Judgment — ECLI:EU:C:1998:448
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 10 the Commission 
justifies that reduction on the ground that the 
United Kingdom did not check whether mul­
tiple tenders had been submitted. 
5 — 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 markets for beef and veal (OJ, 
English Special Edition 1968(1), p. 187). 
6 — Cited in footnote 3. 
7 — Third recital and Article 7 et seq. of Regulation 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 markets 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). 
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 VI/6355/95. 
I - 5659 
OP I NI ON OF MR ALBER — CASE C-209/96 
8. This would have been easy to ascertain, 
since the tenderers made no great efforts to 
conceal the connections between them. As is 
apparent from the documents before the 
Court, tenders were made in certain cases by 
admittedly independent legal persons, yet 
were signed by the same person and sent from 
the same fax machine. The tenders mentioned 
the same account number for transfer of the 
payment, and the securities were lodged by 
one and the same person in respect of all those 
tenders. The United Kingdom authority must 
therefore have been aware of the conduct of 
the tenderers from the beginning. 
9. The approach of the competent United 
Kingdom authority (Intervention Board) was 
therefore not compatible with the Commu­
nity rules and discriminated against partici­
pants who had observed the rules. 
10. In the applicant's view, however, all the 
rules concerning intervention were observed. 
It accepted no tenders which were not lawful; 
it therefore contravened no requirement to 
carry out 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 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. 
14. On the other hand, the applicant is of the 
opinion that the concepts of 'tenderer' and 
'interested party' are interchangeable. The 
11 — Emphasis added. 
12 — Emphasis added. 
I - 5660 
UNITED KINGDOM v COMMISSION 
'tenderer', on the other hand, is the person 
who in fact submits the tender. Accordingly, 
the prohibition in the second sentence of 
Article 9(2) merely precludes the person finally 
appearing as a tenderer from submitting more 
than one tender. 
15. The fact that this provision covers other 
persons than the tenderer is, it is submitted, 
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 Regula­
tion (EEC) N o 805/68 as regards the general 
and special intervention measures for beef 13 
which was not yet in force at the material 
time. That provision is as follows: 
'Interested parties may submit only one tender 
per category in response to each invitation to 
tender. 
The Member States shall ensure that tenderers 
are independent of each other in the terms of 
their management, staffing and operations. 
Where there are serious indications to the 
contrary or that tenders are not in line with 
economic facts, tenders shall be deemed admis­
sible only where the tenderer presents suit­
able evidence of compliance with the second 
subparagraph. 
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. The applicant, which in contrast to the 
Commission is of the opinion that the second 
sentence of Article 9(2) was fully complied 
with in the context of the tender procedure 
operated by it, in May 1995 referred a request 
for conciliation to the Conciliation Body. 14 
On the practice of multiple tenders which in 
fact, from an economic point of view, stem 
from the same operator, the Conciliation Body 
gave, according to the applicant, the following 
opinion: Although Member States took no 
initiative to counter this practice, the Com­
mission services themselves could not have 
been unaware of it, but failed to react before 
1993. In the circumstances, the Conciliation 
Body went on, and because of the apparent 
absence of financial loss to the Fund resulting 
from this practice, the financial correction of 
2% of total expenditure was difficult to jus­
tify. 
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 EAGGF, Guarantee Section 
(OJ 1994 L 182, p. 45). 
I - 5661 
OPINION OF MR ALBER — CASE C-209/96 
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 after checks carried 
out by it. 
18. In its decision the Commission confirmed 
the 2% reduction proposed in the Summary 
Report, whereupon the applicant in June 1996 
brought these proceedings before the Court 
in which it sought 
— the annulment of the decision 15 to dis­
allow the sum of UKL 3 356 000 in respect 
of the United Kingdom's expenditure for 
1992 of the Guarantee Section of the Euro­
pean Agricultural Guidance and Guar­
antee Fund; 
— an order that the Commission pay the 
applicant's costs of these proceedings. 
The Commission contended that the Court 
should 
— dismiss the application, and 
— order the applicant to pay the costs. 
C — Opinion 
Meaning and purpose of the second sentence 
of Article 9(2) 
19. First, the applicant claims that the Com­
mission has misconstrued the second sentence 
of Article 9(2). That provision, it is argued, 
merely requires every natural legal person 
applying to the intervention agency as a ten­
derer to submit one tender only. Regulation 
N o 859/89 is silent on any connections 
between individual tenderers which may need 
to be borne in mind. The second sentence of 
Article 9(2) merely governs the number of 
tenders. Nothing is said concerning the char­
acteristics of the tenderers. The number of 
tenders was checked in the United Kingdom. 15 — See footnote 9. 
I - 5662 
UNITED KINGDOM v COMMISSION 
The national authority verified whether each 
individual tenderer was a registered legal 
person. Whether there were any connections 
between the individual undertakings which 
submitted tenders was not verified in the 
United Kingdom since there was no necessity 
to do so. 
20. Even if such verification had been carried 
out, Regulation N o 859/89 would have given 
the applicant no legal basis on which to reject 
such interconnected tenders. 
21. 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. 
22. The applicant refers to the case-law of the 
Court. Thus, 'as the Court has already 
observed, only refunds granted and interven­
tion undertaken in accordance with the Com­
munity rules within the framework of the 
common organisation of agricultural markets 
are to be financed by the EAGGF ...'. 16 In 
that connection it is for the Commission to 
prove an infringement of the rules governing 
the common organisation of the agricultural 
markets. 17 
23. Moreover, in regard to the requirements 
which the formulation of provisions must 
satisfy, the Court has held: 'Since a rule whose 
breach inevitably entails financial conse­
quences must be sufficiently clear and precise, 
the Commission was not entitled to rely on 
the terms of subheading ... as a basis for 
imposing, at the time of the clearance of 
EAGGF accounts, an interpretation which 
was not dictated by the normal meaning of 
the words used.' 18 
24. Accordingly, it must be examined whether 
the terms in which the second sentence of 
Article 9(2) of Regulation N o 859/89 are 
couched satisfies 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 second 
sentence of Article 9(2). The pleadings mainly 
speak of multiple tenders. Those cannot be 
tenders submitted by one and the same ten­
derer under one name, for such tenders are 
16 — Case C-48/91 Netherlands v Commission [1993] 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, paragraph 16; and 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 - 5663 
OPINION OF MR ALBER — CASE C-209/96 
not lawful in the United Kingdom either. As 
is also clear from the pleadings, the Commis­
sion is also not challenging every kind of 
connection between the individual tenders. 
For example, it states that, where a person 
operates two independent slaughterhouses, 
both may submit a tender. As the Commis­
sion explained in the hearing in its view only 
tenders relating to the same quantity of meat 
are unlawful under the second sentence of 
Article 9(2). Where an interested party there­
fore offers his meat not only himself but 
through the intermediary of nominees, that is 
in breach of Community provisions and must 
be prohibited by the authorities of the Member 
States. 
25. 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 prohibitive 
provision. 
26. The intervention scheme is jeopardised, 
as has been demonstrated, by the practice in 
regard to intervention buying-in in the United 
Kingdom. By the buying-in of excessive quan­
tities 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 Regula­
tion N o 805/68, as amended by Regulation 
N o 571/89, is not guaranteed. 
27. Article 9(2) of Regulation N o 859/89 must 
therefore, it is contended, be interpreted 
according to its meaning and purpose in such 
a way that intervention measures are not 
frustrated. If tenders relate to the same quan­
tity of meat they are in reality only from one 
single tenderer. Such tenders are therefore 
unlawful. 
28. 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 cer­
tainly point to a difference in meaning. It 
could be inferred therefrom that it is not suf­
ficient 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 understood as including a person 
interested in selling his meat into interven­
tion. As has been seen, that person must not 
necessarily be the same person as the ten­
derer, that is to say the person who actually 
submits the tender. If, for example, the meat 
is offered via nominees, in that case there is 
only one interested party but several ten­
derers. But if one looks at the way in which 
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 - 5664 
UNITED KINGDOM v COMMISSION 
those two concepts are used in other regula­
tions dealing with intervention 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, 20 provides that '... 
tenderers should only be allowed to submit a 
single tender ... for each category in response 
to each invitation to tender'. Moreover, Article 
11(3) of Regulation N o 2456/93, which 
replaced Article 9 of Regulation 859/89, uses 
the terms 'Intéressent' (interested party) and 
'Bieter' (tenderer) in connection with the sub­
mission of tenders. 21 
29. Thus, no further conclusions may be 
drawn from the distinction between 'tenderer' 
and 'interested party' in Article 9. 
30. However, it is more instructive to 
have regard to the provisions which pre­
ceded those at issue in the present pro­
ceedings. Thus, in 1990 it was made possible 
to submit several tenders at different 
prices. Under Regulation N o 1282/90 22 
the last phrase of Article 9(2) received the fol­
lowing formulation: 
'They may submit more than one tender, at 
different prices, for each category in response 
to each invitation to tender.' 
31. 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.' 
32. In the applicant's view that regulation 
only governs the number of tenders which 
the tenderer may submit. However, it is clear 
that after repeal of the provision in Regula­
tion N o 1282/90 the tenderer may no longer 
submit several tenders in respect of the same 
quantity of meat. The meaning and purpose 
of the provision here at issue in the second 
sentence 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. 
20 — 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 intcrvention measures in 
the beef and veal sector (OJ 1990 L 204, p. 45). 
21 — This distinction is also reflected in the English version which 
speaks of 'interested parties' and 'tenderer'. 
22 — 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 - 5665 
OPINION OF MR ALBER — CASE C-209/96 
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, 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. 
34. 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 23 be borne by the Member States. 24 
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. 25 
35. Admittedly, the applicant rightly points 
out that the second sentence of Article 9(2) is 
silent on who the individual tenderers are and 
the manner in which individual tenderers are 
to structure their relationships one to another. 
There is, however, no requirement to this 
effect. It follows from the meaning and pur­
pose of the second sentence of Article 9(2) 
that it is prohibited to offer meat by way of 
nominees. The applicant cannot rest content 
in the assertion that it is under no obligation 
under the terms of Article 9 to examine pos­
sible connections between individual ten­
derers. That is merely a question as to the 
manner in which observance of a prohibitive 
provision such as that contained in the second 
sentence of Article 9(2) can be monitored. 
36. Accordingly, it is right to uphold the 
Commission's submission that the second sen­
tence of Article 9(2) also prohibits tenders 
which, whilst coming from different legal 
persons, are made in respect of the same beef, 
with the result that the tenders may be assumed 
to have been submitted by nominees. 
37. In that 'way, contrary to the applicant's 
submission, a basis is provided for such ten­
ders to be rejected, namely the second sen­
tence of Article 9(2) aforesaid. 
23 — Regulátion (EEC) N o 729/70 of the Council of 21 April 
1970 on the financing of the common agricultural policy 
(OJ, English Special Edition 1970 (I), p. 218). 
24 — Article 3(1) of Regulation 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 l(2)(b).' 
25 — Case 11/76 Netherlands v Commission [1979] ECR 245, 
paragraphs 8 and 9. 
I - 5666 
UNITED KINGDOM v COMMISSION 
Monitoring obligation on the part of the 
Member State 
38. 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. 
39. It is clear that in the United Kingdom 
tenders are examined only to see whether they 
originate from different legal persons. N o 
further examination was undertaken. In what 
follows it will be a matter of examining 
whether on that basis the applicant may be 
said to have failed to observe a provision of 
Community law. 
40. For the applicant submits that the Com­
mission has mentioned not one single example 
in which tenders were actually submitted by 
nominees. 
41. 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.' 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 did. 
43. 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-
26 — Netherlands v Commission (cited in footnote 16, paragraph 
11). 
I - 5667 
OPINION OF MR ALBER — CASE C-209/96 
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.' 27 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.' 
44. 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. 
' 
45. 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 
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). 
27 — Seventh recital. 
28 — Netherlands v Commission (cited at 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 [1982] ECR 1503, paragraph 26. 
I - 5668 
UNITED KINGDOM v COMMISSION 
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 
46. 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. 
47. 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? 
48. 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. 
49. 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), in order 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 posses­
sion. 
50. 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 already prior 
thereto there must have been awareness of 
that idea. 
29 — Case C-2/93 Exportslachterijen van Oordegem [1994] ECR 
I-2283, paragraphs 17 and 18. 
30 — Article 10 of Regulation N o 859/89. 
31 — Third recital in the preamble to Regulation N o 859/89. 
32 — Third recital in the preamble to Regulation N o 2456/93. 
I - 5669 
OPINION OF MR ALBER — CASE C-209/96 
51. Thus, it is clear that the applicant ought 
to have carried out further checks in order to 
establish whether the tenders submitted were 
in fact from the same tenderer. That is par­
ticularly the case in light of the clear indica­
tions already alluded to of interconnections 
between individual tenderers. Even if it could 
not with certainty be concluded from those 
interconnections that there was an infringe­
ment of the second sentence 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. 
52. The applicant submitted that monitoring 
of that kind could not be carried out since 
slaughtering came after the submission of 
tenders. Therefore, it is argued, it was not 
possible at the latter date to check whether 
the beef in respect of which tenders were 
made actually existed. In that connection it 
should be stated that that was not the only 
way of checking whether the tender was sub­
mitted by a nominee. For example, an exami­
nation could be carried out as to the inter­
connection between the individual tenderers 
and whether it was at all possible for the indi­
vidual tenderer to offer its own beef. Thus, 
Regulation N o 2456/93 provides that the 
Member States are to ensure that tenderers 
are independent of each other in terms of 
management, staffing and operations. 33 Even 
before the entry into force of the 1993 regula­
tion such a check could have been carried 
out. As has been shown a monitoring obliga­
tion on the part of the Member States may 
subsist even if it is not expressly provided for 
in the relevant regulation. In the present case 
this duty arose out of the rationale under­
lying intervention long before the provision 
was enacted in Regulation N o 2456/93. The 
important factor in that connection is that the 
Member State should check whether in fact 
tenders are being made in respect of different 
quantities of beef. 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 Com­
mission cannot be said, contrary to the appli­
cant's submission, to be seeking to apply 
Regulation N o 2456/93 retroactively to the 
facts of the present case. 
53. It must therefore be held that the appli­
cant ought to have carried out further checks 
which it failed to do. 
Proof of loss occasioned to the EAGGF — 
burden of proof 
54. It now falls to examine whether a reduc­
tion in the context of the clearance of accounts, 
as applied by the Commission, was justified. 
In the applicant's view that is not the case 
since the Fund suffered no loss. 
55. 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 33 — Second subparagraph of Article 11(3). 
I - 5670 
UNITED KINGDOM v COMMISSION 
of the clearance of EAGGF accounts. Thus, 
the Court has stated that only refunds granted 
in accordance with Community provisions 
and interventions carried out in the context 
of the common organisation of agricultural 
markets are to be financed by the EAGGF. 34 
It is, the Court went on, for the Member 
State to show that the conditions for obtaining 
the financing refused by the Commission 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 Community rules 
attributable to that Member State. 35 
56. 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. 36 
57. There may be a case of that kind here 
since, precisely because the necessary checks 
were not made, the Commission is unable to 
establish to what extent the applicant's con­
duct 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. 
58. 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 
59. 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 
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 13). 
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, paragraphs 32 et seq. and United 
Kingdom v Commission (cited in footnote 17, paragraph 13). 
37 — Judgment in Netherlands v Commission (cited in footnote 
16, paragraph 17). 
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OPINION OF MR ALBER — CASE C-209/96 
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. 
60. 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. 38 
61. It is therefore for the applicant — as is 
apparent from the judgment cited in para­
graph 55 — 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 the Commission is not 
dependent on tenders for sale into interven­
tion forwarded by the Member States but has 
other possibilities available to it for obtaining 
information on the prevailing market situa­
tion. 
62. In that connection it should be said that, 
under Regulation N o 571/89, purchase prices 
and quantities are determined on the basis of 
tenders received. 39 It is apparent therefrom 
that the numbers of tenders have at least a 
concomitant role 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 
have given rise to an erroneous assessment. 
63. 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. 
64. 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 Commu­
nity rules authorise payment of aid only on 
condition that certain formalities relating to 
38 — Case 55/83 Italy v Commission [1985] EC» 683, paragraph 
16. 
39 — Second recital in the preamble to Regulation No 571/89 
(cited in footnote 8). 
I - 5672 
UNITED KINGDOM v COMMISSION 
proof or supervision are 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 substantive irregularity. 40 
65. Also in connection with the observance 
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.' 41 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. 
66. The sole matter to be determined is there­
fore whether the applicant can successfully 
plead 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 is, as demonstrated above, 42 not correct. 
In addition it claims that to its knowledge no 
higher expenditure was incurred. That too 
cannot be regarded as sufficient. 
67. Moreover, the applicant submits that 
during the relevant period only small amounts 
of security payments were forfeited. Accord­
ingly, there can have been no extensive specu­
lation in regard to tenders. The Commission's 
view is that this shows, precisely, how suc­
cessful the practice of so-called multiple ten­
ders is in reducing the risk to the individual 
tenderer. 
68. 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. 
69. Accordingly, the practice of so-called mul­
tiple tenders need not necessarily lead to a 
reduction in cases in which the security is 
40 — Case 327/85 Netherlands v Commission [1988] ECR 1065, 
paragraph 25. 
41 — Case C-49/94 Ireland v Commission [1995] ECR I-2683, 
paragraph 22. 42 — Cf. paragraph 54 et seq. 
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OPINION OF MR ALBER — CASE C-209/96 
forfeited but rather to a reduction in amounts 
of security retained. 
70. 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 exchanged. In the Commission's example, 
however, tenders were made in respect of the 
same quantity of meat. 
71. Finally, the applicant claims that the par­
ticipants in tendering procedures under the 
so-called safety net procedure are scarcely 
different from the participants in normal ten­
dering procedures. 43 However, since under 
the safety net procedure all bids were accepted, 
there was in that case no need for speculative 
tenders. Yet, if the participants under these 
intervention measures are the same as those 
participating in the normal intervention pro­
cedures, as the applicant asserts, it might 
indeed be open to question whether multiple 
tenders were lodged in the case of normal 
intervention procedures. 
72. However, since, as the Commission con­
tends, intervention measures under the safety 
net procedure were adopted only in very few 
cases, it cannot, in light of the other indica­
tions, be inferred solely from this assertion 
by the applicant that there were no multiple 
tenders and accordingly no loss was incurred 
by the EAGGF. Nor is it thereby refuted that 
in a given case several tenders were submitted 
in respect of the same quantity of beef. 
73. 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 
74. The applicant also challenges the flat-rate 
calculation of the financial loss undertaken by 
the Commission. Since there is no connection 
between that calculation and the loss, that is 
said to be a penalty for which there must be 
an express legal basis. N o such basis is, how­
ever, apparent. 
43 — 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 are accepted (Article 6(5) of 
Regulation No 805/68 as amended by Regulation No 571/89). 
I - 5674 
UNITED KINGDOM v COMMISSION 
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, 44 a loss to the EAGGF 
cannot be precluded. Moreover, it is sufficient 
to refer to the Court's case-law in regard to 
cases in which the Commission does not dis­
allow the total expenditure affected by the 
infringement but endeavours to establish the 
financial consequences of the unlawful action 
by means of calculations. These calculations 
are based on an assessment of the situation 
which would have prevailed on the market in 
question had it not been for the infringement. 
In such cases, the Court has held, it is for the 
Member State to show that the conditions for 
obtaining the financing disallowed by the 
Commission are fulfilled. 45 Thus, in this case 
too, it is for the applicant to show that the 
Commission's assessment is erroneous. As 
demonstrated above, it has been unable to do 
so. 
Commission's guidelines (Belle Group Report) 
76. In that connection it should again be 
recalled that, under the Court 's case-law, 
financing of expenditure can be disallowed 
even as to 100%, if the precise financial con­
sequences of a measure contrary to Commu­
nity law cannot be established. 46 
77. For the purposes of flat-rate corrections, 
the Commission adopted certain guidelines 
upon a proposal by an inter-service group 
(Belle Group Report). The group proposed a 
reduction in flat-rate calculations by three 
possible percentages: 
— 2%, where the deficiency is limited to 
parts of the control system of lesser impor­
tance, or to the operation of controls which 
are not essential to the assurance of the 
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 
44 — Sec paragraph 54 et seq., in particular paragraph 63. 
45 — United Kingdom v Commission (cited in footnote 17, para­
graphs 14 and 15). 46 — Sec footnote 36. 
I - 5675 
OPINION OF MR ALBER — CASE C-209/96 
controls essential to assuring the regu­
larity of the expenditure, such that it can 
reasonably be concluded that there was a 
high risk of widespread loss to the EAGGE 
78. Those guidelines also provide that no 
correction should be made in relation to cases 
of minor deficiencies in the controls where 
the risk of loss is assessed as minimal. That 
applies particularly to cases where the national 
authorities took effective steps to remedy the 
deficiencies as soon as they were brought to 
light, and where the deficiencies arose from 
difficulties in the interpretation of Commu­
nity texts. 
79. It is this provision which the applicant 
invokes. Even if one could proceed on the 
basis that the deficiencies in the control system 
were attributable to the fact that the second 
sentence of Article 9(2) of Regulation N o 
859/89 was difficult to interpret, it must be 
pointed out that the criterion of (only) minor 
deficiencies mentioned in those guidelines is 
not satisfied in this case. This is not a case of 
minor deficiencies in the control system. 
Rather it is a case where no checks were car­
ried out to ascertain whether multiple tenders 
were made in respect of the same quantity of 
meat or indeed whether they were made by 
nominees. Accordingly, the 2% flat-rate cor­
rection chosen by the Commission appears to 
be proportionate and reasonable. 
80. The applicant was thus unable to show 
that the Commission erred in its assessment 
of the financial correction to be applied in the 
clearance of accounts. 
Infringement of Article 190? 
81. Finally, the applicant additionally submits 
that the Commission's decision must be set 
aside because it contravenes Article 190 of the 
EC Treaty. The Commission, it is submitted, 
failed adequately to demonstrate that the mul­
tiple tenders produced the effects alleged by 
it. As already demonstrated above, the Com­
mission, in any event, discharged the burden 
of proof imposed on it in the present case. 
82. 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 
I - 5676 
UNITED KINGDOM v COMMISSION 
therefore aware of the reason for which the 
Commission considers that it must not charge 
the sums in dispute to the EAGGF. 47 
83. Accordingly, the objections made against 
the Commission's decision cannot avail the 
applicant. 
Costs 
84. 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. 
D — Conclus ion 
85. I therefore p ropose that the C o u r t should: 
(1) dismiss the application; 
(2) o rde r the U n i t e d K i n g d o m to p a y the costs . 
47 — United Kingdom v Commission (cited in footnote 17, para­
graph 60). 
I - 5677