Judgment — ECLI:EU:C:1998:451
Date: 1998-10-01
Language of the case: English
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: United Kingdom

Summary Report shows, 
the Commission is alleging that the control 
mechanisms in place in Ireland were not 
capable of ensuring satisfactory protection of 
Community funds. The Commission alleges 
that yields achieved in deboning were at a 
lower percentage rate in the case of public 
storage than in the case of private storage. 
Furthermore, there had been found to be 
packaging defects and classifications in incor­
rect categories. Nor did the markings on car­
tons comply with Community rules. 2 
3. On these and other grounds the Commis­
sion concluded that the Irish authorities had 
not fulfilled their obligations in regard to 
Article 8 of Regulation (EEC) N o 729/70 of 
21 April 1970 on the financing of the common 
agricultural policy. 3 
4. A further infringement alleged by the Com­
mission concerns the tendering procedure. The 
flat-rate reduction applied in that regard is 
justified by the Commission on the ground 
that the national authorities in their interven­
tion purchases had accepted unlawful mul­
tiple tenders (group tenders or interconnected 
tenders). 4 
B — Facts and legal provisions 
Deficiencies in control procedures for the public 
storage of beef 
5. In this connection Ireland is seeking annul­
ment of the Commission decision disallowing 
* Original language: German. 
1 — European Agricultural Guidance and Guarantee Fund. 
2 — 1992 Summary Report P o c . VI/6355/95-EN), pp. 130 and 
131 in conjunction, inter alia, with Article 22 of Regulation 
N o 859/89. 
3 — OJ, English Special Edition 1970 (I), p. 218. 
4 — This problem forms at least part of the subject-matter of the 
proceedings in Gases C-209/96 United Kingdom v Commis-
lion [1998] ECR I-5655, C-232/96 France v Commission 
[1998] ECR I-5699, C-233/96 Denmark v Commission [1998] 
ECR I-5759 and C-242/96 Italy v Commission [1998] ECR 
I.-5863. 
I - 5805 
OPINION OF MR ALBER — CASE C-238/96 
from the expenditure declared by Ireland in 
1992 for public storage of beef for 1990 the 
sum of IRL 26 222 656.22 and for 1991 the 
sum of IRL 24 020 455.26 5 (hereinafter the 
'Decision'). These amounts correspond to a 
flat-rate correction of 10% of the expenditure 
declared by Ireland for 1990 and 5% of the 
expenditure declared for 1991. 
6. In the Commission's view, losses could 
have been occasioned as a result of the irreg­
ular and defective control procedures; accord­
ingly, the amounts declared were reduced by 
10% and 5% respectively. 
7. Ireland does not dispute that there were 
deficiencies in the control procedures. These 
were less significant in 1991 than in 1990. 
(The Commission took account of that fact in 
making the reductions: 10% for 1990 and 5% 
for 1991. This had become possible, the Com­
mission stated, since it had been possible to 
organise the control procedures more effec­
tively after the Commission had drawn the 
existing defects to Ireland's attention.) 
8. However, Ireland puts forward a number 
of reasons why the reduction applied by the 
Commission was not justified, notwith­
standing the deficiencies in the control pro­
cedures. Thus, the Commission gave no jus­
tificatory grounds for the amount of the 
financial correction. Nor did it explain why 
the Fund incurred considerable expenditure 
as a result of the weaknesses in the Irish con­
trol procedures. Moreover, it did not estab­
lish the amount of the losses to the Fund, as 
required by the Belle Group Report. 
According to the guidelines of the Belle Group 
Report, a reduction of 10% or 5% respec­
tively was neither necessary nor justified. Since 
the amount of the correction thus exceeds the 
amount of losses incurred by the Fund, the 
correction amounts to a penalty for which 
there is no legal basis in the Treaty. In light 
of the inadequate statement of reasons on 
which the financial corrections were based, 
there has also been an infringement of Article 
190 of the Treaty. 
Infringement in regard to tendering proce­
dures 
9. In this connection Ireland seeks the annul­
ment of the Commission decision disallowing 
from Ireland's expenditure for 1991 and 1992, 
which was incurred in the buying-in of beef, 
the amount of IRL 9 613 206 for 1991 and the 
amount of IRL 8 862 144 for 1992. 6 The dis­
allowance of that expenditure is contained in 
Annex I to the decision. The amount disal-
5 — 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 on the guarantee section 
of the European Agriculture Guidance and Guarantee Fund 
and in respect of certain expenditure for 1993 (OJ 1996 
L 117, p. 19). 6 — See footnote 5. 
I - 5806 
IRELAND v COMMISSION 
lowed corresponds to a flat-rate correction of 
2% of 1991 and 1992 expenditure. 
10. In its Summary Report the Commission 
justifies that reduction on the ground that the 
approach of the competent Irish authority 
was not compatible with the Community 
rules and discriminated against participants 
who had observed the rules. 
11. The Commission further contended that 
so-called multiple tenders may be of a specu­
lative nature. If, for example, very large quan­
tities of beef are offered for sale into interven­
tion, it becomes necessary to reduce these 
quantities by application of a coefficient. 7 
Since the tenderers endeavour to continue to 
sell the whole of their meat into intervention 
inflated tenders are lodged for speculative 
purposes. If a tenderer speculates that a spe­
cific reduction coefficient will be laid down, 
he offers a correspondingly higher quantity 
for sale into intervention. If it then turns out 
that the coefficient laid down is not as high as 
the tenderer assumed, the tenderer must 
deliver into intervention more meat than he 
actually has available. If he is unable to per­
form his contract with the intervention agency 
as to 85 or 95%, he loses in whole or in 
part the security deposited in respect of the 
total amount. 8 
12. If, however, the tenderer splits his original 
tender into several smaller ones which are 
made in the name of nominees, the risk of 
losing the security payment is reduced. If he 
is unable to deliver the full quantity tendered 
for, in the case of several smaller tenders he 
is at least in a position to honour certain of 
them in such a way that he does not lose the 
security payment. It is true that in respect of 
the remaining tenders which he is then no 
longer in a position to honour he will lose his 
security payment. However, that security is 
not calculated on the total amount of all the 
tenders offered by him but only on the smaller 
amount in each case. The amount of the secu­
rity lost is thus smaller and is often exceeded 
by the profit achieved. 
13. A clear consequence of this, in the Com­
mission's view, is that the lodging of multiple 
tenders favours speculation because the effect 
of the security deposit is lessened. 
14. Speculative tendering for larger quantities 
is said to run counter to the purpose of inter­
vention, which is, for example by interven­
tion buying-in, to stabilise the market and 
prevent or lessen any substantial price reduc­
tion, 9 where market prices fall below a 
7 — The relevant provision is to be found in Article 11(3) of 
Commission Regulation (EEC) N o 859/89 of 29 March 1989 
laying down detailed rules for the application of intervention 
measures in the beef and veal sector (OJ 1989 L 91, p. 5). 
8 — Article 13(4) of Regulation N o 859/89. 
9 — Fourth recital in the preamble to and Article 5 of Regulation 
(EEC) N o 805/68 of the Council of 27 June 1968 on the 
common organisation of the market in beef and veal (OJ, 
English Special Edition 1968 (I), p. 187). 
I - 5807 
O P I N I O N OF MR ALBER — CASE C-238/96 
certain level. Regulation N o 859/89 10 intro­
duced a tendering procedure. 1 1 Under that 
tendering procedure purchase prices and quan­
tities are established on the basis of tenders 
received. 12 
15. Speculative tenders which, as has been 
demonstrated, are favoured by the lodging of 
multiple tenders make it difficult to operate 
intervention successfully. Since more meat is 
offered than is actually on the market, 
buying-in prices and quantities determined 
on the basis of tenders received can no longer 
be established in accordance with the actual 
market situation. Speculative tenders thus pre­
vent the Commission from obtaining a pre­
cise overview of the market situation. For 
that reason it may almost certainly be pre­
sumed that, as a result of the speculative ten­
ders and the multiple tenders favouring them, 
more meat is bought in by the intervention 
agencies at higher prices. In that connection 
it must also be borne in mind that the lodging 
of several tenders allows speculation as to the 
price. The buying-in of excessive quantities 
causes the EAGGF to incur higher costs than 
is necessary in order to support the market. 
16. As is apparent from the documents and is 
pleaded by the Commission, in certain cases 
bids were made by companies which did not 
have their own bank account. Therefore, pay­
ments had to be made to another company, 
perhaps a parent company. Likewise, some 
companies did not have their own accounting 
system. This was apparent from the sequen­
tial numbering of invoices made out in the 
names of different companies. The Irish 
authority must therefore have been aware of 
the conduct of the tenderers from the begin­
ning. Nevertheless, Ireland carried out no 
checks in this connection, as it ought to have 
done. 
17. In the applicant's view, however, all the 
rules concerning intervention were observed. 
It did not accept more than one bid per ten­
derer. 
18. 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.' 13 
10 — Cited in footnote 7. 
11 — Third recital and Article 7 et seq. of Regulation N o 859/89. 
12 — 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 
renewing Regulation (EEC) N o 4132/88 (OJ 1989 L 61, 
p. 43). 13 — Emphasis added. 
I - 5808 
IRELAND v COMMISSION 
19. 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.' 14 
20. 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 circle 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. 
21. On the other hand, the applicant is of the 
opinion that persons participating in a ten­
dering procedure are 'tenderers' and 'inter­
ested parties'. It is not possible to make a dis­
tinction between those two concepts. 
Accordingly, the prohibition in the last phrase 
of Article 9(2) merely provides that the person 
finally appearing as tenderer may submit only 
one tender. 
22. A delimitation of the categories of per­
sons who may lodge a tender is, it is sub­
mitted, 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 Council 
Regulation (EEC) N o 805/68 as regards the 
general and special intervention measures for 
beef 15 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. 
14 — Emphasis added. 15 — OJ 1993 L 225, p. 4. 
I - 5809 
OPINION OF MR ALBER — CASE C-238/96 
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.' 
23. The applicant, which in contrast to the 
Commission is of the opinion that Article 
9(2) was fully complied with in the context of 
the tender procedure operated by it, referred 
a request for conciliation to the Conciliation 
Body. 16 The Conciliation Body gave, 
according to the applicant, the following pro­
visional opinion: Although Member States 
took no initiative to counter this practice, the 
Commission services themselves could not 
have been unaware of it, but failed to react 
before 1993. In light of the fact, the Concili­
ation Body went on, that no apparent finan­
cial loss had been caused to the Fund as a 
result of this practice, the financial correction 
of 2% of total expenditure was difficult to 
justify. 
24. 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 after checks carried 
out by it. 
25. On the abovementioned grounds Ireland 
brought these proceedings for 
' 1 . a declaration that, pursuant to Article 173 
of the Treaty establishing the European Eco­
nomic Community, the Commission decision 
of 10 April 1996 on the clearance of accounts 
presented by Member States in respect of 
expenditure for 1992 of the guarantee section 
of the European Agricultural Guidance and 
Guarantee Fund and in respect of certain 
expenditure for 1993 is void in so far as it 
purports to disallow a sum of IRL 
26 222 656.22 (being 10% of the expenditure 
declared by Ireland for public storage of beef 
for 1990) from the expenditure declared by 
Ireland for public storage of beef for 1992; 
2. a declaration that, pursuant to Article 173 
of the Treaty establishing the European Eco­
nomic Community, the Commission decision 
of 10 April 1996 on the clearance of accounts 
presented by Member States in respect of 
expenditure for 1992 of the guarantee section 
of the European Agricultural Guidance and 
Guarantee Fund and in respect of certain 
expenditure for 1993 is void in so far as it 
purports to disallow a sum of IRL 
24 020 455.26 (being 5% of the expenditure 
declared by Ireland for public storage of beef 
for 1991) from the expenditure declared by 
Ireland for public storage of beef for 1992; 
16 — 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 EAGGF, Guarantee Section 
(OJ 1994 L 182, p. 45). 
I -5810 
IRELAND v COMMISSION 
3. a declaration that, pursuant to Article 173 
of the Treaty establishing the European Eco­
nomic Community, the Commission decision 
of 10 April 1996 on the clearance of accounts 
presented by Member States in respect of 
expenditure for 1992 of the guarantee section 
of the European Agricultural Guidance and 
Guarantee Fund and in respect of certain 
expenditure for 1993 is void in so far as it 
purports to disallow a sum of IRL 9 613 206.00 
from expenditure declared by Ireland for 
public storage of beef for 1991 being 2% of 
such expenditure; 
4. a declaration that, pursuant to Article 173 
of the Treaty establishing the European Eco­
nomic Community, the Commission decision 
of 10 April 1996 on the clearance of accounts 
presented by Member States in respect of 
expenditure for 1992 of the guarantee section 
of the European Agricultural Guidance and 
Guarantee Fund and in respect of certain 
expenditure for 1993 is void in so far as it 
purports to disallow a sum of IRL 8 862 144.00 
from expenditure declared by Ireland for 
public storage of beef for 1992 being 2% of 
such expenditure; 
5. such further or other order as may be nec­
essary and appropriate for the purpose of the 
relief which Ireland seeks in these proceed­
ings; 
6. an order that the Commission of the Euro­
pean Communities pay the costs of these 
proceedings.' 
The Commission contends that the Court 
should: 
(1) dismiss the action; 
(2) order Ireland to pay the costs. 
C — Opinion 
Deficiencies in control procedures for public 
storage of beef 
26. The applicant does not dispute that there 
were deficiencies in the Irish control proce­
dures. None the less, it is of the opinion that 
the corrections of 10 and 5% applied respec­
tively by the Commission were not justified. 
27. In order to deal with this question, it is 
first necessary to review the Court's case-law 
I -5811 
O P I N I O N OF MR ALBER — CASE C-238/96 
on clearance of accounts, primarily in regard 
to the establishment of damage and the burden 
of proof. 
28. According to the Court's case-law, 'as the 
Court has already observed, only refunds 
granted and intervention undertaken in accor­
dance with the Community rules within the 
framework of the common organisation of 
agricultural markets are to be financed by the 
EAGGF ...'. 17 In that connection it is for the 
Commission to prove an infringement of the 
rules governing the common organisation of 
the agricultural markets. 18 
29. Such proof was not even necessary in the 
present case, since, as already stated, the appli­
cant does not dispute that there were weak­
nesses in the system of controls in Ireland. 
Nor does it contest the infringement of Article 
8 of Regulation N o 729/70 alleged by the 
Commission. 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, 
regulation 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. 
30. If there is such an infringement, the Court 
has held that the Member State concerned 
must show that the Commission misdirected 
itself in regard to the financial consequences 
of such infringement. 19 
31. In the applicant's submission, however, 
the samples made by the Commission were 
17 — Judgment in Case C-48/91 Netherlands v Commission [1993] 
ECR I-5611, paragraphs 13 and 14, with further references. 
18 — Judgments in Netherlands v Commission (cited in footnote 
17, paragraph 18, with further references); Case C-281/89 
Italy v Commission [1991] ECR I-347, paragraph 19, with 
further references; Case 347/85 United Kingdom v Commis­
sion [1988] ECR 1749, paragraph 16; and in Case C-55/91 
Italy v Commission [1993] ECR I-4813, paragraph 13, with 
further references. 
19 — Judgment in Case C-281/89 Italy v Commission [1991] ECR 
I-347, paragraph 19. 
I -5812 
IRELAND v COMMISSION 
not representative. For that reason, the Com­
mission could not be said to have correctly 
assessed the risk to the Fund. In that connec­
tion it should be said that, under the guide­
lines adopted by the Commission upon a 
proposal by an inter-service group (Belle 
Group Report), the checks carried out cannot 
and need not be used in each case as the (sole) 
basis for assessing financial loss. In cases, such 
as the present one, where it is not possible to 
give a precise assessment of the loss, provi­
sion is made for a flat-rate correction proce­
dure on the basis of the risk incurred by the 
Fund. 
32. Thus, it cannot be concluded, as Ireland 
indeed so concludes, that the corrections 
applied were to that extent disproportionate. 
33. The applicant also refers to the alleged 
defects in the context of deboning of the beef. 
In that connection the Commission claimed, 
inter alia, that after deboning the quantity of 
meat was not established. On that point the 
applicant made submissions as to whether and 
why the quantity of meat achieved on deb­
oning in Ireland was less than, for example, 
in other Member States. Even if the applicant 
were thereby able to prove that the yield on 
deboning was scarcely less than in other 
Member States and was delivered in its entirety 
to the intervention agencies, that remains 
merely a theoretical consideration so long as 
the relevant checks are not made. Even if, 
therefore, the deficiencies alleged by the Com­
mission had not been present, none the less 
the correction applied would have been justi­
fied on the grounds of other deficiencies. The 
decisive factor in that connection is that no 
checks at all were made and there was no 
ascertainment of the remaining quantity of 
meat. On that ground it cannot be ruled out 
that the EAGGF incurred a loss. That alone 
is decisive since, as stated, it is a matter of 
establishing the financial risk incurred by the 
Fund. 
34. In order to show that, in its view, the 
EAGGF incurred no loss, the applicant finally 
focuses on sales into intervention. It submits 
that the yields achieved in respect of sales of 
meat in storage were scarcely less than those 
achieved in other Member States. Since there 
were scarcely any complaints, no inference 
could be drawn that the quality of the meat 
was lower. However, this argument concerns 
only certain of the possible causes for losses 
in the context of the EAGGF. 
35. The applicant claims finally that, under 
the Commission's guidelines, neither a reduc­
tion of 5% nor one of 10% is justified. Those 
guidelines propose three possible percentages 
for the flat-rate reduction: 
— 2%, where the deficiency is limited to 
parts of the control system of lesser impor­
tance, or to the operation of controls which 
are not essential to the assurance of the 
I -5813 
OPINION OF MR ALBER — CASE C-238/96 
regularity 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 to the EAGGF. 
36. As demonstrated, the applicant has been 
unable to show that the deficiencies in con­
trol procedures did not entail a risk for the 
Fund. As regards the individual percentages, 
these are related to the seriousness of the 
deficiencies. 
37. Further, it should be recalled that, under 
the Court's case-law, financing of expenditure 
can be disallowed even as to 100%, if the pre­
cise financial consequences of a measure con­
trary to Community law cannot be estab­
lished. 20 
38. In that connection it should also be 
pointed out that the Commission has main­
tained that in the course of its checks it estab­
lished that more than 10% of the meat 
inspected did not satisfy quality requirements 
and other criteria. The amount of the correc­
tion appears to be justified by calculations of 
that level. N o error of appraisal or calcula­
tion is apparent. 
39. Moreover, reference should be made to 
the Court's case-law in regard to cases in 
which the Commission does not disallow the 
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 held, it is for the Member State 
to show that the conditions for obtaining the 
financing disallowed by the Commission are 
fulfilled. 21 Thus, in this case too, it is for the 
applicant to show that the Commission's 
20 — Judgments in Case C-50/94 Greece v Commission [1996] 
ECR I-3331, paragraph 26, Joined Cases 15/76 and 16/76 
France v Commission [1979] ECR 321, paragraph 32 et seq., 
and Case 347/85 United Kingdom v Commission (cited in 
footnote 18, paragraph 13). 
21 — Judgment in United Kingdom v Commission (cited in foot­
note 18, paragraphs 14 and 15). 
I - 5814 
IRELAND v COMMISSION 
assessment is erroneous. As demonstrated 
above, 22 it has been unable to do so. 
40. For that reason, there was also no infringe­
ment of Article 190 of the EC Treaty since 
the Commission discharged its burden of 
proof. Nor, for the reasons mentioned, may 
the correction proposed by the Commission 
be regarded as a penalty. 
41. Moreover, reference should be made to 
the Court's case-law under which decisions 
concerning the clearance of accounts do not 
require detailed reasons if the government 
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. 23 
42. The applicant further points out that 
expenditure for 1991 was already reduced by 
2% on account of the multiple tenders to be 
dealt with in the second part. If, however, 
that expenditure were to be further reduced 
by 5% on the grounds of deficient control 
procedures, that would represent a reduction 
of 7%, which is not permitted. In the case of 
a uniform assessment of risk by the Commis­
sion — contested by the applicant — the 
Commission can merely apply a uniform rate 
of correction. 
43. However, since this case involves dif­
ferent risks attributable to different deficien­
cies in the system, it was entirely proper for 
the Commission to assess them differently 
and to apply an appropriate correction, all the 
more so since under the Court's case-law the 
entirety of the expenditure could have been 
disallowed. 
44. Moreover, in the applicant's view, the 
Commission decision is tantamount to a pen­
alty because the reduction in expenditure for 
1990 and 1991 was sought in the context of 
the clearance of accounts for 1992. There is 
thus no link between the reduction and any 
loss to the Fund. 
45. In that connection it should be said that 
the decisive factor is whether there is a link 
between deficiencies found to exist and any 
loss or financial risk to the Fund. That is 
independent of the question as to the time 
when the resulting reduction in expenditure 
is made. Clearance at a subsequent date is 
possible where, as in the present case, an ear­
lier decision is stated to be without prejudice 
to subsequent financial consequences. This 
may be justified by the fact that the relevant 
22 — Cf. para. 36. 
23 — Judgment in United Kingdom v Commission (cited in foot­
note 18, paragraph 60). 
I -5815 
OPINION OF MR ALBER — CASE C-238/96 
investigations had not yet been concluded. 24 
Under the Court's case-law it is sufficient in 
that connection for the recitals of the decision 
to contain reservations of a general nature. 25 
46. There is thus no ground apparent for 
annulment of the Commission decision as 
regards this part of the claim. 
Infringement in regard to the tendering pro­
cedure 
Meaning and purpose of the last phrase of 
Article 9(2) 
47. First of all, the applicant claims that the 
Commission misinterpreted Article 9(2). In 
its submission it is clear from Regulation 
N o 859/89 that all tenders from a company 
registered in the register of companies had to 
be accepted. This was checked in each case by 
the national authority. Whether the individual 
undertakings which submitted a tender may 
have belonged to the same group of compa­
nies was not examined in Ireland because 
there was no provision in Regulation N o 
859/89 for this to be done. 
48. According to the Court 's case-law, it is 
for the Commission, it is submitted, in the 
context of the clearance of the accounts of the 
EAGGF, to show that a Member State has 
contravened Community rules. The Commis­
sion, as has been demonstrated, was not able 
to adduce such proof. Moreover, the appli­
cant points out that rules which may have 
financial consequences for the Member States 
must be clearly and precisely formulated. 
49. Under the Court's case-law, it is for the 
Commission to prove an infringement of the 
rules governing the common organisation of 
the agricultural markets. 26 
50. 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-
24 — Seventh and seventeenth recitals in the preamble to Com­
mission Decision 94/871/EC of 21 December 1994 on the 
clearance of the accounts presented by the Member States in 
respect of the expenditure for 1991 of the European Agri­
cultural Guidance and Guarantee Fund (EAGGF), Guar­
antee Section (OJ 1994 L 352, p. 82). Nineteenth recital in 
the preamble to Commission Decision 93/659/EC of 25 
November 1993 on the clearance of the accounts presented 
by the Member States in respect of the expenditure for 1990 
of the European Agricultural Guidance and Guarantee Fund 
(EAGGF) Guarantee Section (OJ 1993 L 301, p. 13). See in 
this connection judgments in Case C-61/95 Greece v Com­
mission [1998] ECR I-207, paragraph 30 and Greece v 
Commission, cited above in footnote 20, paragraph 6. 
25 — Judgment in Case C-335/87 Greece v Commission [1990] 
ECR I-2875, 1st introductory sentence. 26 — See footnote 18. 
I - 5816 
IRELAND v COMMISSION 
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.' 27 
51. Accordingly, it must be examined whether 
the terms in which Article 9(2) of Regulation 
N o 859/89 are couched satisfies these require­
ments and whether they allow of a construc­
tion of the kind placed on them by the Com­
mission. In that connection it would appear 
appropriate to examine first the manner in 
which the Commission seeks to interpret 
Article 9(2). The pleadings mainly speak of 
multiple tenders. Those cannot be tenders 
submitted by one and the same tenderer under 
one name, for such tenders are not lawful in 
Ireland either. As is also clear from the plead­
ings, the Commission is also not challenging 
every kind of connection between the indi­
vidual tenders. For example, it states that 
where a person operates two independent 
slaughterhouses, both may submit a tender. 
As the Commission explained in the hearing 
in its view only tenders relating to the same 
quantity of meat are unlawful under Article 
9(2). Where an interested party therefore 
offers his meat not only himself but through 
the intermediary of nominees, that is in breach 
of Community provisions and must be pro­
hibited by the authorities of the Member 
States. 
52. 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. 28 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 prohibitive 
provision. 
53. The intervention scheme is jeopardised, 
as has been demonstrated, by the practice in 
regard to intervention buying-in in Ireland. 
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 No 571/89, 
is not guaranteed. 
54. The last phrase of Article 9(2) of Regula­
tion N o 859/89 must therefore, it is con­
tended, 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 tenderer. Such 
tenders are therefore unlawful. 
27 — Judgment in Case 349/85 Denmark v Commission [1988] 
ECR 169, paragraph 16. 
28 — Judgment in Case C-283/91 Contarini [1992] ECR I-6359, 
paragraph 14 and judgment in Joined Cases C-296/93 and 
C-307/93 France and Ireland v Commission [1996] ECR 
I-795, paragraph 21. 
I - 5 8 1 7 
OPINION OF MR ALBER — CASE C-238/96 
55. In the Commission's view, this follows 
from the wording. In this connection it should 
be said 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 therefrom 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 indepen­
dent (legal) person participates in the proce­
dure. Thus the term 'interested party' could be 
understood as including a person interested 
in selling his meat into intervention. As has 
been seen, that person must not necessarily 
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 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, it may be seen that 
the abovementioned distinction is not always 
adhered to. Thus, for example, the first recital 
in the preamble to Regulation N o 2271/90, 29 
provides that '... tenderers should only be 
allowed to submit a single tender ... for each 
category in response to each invitation to ten­
der.' Moreover, the German version of Article 
11(3) of Regulation N o 2456/93, which 
replaced Article 9 of Regulation 859/89, uses 
the terms 'Interessent' (interested party) and 
'Bieter' (tenderer) in connection with the sub­
mission of tenders. 30 
56. Thus, no further conclusions may be 
drawn from the distinction between 'tenderer' 
and 'interested party' in Article 9. 
57. 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 
N o 1282/90 31 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.' 
58. That provision was, however, repealed 
shortly afterwards in August 1990. Amending 
Regulation N o 2271/90 stated in the first 
recital to the preamble thereof: 'Experience 
shows that tenderers should only be allowed 
to submit a single tender for each category in 
response to each invitation to tender.' 
59. In the applicant's view that formulation 
shows why the Commission inserted the last 
phrase of Article 9(2) in the version contained 
in Regulation N o 2271/90. The tenderer may 
submit only one tender. At the same time, 
however, it is clear that after repeal of the 
provision in Regulation N o 1282/90 the ten­
derer may no longer submit several tenders in 
respect of the same quantity of meat. The 
29 — Commission Regulation (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). 
30 — This distinction is also reflected in the English version which 
speaks of 'interested parties' and 'tenderer'. 
31 — Commission Regulation (EEC) N o 1282/90 of 15 May 1990 
amending Regulation (EEC) N o 859/89 and laying down 
detailed rules for the application of intervention measures 
for beef (OJ 1990 L 126, p. 31). 
I -5818 
IRELAND v COMMISSION 
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 circumvented by recourse to 
nominees. 
60. 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, by virtue of the 
fact that the same meat is offered by several 
persons. Secondly, the applicant was aware of 
the meaning and purpose of intervention. 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 beef available on the market. 
61. Moreover, the Court has held that even 
in cases where Community law is applied 
objectively but incorrectly as a result of an 
interpretation in good faith by national author­
ities, costs incurred in that connection must, 
under Articles 2 and 3 of Regulation N o 
729/70, be borne by the Member States. 32 
This narrow interpretation of the criteria for 
allowing expenditure under the EAGGF is 
dictated by the objective pursued by Regula­
tion N o 729/70. Since implementation of a 
common agricultural policy must ensure equal 
treatment as between citizens of the Member 
States, national authorities of a Member State 
are not permitted, by means of a broad inter­
pretation of a given provision, to favour citi­
zens of that State as against those of other 
Member States in which a stricter interpreta­
tion is applied. 33 
62. Admittedly, the applicant rightly points 
out that the last phrase of Article 9(2) is silent 
as to the fact that separate tenders may not be 
submitted by undertakings in the same group. 
There is, however, no requirement to this 
effect. It follows from the meaning and pur­
pose of the last phrase of Article 9(2) that it 
is prohibited to offer meat by way of nomi­
nees. The applicant cannot rest content in the 
assertion that it is under no obligation under 
the terms of Article 9 to examine possible 
connections between individual tenderers. 
That is merely a question as to the manner in 
which observance of a prohibitive provision 
such as that contained in the last phrase of 
Article 9(2) can be monitored. 
63. Accordingly, it is right to uphold the 
Commission's submission that the last phrase 
of Article 9(2) also prohibits tenders which, 
whilst coming from different legal persons, 
are made in respect of the same beef, with the 
32 — 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 the markets, shall be 
financed under Article 1(2)(b).' 
33 — Judgment in Case 11/76 Netherlands v Commission [1979] 
ECR 245, paragraphs 8 and 9. 
I - 5 8 1 9 
OPINION OF MR ALBER — CASE C 238/96 
result that the tenders may be assumed to 
have been submitted by nominees. 
64. In that way, contrary to the applicant's 
submission, a basis is provided for such ten­
ders to be rejected, namely the last phrase of 
Article 9(2) aforesaid. 
Monitoring obligation on the Member State 
65. In the Commission's view, the disallow­
ance made in the context of the clearance of 
accounts is justified on the ground that the 
applicant did not ensure compliance with that 
provision. 
66. It is clear that in Ireland tenders are 
examined only to see whether they originate 
from companies registered in the register of 
companies. N o further examination was 
undertaken. In what follows it will be a matter 
of examining whether on that basis the appli­
cant may be said to have failed to observe a 
provision of Community law, since the Com­
mission has mentioned no actual example 
where tenders were actually submitted via 
nominees. 
67. 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 as 
to the further details of specific circumstances. 
Admittedly, the Commission may also carry 
out its own checks. However, under the 
Court's case-law on the implementation on 
EAGGF financing it is primarily for the 
national authorities to ensure precise compli­
ance with Community provisions. As the 
Court went on to point out, 'that system, 
based on trust, does not involve any system­
atic 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 information necessary for drawing up 
EAGGF accounts since the Commission is 
not close enough to obtain the information it 
needs from the economic operators.' 34 
68. 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. 
34 — Judgment in Netherlands v Commission (cited in footnote 
17, paragraph 11). 
I - 5820 
IRELAND v COMMISSION 
69. In connection with the question whether 
there is thus shown to be an infringement by 
the applicant, a matter also to be considered 
is whether the applicant was required to carry 
out any additional examination. In that con­
nection reference should be made to Regula­
tion (EEC) 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.' 35 The eighth recital states: 
'Community expenditure must be made sub­
ject to close supervision. In addition to super­
vision carried out by the Member States on 
their own initiative, which remains essential, 
provision should be made for verification by 
officials of the Commission and for it to have 
the right to enlist the help of Member States.' 
Article 8 of the regulation is in accordance 
with those considerations. 
70. Under the Court's case-law it is for the 
national authorities to monitor precise com­
pliance with Community provisions. 36 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 
Exportskchterijen van Oordegem. In that 
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).' 37 
71. It follows therefrom 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 
provision. 35 — Seventh recital. 
36 — Judgment in Netherlands v Commission (cited at footnote 
17, paragraph 11), in Case C-366/88 France v Commission 
[1990] ECR 1-3571, paragraph 20, in Case C-8/88 Germany 
v Commission [1990] ECR I-2321, paragraph 17 and in 
Joined Cases 146/81, 192/81 and 193/81 BayWa [1982] ECR 
1503, paragraph 26. 
37 — Judgment in Case C-2/93 Exportslachterijen van Oordegem 
[1994] ECR I-2283, paragraphs 17 and 18. 
I - 5821 
OPINION OF MR ALBER — CASE C-238/96 
72. Thus, the question arises whether in the 
specific case before the Court the applicant 
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? 
73. In line with the Commission's submis­
sion, the disadvantage for the Fund arises out 
of the fact that the submission of several ten­
ders by an interested party by means of nomi­
nees encourages the submission of speculative 
tenders. Yet if one has regard to the Commis­
sion's procedure against speculative tenders, 
it might be queried whether the applicant was 
required to take any further steps. 
74. 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, 38 
a security payment was introduced under 
Article 10(1), in order to ensure that 'tenders 
are bona fide and that the conditions laid 
down are complied with.' 39 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. 
75. 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. 40 However, 
that does not alter the fact that already prior 
thereto there must have been awareness of 
that idea. 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. 
76. Thus, one arrives at the conclusion that 
the applicant ought to have carried out fur­
ther checks in order to establish whether the 
tenders submitted were in fact from the same 
tenderer. That is particularly the case in light 
of the clear indications already alluded to of 
interconnections between individual tenderers. 
Even if it could not with certainty be con­
cluded 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 specific 
checks, and that was the sole decisive factor. 
77. It must therefore be held that the appli­
cant ought to have carried out further checks 
which it failed to do. 
38 — Article 10 of Regulation No 859/89. 
39 — Third recital in the preamble to Regulation No 859/89. 40 — Third recital in the preamble to Regulation No 2456/93. 
I - 5822 
IRELAND v COMMISSION 
Proof of loss occasioned to the EAGGF — 
burden of proof 
78. It now falls to examine whether a reduc­
tion in the context of the clearance of accounts, 
as applied by the Commission, was justified. 
As the applicant claims in the alternative, that 
is not the case since the reduction made is 
disproportionate in the absence of any loss to 
the Fund. 
79. In order to answer that question, regard 
must again 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 it is for the 
Member State to show that the conditions for 
obtaining the financing refused by the Com­
mission are fulfilled, where the Commission 
refuses to charge certain expenditure to the 
EAGGF on the ground that such expenditure 
was incurred as a result of breaches of Com­
munity rules attributable to that Member 
State. 41 
80. In that connection, a further question is 
as to the requirements 'which the Commis­
sion's submission with regard to the occa­
sioning of financial loss must satisfy. Under 
the Court's case-law, in cases where it cannot 
be established to what extent a national mea­
sure incompatible with Community law has 
led to an increase in expenditure under a bud­
getary heading of the EAGGF, the Commis­
sion has 'no choice' but to disallow the ques­
tionable expenditure altogether, and not 
merely a certain percentage of it. 42 
81. 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. 
Hypothetically, it may only be speculated 
what costs would not have been incurred if 
the applicant had carried out the proper 
checks. 
82. 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 
41 — Judgment in Case C-48/91 (cited in footnote 17, paragraph 
16) and judgment in Case 347/85 (cited in footnote 18, para­
graph 14). 
42 — Judgments in Case C-50/94 Greece v Commission [1996] 
ECR 1-3331, paragraph 26, in Joined Cases 15/76 and 16/76 
France v Commission [1979] ECR 321, paragraph 32 et seq. 
and in United Kingdom v Commission (citedin footnote 18, 
paragraph 13). 
I - 5823 
OPINION OF MR ALBER — CASE C-238/96 
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'. 43 
83. That case is not directly comparable with 
the present case since the Commission is not 
alleging that the figures communicated to it 
by the applicant are incorrect. It is rather the 
case that the figures could have been different 
if the applicant had carried out adequate 
checks. But, also in that connection, the Com­
mission did not merely submit that the 
EAGGF suffered no loss. Rather it showed 
that the applicant had infringed Community 
law and the manner in which it had done so. 
It explained, furthermore, how that may have 
favoured speculative bids by tenderers. It 
explained, finally, that that may have led to an 
erroneous appraisal of the market and thus to 
excessive buying-in of beef, in some cases, at 
increased prices. Thus, in any event, it adduced 
credible evidence that it was possible for loss 
to have been incurred by the EAGGF. 
84. 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. 
85. It is therefore for the applicant — as is 
apparent from the judgment cited in para­
graph 30 — to show that the conduct alleged 
against it did not lead to an increase in expen­
diture in the context of the EAGGF. The 
applicant submits that tendering procedures 
in Ireland did not lead to more meat being 
bought in at higher prices. The allegation in 
that regard in the 1991 Summary Report was 
finally withdrawn. From that it may be 
inferred that the Irish at any rate did not ben­
efit from the practice of multiple tenders. 
86. The Commission, on the other hand, fur­
ther claims that it cannot be ruled out that as 
a result of the acceptance of multiple tenders 
and the resulting speculation more beef was 
bought in at higher prices. 
87. In that connection it should be said that 
it cannot be inferred from the mere fact that 
the relevant allegation no longer appears in 
the Summary Report that the conduct of the 
Irish authorities did not in fact have those 
consequences. Secondly, it is not apparent 
why the acceptance of multiple tenders should 
43 — Judgment in Netherlands v Commission (cited in footnote 
17, paragraph 17). 
I - 5824 
IRELAND v COMMISSION 
only in Ireland not have given rise to exces­
sive buying-in of beef. 
88. Ireland also claims that speculation by 
means of inflated tenders in order to reduce 
the risk of forfeiture of security payments is 
only of limited interest to Ireland. Thus, in 
many cases in Ireland the safety net proce­
dure was applied. 44 Under that procedure all 
bids were accepted which was why there was 
no need to submit speculative tenders. None 
the less, even during that procedure the mul­
tiple tenders criticised by the Commission 
continued to be made. It may be inferred from 
that fact that the purpose of multiple tenders 
was not to diminish the effect of the security 
deposit. 
89. The Commission contends, however, that 
almost one-half of the beef was bought in not 
under the safety net procedure but under the 
normal procedure in the context of which 
inflated tenders may be advantageous. Thus, 
also in Ireland the practice of multiple ten­
ders may have had negative consequences. As 
the Commission submits, this is all the more 
so since expenditure during the relevant period 
was unusually high. 
90. On the other hand, it could be inferred 
from the applicant's submissions that there 
was a practice in Ireland of multiple tenders, 
that is to say tenders made by undertakings 
belonging, for example, to the same group of 
companies. The Commission further points 
out that the applicant stated in a letter that, 
also in relation to intervention sales, it was 
not uncommon for large contracts to be 
divided amongst subsidiary companies to 
diminish the risk of security loss. In a further 
letter the applicant stated that the practice of 
using subsidiary companies as a means of 
minimising the risk of security loss was widely 
known at the time. Such a business policy 
had to be considered both a legitimate and 
prudent practice. However, in the Commis­
sion's view, that practice led to an increase in 
the financial risks to the Fund. That view of 
the matter must be upheld. 
91. 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. 
92. To distribute the burden of proof in that 
manner, as 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 Commu­
nity rules authorised payment of aid only on 
condition that certain formalities relating to 
proof or supervision were observed, the Court 
held that aid was not granted in conformity 
44 — Safety-net measures are adopted if the market price falls par­
ticularly sharply. Under those measures all bids at or under 
80% of the intervention price arc accepted (Article 6(5) of 
Regulation N o 805/68 as amended by Regulation N o 571/89). 
I - 5825 
OPINION OF MR ALBER — CASE C-238/96 
with Community law if those preconditions 
were 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. 45 
93. 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 possibility of losses, or even fraud, 
to the detriment of the Community budget, 
the amount disallowed by the Commission, 
which was limited to 2% of the expenditure 
involved, cannot be regarded as excessive and 
disproportionate'. 46 Thus, even the mere like­
lihood of losses may be used as a criterion for 
the purposes of the assessment. Such likeli­
hood subsists in the present case in light of 
the abovementioned factors and the absence 
of checks. 
94. The sole matter to be determined is there­
fore whether the applicant can successfully 
plead that no loss was incurred by the EAGGF. 
95. The applicant submits that during the rel­
evant period security payments were retained 
only in a few cases. Only small amounts of 
security were forfeited. Accordingly, there 
could have been no extensive speculation in 
regard to tenders. However, it is the Com­
mission's view that this shows precisely how 
successfully the practice of multiple tenders 
reduces the risk to the individual tenderer. 
96. As the Commission rightly argues, the 
practice of so-called multiple tenders enables 
the tenderer to speculate with several tenders 
whereby, in the event of an unsuccessful 
speculation, the loss is reduced because the 
security is smaller for the smaller quantity. 
97. O n the other hand, the practice of 
so-called multiple tenders need not neces­
sarily lead to a reduction in cases in which 
the security is forfeited. 
98. It does not follow absolutely from the 
fact that security payments were forfeited 
only in a few cases that more beef than neces­
sary was not sold into intervention. Those 
tenderers who had submitted an excessive bid 
and speculated on a higher reduction 
co-efficient are also able to avoid losing the 
security payment by purchasing the missing 
quantity on the free market. This is of course 
not in keeping with the intervention scheme 
but is apparently practised. Thus, under Article 
45 — Judgment in Case 327/85 Netherlands v Commission [1988] 
ECR 1065, paragraph 25. 
46 — Judgment in Case C-49/94 Ireland v Commission [1995] 
ECR I-2683, paragraph 22. 
I - 5826 
IRELAND v COMMISSION 
12 of Regulation N o 859/89 a tender is to be 
refused if the proposed price is above the 
maximum price applicable to that tendering 
procedure. Therefore, a quantity of beef 
rejected on that ground could be purchased 
by a tenderer who has put in a bid in respect 
of a greater quantity of beef than he has at his 
disposal. 
99. Moreover, the applicant gives examples 
where alleged multiple tenders were of no 
advantage to tenderers. If in cases which 
according to the Commission are open to 
challenge multiple tenderers had submitted 
only one overall tender, smaller amounts in 
respect of security payments would have been 
forfeited; in some cases the security payment 
would not have been forfeited at all. The 
applicant is assuming in that connection that 
tenders were submitted in respect of different 
quantities of beef which, if appropriate, could 
be added to an overall quantity. In the Com­
mission's example, however, tenders were 
made in respect of the same quantity of meat. 
100. 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 
101. The applicant also challenges the flat-
rate calculation of the financial loss under­
taken by the Commission. The Commission, 
it is submitted, did not assess the actual risk 
to the Fund. Had it done so, it would have 
concluded that no correction was to be made. 
102. 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, 47 a loss to the EAGGF 
cannot be precluded. Moreover, it is sufficient 
to refer to the Court's case-law. 48 
103. The applicant finally claims an infringe­
ment of the principle of the protection of 
legitimate expectations. In its view, the Com­
mission must have been aware of the practice 
under tendering procedures in Ireland. It must 
also have been aware that there are 29 approved 
slaughterhouses in Ireland, a l ist of which was 
forwarded to the Commission. Moreover, it 
was clear from the list of unnamed tenders 
forwarded to the Commission that far more 
than 29 tenders had been submitted. The 
Commission must also have been aware of 
the fact that certain slaughterhouses belonged 
to the same group of companies. If, however, 
the Commission was aware of the practice, it 
was under an obligation to inform the Member 
State that in its opinion that practice was not 
consistent with Community law. If it did not 
do so it cannot subsequently be heard to say 
that it is disallowing the relevant expenditure. 
47 — Sec paragraphs 94 to 100. 
48 — See paragraph 85. 
I - 5827 
OPINION OF MR ALBER — CASE C-238/96 
Certainly, it is true that under the Court's 
case-law it is primarily the responsibility of 
the Member State to ensure that all monies 
are paid in accordance with Community rules. 
However, this represents a special case because 
the Commission was directly involved in the 
procedure. 
104. The Commission counters those argu­
ments by pointing out that under the ten­
dering procedure it receives only an anony­
mous list which does not show who submitted 
the tenders. For that reason it could not have 
been aware of the practice of multiple ten­
ders. Furthermore, it should be pointed out 
that it is not only slaughterhouses which are 
entitled to submit tenders for purposes of 
intervention. As the Commission has sub­
mitted, there is in fact no restriction as to the 
characteristics of the tenderer. For that reason 
the number of authorised slaughterhouses in 
Ireland can be of no relevance to the ques­
tion whether under a tendering procedure 
multiple tenders were submitted or not. It 
cannot therefore be assumed that the Com­
mission was aware of the approach adopted 
by Ireland from the outset. It is therefore not 
possible to discern any infringement of the 
principle of the protection of legitimate expec­
tations. 
105. Accordingly, the objections made against 
the Commission decision cannot avail the 
applicant. The reduction proposed by the 
Commission is thus well founded and also 
entirely proportionate. 
Costs 
106. Under Article 69(2) of the Rules of Pro­
cedure 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 plead­
ings. 
D — Conclus ion 
107. I therefore p ropose that the C o u r t should: 
(1) dismiss the action; 
(2) o rde r Ireland t o p a y the costs . 
I - 5828