FOUNDATION IN ARTICLE 3 ( 2 ) OF REGULATION NO 1358/77 AND SHOULD NOT BE INTERPRETED , AS IS ARGUED BY THE PLAINTIFF IN THE MAIN ACTION , AS CONSTITUTING MERELY AN INTERPRETATION OF ARTICLE 3 ( 1 ) OF THE SAME REGULATION TO THE EFFECT THAT SUGAR IN TRANSIT BETWEEN APPROVED WAREHOUSES FULFILS , IN PRINCIPLE , THE REQUIREMENT THAT THE PRODUCT BE STORED IN A WAREHOUSE . 16 CONSEQUENTLY , THE REPLY TO THE FIRST QUESTION SHOULD BE IN THE NEGATIVE AND THE REPLY TO THE THIRD QUESTION SHOULD BE IN THE AFFIRMATIVE . 17 THE OTHER TWO QUESTIONS SEEK TO DISCOVER WHETHER ARTICLE 11 ( 1 ) OF REGULATION NO 1998/78 IS IN BREACH OF THE PROHIBITION OF DISCRIMINATION IN ARTICLE 40 ( 3 ) OF THE TREATY OR THE GENERAL PRINCIPLE OF NON-DISCRIMINATION IN COMMUNITY LAW , AND , IF IT IS , WHAT ARE THE LEGAL CONSEQUENCES FLOWING FROM SUCH A BREACH . 18 ARTICLE 40 ( 3 ) OF THE TREATY IS CONCERNED WITH THE COMMON ORGANIZATION OF AGRICULTURAL MARKETS , INCLUDING THE REGULATION OF STORAGE , AND PROVIDES IN THE SECOND PARAGRAPH THAT THE COMMON ORGANIZATION MUST EXCLUDE ANY DISCRIMINATION BETWEEN PRODUCERS OR CONSUMERS WITHIN THE COMMUNITY . ACCORDING TO CASE-LAW OF THE COURT DISCRIMINATION IS DEFINED AS TREATING DIFFERENTLY SITUATIONS WHICH ARE IDENTICAL , OR TREATING IN THE SAME WAY SITUATIONS WHICH ARE DIFFERENT . 19 EVEN IF IT MIGHT APPEAR TO BE CONTRARY TO THE CONCEPT OF A UNIFIED MARKET THAT AID SHOULD BE GRANTED FOR SUGAR IN TRANSIT BETWEEN TWO APPROVED WAREHOUSES IN A SINGLE MEMBER STATE WHILE IT IS REFUSED FOR SUGAR IN TRANSIT BETWEEN TWO APPROVED WAREHOUSES SITUATED IN DIFFERENT MEMBER STATES , THAT IS NOT IN FACT THE CASE . THE DIFFERENCE OF TREATMENT IS BASED ON REQUIREMENTS OF SUPERVISION WHICH MAY BE JUSTIFIED OBJECTIVELY . COUNCIL REGULATION NO 1358/77 EMPHASIZES THE NEED FOR SUPERVISION AND THEREFORE PROVIDES THAT THE REIMBURSEMENT SHOULD NORMALLY BE MADE BY THE MEMBER STATE IN WHOSE TERRITORY THE SUGAR IS STORED . 20 THE COMMISSION RIGHTLY STATES THAT THE SUPERVISORY MEASURES WHICH WOULD BE NECESSARY IF REIMBURSEMENT HAD TO BE MADE IN THE CASE OF INTERNATIONAL TRANSPORT WOULD INVOLVE DISPROPORTIONATE ADMINISTRATIVE COSTS . THE WAREHOUSE OF DESPATCH AND THE WAREHOUSE OF ARRIVAL ARE SUBJECT TO THE JURISDICTION OF DIFFERENT ADMINISTRATIVE AUTHORITIES . IN THE ABSENCE OF ANY SYSTEM OF COOPERATION TO EFFECT THE NECESSARY SUPERVISION THE RELEVANT AUTHORITY OF THE MEMBER STATE WHICH IS THE DESTINATION OF THE CONSIGNMENT MUST CHECK THAT THE DEALER HAS ACQUIRED OWNERSHIP OF THE GOODS , ESTABLISH THE MOMENT WHEN HE ACQUIRED SUCH OWNERSHIP IF HE IS ALSO CLAIMING REIMBURSEMENT FOR THE END OF THE MONTH AS FAR AS THE WAREHOUSE OF DEPARTURE IS CONCERNED , AND CHECK THAT THE SUGAR WAS STORED IN AN APPROVED WAREHOUSE IN THE MEMBER STATE FROM WHICH THE CONSIGNMENT WAS DESPATCHED . 21 IT FOLLOWS FROM THE FOREGOING CONSIDERATIONS THAT THE SITUATION WITH REGARD TO SUGAR IN TRANSIT AT THE BEGINNING OF A MONTH BETWEEN TWO APPROVED WAREHOUSES IN THE SAME MEMBER STATE IS NOT THE SAME AS THAT WHERE THE WAREHOUSES ARE SITUATED IN DIFFERENT MEMBER STATES . IN THE CIRCUMSTANCES THE DIFFERENCE BETWEEN THE TWO SITUATIONS JUSTIFIES A DIFFERENCE IN TREATMENT WHICH DOES NOT AMOUNT TO UNLAWFUL DISCRIMINATION IN COMMUNITY LAW . 22 THE REPLY TO THE SECOND AND FOURTH QUESTIONS MUST THEREFORE BE THAT THE FACT THAT REIMBURSEMENT IS GRANTED IN RESPECT OF STORAGE COSTS FOR SUGAR WHICH , AT THE BEGINNING OF THE MONTH , IS IN TRANSIT BETWEEN TWO APPROVED WAREHOUSES SITUATED IN THE SAME MEMBER STATE BUT IS NOT GRANTED IN RESPECT OF SUGAR WHICH IS IN TRANSIT BETWEEN TWO APPROVED WAREHOUSES SITUATED IN DIFFERENT MEMBER STATES DOES NOT AMOUNT TO UNLAWFUL DISCRIMINATION IN COMMUNITY LAW . COSTS 23 THE COSTS INCURRED BY THE COMMISSION OF THE EUROPEAN COMMUNITIES , WHICH HAS SUBMITTED OBSERVATIONS TO THE COURT , ARE NOT RECOVERABLE . AS THESE PROCEEDINGS ARE , IN SO FAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED , IN THE NATURE OF A STEP IN THE ACTION PENDING BEFORE THE NATIONAL COURT , THE DECISION ON COSTS IS A MATTER FOR THAT COURT . ON THOSE GROUNDS , THE COURT ( FIRST CHAMBER ), IN ANSWER TO THE QUESTIONS REFERRED TO IT BY THE VERWALTUNGSGERICHT FRANKFURT AM MAIN BY ORDER OF 8 OCTOBER 1981 , HEREBY RULES : 1 . SUGAR WHICH IS IN TRANSIT BETWEEN ONE APPROVED WAREHOUSE AND ANOTHER DOES NOT FULFIL THE REQUIREMENT AS TO STORAGE IN A WAREHOUSE WITHIN THE MEANING OF ARTICLE 3 ( 1 ) OF COUNCIL REGULATION NO 1358/77 OF 20 JUNE 1977 . 2. THE SPECIAL RULE CONTAINED IN ARTICLE 11 ( 1 ) OF COMMISSION REGULATION NO 1998/78 OF 18 AUGUST 1978 IS COVERED BY THE AUTHORITY GRANTED IN ARTICLE 3 ( 2 ) OF REGULATION NO 1358/77 . 3. THE FACT THAT REIMBURSEMENT IS GRANTED IN RESPECT OF STORAGE COSTS FOR SUGAR WHICH , AT THE BEGINNING OF THE MONTH , IS IN TRANSIT BETWEEN TWO APPROVED WAREHOUSES SITUATED IN THE SAME MEMBER STATE BUT IS NOT GRANTED IN RESPECT OF SUGAR WHICH IS IN TRANSIT BETWEEN TWO APPROVED WAREHOUSES SITUATED IN DIFFERENT MEMBER STATES DOES NOT AMOUNT TO DISCRIMINATION PROHIBITED BY COMMUNITY LAW . © European Communities, 2001 All rights reserved BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII URL: https://www.bailii.org/eu/cases/EUECJ/1983/R882.html