Judgment — ECLI:EU:C:1998:449
Date: 1998-10-01
Language of the case: French
Court formation: Fifth Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Agriculture and Fisheries;Beef and veal;Cereals;European Agricultural Guidance and Guarantee Fund (EAGGF)
Concepts: Procedure for clearance of accounts;Conditions subject to which expenditure is borne by the EAGGF;Domestic market
Procedure: Action for annulment - unfounded
Origin: France

Summary Report 10 the Commission 
justifies that reduction on the ground that the 
conduct of the competent French authority 
was not compatible with the Community 
rules and discriminated against participants 
who had observed the rules. 
10. In that report the Commission stated, 
with regard to multiple tenders, that the docu­
ments showed that tenders from different 
companies often gave the same address, tele­
phone and fax numbers and had sometimes 
been signed by the same person. The invoices 
sent by the different undertakings were also 
consecutively numbered. The French 
authority must therefore have been aware of 
the conduct of the tenderers from the begin­
ning. Nevertheless, France carried out no 
checks in this connection, as it ought to have 
done. 
11. In the applicant's view, however, all the 
rules concerning intervention were observed. 
The French authorities had adopted national 
provisions which guaranteed observance of 
the provision under which each participant in 
the invitation to tender may submit one tender 
only per category and invitation to tender. 
12. The provision which underlies this dis­
pute is contained in Article 9 of Regulation 
N o 859/89, paragraph 1 of which provides: 
'Tenderers may take part in the invitation to 
tender only if they undertake in writing to 
comply with all the provisions relating to the 
tender concerned.' 11 9 — Commission 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 Fund and in respect of certain 
expenditure for 1993 (OJ 1996 L 117, p. 19). 
10 — Document VI/6355/95. 11 — Emphasis added. 
I - 5704 
FRANCE v COMMISSION 
13. Paragraph 2 provides: 'Interested parties 
may participate in the invitation to tender 
issued by intervention agencies of the Member 
States in which this is opened either by lodging 
a written tender against a receipt or by any 
other written means of communication 
accepted by the intervention agency, with 
advice of receipt; they may submit one tender 
only per category in response to each invita­
tion to tender.' 12 
14. The distinction between the terms 'ten­
derer' and 'interested party' is, in the Com­
mission's view, of significance in this connec­
tion. According to the Commission, it follows 
from the difference in wording that interested 
parties are not to be equated with tenderers. 
The term 'interested parties' refers not only 
to those persons who actually took action 
and lodged tenders. It embraces a much wider 
class of persons. It is not, therefore, only the 
individual tenderer, that is to say the person 
who actually lodges the tender, who is pro­
hibited from lodging more than one tender. 
The prohibition covers all persons tendering 
in respect of the same quantity of meat. 
15. On the other hand, the applicant is of the 
opinion that the terms 'tenderers' and 'inter­
ested parties' refer to the same persons. Two 
different terms were chosen, it maintains, only 
because of the wish to avoid repeating the 
word 'tenderers'. 
16. Specific conditions regarding the validity 
of tenders are, the applicant submits, apparent 
only on a reading of Article 11(3) of Com­
mission Regulation (EEC) N o 2456/93 of 
1 September 1993 laying down detailed rules 
for the application of Council Regulation 
(EEC) N o 805/68 as regards the general and 
special intervention measures for beef, 13 which 
was not yet in force at the material time. That 
provision is as follows: 
'Interested parties may submit only one tender 
per category in response to each invitation to 
tender. 
The Member States shall ensure that tenderers 
are independent of each other in the terms of 
their management, staffing and operations. 
Where there are serious indications to the 
contrary or that tenders are not in line with 
economic facts, tenders shall be deemed admis­
sible only where the tenderer presents suit­
able evidence of compliance with the second 
subparagraph. 
12 — Emphasis added. 13 — OJ 1993 L 225, p. 4. 
I - 5705 
OPINION OF MR ALBER — CASE C-232/96 
Where it is established that a tenderer has 
submitted more than one tender, all the ten­
ders from that tenderer shall be deemed inad­
missible.' 
17. The applicant, which, unlike the Com­
mission, is of the opinion that the second 
sentence of Article 9(2) was fully complied 
with in the context of the tendering proce­
dure operated by it, in October 1995 referred 
a request for conciliation to the Conciliation 
Body. 14 According to the applicant, the Con­
ciliation Body gave the following opinion in 
its provisional conclusion in the annex to the 
final report: Although Member States took 
no initiative to counter the practice of mul­
tiple tenders which in fact, from an economic 
point of view, stem from the same operator, 
the Commission itself must have been aware 
of it, but failed to react before 1993. In the 
circumstances, the Conciliation Body went 
on, and because of the apparent absence of 
financial loss to the Fund resulting from this 
practice, the financial correction of 2% of 
total expenditure was difficult to justify. 
18. The Commission points out in that con­
nection that, in contrast to the national author­
ities, it did not at first have this information 
available to it. Since the tenders were for­
warded to it anonymously, it became aware 
of the irregularities only in the context of the 
checks carried out by it. 
Intervention measures in the context of the 
public storage of cereals 
19. In this context, the French Republic seeks 
a declaration that the Commission decision is 
void in so far as it disallowed expenditure of 
FRF 84 061 448 relating to intervention mea­
sures in the cereals sector. That amount cor­
responds to 2% of expenditure in respect of 
technical, financing and other costs for 1992. 
The Commission justifies that reduction on 
the ground of deficiencies in the public storage 
of cereals. 
20. During an inspection carried out in June 
and July 1993, the Commission found defi­
ciencies in the management of the interven­
tion system. It informed the French national 
authorities of this and, according to the appli­
cant, gave notice of financial consequences 
for the 1993 clearance of accounts. In their 
reply of December 1993, the French authori­
ties set out a list of measures which they 
would take in order to improve the system 
for the public storage of cereals. 
21. According to the applicant, the Commis­
sion then informed it that no overall financial 
penalties would be imposed, in particular in 
view of the notified improvements to the 
management system. At the same time, how­
ever, as is not disputed by the applicant, the 
Commission gave notice that financial correc­
tions would be applied if it transpired that 
14 — Established by Commission Decision 94/442/EC of 1 July 
1994 setting up 2 conciliation procedure in the context 01 the 
clearance of the accounts of the EAGGF Guarantee Section 
(OJ 1994 L 182. p. 45). 
I - 5706 
FRANCE v COMMISSION 
cereals stored in the context of intervention 
had been replaced by cereals from the open 
market. 
22. During further inspections in June and 
July 1994 the Commission found that the 
deficiencies established during the first inspec­
tion had not been remedied by the French 
authorities. It informed the authorities that 
financial corrections would be adopted with 
effect from 1992. After a further exchange of 
correspondence with the Commission, the 
applicant eventually referred a request for 
conciliation to the Conciliation Body. 
According to the applicant, the Conciliation 
Body, in its final report, reached the conclu­
sion that the financial correction was justi­
fied. It was certainly to be regretted that the 
Commission gave the impression of having 
changed its original intention. However, the 
Conciliation Body also points out that the 
French authorities do not deny that they had 
to modify their original system in order to 
comply with the Commission's requirements. 
Forms of order sought 
23. Folio wing the Commission decision, the 
French Republic finally brought an action 
before the Court of Justice of the European 
Communities and claimed that the Court 
should: 
— declare null and void Commission Deci­
sion 96/311/EC 15 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 and in respect of certain expendi­
ture for 1993, in so far as the Commis­
sion has disallowed for France for 1992: 
— FRF 76 041 440 of eligible expendi­
ture corresponding to intervention 
measures in the beef and veal sector as 
regards the submission of tenders 
under the tendering procedure, 
— FRF 84 061 448 of eligible expenditure 
corresponding to intervention mea­
sures concerning the public storage of 
cereals; 
15 — See footnote 9. 
I - 5707 
OPINION OF MR ALBER — CASE C-232/96 
— in the alternative, consider those cor­
rections to be disproportionate in amount; 
— order the defendant to pay the costs. 
24. The Commission contended that the 
Court should: 
(1) dismiss the action; 
(2) order the French Republic to pay the 
costs. 
C — Opinion 
Intervention measures in the beef and veal 
sector 
Meaning and purpose of the second sentence 
of Article 9(2) 
25. First, the applicant claims that the Com­
mission has misconstrued the second sentence 
of Article 9(2). That provision, it argues, 
merely requires every natural or legal person 
applying to the intervention agency as a ten­
derer to submit one tender only. Regulation 
N o 859/89 is silent on any connections 
between individual tenderers which may need 
to be borne in mind. N o special conditions 
concerning the validity of the tenders are laid 
down. The national authority verified whether 
each individual undertaking which submitted 
a tender was a registered legal person. Whether 
any of the individual undertakings which sub­
mitted tenders may have belonged to the same 
group of undertakings was not verified in 
France since there was no necessity to do so. 
26. Even if such verification had been carried 
out, Regulation N o 859/89 would have given 
the applicant no legal basis on which to reject 
such interconnected tenders. 
27. The applicant points out that, according 
to the Court's case-law, the Member States 
must show that the conditions for the main­
tenance of financing are fulfilled. Referring to 
the national control system, it submits that it 
can be shown that each tenderer constitutes a 
separate and independent undertaking. The 
Commission does not dispute that. However, 
the applicant submits that is not sufficient 
since it is necessary for successful interven­
tion that the companies be economically inde­
pendent of one another. 
I - 5708 
FRANCE v COMMISSION 
28. In the applicant's submission, the burden 
of proof in such a case rests with the Com­
mission. The latter, the applicant claims, has 
not shown that the practice in France led to 
any disruption of intervention. 
29. According to the case-law of the Court, 
'... only refunds granted and intervention 
undertaken in accordance with the Commu­
nity rules within the framework of the 
common organisation of agricultural markets 
are to be financed by the EAGGF' . 16 In that 
connection, it is for the Commission to prove 
the existence of an infringement of the rules 
governing the common organisation of the 
agricultural markets. 17 
30. Moreover, in regard to the requirements 
which the formulation of provisions must 
satisfy, the Court has held: 'Since a rule whose 
breach inevitably entails financial conse­
quences must be sufficiently clear and precise, 
the Commission was not entitled to rely on 
the terms of subheading ... as a basis for 
imposing, at the time of the clearance of 
EAGGF accounts, an interpretation which 
was not dictated by the normal meaning of 
the words used.' 18 
31. Accordingly, it must be examined whether 
the terms in which the second sentence of 
Article 9(2) of Regulation N o 859/89 are 
couched satisfies those requirements and 
whether they allow of a construction of the 
kind placed on them by the Commission. In 
that connection it would appear appropriate 
to examine first the manner in which the 
Commission seeks to interpret the second 
sentence of Article 9(2). The pleadings mainly 
speak of 'multiple' tenders. Those cannot be 
tenders submitted by one and the same ten­
derer under one name, for such tenders are 
not lawful in France either. Moreover, as is 
also clear from the pleadings, the Commis­
sion does not object to every kind of connec­
tion between the individual tenders. For 
example, it states that, where a person oper­
ates two independent slaughterhouses, each 
may submit a tender. As the Commission 
stated at the hearing, in its view only tenders 
relating to the same quantity of meat are 
unlawful under the second sentence of Article 
9(2). Where, therefore, an interested party 
offers his meat not only himself, but also 
through the intermediary of nominees, that is 
in breach of Community provisions and must 
be prohibited by the authorities of the Member 
States. 
32. The Commission points out that, 
according to the Court's case-law, a provision 
is not merely to be construed literally but 
also in accordance with its meaning and pur­
pose. 19 Accordingly, the Commission con­
tends that the provision at issue in these pro­
ceedings would be deprived of its purpose if 
16 — Judgment in Case C-48/91 Netherlands v Commission [1993] 
ECR I-5611, at paragraphs 13 and 14, with further refer­
ences. 
17 — Judgment in Netherlands v Commission (cited in footnote 
16, at paragraph 18, with further references); judgment in 
Case C-281/89 Italy v Commission [1991] ECR I-347, at 
paragraph 19, with further references; judgment in Case 
347/85 United Kingdom v Commission [1988] ECR 1749, at 
paragraph 16; judgment in Case C-55/91 Italy v Commis­
sion [1993] ECR I-4813, at paragraph 13, with further refer­
ences. 
18 — Judgment in Case 349/85 Denmark v Commission [1988] 
ECR 169, at paragraph 16. 
19 — Judgments in Case C-283/91 Contarmi [1992] ECR I-6359, 
at paragraph 14, and Joined Cases C-296/93 and C-307/93 
France and Ireland v Commission [1996] ECR I-795, at 
paragraph 21. 
I -5709 
OPINION OF MR ALBER — CASE C-232/96 
it were possible to submit several tenders via 
nominees, thus circumventing the prohibitory 
provision. 
33. The intervention scheme, the Commis­
sion contends, is jeopardised, as has been 
demonstrated, by the practice in regard to 
intervention buying-in in France. The 
buying-in of excessive quantities gives rise, it 
is submitted, to greater costs than are neces­
sary in order to support the market. More­
over, equality of access for all interested par­
ties, which is required under Article 6(6) of 
Regulation N o 805/68 as amended by Regu­
lation No 571/89, is not guaranteed. 
34. The last phrase of Article 9(2) of Regula­
tion N o 859/89 must therefore, the Commis­
sion contends, be interpreted according to its 
meaning and purpose in such a way that 
intervention measures are not frustrated. If 
tenders relate to the same quantity of meat 
they are in reality only from one single ten­
derer. Such tenders are therefore unlawful. 
35. In the Commission's view, this conclu­
sion follows from the wording. It should be 
said on this point that a difference in wording 
as between paragraphs 1 and 2 of Article 9 
could certainly point to a difference in 
meaning. It could be inferred from this that 
it is not sufficient to check whether the person 
who actually submits the tender only submits 
a single one, that is to say whether in each 
case an independent (legal) person participates 
in the procedure. Thus the term 'interested 
party' could be understood as including a 
person interested in selling his meat into inter­
vention. As has been seen, that person does 
not necessarily have to be the same person as 
the tenderer, that is to say the person who 
actually submits the tender. If, for example, 
the meat is offered via nominees, in that case 
there is only one interested party but several 
tenderers. But if one looks at the way in which 
those two concepts are used in other regula­
tions dealing with intervention measures for 
beef and veal, it may be seen that the above-
mentioned distinction is not always adhered 
to. Thus, for example, the first recital in the 
preamble to Regulation N o 2271/90 20 states 
that ... 'tenderers should only be allowed to 
submit a single tender ... for each category in 
response to each invitation to tender'. More­
over, the German version of Article 11(3) of 
Regulation N o 2456/93, which replaced 
Article 9 of Regulation N o 859/89, uses the 
terms 'Interessent' [interested party] and 
'Bieter' [tenderer] in connection with the sub­
mission of tenders. 21 
36. Thus, no further conclusions may be 
drawn from the distinction between 'tenderer' 
and 'interested party' in Article 9. 
37. However, it is more instructive to have 
regard to the provisions which preceded those 
20 — Commission Régulation (EEC) N o 2271/90 of 1 August 
1990 amending Regulation (EEC) N o 859/89 laying down 
detailed rules for the application of intervention measures in 
the beef and veal sector (OJ 1990 L 204, p. 45). 
21 — This distinction is also reflected in the English version, which 
speaks of 'interested parties' and 'tenderer'. 
I -5710 
FRANCE v COMMISSION 
at issue in the present proceedings. Thus, in 
1990 it was made possible to submit several 
tenders at different prices. Regulation N o 
1282/90 22 amended the last phrase of Article 
9(2) to read as follows: 
'they may submit more than one tender, at 
different prices, for each category in response 
to each invitation to tender'. 
38. That provision was, however, repealed 
shortly afterwards in August 1990. The 
amending Regulation N o 2271/90 stated in 
the first recital in its preamble: 'Experience 
shows that tenderers should only be allowed 
to submit a single tender ... for each category 
in response to each invitation to tender.' 
39. In the applicant's view no conclusions 
may be drawn from those different language 
versions. The aim of Regulation N o 1282/90 
was to improve the existing rules and to make 
it possible for the same tenderer to submit 
different tenders at different prices. After these 
rules were repealed, Regulation N o 859/89 
merely provided that the same tenderer may 
submit one tender only. N o other conditions 
were laid down. At the same time, however, 
it is clear that after repeal of the provision in 
Regulation N o 1282/90 the tenderer may no 
longer submit several tenders in respect of the 
same quantity of meat. The meaning and pur­
pose of the provision here at issue in the last 
phrase of Article 9(2) is thus in any case that 
several tenders may not be submitted in respect 
of a specific quantity of meat. That provision 
would become meaningless if it could readily 
be circumvented by recourse to nominees. 
40. The applicant must also have been aware 
of that fact when it received the tenders. On 
the one hand, it is true of any rule that it 
becomes meaningless if it is circumvented, for 
example, as is maintained here, by virtue of 
the fact that the same meat is offered by sev­
eral persons. On the other hand, the applicant 
was aware of the aim and object of interven­
tion. To that extent it must also have been 
aware of the fact that it runs counter to the 
purpose of intervention if multiple tenders 
are submitted in respect of the meat available 
on the market. 
41. Moreover, the Court has held that even 
in cases where, viewed objectively, Commu­
nity law is incorrectly applied as a result of 
an interpretation adopted in good faith by the 
national authorities, costs incurred in that 
connection must, under Articles 2 and 3 of 
Regulation N o 729/70, 23 be borne by the 
Member States. 2A This strict interpretation of 
22 — Commission Regulation (EEC) N o 1282/90 of 15 May 1990 
amending Regulation (EEC) N o 859/89 laying down detailed 
rules for the application of intervention measures in the beef 
and veal sector (OJ 1990 L 126, p. 31). 
23 — Regulation (EEC) N o 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). 
24 — Article 3(1) of Regulation 729/70 provides: 
'Intervention intended to stabilise the agricultural markets, 
undertaken according to Community rules within the frame­
work of the common organisation of the markets, shall be 
financed under Article 1(2)(b).' 
I - 5711 
OPINION OF MR ALBER — CASE C-232/96 
the conditions under which expenditure is to 
be borne by the EAGGF is necessary in view 
of the objectives of Regulation N o 729/70. 
Since the management of the common agri­
cultural policy must ensure conditions of 
equality between traders in the Member States, 
the national authorities of a Member State 
may not, by the expedient of a wide interpre­
tation of a given provision, favour traders in 
that State to the detriment of those in other 
Member States where a stricter interpretation 
is applied. 25 
42. Admittedly, the applicant rightly points 
out that the last phrase of Article 9(2) is silent 
as to who the individual tenderers are and the 
manner in which they are to structure their 
relationships one to another. This, however, is 
not essential. It follows from the meaning 
and purpose of the last phrase of Article 9(2) 
that it is prohibited to offer meat by way of 
nominees. The applicant cannot rest content 
with the assertion that it is under no obliga­
tion under the terms of Article 9 to examine 
possible connections between individual ten­
derers. That goes merely to the question as to 
the manner in which observance of a prohibi­
tory provision such as that contained in the 
last phrase of Article 9(2) can be monitored. 
43. Accordingly, it is necessary to concur 
with the Commission's submission that the 
last phrase of Article 9(2) also prohibits ten­
ders which, whilst coming from different legal 
persons, are made in respect of the same meat, 
with the result that the tenders may be assumed 
to have been submitted by nominees. 
44. Accordingly, contrary to the applicant's 
submission, there is also a basis for such ten­
ders to be rejected, namely the second sen­
tence of Article 9(2). 
Monitoring obligation on the part of the 
Member State 
45. In the Commission's view, the reduction 
made in the context of the clearance of 
accounts is justified on the ground that the 
applicant did not ensure compliance with that 
provision. 
46. It is clear that in France tenders are exam­
ined only to see whether they originate from 
different legal persons. N o further examina­
tion was undertaken. In what follows it will 
now be considered whether on that basis the 
applicant may be said to have failed to observe 
a provision of Community law, since the 
Commission has mentioned no actual example 
25 — Judgment in Case 11/76 Netherlands v Commission [1979] 
ECR 245, at paragraphs 8 and 9. 
I - 5712 
FRANCE v COMMISSION 
where tenders were in fact submitted by nomi­
nees. 
47. However, the Commission is unable to 
adduce such proof because in this connection 
the applicant carried out no checks. The only 
check made was whether the tenders were 
from independent (legal) persons. Thus, the 
Commission has no information before it for 
examining the more detailed circumstances. 
Admittedly, the Commission may also carry 
out its own checks. However, under the 
Court's case-law the management of EAGGF 
finances is principally in the hands of the 
national administrative authorities respon­
sible for ensuring that the Community rules 
are strictly observed. The Court went on to 
point out: 'That system, based on trust, does 
not involve any systematic supervision by the 
Commission, which moreover would in prac­
tice be impossible for it to carry out . . . Only 
the Member State is in a position to know 
and determine precisely the information nec­
essary for drawing up EAGGF accounts since 
the Commission is not close enough to obtain 
the information it needs from the economic 
operators.' 26 
48. Thus, since in the context of the clearance 
of EAGGF accounts the Commission is 
dependent upon information provided by the 
Member States, it is not possible for it here to 
give a specific example of an infringement 
under the tendering procedures. The Com­
mission is able — and required — merely to 
show that the applicant failed to examine all 
the criteria necessary for the purposes of 
compliance with the relevant provision. That 
the Commission did, particularly since the 
applicant itself does not deny that it is impos­
sible, even when undertakings are registered, 
to prevent legally distinct persons, by virtue 
of the economic links existing between them, 
from submitting concerted tenders. 
49. In connection with the question whether 
there is thus shown to be an infringement of 
Community law by the applicant, a matter 
also to be considered is whether the applicant 
was required to carry out any additional 
checks. In that connection reference should 
be made to Regulation N o 729/70. In the 
recitals in the preamble to that regulation it 
is stated, inter alia: 'Measures must be taken 
to prevent ... irregularities.' 27 The eighth 
recital states: '... Community expenditure must 
be made subject to close supervision; ... In 
addition to supervision carried out by Member 
States on their own initiative, which remains 
essential, provision should be made for veri­
fication by officials of the Commission and 
for it to have the right to enlist the help of 
Member States.' 
26 — Judgment in Netherlands v Commission, cited in footnote 
16, at paragraph 11. 27 — Seventh recital in the preamble to Regulation No 729/70. 
I -5713 
OPINION OF MR ALBER — CASE C-232/96 
50. Article 8 of the regulation, which reflects 
those recitals, provides in paragraph 1 thereof: 
'The Member States in accordance with 
national provisions laid down by law, regula­
tion or administrative action shall take the 
measures necessary to: 
— satisfy themselves that transactions 
financed by the fund are actually carried 
out and are executed correctly; 
— prevent and deal with irregularities; 
— recover sums lost as a result of irregulari­
ties or negligence. 
...' 
51. Under the Court 's case-law it is for 
the national authorities to monitor precise 
compliance with Community provisions. 28 
The extent of this obligation on the Member 
States in regard to the financing of the EAGGF 
was decided by the Court in its judgment in 
Exportslachterijen van Oordegem. In that 
judgment it was held in regard to Article 8(1) 
of Regulation No 729/70: 
'That provision, which expressly lays down 
in that specific area the obligations imposed 
on Member States by Article 5 of the Treaty, 
defines, the Court has said, the principles 
according to which the Community and the 
Member States must ensure the implementa­
tion of Community decisions on agricultural 
intervention financed by the Fund and combat 
fraud and irregularities in relation to those 
operations (judgment in BayWa, cited above, 
at paragraph 13). 
That article thus imposes on the Member 
States the general obligation to take the mea­
sures necessary to satisfy themselves that the 
transactions financed by the Fund are actu­
ally carried out and are executed correctly, 
even if the specific Community act does not 
expressly provide for the adoption of par­
ticular supervisory measures (Case C-8/88 
Germany v Commission [1990] ECR I-2321, 
at paragraphs 16 and 17).' 29 
28 — Judgment in Netherlands v Commission, cited in footnote 
16, at paragraph 11; judgments in Case C-366/88 France v 
Commission [1990] ECR I-3571, at paragraph 20; in Case 
C-8/88 Germany v Commission [1990] ECR I-2321, at para­
graph 17; and in Joined Cases 146/81, 192/81 and 193/81 
Baywa [1982] ECR 1503, at paragraph 26. 
29 — Judgment in Case C-2/93 Exportslachterijen van Oordegem 
[1994] ECR I-2283, points 17 and 18. 
I-5714 
FRANCE v COMMISSION 
52. It follows that an obligation on the part 
of Member States to carry out checks may 
subsist even if such a requirement is not 
expressly provided for in the relevant provi­
sion. 
53. Thus, the question arises whether in the 
specific case now before the Court the appli­
cant was required to carry out further checks, 
that is to say whether the Member State ought 
to have or could have done more and, if so, 
what? 
54. As the Commission here stated, the dis­
advantage for the Fund arises out of the fact 
that the submission of several tenders by an 
interested party by means of nominees encour­
ages the submission of speculative tenders. 
Yet if one has regard to the Commission's 
procedure against speculative tenders, it might 
be queried whether the applicant was required 
to take any further steps. 
55. In order to prevent speculative tenders 
whereby, in anticipation of a specific reduc­
tion coefficient, tenders are made in respect of 
a greater quantity of meat than is available, a 
security payment was introduced under 
Article 10(1), 30 in order to ensure that 'ten­
ders are bona fide and that the conditions laid 
down are complied with'. 31 That means that 
in that connection the Member States are 
merely obliged to ensure that the appropriate 
amount of security is deposited. They do not 
have to check whether the individual tenderer 
has offered more beef than is in his posses­
sion. 
56. In the present case, however, there was a 
further provision to be considered which 
could not be circumvented. An interested 
party desirous of selling his meat into inter­
vention could not submit more than one 
tender. That followed from the underlying 
rationale of intervention. It is true that that 
idea was only subsequently given concrete 
shape in Regulation N o 2456/93. 32 However, 
that does not alter the fact that prior to this 
there must already have been awareness of 
that idea. 
57. Thus, it is clear that the applicant ought 
to have carried out further checks in order to 
establish whether the tenders submitted were 
in fact from the same tenderer. That is par­
ticularly the case in light of the clear indica­
tions, already alluded to, of interconnections 
between individual tenderers. Even if it could 
not with certainty be concluded from those 
indications that there was an infringement of 
the second sentence of Article 9(2), the indi­
cations were however of such a nature as to 
30 — Article 10 of Regulation N o 859/89. 
31 — Third recital in the preamble to Regulation N o 859/89. 32 — Third recital in the preamble to Regulation N o 2456/93. 
I -5715 
OPINION OF MR ALBER — CASE C-232/96 
necessitate more precise checks, and that 'was 
the sole decisive factor. 
58. The applicant has submitted that moni­
toring of that kind could not be carried out 
since slaughtering came after the submission 
of tenders. It was therefore not possible to 
locate the meat in respect of which tenders 
were made since it did not yet exist in the 
form of meat. On the contrary, it was still out 
at pasture. In that connection, it should be 
stated that that was not the only way of 
checking whether the tender was submitted 
by a nominee. For example, an examination 
could be carried out as to the interconnection 
between the individual tenderers and whether 
it was at all possible for the individual ten­
derer to offer its own beef. Thus, Regulation 
N o 2456/93 provides that the Member States 
are to ensure that tenderers are independent 
of each other in terms of their management, 
staffing and operations. 33 Even before the 
entry into force of the 1993 regulation such a 
check could have been carried out. As has 
been shown, a monitoring obligation on the 
part of the Member States may subsist even 
if it is not expressly provided for in the rel­
evant regulation. In the present case this duty 
arose out of the rationale underlying inter­
vention long before the provision was enacted 
in Regulation N o 2456/93. The important 
factor in that connection is that the Member 
State should check whether in fact tenders are 
being made in respect of different quantities 
of meat. The manner in which it carries out 
those checks is for it to decide. This does not 
need to be expressly regulated by the Com­
mission. Accordingly, the Commission cannot 
be said, contrary to the applicant's submis­
sion, to be seeking to apply Regulation N o 
2456/93 retroactively to the facts of the present 
case. 
59. It must therefore be held that the appli­
cant ought to have carried out further checks 
but failed to do so. 
Proof of loss occasioned to the EAGGF — 
burden of proof 
60. It now falls to examine whether a reduc­
tion in the context of the clearance of accounts, 
as applied by the Commission, was justified 
on the facts. In the applicant's view that is 
not the case since the Fund suffered no loss. 
61. In order to answer that question, regard 
must be had to the Court's case-law on proof 
of loss and the burden of proof in the context 
of the clearance of EAGGF accounts. Thus, 
the Court has stated that only refunds granted 
and intervention undertaken in accordance 
with the Community rules within the frame­
work of the common organisation of agricul­
tural markets are to be financed by the 33 — Second sentence of Article 11(3). 
I - 5716 
FRANCE v COMMISSION 
EAGGF. 34 Finally, the Court went on, when 
the Commission refuses to charge certain 
expenditure to the EAGGF on the ground 
that it was incurred as a result of breaches 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 by the Commission are ful­
filled. 35 
62. In that connection, a question arises as to 
the requirements which the Commission's 
submission with regard to the occasioning of 
financial loss must satisfy. Under the Court's 
case-law, in cases where it cannot be estab­
lished to what extent a national measure 
incompatible with Community law has led to 
an increase in expenditure under a budgetary 
heading of the EAGGF, the Commission has 
'no choice' but to disallow all the expenditure 
in question, and not merely a certain per­
centage of it. 36 
63. There may be a case of that kind here 
since, precisely because the necessary checks 
were not made, the Commission was unable 
to establish to what extent the applicant's 
conduct occasioned loss to the EAGGF. It 
may only be speculated hypothetically what 
costs would not have been incurred if the 
applicant had carried out the proper checks. 
64. Conversely, in a case in which the Com­
mission called in question the correctness of 
figures notified by a Member State, the Court 
held: 'The Commission is required not to 
demonstrate exhaustively that there are irregu­
larities in the data submitted by the Member 
States but to adduce evidence of serious and 
reasonable doubt on its part regarding the 
figures submitted by the national authorities. 
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 verify 
the data required for the clearance of EAGGF 
accounts; consequently, it is for the State to 
adduce the most detailed and comprehensive 
evidence that its figures are accurate and, if 
appropriate, that the Commission's calcula­
tions are incorrect.' 37 
65. That case is, admittedly, not directly com­
parable with the present case since the Com­
mission is not alleging that the figures com­
municated to it by the applicant are incorrect. 
The point is rather that the figures could have 
been different if the applicant had carried out 
adequate checks. In this case also, however, 
the Commission has not merely submitted 
that the EAGGF suffered loss. Rather it has 
shown that the applicant infringed Commu­
nity law and the manner in which it did so. 
34 — Judgment in Netherlands v Commission, cited in footnote 
16, at paragraph 14, with further references. 
35 — Judgments in Netherlands v Commission, cited in footnote 
16, at paragraph 16, and United Kingdom v Commission, 
cited in footnote 17, at paragraph 14. 
36 — Judgments in Case C-50/94 Greece v Commission [1996] 
ECR I-3331, at paragraph 26, Joined Cases 15/76 and 16/76 
France v Commission [1979] ECR 321, at paragraph 32 et 
seq., and United Kingdom v Commission, cited in footnote 
17, at paragraph 13. 
37 — Judgment in Netherlands v Commission, cited in footnote 
16, at paragraph 17. 
I -5717 
OPINION OF MR ALBER — CASE C-232/96 
It has set out, furthermore, how that may 
have favoured speculative bids by tenderers. 
It has explained, finally, that that may have 
led to an erroneous appraisal of the market 
and thus to excessive buying-in of beef, pos­
sibly at increased prices. Thus, in any event, 
it had adduced credible evidence that it was 
possible for loss to have been incurred by the 
EAGGF. 
66. A more extensive evidentiary obligation 
cannot be imposed on the Commission since 
the abovementioned grounds for easing the 
burden of proof also subsist in this case. N o r 
can it be ruled out beyond doubt that the 
applicant's conduct jeopardised the func­
tioning of the common organisation of the 
market. 
67. It is therefore for the applicant — as is 
apparent from the judgment cited in point 61 
— to show that the conduct alleged against it 
did not lead to an increase in expenditure in 
the context of the EAGGF. The applicant 
submits that the 2% reduction cannot be jus­
tified on the ground that there was specula­
tion in connection with the intervention 
buying. It claims that the multiple tenders did 
not trigger a downward price spiral at the 
time of the intervention buying. That is not 
maintained by the Commission either. Rather 
it has submitted that, on account of the specu­
lation, the meat was bought into intervention 
at higher prices than was necessary. 
68. Moreover, the applicant claims that the 
risk with speculation is always high and does 
not depend on whether multiple tenders have 
been submitted. It points out that the security 
payment which is required in respect of a 
given quantity of meat always remains the 
same regardless of whether one or more ten­
ders have been submitted. That cannot be 
disputed. What the applicant fails to take into 
account, however, is that the level of the 
security payment retained may, as shown 
above, be reduced in the case of multiple ten­
ders. 
69. The applicant further submits that the 
Commission has never shown that a risk to 
the Fund actually existed. It has merely put 
forward considerations of a purely hypo­
thetical and theoretical nature. However, as 
has been shown, the Commission was neither 
able nor required to do more. 
70. The applicant also claims that the tender 
prices communicated to the Commission were 
not excessive. On the contrary, they fell within 
a broad range between the market price and 
the maximum price fixed by the Commission. 
The Commission was therefore perfectly able 
to assess the market situation. Had that not 
been the case, it argues, the intervention 
buying would necessarily have resulted in a 
rise in the market price. However, that was 
not the case. 
71. As the Commission rightly submits, the 
function of intervention is to support the 
I -5718 
FRANCE v COMMISSION 
market. To that extent it is questionable 
whether its effects could be so marked — 
even with increased buying-in — as to result 
in such a price rise. Moreover, the applicant 
refers in this context only to the question of 
the buying-in price. At least as important, if 
not even more so, is the question whether 
more meat was bought in than was necessary 
to support the market. In that regard, irre­
spective of the price, multiple tenders may 
give rise to an erroneous appraisal. 
72. Nor is it possible to uphold the appli­
cant's argument that the Commission could 
control buying-in prices and quantities pur­
chased by fixing a reduction coefficient. That 
possibility certainly exists for the Commis­
sion. However, the reduction coefficient is 
also governed by the quantity of meat ten­
dered. In that respect it cannot prevent an 
erroneous appraisal but may in some circum­
stances be the expression of such an erro­
neous appraisal. 
73. The applicant has thus been unable to 
show that the submission of multiple tenders 
did not lead to an increased risk to the Fund. 
It should also be pointed out in this connec­
tion that the applicant itself stated at the 
hearing that the risk of forfeiting the security 
payment is lower with multiple tenders. 
74. Since the Commission has thus at least 
adduced credible evidence that the applicant's 
conduct may have occasioned loss to the 
EAGGF, it is for the applicant to show that 
this was not the case. 
75. To distribute the burden of proof in that 
manner in the present case also appears rea­
sonable against the background of other judg­
ments of the Court in regard to the clearance 
of accounts. Thus, in cases where the Com­
munity law makes the payment of aid condi­
tional on the observance of certain formali­
ties relating to proof or checks, the Court has 
held that aid is not granted in conformity 
with Community law if those preconditions 
are not observed; The expenditure incurred in 
connection therewith could not be charged to 
the EAGGF even if it was clear that there 
had been no substantive irregularity. 38 
76. Likewise in connection with the obser­
vance of formalities, the Court has held: 'In 
view of the essential nature of the formalities 
which were not complied with and of the fact 
that it was not possible to check that the 
time-limit within which the products were to 
be exported was observed, and in view, there­
fore, of the probability of losses, or even 
fraud, to the detriment of the Community 
budget, the amount disallowed by the Com­
mission, which was limited to 2% of the 
expenditure involved, cannot be regarded as 
38 — Judgment in Case 327/85 Netherlands v Commission [1988] 
ECR 1065, at paragraph 25. 
I -5719 
OPINION OF MR ALBER — CASE C-232/96 
excessive and disproportionate.' 39 Thus, even 
the mere likelihood of losses may be used as 
a criterion for the purposes of the assessment. 
Such a likelihood subsists in the present case 
in light of the abovementioned factors and 
the absence of checks. 
77. The sole matter to be determined is there­
fore whether the applicant is able to show, on 
the basis of its submissions, that no loss was 
incurred by the EAGGF. 
78. Moreover, the applicant submits that 
during the relevant period security payments 
were forfeited in only very few cases. Accord­
ingly, there can have been no extensive specu­
lation in regard to tenders. The Commission's 
view is that this shows precisely how suc­
cessful the practice of so-called multiple ten­
ders is in reducing the risk to the individual 
tenderer. 
79. The applicant's argument cannot be 
accepted without reservation. As the Com­
mission states, the practice of so-called mul­
tiple tenders enables the tenderer to speculate 
with several tenders whereby, in the event of 
an unsuccessful speculation, the loss is reduced 
because the security payment is smaller for 
the smaller quantity. 
80. Accordingly, as the Commission has also 
stated, the practice of so-called multiple ten­
ders need not necessarily lead to a reduction 
in cases in which the security is forfeited. On 
the other hand, it does not necessarily follow 
from the fact that the security was retained 
only in a few cases that no more meat than 
necessary was sold to the intervention agency. 
Those tenderers who submitted an excessive 
bid and speculated on a higher reduction 
coefficient could not avoid losing the security 
even by purchasing the missing quantity of 
beef on the open market. This is of course 
also not in keeping with the intervention 
scheme but is clearly practised, as emerges 
from the submissions of the parties. Thus, 
under Article 12(1) of Regulation N o 859/89, 
a tender is to be rejected if the price proposed 
is higher than the maximum price for the 
invitation to tender concerned. Therefore, a 
quantity of meat rejected on that ground 
could be purchased by a tenderer who has 
offered a greater quantity of meat than he has 
at his disposal. The Commission also views 
this as an infringement of Article 12(2) of 
Regulation N o 859/89, which provides that 
rights and obligations arising from the invita­
tion to tender are not transferable. 
81. Nor can the applicant's submission that 
the prices in the alleged multiple tenders varied 
by only a few francs disprove the claim that 
speculation and possibly also loss to the 
EAGGF occurred. Speculating by indicating 
different prices is only one aspect which is 
complained of by the Commission. However, 
the main form which the speculation undoubt-
39 — Judgment in Case C-49/94 Ireland v Commission [1995] 
ECR I-2683, at paragraph 22. 
I - 5720 
FRANCE v COMMISSION 
edly takes is that of excessive bids. The fact 
that such bids cannot be ruled out and may 
result in a loss to the Fund cannot be refuted 
by the applicant's submission. 
82. Thus, it is clear that the applicant has 
been unable to refute the Commission's argu­
ment concerning financial loss incurred by 
the EAGGF. 
Possibility of a flat-rate calculation of the 
financial loss 
83. The applicant, however, also challenges 
the Commission's flat-rate calculation of the 
financial loss. Since there is no connection 
between that calculation and a loss, what is 
concerned here, the applicant submits, is more 
in the nature of a penalty. 
84. In that connection, it should be said that 
the applicant is incorrectly assuming that no 
connection with a loss can be established. As 
demonstrated above, 40 a loss to the EAGGF 
cannot be ruled out. Moreover, it is sufficient 
to refer to the Court's case-law in regard to 
cases in which the Commission does not dis­
allow the total expenditure affected by the 
infringement but endeavours to establish the 
financial consequences of the unlawful action 
by means of calculations. These calculations 
are based on an assessment of the situation 
which would have prevailed on the market in 
question had it not been for the infringement. 
In such cases, the Court has held, it is for the 
Member State to show that the conditions for 
obtaining the financing refused by the Com­
mission are fulfilled. 41 Thus, in this case also, 
it is for the applicant to show that the Com­
mission's assessment is erroneous. As dem­
onstrated above, it has been unable to do so. 
Commission's guidelines (Belle Group 
Report) 
85. Finally, the applicant claims in the alter­
native that the 2% reduction is dispropor­
tionate since no risk of loss to the Fund 
existed. That claim cannot be upheld because, 
as has been demonstrated, a financial risk to 
the Fund certainly did exist. 
86. Moreover, the applicant claims that the 
reduction is also disproportionate in relation 
to the other Member States. Thus, the Com­
mission itself stated that in France's case the 
infringements were less serious than in other 
Member States. It nevertheless provided for a 
40 — See points 60 to 82. 
41 —- Judgment in United Kingdom v Commission cited in foot­
note 17, at paragraphs 14 and 15. 
I - 5721 
OPINION OF MR ALBER — CASE C-232/96 
2% reduction for all the Member States, 
although in many cases for two years, whereas 
the reduction in France's case was limited to 
1992 only. Under those circumstances, 
according to the applicant, no correction 
should have been carried out, particularly as 
the risk to the Fund 'was minimal. 
87. The Commission rightly refers in this 
connection to the Court's case-law under 
which financing of expenditure can be disal­
lowed even as to 100% if the precise financial 
consequences of a measure contrary to Com­
munity law cannot be established. 42 
88. For the purposes of flat-rate correction, 
the Commission has adopted certain guide­
lines upon a proposal by an interservice group 
(Belle Group Report). The group proposed a 
reduction in flat-rate calculations by three 
possible percentages: 
— 2% where the deficiency is limited to parts 
of the control system of lesser importance 
or to the operation of controls which are 
not essential to the assurance of the regu­
larity of the expenditure, such that it can 
reasonably be concluded that the risk of 
loss to the EAGGF was minor; 
— 5% where the deficiency relates to impor­
tant elements of the control system or to 
the operation of controls which play an 
important part in the assurance of the 
regularity of the expenditure, such that it 
can reasonably be concluded that the risk 
of loss to the EAGGF was significant; 
— 10% where the deficiency relates to the 
whole of or fundamental elements of the 
control system or to the operation of con­
trols essential to assuring the regularity of 
the expenditure, such that it can reason­
ably be concluded that there was a high 
risk of widespread loss. 
89. Those guidelines also provide that no 
correction should be made in relation to cases 
of minor deficiencies in the controls where 
the risk of loss is assessed as minimal. That 
applies particularly to cases where the national 
authorities took effective steps to remedy the 
deficiencies as soon as they were brought to 
light, and where the deficiencies arose from 
difficulties in the interpretation of Commu­
nity provisions. 
90. Even if one could proceed on the basis 
that the deficiencies in the control system 
were attributable to the fact that the last 
phrase of Article 9(2) of Regulation N o 859/89 
was difficult to interpret, it must be pointed 
out that the criterion of (only) minor defi-42 — See footnote 36. 
I - 5722 
FRANCE v COMMISSION 
ciencies mentioned in those guidelines is not 
satisfied in this case. This is not a case of 
minor deficiencies in the control system. 
Rather it is a case 'where no checks were car­
ried out to ascertain whether multiple tenders 
were made in respect of the same quantity of 
meat or indeed whether they were made by 
nominees. In view of this and of the resulting 
financial risk, the 2% flat-rate correction 
chosen by the Commission appears to be 
proportionate and reasonable. 
91. Moreover, the applicant submits that the 
Commission should not have extended the 
2% reduction to the budgetary item relating 
to depreciation. The failure to observe certain 
conditions for the submission of tenders had 
no effect whatsoever on storage conditions. 
Such a financial correction bears no relation 
to the financial risk which existed for the 
Fund. 
92. In this connection, the Commission sub­
mits that the costs connected with deprecia­
tion bear a direct relation to the value of the 
quantities purchased, amounting to 50 to 55% 
thereof. It is therefore not clear how losses 
due to depreciation could be separated from 
other relevant items. That must be endorsed. 
The more meat is purchased by intervention 
— possibly as a consequence of excessive ten­
ders — the more losses arise through its 
depreciation. 
93. The applicant has thus been unable to 
show that the Commission erred in its assess­
ment of the financial correction to be applied 
to the clearance of accounts. 
94. Accordingly, the objections raised by the 
applicant against the Commission decision 
cannot succeed. 
Intervention measures concerning public 
storage of cereals 
95. In this connection, the applicant chal­
lenges the Commission decision from three 
points of view. Firstly, it claims that the mea­
sures adopted by the French authorities in 
the sphere of intervention for cereals were 
sufficient. The Commission, on the other 
hand, is of the opinion that the Fund was 
exposed to serious financial risks as a conse­
quence of existing deficiencies in the control 
system. 
96. In support of its submission, the appli­
cant claims that certain of the measures 
demanded by the Commission are not laid 
down in the relevant Community provisions. 
I - 5723 
OPINION OF MR ALBER — CASE C-232/96 
97. In this connection, reference should be 
made to Article 6 of Commission Regulation 
(EEC) N o 689/92 of 19 March 1992 fixing 
the procedure and conditions for the taking-
over of cereals by intervention agencies, 43 
which states: 'The intervention agencies shall, 
where necessary, adopt additional procedures 
and conditions for taking over, compatible 
with this Regulation, to take account of any 
special conditions existing in the Member 
State in question; ..." 
98. Irrespective of the foregoing, it is never­
theless for Member States, as has already been 
demonstrated, to carry out all the necessary 
checks in the context of the EAGGF, even if 
those checks are not expressly contained in 
the text of the relevant provisions. 
99. Furthermore, the applicant submits that 
the measures provided for by it were suffi­
cient and that the checks were carried out as 
prescribed. It is questionable whether that 
submission is sufficient to refute the Com­
mission's opinion. 
100. That is so a fortiori since, as the appli­
cant itself states, according to the Concilia­
tion Body the French authorities do not dis­
pute that they had to modify their original 
system in order to comply with the Commis­
sion's requirements. According to the appli­
cant, however, the improvements notified were 
not carried out until 1993. 
101. According to the Court's case-law, the 
Commission is obliged on each occasion to 
give reasons for its decision finding an absence 
of, or defects in, inspection procedures oper­
ated by the Member State in question. 44 In 
the case cited, the Commission argued, inter 
alia, that the competent authorities had been 
unable to provide information either on the 
frequency of on-the-spot inspections or on 
the system of communication between the 
supervisory authorities and local officials. 
They were also said to have been unable to 
comment on the failure to draw up written 
reports. From the Commission's point of 
view, those factors constituted sufficient rea­
sons for its decision. It was now for the 
applicant to show that the Commission's find­
ings were inaccurate. It was not sufficient in 
this regard, the Court went on, for the appli­
cant to contend that administrative checks as 
well as on-the-spot inspections were in fact 
carried out, but without producing any evi­
dence for it. Since it had thus failed to show 
that checks had been carried out, those find­
ings were capable of giving rise to serious 
doubts as to the existence of an adequate and 
effective series of supervisory measures and 
inspection procedures. 45 
43 — OJ 1992 L 74, p. 18. 
44 — Judgment in Case C-8/88 Germany v Commission [1990] 
ECR I-2321, at paragraph 23. 
45 — Judgment in Germany v Commission, cited in footnote 44, 
at paragraph 26 et seq. 
I - 5724 
FRANCE v COMMISSION 
102. In this case also, the applicant has basi­
cally put forward mere assertions. That cannot 
suffice in view of the fact that the Commis­
sion found that cereals which should have 
been stored under different systems had been 
mixed together or substituted for one another. 
That allegation has not been denied by the 
applicant. The latter has merely pointed out 
that cereals which were supposed to be stored 
in the context of intervention measures were 
not concerned. Nevertheless, as the Commis­
sion rightly argues, it can be inferred from 
this that the effectiveness of the control system 
was questionable and that there was the risk 
that cereals stored under different arrange­
ments were not strictly separated from each 
other. 
103. The applicant has thus been unable to 
show that the measures adopted by it were 
sufficient and that there was no breach of 
Regulation N o 729/70. The other submissions 
made by the applicant relate to the 1993 mar­
keting year which cannot be used by way of 
comparison since, according to the applicant, 
the notified improvements to the system were 
carried out in December 1993. 
104. Secondly, the applicant pleads a breach 
of the principle of legal certainty. It refers in 
this connection to the Commission's commu­
nication indicating that no financial correc­
tions would be made in view, in particular, of 
the improvements which had been notified 
by the French authorities. The fact that the 
Commission did, after all, make a correction 
for 1992, was a breach of legal certainty. 
105. It should be said in this connection that 
the Commission had based that announce­
ment on the fact that the French authorities 
for their part had notified improvements. 
According to the Commission, those improve­
ments were not carried out. (Thus the Com­
mission found that there was substitution 
and/or mixing of cereals with different storage 
arrangements.) 
106. The applicant argues in this connection 
that it is also a breach of legal certainty if 
decisions are based on provisions other than 
those applicable to intervention measures. 
However, as has already been demonstrated, 
it is at least possible to infer from this that 
there were deficiencies in the control system. 
The applicant would at least have had to 
submit that such substitution was allowed in 
the case of the other storage methods men­
tioned. This it has failed to do. 
107. On the other hand, it should be pointed 
out that the Commission also made clear in 
its communication that, if a missing quantity 
were established as a result of substitution 
between individual cereal storages arrange-
I - 5725 
OPINION OF MR ALBER — CASE C-232/96 
ments, substantial financial corrections would 
be made. If such action is then eventually 
taken, that cannot be a breach of legal cer­
tainty. 
108. The applicant further submits that the 
Commission should not have relied on mere 
rumours regarding substitution between dif­
ferent types of storage. As has already been 
demonstrated above, the matters put forward 
by the Commission were sufficient in this 
connection. 
109. Finally, the applicant claims that the 
Commission has been unable to cite any 
examples of substitution occurring between 
cereals under different storage arrangements. 
In this connection, reference should be made 
to the Court's case-law. The Court has held 
that where the Commission has not adduced 
any evidence relating to individual cases in 
which the agricultural rules were not com­
plied with, that does not mean that the super­
visory system existing in the Member State 
concerned guarantees the correct application 
of those rules. Proven individual cases con­
stitute an additional factor which may sub­
stantiate the Commission's criticisms 
regarding the effectiveness of the Member 
State's supervisory system. 46 Moreover, the 
applicant itself has denied that such substitu­
tions occurred. 
110. Consequently, it is not possible to dis­
cern any breach of the principle of legal cer­
tainty. 
111. Finally, the applicant relies in the alter­
native on a breach of the principle of propor­
tionality. In its opinion, the 2% reduction 
should not also have been applied to budget 
item 10-13, which concerns losses on the sale 
of stocks. Such losses, it argues, are fully offset 
by Commission Regulation (EEC) N o 
3597/90 of 12 December 1990 on the 
accounting rules for intervention measures 
involving the buying-in, storage and sale of 
agricultural products by intervention agen­
cies. 47 To that extent, it argues, the Fund 
incurred no losses whatever under that budget 
item. 
112. The Commission, on the other hand, 
submits that the item in question relates to 
financial consequences of losses in the con­
text of sales. Since it established that there 
were missing quantities, it argues that this, in 
combination with the existing control defi­
ciencies, could result in losses to the Fund. 
113. Whether there were in fact missing quan­
tities in this case is a matter of dispute between 
the parties. As has already been demonstrated, 
however, it may be assumed that there were 
deficiencies in the control system. That being 
the case, it is not possible to concur with the 
applicant when it claims that such losses on 
46 — Judgment in Netherlands v Commission, cited in footnote 
16, at paragraph 33. 47 — OJ 1990 L 350, p. 43. 
I - 5726 
FRANCE v COMMISSION 
sales were immediately offset. That would 
presuppose extensive controls which, how­
ever, did not exist. To that extent losses were 
liable to occur in the context of budget item 
10-13. There is thus no breach of the prin­
ciple of proportionality. 
114. N o ground has therefore been disclosed 
for annulling the Commission decision. 
Costs 
115. Under the first subparagraph of Article 
69(2) of the Rules of Procedure of the Court 
the unsuccessful party is to be ordered to pay 
the costs if they have been applied for in the 
successful party's pleadings. 
D — Conclus ion 
116. I therefore p ropose that the C o u r t should: 
(1) dismiss the action; 
(2) o rde r the F rench Republ ic t o p a y the costs . 
I - 5727