Judgment — ECLI:EU:C:1998:450
Date: 1998-10-01
Language of the case: Danish
Court formation: Fifth Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Agriculture and Fisheries;Beef and veal;European Agricultural Guidance and Guarantee Fund (EAGGF)
Concepts: Statement of reasons;Procedure for clearance of accounts;Conditions subject to which expenditure is borne by the EAGGF;Domestic market
Procedure: Action for annulment - unfounded
Origin: Denmark

Summary Reports 10 the Commis­
sion justifies that reduction on the ground 
that the Kingdom of Denmark did not check 
whether multiple tenders had been submitted. 5 — Fourth recital in the preamble to and Article 5 of Council 
Regulation (EEC) N o 805/68 of 27 June 1968 on the common 
organisation of the market in beef and veal (OJ, English Spe­
cial Edition 1968 (I), p. 187). 
6 — Cited in footnote 3. 
7 — Third recital in the preamble to and Article 7 et seq. of Regu­
lation N o 859/89. 
8 — Second recital in the preamble to Council Regulation (EEC) 
N o 571/89 of 2 March 1989 amending Regulation (EEC) N o 
805/68 on the common organisation of the market in beef and 
veal, repealing Regulation (EEC) N o 1302/73 and extending 
Regulation (EEC) N o 4132/88 (OJ 1989 L 61, p. 43). 
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 Guidance and Guarantee Fund 
and in respect of certain expenditure for 1993 (OJ 1996 
L 117, p. 19). 
10 — Document W320/94 and Document VI/6355/95. 
I - 5763 
OPINION OF MR ALBER — CASE C-233/96 
8. This point would have been easy to ascer­
tain since, as the Commission points out, 17 
tenders lodged in one tendering procedure 
originated from only seven sources. One par­
ticularly large group alone was the source of 
eight tenders at eight different prices. By 
matching names, addresses, fax numbers, secu­
rity deposits and payments, the E A G G F was 
able to establish for each tendering procedure 
it examined that many of the individual ten­
ders originated from the same source. It was 
also evident from the invoices submitted that 
payment was to be made to other companies. 
The Danish authority must therefore, 
according to the Commission, have been aware 
of the conduct of the tenderers from the 
beginning. 
9. The approach of the competent Danish 
authority was therefore, in the Commission's 
view, not compatible with the Community 
rules and discriminated against participants 
who had observed the rules. 
10. In the applicant's view, however, all the 
rules concerning intervention were observed. 
It made sure that each natural or legal person 
registered as a company did not submit more 
than one tender per category in response to 
each invitation to tender. The checks carried 
out by the Danish authorities involved ascer­
taining whether the tender came from a com­
pany registered with them. There was no 
reason at that time to carry out more tho­
rough checks. 
11. 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 
12. 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 
13. The distinction between the concepts of 
'tenderer' and 'interested party' is, in the 
Commission's view, of significance in this 
connection. According to the Commission, it 
follows from the difference in -wording that 
interested parties are not to be equated with 
tenderers. 'Interested parties' are not only 
those persons who lodged tenders in the 
course of their economic activities. That con­
cept embraces a much wider class of persons. 
It is not therefore only the individual ten­
derer, that is to say the person who actually 
lodges the tender, who is prohibited from 
lodging more than one tender. The prohibi­
tion covers all persons tendering in respect of 
the same quantity of meat. 
11 — Emphasis added. 
12 — Emphasis added. 
I - 5764 
DENMARK v COMMISSION 
14. On the other hand, the applicant, taking 
a narrow view, is of the opinion that the con­
cepts of 'tenderer' and 'interested party' are 
interchangeable since there is no discernable 
difference between them. Neither the pre­
amble nor the text of the regulation itself 
provides any clarification of the concept of 
'tenderer'. It should therefore be taken to 
mean any independent natural or legal person 
submitting a tender in response to an invita­
tion to tender. The prohibition in the last 
phrase of Article 9(2) confines itself to speci­
fying that the person acting as tenderer may 
submit only one tender. 
15. The fact that this provision covers other 
persons than the tenderer is, the applicant 
submits, apparent only on a reading of Article 
11(3) of Commission Regulation (EEC) N o 
2456/93 of 1 September 1993 laying down 
detailed rules for the application of Regula­
tion 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. 
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.' 
16. Since the applicant, unlike the Commis­
sion, was of the opinion that the last phrase 
of Article 9(2) was fully complied with in the 
context of the tendering procedure operated 
by it, it ultimately referred the matter to the 
Conciliation Body. 14 According to the appli­
cant, the Conciliation Body concluded that it 
could not state with any certainty that the 
conduct of the Member States was in breach 
of the regulation. The Conciliation Body ruled 
that in any event it had been considered 
13 — OJ 1993 L 225, p. 4. 
14 — Established by 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 Sec-
tion (OJ 1994 L 182, p. 45). 
I - 5765 
OPINION OF MR ALBER — CASE C-233/96 
necessary to clarify the rules contained in 
Regulation N o 2456/93 and that the Com­
mission had failed to react before 1993. 
17. 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 in 1992, and it alerted the 
Kingdom of Denmark forthwith. 
18. In its decision the Commission confirmed 
the 2% reduction proposed in each of its 
Summary Reports, whereupon the applicant 
in July 1996 brought these proceedings before 
the Court in which it sought: 
— the annulment of the decision 15 in so far 
as it means that the following expenditure 
of the Kingdom of Denmark cannot be 
financed by the Guarantee Section of the 
EAGGF: DKK 26 867 909 in respect of 
intervention purchases of beef and veal 
during the financial years 1991 and 1992; 
— an order that the Commission pay the 
costs of these proceedings. 
The Commission contended that the Court 
should: 
— dismiss the application, and 
— order the applicant to pay the costs of 
these proceedings. 
C — Opinion 
Meaning and purpose of the last phrase of 
Article 9(2) 
19. First, the applicant claims that the Com­
mission has misconstrued the last phrase of 
Article 9(2). That provision, it argues, merely 
requires every natural or legal person applying 
to the intervention agency as a tenderer to 
submit one tender only. Regulation N o 859/89 
is silent on any connections between indi­
vidual tenderers which may need to be borne 
in mind. The last phrase of Article 9(2) merely 15 — See footnote 9. 
I - 5766 
DENMARK v COMMISSION 
governs the number of tenders. Nothing is 
said concerning the characteristics of the ten­
derers. The number of tenders was checked 
in Denmark. The national authority verified 
whether each individual tenderer was a reg­
istered legal person. Whether the individual 
undertakings which submitted tenders may 
have belonged to the same group of under­
takings was not verified in Denmark since 
there was no necessity and also no legal basis 
for doing so. 
20. The applicant states that, in accordance 
with the Court's case-law, it is for the Com­
mission, in the context of the clearance of the 
accounts of the EAGGF, to show that a 
Member State had contravened Community 
rules. The Commission, as demonstrated by 
the applicant, was not able to adduce such 
proof. Moreover, the applicant points out that 
rules which may have financial consequences 
for the Member States must be clearly and 
precisely formulated. 
21. According to the case-law of the Court, 
'only refunds granted and intervention under­
taken in accordance with the Community 
rules within the framework of the common 
organisation of agricultural markets are to be 
financed by the EAGGF'. 16 In that connec­
tion, it is for the Commission to prove the 
existence of an infringement of the rules gov­
erning the common organisation of the agri­
cultural market. 17 
22. 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 the 
EAGGF accounts, an interpretation which 
was not dictated by the normal meaning of 
the words used'. 18 
23. Accordingly, it must be examined whether 
the terms in which the last phrase of Article 
9(2) of Regulation N o 859/89 is couched sat­
isfies these 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 last phrase of Article 9(2). 
The pleadings mainly speak of 'multiple' ten­
ders. Those cannot be tenders submitted by 
one and the same tenderer under one name, 
for such tenders are not lawful in Denmark 
either. As it is also clear from the pleadings, 
the Commission is also not challenging every 
kind of connection between the individual 
16 — Case C-48/91 Netherlands v Commission [1993] ECR I-5611, 
paragraphs 13 and 14, with further references. 
17 — Netherlands v Commission (cited in footnote 16, paragraph 
18, with further references); Case C-281/89 Italy v Com­
mission [1991] ECR I-347, paragraph 19, with further refer­
ences; Case 347/85 United Kingdom v Commission [1988] 
ECR 1749, p. 16; judgment in Case C-55/91 Italy v Com­
mission [1993] ECR I-4813, paragraph 13, with further refer­
ences. 
18 — Case 349/85 Denmark v Commission [1988] ECR 169, para­
graph 16. 
I - 5767 
OPINION OF MR ALBER — CASE C-233/96 
tenders. For example, it states that, where a 
person operates two independent slaughter­
houses, each of them may submit a tender. As 
the Commission explained at the hearing, in 
its view only tenders relating to the same 
quantity of meat are unlawful under the last 
phrase of Article 9(2). Where, therefore, an 
interested party offers his meat not only him­
self but also through the intermediary of 
nominees, that, according to the Commission, 
is in breach of Community provisions and 
must be prohibited by the authorities of the 
Member States. 
24. 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 
it were possible to submit several tenders via 
nominees, thus circumventing the prohibitory 
provision. 
25. The intervention scheme, the Commis­
sion contends, is jeopardised, as has been 
demonstrated, by the practice in regard to 
intervention buying-in in Denmark. By the 
buying-in of excessive quantities greater costs 
arise, it is submitted, than are necessary in 
order to support the market. Moreover, 
equality of access for all interested parties 
required under Article 6(6) of Regulation 
N o 805/68, as amended by Regulation N o 
571/89, is not guaranteed. 
26. 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 cannot be 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. 
27. In the Commission's view, this conclu­
sion also 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 in actual fact 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 under­
stood as meaning a person interested in selling 
his meat into intervention. 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 nomi­
nees, 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 regulations dealing with inter­
vention measures for beef and veal, it may be 
seen that the abovementioned distinction is 
not always adhered to. Thus, for example, the 
first recital in the preamble to Regulation 
19 — Case C-283/91 Contarini [1992] ECR I-6359, paragraph 14, 
and Joined Cases C-296/93 and C-307/93 France and Ire­
land v Commission [1996] ECR I-795, paragraph 21. 
I - 5768 
DENMARK v COMMISSION 
(EEC) N o 2271/90, 20 provides that 'tender­
ers should only be allowed to submit a single 
tender ... for each category in response to 
each invitation to tender'. Moreover, the 
German version of Article 11(3) of Regula­
tion N o 2456/93, which replaced Article 9 of 
Regulation N o 859/89, uses the terms 'Inter­
essant' [interested party] and 'Bieter' [ten­
derer] in connection with the submission of 
tenders. 21 
28. Thus, no further conclusions may be 
drawn from the distinction between 'tenderer' 
and 'interested party' in Article 9. 
29. However, it is more instructive to have 
regard to the provisions which preceded those 
at issue in the present proceedings. Thus, in 
1990 it was made possible to submit several 
tenders at different prices. Under Regulation 
(EEC) N o 1282/90 22 the last phrase of Article 
9(2) received the following formulation: 
'They may submit more than one tender, at 
different prices, for each category in response 
to each invitation to tender.' 
30. That provision was however repealed 
shortly afterwards in August 1990. 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'. 
31. In the applicant's view that regulation 
only governs the number of tenders which 
the tenderer may submit. That number was 
further reduced because the administration 
had been overwhelmed by the number of 
tenders. The purpose of Regulation N o 
2271/90 was therefore, according to the appli­
cant, to lighten the administration's workload 
by reducing the number of tenders. This pur­
pose 'was achieved in Denmark. The require­
ments of the 'new' version of the last phrase 
of Article 9(2) of Regulation No 859/89 were 
thus met. 
32. What is more, 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 quan­
tity of meat. The meaning and purpose of the 
provision here at issue in the last phrase of 
Article 9(2) is thus 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 cir­
cumvented by recourse to nominees. 
20 — Commission Regulation of 1 August 1990 amending Regula­
tion No 859/89 (OJ 1990 L 204, p. 45). 
21 — This distinction is also reflected in the English version, which 
speaks of 'interested parties' and 'tenderer'. 
22 — Commission Regulation of 15 May 1990 amending Regula­
tion No 859/89 (OJ 1990 L 126, p. 31). 
I - 5769 
OPINION OF MR ALBER — CASE C-233/96 
33. 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. 
34. 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 (EEC) N o 729/70, 23 be borne by 
the Member States. 24 That strict interpreta­
tion of the conditions under which expendi­
ture is to be borne by the EAGGF is neces­
sary in view of the objectives of Regulation 
N o 729/70. Since the management of the 
common agricultural policy must ensure 
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 
35. 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 individual tenderers 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 obligation under the terms of Article 9 to 
examine possible connections between indi­
vidual tenderers. That merely goes to the 
question as to the manner in which obser­
vance of a prohibitory provision such as that 
contained in the last phrase of Article 9(2) 
can be monitored. 
36. In this connection it is also irrelevant that 
during the preparation of Regulation N o 
859/89 the Commission proposed the addi­
tion of further details concerning the types of 
tenderers who would be accepted, but those 
details were not included in the regulation. 
The applicant infers from this that the regula­
tion was specifically intended not to define 
individual tenderers more precisely. Again, it 
follows, according to the applicant, that no 
further restrictions can be imposed on the 
term 'tenderer' other than that a tenderer 
should be a single, independent, natural or 
legal person under national law. 
37. Even if it were possible to draw this con­
clusion from those circumstances this would 
not alter the fact that in the light of the 
23 — Council Regulation (EEC) N o 729/70 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 N o 729/70 provides: 
'Intervention intended to stabilise the agricultural markets, 
undertaken according to Community rules within the frame­
work of the common organisation of agricultural markets, 
shall be financed under Article 1(2)(b)'. 
25 — Case 11/76 Netherlands v Commission [1979] ECR 245, 
paragraphs 8 and 9. 
I - 5770 
DENMARK v COMMISSION 
meaning and purpose of the last phrase of 
Article 9(2) the involvement of nominees is 
prohibited. 
38. 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. 
Monitoring obligation on the part of the 
Member State 
39. 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. 
40. It is clear that in Denmark tenders are 
examined only to see whether they originate 
from different legal persons. No further exam­
ination 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 where tenders were in fact submitted 
by nominees. 
41. However, the Commission is unable to 
adduce such proof because in this respect the 
applicant carried out no checks at all. The 
only check made was whether the tenders 
were from independent (legal) persons. Thus, 
the Commission has no information before it 
for examining the specific 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. As 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 practice be impossible for it to carry out. 
... Only the Member State is in a position to 
know and determine precisely the informa­
tion necessary for drawing up EAGGF 
accounts since the Commission is not close 
enough to obtain the information it needs 
from the economic operators'. 26 
42. 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 has done. 
26 — Netherlands v Commission (cited in footnote 16, paragraph 
11). 
I - 5771 
OPINION OF MR ALBER — CASE C-233/96 
43. The Kingdom of Denmark has moreover 
stated that there may have been a certain 
amount of speculation in order to limit the 
risk of forfeiting the security payment. 
44. 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 ... any irregularities'. 27 The eighth 
recital states: 'Community expenditure must 
be made subject to close supervision. In addi­
tion 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'. 
45. Article 8 of the regulation, which reflects 
these 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. 
...' 
46. Under the Court's case-law, it is for the 
national authorities to monitor precise com­
pliance 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 
27 — Seventh recital. 
28 — Netherlands v Commission (cited in footnote 16, paragraph 
11), Case C-366/88 France v Commission [1990] ECR I-3571, 
paragraph 20, Case C-8/88 Germany v Commission [1990] 
ECR I-2321, paragraph 17 and Joined Cases 146/81, 192/81 
and 193/81 BayWa [1983] ECR 1503, paragraph 26. 
I - 5772 
DENMARK v COMMISSION 
judgment it was held in regard to Article 8(1) 
of Regulation N o 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 (BayWa, cited above, 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, 
paragraphs 16 and 17).' 29 
47. 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. 
48. 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? 
49. As the Commission has stated, the disad­
vantage 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 
action against speculative tenders as such, it 
might be queried whether the applicant was 
required to take any further steps. 
50. 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, 30 
a security payment was introduced under 
Article 10(1) to ensure that 'tenders 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 possession. 
29 — Case C-2/93 Exportslachterijen van Oordegem [1994] ECR 
I-2283, paragraphs 17 and 18. 
30 — Article 10 of Regulation No 859/89. 
31 — Third recital in the preamble to Regulation No 859/89. 
I - 5773 
OPINION OF MR ALBER — CASE C-233/96 
51. 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. 
52. 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 the light of the clear indi­
cations, already alluded to, of interconnec­
tions between individual tenderers. Even if it 
could not with certainty be concluded from 
those interconnections that there was an 
infringement of the last phrase of Article 9(2), 
the indications were however of such a nature 
as to necessitate more precise checks, and that 
was the sole decisive factor. 
53. The applicant submitted that monitoring 
of that kind could not be carried out since 
there was no time during the tendering pro­
cedure to carry out extensive checks. The 
applicant also states, however, that the checks 
introduced by Regulation N o 2456/93 were 
carried out in Denmark. Those checks were 
undoubtedly intended to prevent the involve­
ment of nominees. 33 The applicant cannot 
therefore claim that the checks that were 
required before the adoption of the 1993 
regulation were not possible due to lack of 
time. In the present case this duty arose out 
of the rationale underlying intervention long 
before the provision was enacted in Regula­
tion 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 Commission. 
Accordingly, the Commission cannot be said, 
contrary to the applicant's submission, to be 
seeking to apply Regulation N o 2456/93 ret­
roactively to the facts of the present case. 
54. 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 
55. 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. 
32 — Third recital in the preamble to Regulation N o 2456/93. 
33 — Third recital in the preamble and the second sentence of 
Article 11(3). 
I - 5774 
DENMARK v COMMISSION 
56. 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 
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 
57. 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 the expenditure under a bud­
getary heading of the EAGGF, the Commis­
sion has 'no choice' but to disallow all the 
expenditure in question, and not merely a 
certain percentage of it. 36 
58. 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 has 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. 
59. 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 
60. That case is admittedly not direcdy 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 
34 — Netherlands v Commission (cited in footnote 16, paragraph 
14) with further references. 
35 — Netherlands v Commission (cited in footnote 16, paragraph 
16) and United Kingdom v Commission (cited in footnote 
17, paragraph 14). 
36 — Case C-50/94 Greece v Commission [1996] ECR I-3331, 
paragraph 26, Joined Cases 15/76 and 16/76 France v Com­
mission [1979] ECR 321, paragraph 32 et seq., and United 
Kingdom v Commission (cited in footnote 17, paragraph 13). 
37 — Netherlands v Commission (cited in footnote 16, paragraph 
I - 5775 
OPINION OF MR ALBER — CASE C-233/96 
adequate checks. In this case also, however, 
the Commission has not merely submitted 
that the EAGGF suffered loss. Rather it 
showed that the applicant had infringed Com­
munity law and the manner in which it had 
done so. It has set out, furthermore, how that 
may have favoured speculative bids by ten­
derers. It has explained, finally, that that may 
have given rise to an erroneous appraisal of 
the market and thus to excessive buying-in of 
beef, possibly at increased prices. Thus, in 
any event, it has adduced credible evidence 
that it was possible for loss to have been 
incurred by the EAGGF. 
61. 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. Nor 
can it be ruled out beyond doubt that the 
applicant's conduct jeopardised the func­
tioning of the common organisation of the 
market. 
62. It is therefore for the applicant — as is 
apparent from the judgment cited in point 56 
— 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 Commission is not depen­
dent on tenders for sale into intervention for­
warded by the Member States but has other 
possibilities available to it for obtaining infor­
mation on the prevailing market situation. 
63. In that connection the applicant refers to 
Commission Regulation (EEC) N o 610/77 of 
18 March 1977 on the determination of prices 
of adult bovine animals on representative 
Community markets and the survey of prices 
of certain other cattle in the Community. 38 
Under that regulation the Commission 
receives all the information necessary to enable 
it to assess the market situation. In this regard, 
it should be noted that this means the infor­
mation needed in order to determine the 
prices recorded on the representative markets 
of the Community. The respective levels of 
prices on the markets are important for 
deciding whether it is appropriate to imple­
ment intervention measures. This is not the 
case as regards the determination of prices 
and quantities in the context of intervention. 
These are determined, pursuant to Regulation 
N o 571/89, on the basis of the tenders 
received. 39 
64. It follows that these figures relating to 
tenders have at least a part to play in the 
appraisal of the market and the determination 
of prices and quantities which are bought in. 
Thus it cannot be precluded that excessive 
bids could give rise to an erroneous assess­
ment. 
65. This remains the case even bearing in 
mind that, as the applicant submits, the Com­
mission alone can have a global view of the 
market situation and that it alone decides on 
the quantity of meat to be withdrawn from 
the market. The Commission can also, the 
38 — OJ 1977 L 77, p. 1. 
39 — Second recital in the preamble to Regulation No 571/89 
(cited above in footnote 8). 
I - 5776 
DENMARK v COMMISSION 
applicant adds, determine a maximum price, 
so that the price level is maintained. On this 
point, it should be observed that the Com­
mission takes all these decisions inter alia on 
the basis of the tenders submitted to it. If 
those tenders are speculative they may give 
rise to an erroneous assessment. 
66. The applicant submits moreover that the 
tendering procedure is by definition specula­
tive and that it cannot therefore reflect the 
true situation on the market. It justifies this 
assertion by the fact that the slaughter date is 
subsequent to the submission of tenders. When 
the undertakings submit tenders, they do so 
in relation to the meat which they can obtain 
on the market in the days that follow. The 
purpose of intervention is however to with­
draw from the market meat which is currently 
with the tenderer and cannot be disposed of 
on the normal market. So, for example, a cattle 
breeder must be able to assess even before the 
slaughter date the quantity of meat which he 
intends to, or must, sell into intervention. In 
that case it is not a question of buying meat 
which he will still be able to obtain in the 
days that follow. 
67. 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. 
68. To distribute the burden of proof in that 
manner in the present case also appears to be 
reasonable against the background of other 
judgments of the Court in regard to clearance 
of accounts. Thus in cases where the Com­
munity rules make payment of aid conditional 
on the observance of certain formalities 
relating to proof or checks having been 
observed, 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 substan­
tive irregularity. 40 
69. 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 
excessive and disproportionate.' 41 Thus, even 
the mere likelihood of losses may be used as 
a criterion for the purpose of the assessment. 
Such likelihood also subsists in the present 
case in the light of the abovementioned fac­
tors and the absence of checks. 
40 — Case 327/85 Netherlands v Commission [1988] ECR 1065, 
paragraph 25. 
41 — Cese C-49/94 Ireland v Commission [1995] ECR I-2683, 
paragraph 22. 
I - 5777 
OPINION OF MR ALBER — CASE C-233/96 
70. The sole matter to be determined is there­
fore whether the applicant is able to prove, 
on the basis of its submissions, that no loss 
was incurred by the EAGGF. The applicant 
submits, first, that it is for the Commission to 
show that a loss was incurred. That, as is 
demonstrated above, is not correct. 
71. The applicant also cites examples in order 
to show that the alleged multiple tenders give 
tenderers no advantage. As for the examples 
cited by the Commission in order to show 
that multiple tenders encourage speculation 
and lead to an erroneous assessment of the 
market, the applicant submits that it is pos­
sible to think not only of examples where the 
splitting of a single tender is to the tenderer's 
advantage since it reduces the risk of losing 
the security. It claims that it is also possible 
to think of examples where a single tender is 
to the tenderer's advantage. 
72. It cannot be excluded that, if certain types 
of speculation and various reduction coeffi­
cients were assumed, it would also be pos­
sible to think of examples where a single 
tender would have been more advantageous 
for the tenderer. This does not however invali­
date the Commission's assertion that the split­
ting of a tender into several smaller tenders 
reduces the risk of losing the security deposit. 
Even if that particular risk could not, as such, 
be reduced, the amount of the security retained 
could still be reduced. 
73. Thus it is clear that the applicant has been 
unable to refute the Commission's argument 
concerning financial loss incurred by the 
EAGGF. 
Possibility of a flat-rate calculation of the 
financial loss 
74. The applicant, however, also challenges 
the flat-rate calculation of the financial loss 
undertaken by the Commission. Since there 
is no connection between that calculation and 
any loss, what is concerned here, the appli­
cant submits, is a penalty for which there 
must be an express legal basis. N o such basis 
is, however, apparent. 
75. 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, 42 a loss to the EAGGF 
cannot be ruled out. The applicant submits 
also that in this case it is possible to make a 
precise calculation, so that the Commission 
does not have to have recourse to a flat-rate 
calculation. It is impossible to agree with the 
applicant on this because, as has already been 
shown, it is possible only to speculate hypo-
thetically on what costs may not have been 
incurred. Moreover, it is sufficient to refer to 
the Court's case-law in regard to cases in 
which the Commission does not disallow the 
42 — Sec points 55 to 73. 
I - 5778 
DENMARK v COMMISSION 
total expenditure affected by the infringement 
but endeavours to establish the financial con­
sequences 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 gone on to hold, it is for the 
Member State to show that the conditions for 
obtaining the financing refused by the Com­
mission are fulfilled. 43 Thus, in this case it is 
for the applicant to show that the Commis­
sion's assessment is erroneous. As demon­
strated above, it has been unable to do so. 
(Reference should be made to point 76 et seq. 
of the Opinion of 24 March 1998 in Case 
C-209/96 United Kingdom v Commission 
regarding the methods for making the flat-
rate calculation and the guidelines which the 
Commission has laid down in this regard.) 
Infringement of Article 190? 
76. Finally, the applicant submits in addition 
that the Commission's decision must be 
annulled because it contravenes Article 190 of 
the EC Treaty. It maintains that the decision 
is inadequately reasoned since the reason for 
disallowing the expenditure is not apparent 
from it. In this regard, reference should be 
made to the Court's case-law according to 
which decisions concerning the clearance of 
accounts do not require detailed reasons if 
the country concerned was closely involved 
in the process by which the decision came 
about and is therefore aware of the reason for 
which the Commission considers that it must 
not charge the sums in dispute to the 
EAGGF. 44 In the present case, the reasons 
for the Commission's decision to disallow the 
expenditure are contained in the two Sum­
mary Reports. Moreover, the Commission, 
after carrying out its investigations in 1992, 
informed the applicant of its complaints. Den­
mark was thus informed of the grounds for 
disallowing the expenditure. 
77. Accordingly, the objections raised by the 
applicant against the Commission's decision 
cannot succeed. 
Costs 
78. 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 asked for in the 
successful party's pleadings. 
43 — Judgment in Case 347/85 United Kingdom v Commission 
(cited in note 17 above, paragraphs 14 and 15). 
44 — Judgment in Case 347/85 United Kingdom v Commission 
(cited in footnote 17 above, paragraph 60). 
I - 5779 
OPINION OF MR ALBER — CASE C-233/96 
D — Conclusion 
79. I therefore propose that the Court should: 
(1) dismiss the application; 
(2) order the Kingdom of Denmark to pay the costs. 
I - 5780