CELEX: 61997CJ0059
EAGGF
Clearance of accounts
1992 financial year

Grounds
1 By application lodged at the Court Registry on 11 February 1997, the Italian Republic brought an action under the first paragraph of Article 173 of the EC Treaty for the partial annulment of Commission Decision 96/701/EC of 20 November 1996, amending Decision 96/311/EC of 10 April 1996 on the clearance of the accounts presented by the Member States in respect of the expenditure for 1992 of the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF) and in respect of certain expenditure for 1993 (OJ 1996 L 323, p. 26, `the contested decision').
2 The application seeks the annulment of the contested decision only in so far as the Commission declared that the sum of ITL 11 934 331 913 for aid for olive oil consumption for the year 1992 was not chargeable to the EAGGF.  That financial adjustment corresponds to 82 cases concerning advance payments of aid to undertakings, which the Commission considers to have been unduly paid, and which were no longer covered by valid guarantees and had still not been recovered by the national authorities.
The Community legislation
3 The basic rules of the common organisation of the market in oils and fats are laid down in Regulation No 136/66/EEC of the Council of 22 September 1966 on the establishment of a common organisation of the market in oils and fats (OJ, English Special Edition, 1965-1966, p. 221).
4 Article 11 of Regulation No 136/66 forms the basis for the system of aid designed to encourage the consumption of olive oil produced and marketed in the Community.  The version as amended by Council Regulations No 1917/80 of 15 July 1980 (OJ 1980 L 186, p. 1) and No 2210/88 of 19 July 1988 (OJ 1988 L 197, p. 1), applicable at the material time, provides:
`1. Where the production target price minus the production aid is higher than the representative market price for olive oil, consumption aid shall be granted for olive oil produced and placed on the market in the Community. Such aid shall be equal to the difference between those two amounts.
...'
5 The general rules in respect of aid for the consumption of olive oil, applicable to the marketing year 1991/92, were laid down by the Council in Regulation (EEC) No 3089/78, of 19 December 1978 (OJ 1978 L 369, p. 12), most recently amended by Council Regulation (EEC) No 3461/87 of 17 November 1987 (OJ 1987 L 329, p. 1).
6 In accordance with Article 1 of Regulation No 3089/78, the consumption aid is to be granted only to approved olive oil packaging plants, the approval being subject to compliance with the conditions set out in Article 2 of the regulation.  Under Articles 5 and 6(2) of the same regulation, entitlement to consumption aid is acquired the moment the olive oil leaves the packaging plant, which must submit an application within a period to be determined.
7 Article 7 of Regulation No 3089/78 lays down the supervision which the Member States must carry out:
`The Member States shall institute a system of supervision to ensure that the product for which aid has been applied qualifies for such aid.
...'
8 Article 8 of that regulation provides:
`The aid shall be paid when the supervisory body designated by the Member State in which packaging takes place has checked that the conditions for granting the aid have been satisfied.
The aid may, however, be advanced as soon as the aid application is submitted, provided that sufficient security has been provided.'
9 The implementing rules in respect of the system of consumption aid for olive oil, applicable at the beginning of the marketing year 1991/92, are laid down in Commission Regulation (EEC) No 2677/85 of 24 September 1985 (OJ 1985 L 254, p. 5), as most recently amended by Commission Regulation (EEC) No 571/91 of 8 March 1991 (OJ 1991 L 63, p. 19).
10 In accordance with Article 9(3) of Regulation No 2677/85, the Member State is in principle to pay the aid within 150 days of the submission of the aid application. However, Article 11 of that regulation, as amended by Article 1(19) of Regulation No 571/91, provides that, under certain conditions, the amount of the aid may be advanced:
`1. The amount of the aid shall be advanced to the party concerned as soon as he submits an application for aid together with a certificate showing that a security equal to the amount of the aid has been lodged.
2. The security shall be lodged by an establishment meeting the criteria laid down by the Member State to which application for aid is made. The security shall be valid for at least six months.
3. The security shall be released as soon as the competent authority of the Member State has recognised entitlement to the aid in respect of the quantities shown in the application.
If entitlement to the aid is not recognised in respect of all or part of the quantities shown in the application, the security shall be forfeit in proportion to the quantities in respect of which the conditions giving entitlement to the aid were not complied with.
The body responsible for checking entitlement to aid shall notify the paying agency each month of its findings as regards the recognition of entitlement to aid of each approved undertaking.
...'
11 Article 12(1) of Regulation No 2677/85 defines the nature and details of the checks referred to in Article 7 of Regulation No 3089/78 which are intended to ensure that the product complies with the necessary conditions for eligibility for the aid applied for.  It also provides that:
`(2) If any doubt arises as to the accuracy of the information given in the application for aid, the Member State shall suspend payment of aid in respect of the quantity of olive oil which is the subject of the inspection and take any steps necessary to ensure recovery of aid which may turn out to have been wrongly granted and the payment of any fines. ...
The amount paid to the Member State shall be deducted from claims made on the EAGGF by the paying agencies or authorities of the Member States.'
12 Lastly, Article 29 of Commission Regulation (EEC) No 2220/85 of 22 July 1985 laying down common detailed rules for the application of the system of security to agricultural products (OJ 1985 L 205, p. 5), provides:
`Once the competent authority is aware of circumstances giving rise to forfeiture of the security, in whole or in part, it shall without delay demand of the party required to meet the obligation to pay the sum forfeited, allowing up to 30 days from the day of issue of demand for payment.
Where payment has not been made at the end of this period, the competent authority shall:
...
(b) without delay require the guarantor ... to pay ...'
13 Regulation (EEC) No 729/70 of the Council of 21 April 1970 on the financing of the common agricultural policy (OJ, English Special Edition, 1970 (I), p. 218) introduced the system of Community financing for intervention aimed at stabilising agricultural markets.  Article 3 provides that the Guarantee Section of the EAGGF is to finance intervention intended to stabilise the agricultural markets, undertaken according to Community rules within the framework of the common organisation of agricultural markets.  Under Article 5(2)(b) of that regulation, the Commission is to make up the accounts relating to the expenditure of the national services and bodies on the basis of the annual accounts submitted by the Member States and accompanied by the documents required for making up those accounts.
14 Article 1(3) of Commission Regulation (EEC) No 1723/72 of 26 July 1972 on making up accounts for the European Agricultural Guidance and Guarantee Fund, Guarantee Section (OJ, English Special Edition 1972 (III), p. 109), added by Commission Regulation (EEC) No 422/86 of 25 February 1986 (OJ 1986 L 48, p. 31) provides:
`Additional information may be forwarded to the Commission up to a deadline to be fixed by the Commission, taking into account in particular the amount of work necessary to supply the information concerned. In the case of failure to submit the aforementioned information within the period fixed, the Commission shall take its decision on the basis of those elements of information in its possession at the deadline, except in cases where the late submission of information is justified by exceptional circumstances.'
The dispute
15 In the clearance of accounts for the financial year 1992, the Commission found that the Italian authorities were carrying out checks with a considerable delay and had failed to declare forfeit the securities for the advances unduly paid.  Consequently, on 24 September 1993, it requested the Italian authorities to send it the following documents on aid for the consumption of olive oil for the financial year 1992: the list of payments made, broken down by marketing year and by undertakings, indicating the relevant quantities, the list of recoveries made, the list of undertakings against which any legal action had been brought and the list of undertakings subjected to the checks made by the Guardia di Finanza.
16 The competent national authority, Azienda di Stato per gli Interventi nel Mercato Agricolo (State Board for Intervention in the Agricultural Market, `AIMA'), which subsequently became Ente per gli Interventi nel Mercato Agricolo (Italian Intervention Agency, `EIMA'), answered that request on 19 November 1993, sending the following documents:  the list of payments made, broken down by marketing year and by undertaking, indicating the relevant quantities, the list of recoveries made, the list of undertakings referred to in the notice of service effected by Agecontrol (the national body responsible for supervising entitlement to aid) and the Guardia di Finanza, the list of undertakings in respect of which Agecontrol had not been able to carry out any checks and the list of undertakings still being checked by Agecontrol.
17 By letter of 29 July 1994, the EAGGF informed the Italian authorities that, on the basis of the data communicated by the latter in their letter of 19 November 1993, it had proposed to make, for the financial year 1992, a negative financial adjustment  of ITL 17 149 929 372, representing the amount of aid which, according to Agecontrol's findings, had been unduly paid.
18 On 30 September 1994, the Italian authorities forwarded a list of the sums which had been repaid to them in the meantime, which they considered ought to be set against the financial adjustment proposed by the EAGGF.
19 On the basis of Article 1(3) of Regulation No 1723/72, according to which the Commission may fix a deadline for the forwarding of additional information by the Member States, the Commission, in its decision of 13 January 1995 notified to the Italian Republic on 16 January 1995, provided that any additional information from the Member States proving necessary in order to draw up the decision on the clearance of accounts for 1992 must be forwarded to the Commission by 28 February 1995 at the latest.
20 Since no additional information other than that communicated by the Italian authorities on 30 September 1994 was sent to it before that deadline, the EAGGF, by letter of 15 June 1995, informed the Italian authorities that, on the basis of the correspondence exchanged and of the documents available, it had assessed the financial correction in respect of aid for olive oil consumption for 1992 at ITL 11 934 331 913, corresponding to the amount unduly paid and not yet recovered.  That sum was obtained by deducting from the total of the amounts communicated in AIMA's letter of 19 November 1993 (ITL 17 149 929 432) the amounts recovered in the meantime and communicated by EIMA in its letter of 30 September 1994 (ITL 5 215 597 519).
21 By letter of 6 July 1995, in accordance with Article 1(1)(a) of Commission Decision 94/442/EC of 1 July 1994 setting up a conciliation procedure in the context of the clearance of the accounts of the European Agricultural Guidance and Guarantee Fund (EAGGF) Guarantee Section (OJ 1994 L 182, p. 45), the Commission officially informed the Italian authorities that the amount of expenditure of ITL 11 934 331 913 declared by the Italian Republic under heading 1220 (aid for olive oil consumption) could not be charged to the EAGGF, Guarantee Section, for 1992.
22 By letter of 18 September 1995, the Italian authorities brought the matter of that financial adjustment before the conciliation body.  They challenged the adjustment, claiming, in particular, that certain sums had in the meantime been recovered and credited to the EAGGF.
23 The Commission forwarded to the Chairman of the conciliation body its observations on the application for conciliation in a letter of 9 November 1995.  It stated that, in the clearance of the accounts for 1992, account had been taken of recoveries made up to 30 September 1994, by reference to the letter of the Italian authorities of that date.  It stated that any subsequent recovery of sums which had been the subject for 1992 of financial adjustments by the EAGGF should be credited to the national budget, since it was not possible for the EAGGF to act in the place of the AIMA's accounting department.
24 By letter of 17 January 1996, the Commission informed the Italian authorities that it was prepared to take into account for 1995 the sums which, having been the subject of financial adjustments for 1991 and 1992, had in the meantime been recovered by the AIMA and repaid to the EAGGF before 15 October 1995.  In conclusion, it stated that:
- the information and the documents requested were to be forwarded to the EAGGF by 29 February 1996 at the latest;
- if the information and evidence requested were not forthcoming, or if they were insufficient to enable the EAGGF to ascertain that the sums in question had in fact been repaid to it, it would be impossible to take into account the sums concerned;
- any other recovery of the sums which were the subject of financial adjustments for 1991 and 1992 were to be credited to the national budget, since the EAGGF was no longer prepared to act in the place of AIMA's accounting division.
25 On 19 January 1996 the conciliation body submitted its final report on Case 95/IT/021, in which it pointed out that the Commission had declared itself ready to take account of sums paid to the EAGGF up until 15 October 1995, while inviting the parties to remain in contact in order to find a bilateral solution to the outstanding questions.
26 On 29 February 1996, the Italian authorities informed the Commission that they could not meet the deadline of 29 February 1996 set in the letter of 17 January 1996 because of the complications involved in the calculations and cross-checks to be made, and asked for the deadline to the extended until 30 March 1996.
27 By letter of 11 March 1996, the Commission agreed to extend until 31 March 1996 the deadline set for receipt of the documents requested, stating, however, that no document submitted after that date would be taken into consideration.
28 The Commission maintains that it subsequently received several versions of a fax sent by the Italian authorities on 29 March 1996, which made it clear that the information concerning the date on which sums were credited to the EAGGF could be supplied in respect only of certain amounts.
29 By letter of 2 May 1996, the EAGGF indicated that, on the basis of the information communicated, a positive financial adjustment of ITL 743 129 209, corresponding to six files, would be taken into account in Italy's favour for the year 1995, once the Commission was satisfied that the sums in question had actually been credited to the EAGGF.
30 On 20 November 1996, the Commission adopted the contested decision, which, on the basis of the information forwarded before 28 February 1995, the deadline set by its decision of 13 January 1995, confirmed for 1992 a financial adjustment of ITL 11 934 331 913 with regard to aid for olive oil consumption, as shown in point 4.7.3.1 of the summary report concerning the results of checks made in connection with the clearance of the accounts of the EAGGF, Guarantee Section (Commission final document VI/6355/95, of 27 March 1996).
31 By its action brought on 11 February 1997, the Italian Republic sought partial annulment of that decision, referring more particularly to the part concerning the abovementioned financial adjustment.
The application
32 The Italian Government disputes the accuracy of the provisions of point 4.7.3.1 of the Commission's summary report, according to which the financial adjustment of ITL 11 934 331 913 corresponds to 82 files relating to aid for olive oil consumption which was unduly paid to Italian undertakings, was no longer covered by valid security and had still not been recovered by the national authorities from the recipient undertakings.  Among the files referred to by the Commission and contrary to the latter's submissions, the aid paid by way of advances had either been recovered and repaid to the EAGGF or was still covered by valid security in as much as the AIMA has always acted in compliance with the provisions of Article 11 of Regulation No 2677/85 in the matter of security. Consequently, the amounts in dispute were paid in accordance with the established rules in the sector concerned and the Commission ought to have charged them to the EAGGF pursuant to Article 3 of Regulation No 729/70.
33 The first plea put forward by the Italian Government is divided into two parts.  The first relates to various undertakings which are the subject of seven of the 82 files covered by the summary report.  According to the Italian Government, the advances paid to those undertakings by way of aid for olive oil consumption were, contrary to the submission of the Commission, recovered by the national authorities in order to be repaid to the EAGGF.  The amounts concerned are the following: ITL 75 808 299 recovered from Valdolio, ITL 37 632 125 from P.I.O., ITL 533 877 675 from Certo C., ITL 90 938 022 from Ol. Fratelli di Sensi (which was recovered out of a total amount of aid of ITL 177 863 937), ITL 119 593 700 from Perilli, ITL 55 989 901 from Vizzari, ITL 7 923 300 and ITL 52 130 522 from Ol. Albanese.
34 As the Advocate General points out at point 36 of his Opinion, so far as concerns the aid paid by way of advances to four of the abovementioned undertakings, namely Valdolio, Ol. Fratelli di Sensi, Vizzari and Ol. Albanese, the Italian Government acknowledged at the hearing that its application had become redundant, since the amounts challenged in its application had been taken into account by the Commission for the financial year 1995. Accordingly, the only remaining issue is the case of the amounts paid by way of advances to the three other abovementioned undertakings by the Italian Government, namely P.I.O., Certo C. and Perilli.
35 The Commission refused to treat those advances as chargeable to the EAGGF for 1992 in so far as, since it had fixed, pursuant to Article 1(3) of Regulation No
1723/72, a time-limit expiring on 28 February 1995 for the submission of documentary evidence which was not produced before the expiry of that time-limit, those advances were not taken into account because of the delay in declaring them.
36 For the sake of completeness, the Commission maintains that, as regards the data concerning P.I.O., Certo C. and Perilli, communicated by the Italian authorities after 28 February 1995, it found points of obscurity and contradictions in the figures supplied, which did not enable it to conclude that reimbursement had taken place or to make a positive adjustment in favour of Italy when clearing the accounts for the following financial years. The Italian Government has denied that the documents relating to P.I.O., Certo C. and Perilli contain contradictions or points of obscurity, without adducing any evidence to challenge the accuracy of the conclusions reached by the Commission and the legal inferences which it deduced therefrom.
37 It is sufficient to note that it is common ground that, in the present case, the deadline referred to in Article 1(3) of Regulation No 1723/72 had been set by the Commission at 28 February 1995.  Since the Italian Government has not claimed that there are any exceptional circumstances, it follows that the additional information produced after that date must be regarded as out of time (to the same effect, with regard to the communication of information after the expiry of the deadline fixed in the absence of any exceptional circumstances, see Case C-197/90 Italy v Commission [1992] ECR I-1, paragraph 9, Case C-54/91 Germany v Commission [1993] ECR I-3399, paragraph 14, and Case C-41/94 Germany v Commission [1996] ECR I-4733, paragraph 23.)
38 The first part of the plea in law alleging that the information supplied by the Italian authorities for 1992 concerning Valdolio, P.I.O., Certo C., Ol. Fratelli di Sensi, Perilli, Vizzari and Ol. Albanese was not taken into account must therefore be rejected.
39 The second part of the first plea in law put forward by the Italian Government concerns the advance of an amount of ITL 32 113 434 paid to Luccisano by way of aid for olive oil consumption.  According to the Italian Government, that sum ought to be charged to the EAGGF for 1992, since it had been set off against other debts.
40 The Commission submits, with regard to Luccisano, that the documents supplied by the competent national authority before 28 February 1995 did not support the conclusion that the amount declared had been repaid to the EAGGF.  It states that it was only by letter of 18 September 1995 that the Italian authorities informed it that Luccisano had requested that the aid to be repaid should be set off against debts due, and the set-off itself occurred only by virtue of a decree of 15 December 1995.  The Commission adds that it took into account for 1995 the information supplied after the expiry of the deadline fixed for the production of evidence relating to 1992, in so far as that information reached it before 15 October 1995, the deadline for the submission of evidence relating to 1995.
41 It is sufficient to point out, as observed in paragraph 37 of this judgment, that the documents forwarded to the Commission by the Italian authorities were sent after the expiry of the deadline fixed by the Commission and that the Italian Government did not invoke any exceptional circumstances capable of justifying the delay.
42 The second part of the plea alleging that information supplied by the Italian Government regarding Luccisano for 1992 was not taken into consideration must also be rejected.
43 The second plea in law put forward by the Italian Government concerns aid, paid by way of advance to Valle Picentino, in the amount of ITL 175 839 700.  The Italian Government maintains that the security initially lodged by Valle Picentino was correctly released by decision of the AIMA on the basis of information supplied by Agecontrol. It claims that, contrary to the Commission's contention, that security was not released in contravention of Article 11(3) of Regulation No 2677/85.
44 In this connection, it should be noted that the Italian Government initially referred in its written observations to a report by Agecontrol, dated 8 November 1990, finding that there were no irregularities or defects such as to constitute an obstacle to releasing the security or to the grant of the advances requested.  It therefore concluded that the security had been released in accordance with Article 11(3) of Regulation No 2677/85.
45 At the hearing, the Italian Government altered its position and acknowledged that the Agecontrol report to which reference was to be made was not that of 1990, concerning the oil marketing year 1988/89, but the report of 26 January 1993, relating to the 1991/92 marketing year. It claimed that in that report Agecontrol found irregularities relating solely to an amount of ITL 759 300 and that, as regards the remaining amount, what it described was no more than a presumption of fraud.  The Italian Government stated that that report by Agecontrol was received by the AIMA after the security initially lodged had been released, since the minimum period of its validity, set at six months by Article 11(2) of Regulation No 2677/85, had expired.
46 Last, the Italian Government also claimed that in September 1993 new securities were lodged at the request of AIMA after criminal proceedings had been initiated against representatives of Valle Picentino, because the Guardia di Finanza considered that a total amount of aid greater than ITL 7 000 000 000 had been unduly received by that company. The debt of ITL 175 839 700 claimed by the EAGGF was therefore still covered by security, since it was included in the debt covered by the security consisting of a mortgage over the company's real property for a sum of ITL 5 900 000 000 and by the lodging of a bank guarantee for an additional sum of ITL 1 531 926 352.  Consequently, the Italian Government concludes that the competent national authority acted in compliance with the requirements of Regulation No 2677/85.
47 The Commission maintains that, in accordance with Article 11(3) of Regulation No 2677/85, the security may not be released unless the competent national authorities have recognised entitlement to the aid.  It is clear from Agecontrol's 1993 report that serious doubts existed as to the lawfulness of the company's actions.  In that report, Agecontrol sets out inter alia evidence of fraud consisting of fictitious purchases of olive oil.  According to the Commission, on receiving such a report, the AIMA ought to have requested further inquiries to be made and suspended the release of the security; it ought not to have gone on to recognise entitlement to the aid, which is the essential condition for the release of securities, in accordance with Article 11(3) of Regulation No 2677/85.  Consequently, the security initially lodged ought not to have been released and the provision of new security at a later stage cannot in any way alter that conclusion.
48 In that connection, it must be borne in mind that, in accordance with the general principle laid down in Article 8 of Regulation No 3089/78, aid may not be paid until the competent authorities of the Member State in which packaging takes place have ascertained that the conditions for granting the aid have been satisfied.  According to Article 11(1) of Regulation No 2677/85, the amount of the aid may, however, be advanced as soon as the application for aid is submitted together with a certificate showing that a security equal to the amount of the aid has been lodged.  In accordance with Article 11(3) of the same regulation, where, on the basis of information supplied by the national body responsible for checking entitlement to aid as regards the recognition of the entitlement to aid of each approved undertaking, the competent national authorities find irregularities, entitlement to the aid may not be recognised and the security is to be forfeited in proportion to the quantities in respect of which the conditions giving entitlement to the aid were not complied with.
49 In the circumstances, the Commission must be held to have been right in concluding that the security initially lodged by Valle Picentino ought not to have been released by the competent national authorities because serious doubts existed as to the lawfulness of that company's actions.
50 Moreover, as the Advocate General observes at point 51 of his Opinion, the lodging of new securities subsequent to the release of the security initially lodged has no bearing on the contravention by the Italian authorities of Article 11(3) of Regulation No 2677/85.  That provision requires sums advanced by way of aid for olive oil consumption to remain covered by security for so long as entitlement to the aid cannot be recognised.
51 The plea in law alleging that the provisions of Regulation No 2677/85 were not contravened by the decision to release the security initially lodged by Valle Picentino must consequently be rejected.
52 By its third plea in law, the Italian Government challenges the Commission's finding that advances of a total amount of ITL 8 530 112 463, which had been unduly paid to 30 undertakings by way of aid for olive oil consumption, were not chargeable to the EAGGF.  It states that procedures for the recovery of the sums due were under way and that security still existed.  The Italian Government stated that it reserved the right to prove that security existed, but it has not adduced any evidence to that effect.
53 The Commission submits that the financial adjustment concerning the abovementioned amount was lawful since the Italian Government itself had acknowledged that recovery had not yet taken place and that, even in the course of its application for annulment, it had not been able to adduce any evidence that the securities to which it referred existed.  Furthermore, pursuant to Article 11(3) of Regulation No 2677/85, those securities ought to have been declared forfeit by the competent national authorities.
54 In that connection, the settled case-law of the Court should be borne in mind with regard to apportioning the burden of proof in actions for annulment brought by a Member State against a decision of the Commission relating to clearance of EAGGF accounts.
55 Where the Commission refuses to charge certain expenditure to the EAGGF on the ground that it was incurred as a result of breach of Community rules for which a Member State can be held responsible, it is for that State to show that the conditions for obtaining the financing refused are fulfilled (see Case 347/85 United Kingdom v Commission [1988] ECR 1749, paragraph 14, and Case C-48/91 Netherlands v Commission [1993] ECR I-5611, paragraph 16).  The Commission is not required to demonstrate that there are irregularities in the data submitted by Member States, it is sufficient for it to show that it has serious and reasonable doubts.  The reason for this mitigation of the burden of proof on the Commission is that it is the State which is best placed to collect and check the data required for the clearance of EAGGF accounts, and which is consequently required to adduce the most detailed and comprehensive evidence that its figures are accurate and, if appropriate, that the Commission's calculations are incorrect (Netherlands v Commission, cited above, paragraph 17).  In the event of a dispute, it is for the Commission to prove that the rules of the common organisation of the agricultural markets have been infringed and, once it has established such an infringement, the Member State concerned must then, if appropriate, demonstrate that the Commission committed an error as to the financial consequences to be drawn from it (Case C-281/89 Italy v Commission [1991] ECR I-347, paragraph 19, and Netherlands v Commission, cited above, paragraph 18).
56 In the present case, the Italian Government has acknowledged that the aid in question had not yet been recovered, since the procedures were still taking place. Furthermore, it alleged that valid security existed without adducing evidence.  It must therefore be concluded that the Italian Government has not demonstrated that the Commission erred in considering that the aid was not due, with the result that its third plea in law must be rejected.
57 The last plea in law put forward by the Italian Government concerns the advance paid by way of aid for olive oil consumption to Caruso Rosa, in the amount of ITL 98 827 589.  The Italian Government claims that the securities lodged by Caruso Rosa were released in accordance with the rules laid down in Article 11(3) of Regulation No 2677/85.  In its report of 22 April 1993, Agecontrol envisaged the existence of irregularities with regard to that undertaking but was not able to assess with any precision the amount of aid unduly paid.  In the absence of definite facts, the national authorities did not judge it possible to order the forfeiture of the securities, which were therefore released.  The Italian Government maintains, moreover, that the further inquiries undertaken by the Guardia di Finanza did not reveal any new evidence, with the result that it would have been unnecessary to extend the security as the Commission recommended.
58 The Commission objects that, for as long as those checks had not been completed, the securities ought not to have been released and the Italian authorities ought, pursuant to Article 12(2) of Regulation No 2677/85, to have decided to extend the period for which those securities were valid.
59 It should be borne in mind in that regard that Article 11(3) of Regulation No 2677/85 provides that where there are serious doubts as to the legality of the actions of an undertaking seeking aid for olive oil consumption, the conditions governing entitlement to the aid are not satisfied and the security lodged by the undertaking in order to receive the advance may not be released.
60 The plea in law alleging that the adjustment made by the Commission concerning the amount received by Caruso Rosa was not correct must consequently be rejected.
61 In those circumstances, in the light of all the preceding considerations, the action brought by the Italian Republic must be rejected.
Decision on costs
Costs
62 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings.  Since the Commission has applied for the Italian Republic to be ordered to pay the costs and the latter has been unsuccessful, it must be ordered to pay the costs.
Operative part
On those grounds,
THE COURT
(Fifth Chamber),
hereby:
1. Dismisses the application;
2. Orders the Italian Republic to pay the costs.