Federal Constitutional Court - Press office -
Press release no. 57/2009 of 5 June 2009
Order of 12 May 2009 – 2 BvR 743/01 –
Constitutional complaint against duties collected for the
Forestry Sales Fund / Timber Promotion Fund successful
Just as the German farming and food industry is promoted (see Press
Release No. 10/2009 of 3 February 2009), the German forestry and timber
industry is also promoted pursuant to the Timber Promotion Fund Act
(Holzabsatzfondsgesetz – HAfG) or, up to the end of 1998, the Forestry
Sales Fund Act (Forstabsatzfondsgesetz – FAfG). An institution under
public law with its registered place of business in Bonn, the Forestry
Sales Fund (Forstabsatzfonds), which was succeeded by the Timber
Promotion Fund (Holzabsatzfonds), was charged with the promotion of the
sale and use of products of the German forestry industry and the timber
industry through the penetration and cultivation of markets in Germany
and abroad with the use of modern means and methods. Duties were
channelled to the Fund to achieve this purpose. These duties were
collected from enterprises in the forestry industry and, later, also
from enterprises in the timber industry. No duties were levied on
foreign imports of untreated timber. According to the annual report of
the Timber Promotion Fund, its spending totalled approximately €14.1
million in the year 2007. Of that amount, approximately €13.5 million
was used for marketing activities. With its assessment notice dated 21
June 1996, the federal agency that was the defendant in the initial
proceedings levied Forestry Sales Fund duties in the amount of DM
3,036.50 on the complainant for the second half of the year 1995
pursuant to § 10.1 FAfG. The objection raised against the notice of
assessment and the action brought thereafter were unsuccessful; the
complainant’s motion for leave to appeal was denied. In his
constitutional complaint, the complainant asserts that the duties
constitute special levies that are prohibited under the Basic Law
(Grundgesetz – GG).
The Second Senate of the Federal Constitutional Court decided that the
provisions of the Forestry Sales Fund Act governing the collection of
duties and their successor provisions in the Timber Promotion Fund Act
are incompatible with the Basic Law and void and violate the fundamental
right of the complainant under Article 12.1 in conjunction with Article
105 and Article 110 of the Basic Law. The duties constitute special
levies that are prohibited since the German timber and forestry industry
lacks the responsibility for providing funding in this respect.
In essence, the decision is based on the following considerations:
According to established case-law of the Federal Constitutional Court
(see most recently the judgment of the Second Senate of 3 February 2009
– 2 BvL 54/06 –, marginal nos.97 et seq.– Press Release No. 10/2009 of 3
February 2009), limits to the imposition of non-tax levies, and in
particular to the imposition of special levies for providing funding
that the legislature imposes in the exercise of its vested authority
outside the scope of provisions pertaining to fiscal activities by the
Länder (Article 104a et seq. GG) in compliance with the general rules
contained in Article 70 et seq. GG, follow from the limitative and
protective function of the provisions pertaining to such fiscal
activities.
Because the German forest industry lacks any responsibility for
providing funding, duties paid to the Forestry Sales Fund represent
constitutionally impermissible special levies. As in the case of the
duties paid under the Agricultural Marketing Fund Act
(Absatzfondsgesetz), duties under the Forestry Sales Fund Act, which
were subsequently removed from the Agricultural Marketing Fund Act, but
remained structurally unchanged, lack sufficient justifying consistency
in terms of the purpose of the Act, factual proximity, group homogeneity
and responsibility for providing funding. At issue are not special
levies that are based on the notion of causality involved in the
assignment of special burdens to those liable to make payment and can be
justified on the basis of responsibility for the ramifications of the
circumstances or conduct of a specific group. In fact, promotional
measures are at issue that are carried out compulsorily and the group of
those liable to make payment is called upon to finance them only by
reason of a benefit that the legislature has imputed to this group. The
enterprises liable to make payment create no need that they could
readily be held responsible for satisfying. Indeed, the government
intervenes in the structure of the economic order by means of
promotional measures grounded in economic policy on the basis of the
Forestry Sales Fund Act and assigns responsibility for the funding
required only because of this intervention to the enterprises burdened
with the duty to make payment. This financial burden for the assumption
of responsibilities by the government that substitutes a decision from
above for entrepreneurial activity on the part of individuals
constitutes from the point of view of those liable to make payment not
only a special burden in addition to that of taxation which requires
justification, but also curtailment of the entrepreneurial freedom
protected by Article 12.1 GG which in that respect also requires special
justification.
Disadvantages at the level of international competition that must be
averted are neither advanced nor are any evident. In view of the fact
that the foreign trade deficit was already moderate when the Forestry
Sales Act took effect in the year 1990, it was from the very beginning
not possible to discern any significant impairment or disadvantages to
be averted at the level of transnational competition. For that reason,
the question as to whether the positive development that it has since
been possible to ascertain was also due to the activities of the
Forestry Sales Fund need not be addressed. There is also no evidence of
any other industry-specific disadvantages that could justify imposition
of a compulsory duty.
The unconstitutionality of the duty in the form of a special levy
pursuant to § 10 FAfG renders void §§ 2.1 to 2.3, §§ 10.1 to 10.4, § 11
and § 12 FAfG and the corresponding provisions of the Timber Promotion
Fund Act. As regards the conduct of administrative activities, the only
aspects that remain meaningful in practice are the currently applicable
provisions governing the establishment of the Forestry Sales Fund or, as
the case may be, Timber Promotion Fund as an independent institution
under public law and its governing bodies and finances as well as the
provisions relating to oversight by the Federal Ministry of Food,
Agriculture and Consumer Protection (Bundesministerium für Ernährung,
Landwirtschaft und Verbraucherschutz – BMELV), the auditing authority of
Germany's Supreme Audit Institution (Bundesrechnungshof – BRH) and the
provision governing exemption from taxation as well as the provision
according to which the Timber Promotion Fund must reimburse the Federal
Agency for Agriculture and Food (Bundesanstalt für Landwirtschaft und
Ernährung – BLE) for personnel and other expenses incurred to collect
the duties in the past.
This press release is also available in the original german version.
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