Judgment — ECLI:EU:C:1999:11
Date: 1999-01-21
Language of the case: German
Court formation: Sixth 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: Procedure for clearance of accounts;Export refunds;Conditions subject to which expenditure is borne by the EAGGF;General
Procedure: Action for annulment - unfounded
Origin: Germany

Summary Report con­
cerning the clearance of the EAGGF Guarantee Section 
Accounts for 1991 (Doc. VI/320/94 of 21 December 1994; 
hereinafter 'the Summary Report'). 
2 — Case C-54/91 Germany v Commission [1993] ECR I-3399. In 
its judgment in that case, the Court dismissed Germany's 
application to have the Decision on the clearance of the 
EAGGF accounts for 1988 annulled, in relation —among 
other things — to the corrections made by the Commission 
to the expenditure in respect of production refunds for starch 
and sugar. Those corrections were imposed because the 
German authorities had unduly advantaged certain compa­
nies, by authorising them to submit applications for refund 
certificates not before processing commenced, as required by 
the relevant Community legislation, but after processing. The 
Court pointed out that the administrative practice described 
made it impossible to carry out consistently the physical 
checks Germany was required to make on goods, and that it 
could not claim, in order to circumvent that requirement, that 
a different system of supervision was allegedly more effec­
tive: ibidem, paragraphs 36 to 40. 
I - 4 1 
OPINION OF MR LA PERGOLA — CASE C-54/95 
decision of 21 January 1994 (Doc. VI/4480/93) 
and in accordance with Article 1(3) of Regu­
lation (EEC) N o 1723/72, 3 the Commission 
set 31 January 1994 as the deadline for pro­
viding additional information relating to the 
clearance of accounts for the 1991 financial 
year (16 October 1990 — 15 October 1991). 
3. The German authorities did not transmit 
to the Commission the information requested 
concerning the measures taken to modify the 
supervisory procedures until July 1994. In 
view of the inadequacy of the supervisory 
measures applied during the 1991 financial 
year, the Commission decided not to charge 
to the EAGGF 5.5% of the expenditure 
relating to the refunds in question incurred 
by the competent national authorities and 
bodies for that year. The rate applied was the 
same (5%) as that already applied — for the 
same reason — for the 1988-1990 financial 
years, with a 10% increase (that is to say 
equivalent to 0.5% of the expenditure in ques­
tion) because of the delay in informing the 
Commission of the corrective measures taken. 
4. In its application — and basing this on the 
reference in the text of the Summary Report 
to the correction being 'increased by 10% in 
view of the delay in amending the procedures' 
— the German Government described that 
increase as an 'additional penalty' for negli­
gence, complaining that the Commission had 
imposed that penalty without having the 
authority to do so. According to the German 
Government, the Commission has the 
authority only to require that the measures 
provided for and regulated by national law be 
substantively compatible with Community 
law, but does not have the power to penalise 
late communication of the national measures 
adopted. What is more, since the new control 
procedures had been applied as of November 
1993, the delay in communicating them to the 
Commission by the German authorities 
cannot be material. 
5. Lastly, no increase of the type contested in 
this case is provided for in the Commission 
guidelines on the calculation of financial con­
sequences when preparing the decision 
regarding the clearance of EAGGF, Guar­
antee Section, accounts (hereinafter 'the 
Guidelines'), 4 which were applicable from 
the time the Summary Report relating to the 
clearance for 1990 was drafted. Those Guide­
lines in fact lay down that the criterion to be 
applied by the Commission in determining 
3 — See Article 1 of Commission Regulation (EEC) N o 422/86 of 
25 February 1986 amending Commission Regulation (EEC) 
N o 1723/72 of 26 July 1972 on making up accounts for the 
European Agricultural Guidance and Guarantee Fund, Guar­
antee Section (OJ 1986 L 48, p. 31; Regulation N o 1723/72 is 
published in OJ, English Special Edition Second Series III, 
p. 109). In accordance with the practice introduced pursuant 
to Regulation N o 1723/72, the Member States are allowed 
— even after 31 March of the year following the year in 
which the relevant expenditure has been incurred (that is to 
say after the expiry of the deadline for submission of the rel­
evant documentary evidence) — to forward additional infor­
mation that is needed to clear the accounts of the national 
authorities and bodies authorised to disburse the export 
refunds and intervention aimed at stabilising agricultural mar­
kets. That allows the Member States to take into account, in 
particular, the results of the checks already carried out by the 
Commission. However, to enable the Commission to scruti­
nise the national accounts rapidly, the abovementioned Article 
1(3) of Regulation N o 1723/70 provides that, in the case of 
failure to submit the information within the period fixed, the 
Commission is to take its decision on the basis of those ele­
ments of information in its possession at the deadline, except 
in cases where the late submission of information is justified 
by exceptional circumstances. 
4 — See the Commission communication to the Fund Committee 
of 3 June 1993, D o c VI/216/93, and more particularly annex 
2 thereof, concerning forfeitary corrections. 
I - 4 2 
GERMANY v COMMISSION 
whether it is appropriate to apply a financial 
correction and in setting the rate of that cor­
rection must be 'the assessment of the degree 
of risk of losses to Community funds having 
occurred as a consequence of the control 
deficiency'. The German Government, how­
ever, takes the view that the circumstances 
surrounding the amendment of the national 
procedures (which took place in 1993) and 
the communication to the Commission of 
that modification (in 1994) could not in any 
way have affected retroactively the question 
whether the controls exercised in 1991 com­
plied with the rules. 
6. The Commission's response is that there is 
no element of penalty in charging to Ger­
many the expenditure in question. The impo­
sition of the rate of correction in question is 
consistent with Commission practice 
regarding the clearance of EAGGF accounts. 
Such a practice favours the Member States by 
taking retroactive account of the amendments 
they have made to their systems of supervi­
sion, which were found to be irregular, during 
the (in this instance three-year) period between 
the end of the relevant financial year and the 
adoption of the decision on the clearance of 
accounts. In any event, that reduced rate is 
substantially lower than the rate the Com­
mission could legitimately have applied, which 
was actually equivalent to 100%. As of 22 
June 1993 (the date on which the Court 
delivered its judgment in Case C-54/91; see 
point 2 above) the mitigating circumstance 
(the fact that proceedings were pending on 
the issue) that had previously justified lim­
iting the rate of correction to 5% ceased to 
exist. Furthermore, on 31 January 1994, and 
in the absence of information to the contrary 
from the German authorities, the Commis­
sion was justified in assuming that they had 
yet to put a stop to the infringement of Com-
munity law, that had been established in rela­
tion to 1991 also, in application of the Court's 
judgment. 
7. I consider it appropriate to begin by 
clearing up a terminological misconception 
on the part of the applicant Member State 
when it refers to the imposition of 'an addi­
tional penalty for negligence'. The Commis­
sion has no power in this area to impose pen­
alties on the Member States; however where 
it establishes an infringement of Community 
law in relation to the payments made by a 
Member State, it is required to correct the 
accounts that that Member State has sub­
mitted. In fact, it is hardly necessary to point 
out that the financing by the EAGGF of the 
expenditure incurred by the German authori­
ties during the 1991 financial year is governed 
by the principle that only expenditure incurred 
in conformity with the Community rules is 
to be charged to the Community budget. 
8. I therefore agree with the Commission that 
a 100% financial correction could have been 
applied to the expenditure on refunds dis­
bursed on the basis of the administrative 
practice in force in Germany in 1991, 5 a for­
tiori because, in the abovementioned judg­
ment, the Court recognised that supervision 
in the sector in question during the relevant 
financial year (and previous financial years) 
had been inadequate. Nor would the Com­
mission have been precluded, on grounds of 
legal certainty or legitimate expectation, from 
charging Germany the whole (or at any rate 
more than 5.5% of the expenditure in issue) 
simply because, in similar circumstances and 
on the occasion of the clearance of accounts 
for the 1988 to 1990 financial years, it had 
confined itself to charging a rate of 5%. In 
5 — See Case C-197/90 Italy v Commission [1992] ECR I-1, para­
graphs 37 to 40, and Case C-56/91 Greece v Commission 
[1993] ECR I-3433, paragraphs 20 to 22. 
I - 4 3 
OPINION OF MR LA PERGOLA — CASE C-54/95 
point of fact, according to the case-law of the 
Court of Justice, a Member State that has 
been accorded favourable treatment on 
grounds of fairness during a particular finan­
cial year does not acquire any right to demand 
that the Commission should refrain from cor­
recting the accounts that it has submitted — 
as the Commission is required to do where 
an infringement of Community rules has been 
established — in relation to the clearance of 
accounts for subsequent years also. 6 
9. If we look closely, however, Germany is 
not disputing that — when making a financial 
correction to expenditure that has been 
declared by a Member State but which proves 
incompatible with the Community rules per­
taining to the agricultural sector in question 
— the Commission may reduce the amount 
of that correction as compared with the max­
imum sum applicable. It would not, of course, 
be in the interest of the applicant Member 
State to take that view because though it 
makes no claim to a reduction in the correc­
tion, it certainly derives an advantage from 
this. 
The criticism levelled by the German Gov­
ernment actually concerns the Commission's 
authority to determine, at its own discretion, 
the level of that reduction: according to the 
German Government, the Commission could 
have made an overall reduction in that cor­
rection to the level of 5% but was not entitled 
to impose the further increase of 10%. 
10. I consider that assertion to be unfounded. 
In the first place, Germany seems to fail to 
appreciate that, by reducing the financial cor­
rections at the time of clearance, the Com­
mission generally arrives at the same outcome 
as is now alleged to be illegal and unaccep­
table: the assessment whether the national 
supervisory measures, as applied during the 
financial year covered by the decision, com­
plied with the rules is affected retroactively 
— in a manner favourable to the Member 
State concerned — by the circumstances of 
the subsequent amendment of those measures 
to make them compatible with the Commu­
nity rules. That is despite the fact that, by 
definition, that amendment has absolutely no 
impact on the risk of losses to the Commu­
nity funds resulting from inadequate supervi­
sion during the financial year in issue. The 
Member States cannot have it both ways: they 
cannot be allowed to complain that the above-
mentioned administrative practice of the Com­
mission may in individual cases, such as the 
case in point, have unfavourable financial con­
sequences (or, to be more precise, conse­
quences less favourable than the Member State 
concerned could theoretically anticipate). 
Therefore, setting aside the issue of the legal 
nature of the Guidelines and any binding 
effect they may have, 7 the argument which 
the German Government claims to base on 
the Guidelines is unfounded (see point 5 
above). 
6 — See Case C-55/91 Italy v Commission [1993] ECR I-4813, 
paragraph 67. 
7 — The Commission argues that the Guidelines cannot form the 
basis for any direct entitlement on the part of the Member 
States. According to the Commission, the legal relevance of 
the Guidelines is at most that they represent a decision of the 
Commission to impose certain limits on its own action, 
though it may depart from this in individual cases (particu­
larly, as in the instant case, in a manner favourable to the 
Member States). 
I - 4 4 
GERMANY v COMMISSION 
11. Nor, moreover, can there be any question 
of the Commission having exceeded its dis­
cretion in this case. The Commission actually 
set about encouraging the German authorities 
to remedy the breaches of Community law 
that had been established. And it seems to me 
evident that had it been informed by 31 
January 1994 of the changes that had been 
made to the national legislation, the correc­
tion in issue would have been not 5.5% but, 
in accordance with practice, 5%. Given that 
there were no exceptional circumstances to 
justify late notification by the German author­
ities, they have only themselves to blame for 
the 10% increase in the correction. Further­
more, it seems to me perfectly reasonable that 
the Commission should have wished to treat 
a Member State that fails to observe the dead­
line for transmitting the additional informa­
tion required for the clearance of accounts 
more severely — albeit not excessively or dis­
proportionately — than a Member State that 
does meet the deadline. If it is the case that 
strict observance of that deadline is very 
important because it allows the Commission 
to scrutinise the national accounts all the more 
rapidly, 8 the conclusion that has to be drawn 
is that had the Commission not applied an 
increase to Germany in this case, it 'would 
have given the Member States exactly the 
opposite signal. 
I consider that the solution I have proposed 
is consistent with the principles established 
by the Court's judgment in Case C-413/92 
Germany v Commission. 9 That decision 
makes clear that where, during the procedure 
for the clearance of accounts, the Commis­
sion requests a Member State — after expiry 
of the deadline it has been accorded to submit 
additional information — to provide still fur­
ther information, but e the sums in issue to 
the EAGGF on the ground that the explana­
tions provided by the national authorities 
were submitted late, after the expiry of the 
first deadline set. That judgment seems to me 
unequivocally to secure the power of the 
Commission to refuse to charge expenditure 
to the EAGGF on the ground that the dead­
line has not been respected, provided it did 
not subsequently extend or remove that dead­
line. The first plea by the German Govern­
ment has therefore to be rejected. 
Ill — Second plea: the correction of DEM 
54 275 090.69 in respect of irregularities 
relating to the export of livestock to Poland 
is unlawful 
12. The inquiries made by the EAGGF (pur­
suant to Article 9 of Regulation (EEC) N o 
729/70 of the Council of 21 April 1970 on the 
financing of the common agricultural policy 
— hereinafter 'Regulation N o 729/70'), 10 
working with the competent German and 
Dutch authorities, during November 1991 
and April 1992, revealed the existence in those 
two States of artificial export patterns to 
Poland of cattle fraudulently declared to be 
pure-bred breeding animals but in fact slaugh-
8 — The requirement that the Member States should transmit the 
information required to enable the Commission to take its 
decision on the clearance of accounts in good time may in 
fact have its foundation in Article 5 of the Treaty even more 
than in the provisions of secondary legislation (sec Case 14/88 
Italy v Commission [1989] ECR 3677, paragraphs 16 to 20). 
9 — See Case C-413/92 Germany v Commission [1994] ECR 
I-3781, paragraphs 29 to 31. 
10 — OJ, English Special Edition 1970 (I), p. 218. 
I - 4 5 
OPINION OF MR LA PERGOLA — CASE C-54/95 
tered in Poland. In the case of Germany, such 
exports began in 1991 and gradually ceased 
only because the national supervisory proce­
dures were tightened up, with effect from 
October 1991. 1 1 Before that time, the German 
bodies responsible for disbursement had paid 
the refunds to the exporters without having 
the requisite proof of import (or rather use) 
in the third country as required by Article 
5(1) of Commission Regulation (EEC) N o 
3665/87 of 27 November 1987 laying down 
common detailed rules for the application of 
the system of export refunds on agricultural 
products (hereinafter 'Regulation N o 
3665/87'), 12 and without verifying that the 
animals were of sound and fair marketable 
quality (a requirement for payment of the 
refunds under Article 13 of that regulation). 
That verification should have considered the 
genetic value of the animals and their perfor­
mance as required — in the Commission's 
view — by Article 1 of Commission Regula­
tion (EEC) N o 1544/79 of 24 July 1979 on 
the granting of export refunds for pure-bred 
breeding bovine animals (hereinafter 'Regula­
tion N o 1544/79'), 13 in conjunction with 
Articles 1(a) and 6 of Council Directive 
77/504/EEC of 25 July 1977 on pure-bred 
breeding animals of the bovine species (here­
inafter 'Directive 77/504'). 14 However, it 
would seem that the German authorities 
required only the submission of T 5 control 
copies and the breeding and reproduction 
certificates issued by the breeders' associa­
tions which contained no information on per­
formance and assessment of the animals' 
genetic value or pedigree (except, in some 
instances, data concerning the parents only). 
13. The finding that animals exported to 
Poland were intended for slaughter and were 
not going to be used for breeding purposes 
was then confirmed by the fact that they were 
infected with bovine enzootic leucosis (here­
11 — The financial correction applied by the Commission to the 
refunds disbursed for the exports in question, all of which 
were deemed unlawful, was therefore fixed according to a 
differentiated rate for each period in question (100% for the 
period November 1990 to mid-October 1991; and 17% 
— reflecting the percentage of transactions that the Com­
mission found to be incompatible with Community rules by 
checking a sample of the practices applied — for the period 
mid-October 1991 to March 1992). 
12 — OJ 1987 L 351, p. 1. Article 5(1) provides as follows: 'Pay-
ment of the differentiated or non-differentiated refund shall 
be conditional not only on the product having left the cus­
toms territory of the Community but also — save where it 
has perished in transit as a result of force majeure — on its 
having been imported into a non-member country and, 
where appropriate, into a specific non-member country 
within 12 months following the date of acceptance of the 
export declaration: 
(a) where there is serious doubt as to the true destination of 
the product, or 
(b) where, by reason of the difference between the amount 
of the refund on the exported product and the amount of 
the import duties applicable to an identical product on the 
date of acceptance of the export declaration, it is possible 
that the product may be re-introduced into the Community 
13 — OJ 1979 L 187, p. 8. Article 1 provides: 'For the purposes 
of granting export refunds, bovine animals are considered as 
pure-bred breeding animals falling within subheading 01.02 
A I of the Common Customs Tariff where they comply 
with the definition given in Article 1 of Directive 
77/504/EEC'. 
14 — OJ 1977 L 206, p. 8. Article 1(a) defines a pure-bred breeding 
animal of the bovine species as: 'any bovine animal the par­
ents and grandparents of which are entered or registered in 
a herd-book of the same breed [maintained by a breeders' 
organisation or association that is officially recognised], and 
which is itself either entered or registered and eligible for 
entry in such a herd-book.' Furthermore, Article 6(2) of the 
directive provides that until the entry into force of Com­
munity rules on the presentation of pedigree certificates 
- drawn up in accordance with a uniform procedure, the 
assessment of the zootechnie value and genetic qualities of 
cattle carried out officially in another Member Sute and the 
herd-books currently in existence are to be recognised by 
the other Member States. On the basis of Article 6(1), the 
Commission adopted Decision 86/130/EEC of 11 March 
1986 laying down performance monitoring methods and 
methods for assessing cattle's genetic value for pure-bred 
breeding animals of the bovine species (OJ 1986 L 101, 
p. 37) and Decision 86/404/EEC of 29 July 1986 laying 
down the specimen and the particulars to be shown on the 
pedigree certificates of pure-bred animals of the bovine spe­
cies (OJ 1986 L 233, p. 19). 
I - 4 6 
GERMANY v COMMISSION 
inafter 'BEL'). Entitlement to refunds was 
therefore also precluded on the ground that 
the product was unsound. 
(i) The unlawful inclusion in the clearance of 
accounts for the 1991 financial year of sums 
reding to the 1992 financial year 
14. In its reply, the German Government 
criticised the inclusion in the financial correc­
tion for 1991 of a sum (amounting to DEM 
15 037 768.01) relating to export refunds dis­
bursed in 1992. If the Commission wanted to 
apply a correction to the expenditure in ques­
tion declared for the 1992 financial year, it 
ought to have done so in the context of the 
clearance of those accounts. 
15. While pointing out that this limb of the 
second plea, which was not raised as part of 
the application and is thus out of time, is 
inadmissible, the Commission explains that 
the reason for including sums relating to the 
subsequent financial year in the clearance of 
accounts for 1991 is that the checks carried 
out by the Commission encompass both years. 
Moreover it is far from unusual for accounts 
and expenditure concerning different years to 
be included in a single clearance procedure, in 
the context of a single system of supervision. 
(ii) Substance and fulfilment of the obligations 
incumbent on the national authorities in rela­
tion to the disbursement of the refunds in 
question, in accordance with Article 5 of Regu-
lation No 3665/87 
16. The German Government maintains that 
the cattle exports met the conditions required 
to enable them to be classified as pure-bred 
breeding animals and were actually placed in 
free circulation and marketed in Poland. The 
Commission's assertion that the bulk of the 
animals were slaughtered on arrival in Poland, 
being in fact animals intended for slaughter, 
is not substantiated by serious and reasonable 
doubt, as required by the case-law of the 
Court of Justice in order to satisfy the rules 
on the burden of proof. On the allegation 
that the cattle exported were not of sound 
quality (infected with BEL: see point 13 
above), the German Government claims that, 
in Poland, imports of pure-bred breeding ani­
mals of the bovine species were subject to 
extremely rigorous checks, including the sub­
mission of a certificate issued by an autho­
rised veterinary surgeon. In the absence of 
evidence to the contrary from the Commis­
sion, there is no reason to doubt that those 
checks were properly carried out in the case 
of the transactions in issue. 
17. Furthermore, according to the German 
Government, in 1991 Community law did 
not require formal proof of and checks on the 
performance and genetic value of breeding 
animals before export refunds could be granted 
(see below, point 28). The Commission cannot 
I-47 
OPINION OF MR LA PERGOLA — CASE C-54/95 
therefore criticise the German authorities for 
having considered — until the point when 
doubts concerning the existence of irregulari­
ties arose — the national pedigree certificates 
proof of the quality of the breeding animals 
(and thus of the fair marketable quality of the 
products exported), or for having disbursed 
the refunds applied for, as required under the 
legislation in force. It is also immaterial that, 
in individual cases, the exporters submitted 
pedigree certificates that did not extend as far 
back as the grandparents. On the other hand, 
since Article 1 of Directive 77/504 does not 
require that an animal should be registered in 
a herd-book before it can be covered by the 
term 'pure-bred breeding animal of the bovine 
species', having only to be eligible for regis­
tration therein, the post-clearance drawing-up 
or submission of a pedigree certificate was 
also sufficient for the purposes of recognising 
that the animal was of such quality. 
18. The Commission first of all rejects the 
German Government's claim that in 1991 
Community legislation contained no rules 
concerning checks on the fair marketable 
quality of pure-bred breeding animals of the 
bovine species intended for export, based on 
their genetic value and performance. Instead 
of simply checking the information contained 
in the T 5 control copies, the German authori­
ties ought also to have required the submis­
sion at the time of export of appropriate cer­
tificates stating that the cattle were intended 
for breeding purposes. 
The German authorities appear to have failed 
to appreciate that the procedure for checking 
that the exported product is of fair market­
able quality takes place in two successive 
stages. The fact that Article 1 of Directive 
77/504 merely requires that the animal be eli­
gible for entry in the herd-book is relevant 
only for the purposes of establishing that the 
goods referred to in the export declaration 
and the goods actually exported are the same 
(first stage). However, once that has been 
established, ascertaining that the pure-bred 
breeding animals of the bovine species 
exported are of fair marketable quality (sec­
ond stage) has to include performance moni­
toring and the data on their genetic value. It 
is only by reference to those factors that the 
value of the animals for breeding purposes — 
which determines their greater commercial 
value — can be established. That is also 
apparent from Article 3(4) of Regulation N o 
3665/87, according to which — for the pur­
pose of entitlement to refund — the quantity, 
nature and characteristics of the product 
exported must be established on the day of 
export, that is to say 'the date on which the 
customs authority accepts the export declara­
tion in which it is stated that a refund will be 
applied for' (see Article 3(1)). Above all, the 
requirement that the checks in question be 
carried out may be inferred from an interpre­
tation of the tariff nomenclature which deter­
mines the rate of refund for each product. 
The description chosen of 'pure-bred breeding 
animals of the bovine species' — which attracts 
a rate of refund of ECU 98/100 kg, far higher 
than the rate applicable to other live cattle 
I -48 
GERMANY v COMMISSION 
(ECU 55.5/100 kg) — must necessarily refer 
to the specific use of the animal for breeding 
purposes: there is thus an indissoluble link 
between that use and the economic objective 
linked to the granting of export refunds. 
19. Finally, the Commission reiterates that 
the health checks of the kind provided for 
under Polish law for imports of breeding ani­
mals were not carried out in relation to the 
transactions in issue. The reason why the 
failure to carry out those checks did not pre­
vent the transactions in issue taking place was 
that the animals exported from Germany were 
considered to be cattle for slaughter. That is 
demonstrated by the fact that the cost of 
issuing the accompanying documents (pedi­
gree and health certificates) for the exported 
animals was DEM 20 per head and therefore 
insufficient to cover the cost (DEM 40 per 
head) of even the blood tests needed to iden­
tify BEL. 
(iii) The Commission's refusal to charge the 
expenditure in issue to the EAGGF, in the 
alternative, on the basis of the rate laid down 
for export refunds for cattle for slaughter is 
unlawful 
20. In the alternative, the German Govern­
ment criticises the stance taken by the Com­
mission to the effect that, since the statistical 
results show that the exports in issue were 
made exclusively for 'speculative purposes' — 
not therefore in order to meet real demand 
for the product in question on the third 
country market, but simply to obtain the 
refunds, set at a higher level than fór cattle 
for slaughter — the exporters were not even 
entitled to receive the refunds at that reduced 
rate. In particular, it is not correct that under 
Article 78 of Council Regulation (EEC) N o 
2913/92 of 12 October 1992 establishing the 
Community Customs Code (hereinafter 'Reg­
ulation N o 2913/92'), 15 a new customs dec­
laration had to be drawn up for that purpose. 
Article 78(3) of that regulation merely gives 
rise to a requirement that, where post-
clearance examination of customs declara­
tions indicates that the provisions governing 
the customs procedure concerned have been 
applied on the basis of incorrect or incom­
plete information, the customs authorities 
must take the measures necessary to regu­
larise the situation. The German authorities 
dispute that they in fact complied with the 
Community legislation as interpreted by the 
Commission. Contrary to the Commission's 
contention, the German body responsible for 
disbursement asked the exporters to repay 
the sums paid out in their entirety not in rela­
tion to all of the transactions in question, but 
only in those cases in which the exporter 
failed to provide the proof requested within 
the period fixed (transport documents and 
customs documents issued for import by the 
Polish authorities). In the remaining cases, 
the refunds were paid at the reduced rate 
applicable to the export of cattle for slaughter. 
21. The Commission's response is that the 
sole objective of the procedure for the clear-
15 — OJ 1992 L 302, p.I. 
I -49 
OPINION OF MR LA PERGOLA — CASE C-54/95 
ance of accounts is to check that Community 
law has been properly applied. It involves no 
calculation of profits and losses of the kind 
cited by the German Government in an effort 
to have taken into account the refunds relating 
to the transactions actually carried out. In the 
instant case, the fact that the product listed in 
the customs declaration (pure-bred breeding 
animals of the bovine species) does not tally 
with the product actually exported (catde for 
slaughter) means that the rate of refund appli­
cable is zero. The export refunds for 'cattle 
for slaughter' could have been charged to the 
EAGGF only if it was the export of that 
product that had been certified, post-clearance 
if need be. The reference to Article 78 of 
Regulation N o 2913/92 indicates precisely the 
course that the German authorities ought to 
have followed with a view to amending the 
content of the customs declaration as speci­
fied. 
22. I would first point out that the Summary 
Report had already indicated that the subject-
matter of the decision would include sums 
relating to the 1992 financial year (see points 
15 and 16 above); however, the German Gov­
ernment did not plead that their inclusion 
was unlawful until it submitted its reply. 
Therefore, setting aside the question of how 
the correction in issue should properly have 
been allocated between the two abovemen-
tioned financial years, the first subparagraph 
of Article 42(2) of the Rules of Procedure 
precludes that new plea being taken into 
account. 
23. Having said that, the German Govern­
ment's second plea seems to me to be largely 
directed at disputing that the Commission 
has met the burden of proving the infringe­
ment that has been identified. The difference 
in the position of the parties seems to reflect 
an underlying difference in their perception 
of the way in which the burden of proof is 
shared between the Commission and the 
Member States. 
It would therefore seem useful to cite the 
case-law of the Court of Justice in this area: 
this shows that the burden of proving that 
there has been a breach of the rules of the 
common organisation of the agricultural mar­
kets falls first to the Commission. , 6 How­
ever, that burden of proof is to some extent 
mitigated, for the reasons which the Court 
has set out as follows: 
'The management of EAGGF finances is prin­
cipally in the hands of the national adminis­
trative authorities responsible for ensuring 
that the Community rules are strictly 
observed. That system, based on trust, does 
not involve any systematic supervision by the 
Commission, which moreover would in prac­
tice be impossible for it to carry out. ... Only 
the Member State is in a position to know 
and determine precisely the information nec­
essary for drawing up EAGGF accounts since 
the Commission is not close enough to obtain 
16 — Sec, among many, Case C-55/91 Italy v Commiuion, cited 
in footnote 6 above, paragraph 13. 
I - 5 0 
GERMANY v COMMISSION 
the information it needs from the economic 
operators. 
It follows that the Commission operates on 
the basis of figures communicated by the 
Member States which it can verify by means 
of inquiries in order to be able to confirm or 
deny their accuracy, as the case may be. 
... when the Commission refuses to charge 
certain expenditure to the EAGGF on the 
ground that it was incurred as a result of 
breaches of Community rules for which a 
Member State can be held responsible, it is 
for that State to show that the conditions for 
obtaining the financing refused by the Com­
mission are fulfilled ... 
The Commission is required not to demon­
strate exhaustively that there are irregularities 
in the data submitted by the Member States 
but to adduce evidence of serious and reason­
able 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'. 17 
24. If the principles I have described here are 
appljed to this case, I consider that it is pos­
sible to recognise a prima facie case in favour 
of the Commission, so that the burden of 
proof is reversed, in the terms set out above. 18 
The doubts voiced by the Commission in 
regard to the information supplied by the 
German authorities in fact seem to be serious 
and reasonable. How, in particular, can the 
spectacular 1991 increase in German exports 
to Poland of cattle declared to be pure-bred 
breeding animals of the bovine species be 
explained, since the 1991 figure actually rep­
resents 345 times the figure for the previous 
year? 19 Then we have the unequivocal state­
ments from the Federal Minister for Food, 
Agriculture and Forests, 20 according to which 
'the exporters insisted that the veterinary cer­
tificates required should make no mention of 
17 — Sec Case C-48/91 Netherlands v Commission [1993] ECR 
I-5611, paragraphs 11, 12, 16 and 17. See also Case 820/79 
Belgium v Commission [1980] ECR 3537, paragraph 15; Case 
214/86 Greece v Commission [1989] ECR 367, paragraph 19, 
and Case C-281/89 Italy v Commission [1991] ECR I-347, 
paragraph 20. In his Opinion of 22 November 1990 in the 
latter case. Advocate General Mischo made the point that to 
apply the rule on the burden of proof rigidly 'would not 
only be contrary to the principle actori incumbit probatio 
but would also require the Commission to furnish negative 
evidence which would be very difficult to obtain, whereas it 
may reasonably be expected that a defendant (sic) Member 
State, being ex hypothesi familiar with the conditions under 
which it arranged for the operations in question to be car­
ried out, would be in a position to produce positive evidence 
in that regard' (sec [1991] ECR I-354, point 18). 
18 — Opinion delivered on 22 November 1990 (cited in footnote 
17 above), point 19. 
19 — More than 57 000 head of cattle were imported into Poland 
from Germany in 1991, compared with 166 in 1990 and 374 
in 1989. 
20 — See the letter to the Federal Minister for Finance of 12 
November 1991, containing a request that an inquiry be set 
in motion by the Public Prosecutor's office or the appro­
priate customs unit (annex 3 to the Commission's rqoinder). 
I - 5 1 
OPINION OF MR LA PERGOLA — CASE C-54/95 
the fact that these were animals for slaughter. 
In fact, since the cattle were not free of BEL, 
they met the veterinary requirements for 
slaughter animals only and not the more strin­
gent requirements placed on breeding stock. 
It cannot be ruled out that by demanding a 
veterinary certificate worded in "neutral" 
terms, the exporters were seeking to prevent 
doubts arising in the minds of customs offi­
cials as to whether these were really pure­
bred breeding animals of the bovine species, 
were those officials to scrutinise the relevant 
veterinary documents. ... There is reason to 
suppose that the requirement for the purpose 
of export refunds that the goods be of sound 
and fair marketable quality was not met by 
the majority of the animals exported to Poland 
before the entry into force of the communi­
cation of 14 October 1991'. Those statements 
are further corroborated by the statements 
made by the Polish Director of Veterinary 
Services: 21 no breeding cattle were imported 
into Poland from the spring of 1991, save for 
a few animals that had a pedigree certificate, 
whereas 90% of the 91 221 live cattle imported 
from Germany in 1991 were cattle for 
slaughter and were slaughtered within 72 
hours of entering Polish territory. In my view, 
the facts set out above, at least taken as a 
whole, constitute serious, specific and cor­
roborative evidence that the animals exported 
possessed neither the zootechnie characteris­
tics nor the pedigree of breeding cattle, and 
that the German body responsible therefore 
paid the differentiated refunds relating to them 
to the exporters without complying with the 
requisite formalities concerning proof and 
checks. 
25. At neither the preliminary stage of the 
administrative procedure nor during these 
proceedings has the German Government, for 
its part, been able to rebut the content of the 
two abovementioned documents. 22 The pos­
sibility, advanced by Germany (see point 27 
below), that the Polish economic operators 
sent pure-bred breeding animals for slaughter 
does not carry conviction. Furthermore, the 
applicant Member State has failed to provide 
detailed statistics to support its claim that the 
increase in the exports in question was the 
result of the break-up in 1991 of many agri­
cultural cooperatives in the former German 
Democratic Republic resulting from reunifi­
cation. There do not appear to be any facts to 
confirm that market outlets for some 57 000 
pure-bred breeding animals existed in Poland, 
despite the serious problems Polish agricul­
ture was facing at the time. 
26. However, the objection from the German 
authorities concerns the actual legal premiss 
on which the correction in issue appears to be 
based: they claim that Community law did 
not require payment of the refunds in issue to 
be subject to compliance with the formal 
requirements of documentary evidence (veri­
fication of pedigree and assessment of genetic 
value) stipulated by the Commission. Con­
trary to the view the Commission has taken, 
during 1991 — the year in which the German 
authorities first established, in the month of 
October, the existence of irregularities in the 
sector dealing with live cattle exports to Poland 
21 — See the note dated 24 March 1992 from Dr Jentsch (submit­
ted by the Commission at annex 4 to the rejoinder), con­
cerning the statements by Mr Malczewski. 
22 — Sec footnotes 20 and 21 above, and the relevant sections of 
the Opinion. 
I - 5 2 
GERMANY v COMMISSION 
— there was no provision of Community law 
requiring that such documents be produced 
as part of the national procedures for veri­
fying the quality of the animals exported. 
Indeed, the German Government considers 
that the sole purpose of the refunds in issue 
was to create for the Community market in 
pure-bred breeding animals of the bovine 
species much-needed outlets given the eco­
nomic climate post-reunification, and that the 
refunds ought therefore to have been paid 
whatever the actual final destination of the 
animals. Consequently, even if the pure-bred 
breeding animals were slaughtered instead of 
being used for breeding purposes, that cir­
cumstance was immaterial under the system 
of refunds which is completely unaffected by 
the inquiry into whether the exports were of 
a speculative nature. 
27. More specifically, the Commission was 
wrong to base its finding that the infringe­
ment in question was established on the 'anti-
fraud' clause under Article 5(1) of Regulation 
N o 3665/87, in conjunction with Article 13 
of that regulation, Article 1 of Regulation N o 
1544/79 and Articles 1 and 6 of Directive 
77/504 (see point 12 above). According to the 
German Government, Article 5(1) was not 
applicable to the circumstances giving rise to 
this aspect of the dispute since none of the 
situations set out in the definitive list it con­
tains apply. 23 
28. The German Government further points 
out that the obligation to submit the pedigree 
certificate showing the results of performance 
tests and of the assessment of the animal's 
genetic value was introduced only when Regu­
lation (EEC) N o 2342/92 was adopted and 
thus at a point subsequent to the matters in 
issue. 24 That regulation, which entered into 
force on 17 August 1992 and repealed the ear­
lier legislation, largely reproduced the provi­
sions of law that had in the meantime been 
introduced in Germany: the Commission thus 
patently demonstrated that it considered that 
Germany had responded appropriately to the 
unusual increase in exports of breeding cattle. 
It was not, however, open to the Commis­
sion, when adopting the contested measure, 
to apply the requirements of the regulation to 
the period prior to its entry into force. 
29. At first sight, the way in which Germany 
interprets the abovementioned 'anti-fraud 
clause', in an attempt to deny that it is appli­
cable in this case, seems plausible. The aim of 
Article 5(1) of Regulation N o 3665/87 — at 
least as actually worded — seems in fact 
merely to be to prevent differentiated refunds 
being disbursed incorrectly where the declared 
territorial destination (third country for which 
the refund is higher) does not tally with the 
true destination (third country for which the 
refund is lower). Once that condition has 
been met, it could be argued — as the German 
Government has done — that it little matters 
how the product exported is used: and that 
applies even if, as in this case, the price of 
that product (like the relevant rate of refund, 
calculated to bring the Community price 
down to the level of the market price in the 
23 — See footnote 12 above and the relevant section of this 
Opinion. 
24 — See Commission Regulation (EEC) N o 2342/92 of 7 August 
1992 on imports of pure-bred breeding animals of the bovine 
species from third countries and the granting of export 
refunds thereon and repealing Regulation (EEC) N o 1544/79 
(OJ 1992 L 227, p. 12; hereinafter 'Regulation N o 2342/92'). 
I -53 
OPINION OF MR LA PERGOLA — CASE C-54/95 
importing third country) is determined by 
reference to the quality of use to which the 
product is to be put. 
30. Nevertheless, if we consider the spirit of 
the relevant provisions of Regulation N o 
3665/87, the premiss implicit in the applicant 
Member State's argument seems to me to be 
illogical: namely that any abuse involving the 
end-use of the exported product would inevi­
tably be of lesser gravity and have therefore 
to be tolerated. It is my view, however, that 
the system set in place by Regulation N o 
3665/87 requires that the objective of ensuring 
that the refunds are paid only to those genu­
inely entitled to them has to be pursued, 
which includes the requirement that the prod­
uct's declared use tallies with its actual use. I 
therefore consider that the Commission was 
right to cite Article 5(1) of Regulation N o 
3665/87: construing the concept of 'true des­
tination' as implying both geographical des­
tination and function. Consequently, there 
can be no doubt that in this case both the 
conditions set down by way of alternative by 
Article 5(1) could be considered to be met. 
The 'existence of serious doubt as to the true 
destination of the product' (Article 5(1)(a)) 
could not be denied if only because of the 
spectacular increase in the exports of (declared) 
pure-bred breeding animals in 1991. 25 There 
was the additional risk of the product being 
re-introduced into the Community (Article 
5(1)(b)): that risk existed because of the dif­
ference between the amount of the export 
refund applicable to pure-bred breeding ani­
mals of the bovine species in 1991 (ECU 
98/100 kg) and the level of import duties then 
applicable to that same product (that is to say, 
zero). N o r was the threat of re-introduction 
— which has to be seen as a potential threat 
— averted by the particularly strict and effec­
tive supervisory measures applicable in Ger­
many for the purposes of exemption from 
import duties for transactions concerning 
breeding animals of the bovine species. 
31. I therefore conclude from the combined 
provisions of Articles 3(4), 5(1) and 13 of 
Regulation N o 3665/87 that the payment of 
a differentiated refund, the rate of which is 
determined by reference to the characteristics 
of the product in question and its specific 
use, is subject to two conditions: not only 
must the product be imported into the third 
country stated in the export declaration, it 
must also in fact be placed on the market in 
that country in accordance with the use to 
which its nature and characteristics would 
normally lend themselves. In this case, there­
fore, proof that the exported pure-bred 
breeding animals of the bovine species were 
of sound and fair marketable quality would 
necessarily consist in evidence that they had 
specific genetic characteristics and zootechnic 
value distinguishing them from the other live 
cattle. 
32. Is that then sufficient to allow us to con­
clude that it is legitimate and correct that the 
25 — See footnote 19 above and the relevant section of this 
Opinion. 
I - 54 
GERMANY v COMMISSION 
decision should have found that the German 
authorities failed to implement the formal 
evidential and monitoring procedures which 
the Community rules required at the time of 
the facts in issue? I do not believe it is, as it 
is first necessary to consider the weight to be 
attached to a further factor cited by the 
German Government. That government has 
made the point that indicating the results of 
the assessment of genetic value on the pedi­
gree certificate on exportation was made a 
specific requirement only by Article 3 of the 
subsequent Regulation N o 2342/92 (see point 
28 above). The Commission argues that that 
factor is irrelevant: in adopting that provi­
sion, it was merely seeking to clarify, for the 
purposes of legal certainty, the legal position 
that already existed pursuant to Regulation 
N o 1544/79 and Directive N o 77/504. 
33. I venture, in passing, to raise at least one 
doubt concerning this claim by the German 
Government: Article 3 of Regulation N o 
2342/92 simply incorporated into the eviden­
tial requirements for the granting of export 
refunds the substance of the abovementioned 
Decision 86/404 of 29 July 1986 26 — based 
on Articles 5 and 6(1) of Directive 77/504 — 
in which the Commission introduced the 
specimen pedigree certificate for pure-bred 
breeding animals of the bovine species for use 
in intra-Community trade and specified the 
information that had to be listed (including, 
in particular: 'the results of performance tests 
and the results with origin of the assessment 
of the genetic value, on the animal itself and 
its parents and grandparents'; see Article 
1(2)). 27 I therefore doubt that it can be seri­
ously argued that the decision of 29 July 1986 
did not afford the German authorities suffi­
cient information on the specific formal docu­
mentary evidence they should have required 
to ascertain that the animals exported to 
Poland were really intended to be breeding 
stock. 
34. However, that issue is of only relative 
importance. Germany could not in any event 
be permitted to rely on alleged gaps or impre­
cision in the Community legislation on super­
vision at the time of the facts in issue for the 
reason that the obligations incumbent on the 
Member States in this area exist indepen­
dently of the powers of the Commission. In 
the light of the duty of genuine cooperation 
with the Commission laid down in Article 5 
of the Treaty, particularly in relation to the 
proper use of Community resources, it is in 
fact for the Member States to ensure that 
Community law on the common agriculture 
policy (hereinafter the 'CAP') is implemented 
in their territory, 28 and this includes setting 
in place a system of supervision to ensure 
that the substantive and formal requirements 
for the granting of export refunds are prop-
26 — Sec footnote 14 above 2nd the relevant section of this 
Opinion. 
27 — Use of a breeding certificate that complies with the specimen 
certificate is not compulsory 'provided that the particulars 
mentioned in this Decision are already present in the refer­
ence documentation referring to the pure-bred animal of the 
bovine species that enters into intra-Community trade' (see 
the third recital in the preamble to Decision 86/404, cited in 
footnote 14 above). 
28 — See joined Cases 205-215/82 Deutsche Milchkontor v Ger­
many [1983] ECR 2633. 
I - 55 
OPINION OF MR LA PERGOLA — CASE C-54/95 
erly observed. 29 As the Court of Justice has 
ruled on several occasions, in acts specifically 
adopting measures regarding the implementa­
tion of the CAP and the use of finance from 
the EAGGF, 
'... the Community legislature does not gen­
erally include provisions regulating the pro­
cedure for supervision in detail, leaving to the 
Member States the power to lay down the 
detailed rules for supervision under their own 
legal system and on their own responsibility, 
choosing the most appropriate solution. That 
distribution of powers, the Court has held, is 
consistent with the general approach on which 
the common organisation of the agricultural 
markets in based ... 
That provision (Article 8(1) of Regulation N o 
729/70), 30 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 ... 
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 particular 
supervisory measures ...' 31 
The Commission, for its part, has only a 
supplementary role to play in monitoring in 
detail Community expenditure in relation to 
CAP financing (see Article 8(1) and the eighth 
29 — See Case C-8/88 Germany v Commission [1990] ECR I-232I, 
paragraphs 16 to 20), concerning the granting of premiums 
for the maintenance of the stickler cow herd and of pre­
miums for sheepmeat producers. 
30 — Article 8(1) of Regulation N o 729/70, which is the basic 
regulation in relation to the obligations of the Community 
and the Member States in connection with the financing of 
the common agricultural policy, provides: 
T h e Member States in accordance with national provisions 
laid down by law, regulation or administrative action shall 
take the measures necessary to: 
— satisfy themselves that the 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 irregularities or negli­
gence ...'. 
31 — See Case C-2/93 Exportslachterijen van Oordegem v Bel­
gische Dienst voor Bedrijfsleven en Landbouw and Generale 
Bank [1994] ECR I-2283, paragraphs 14 and 17 to 18; my 
emphasis; references to earlier judgments omitted). 
I - 5 6 
GERMANY v COMMISSION 
recital in the preamble to Regulation N o 
729/70). 32 
35. I therefore conclude from the principles 
established by the Court that — even if the 
Commission did not specifically request this 
— Germany was required to adopt all the 
supervisory procedures necessary to ensure 
that the exports in question were actually car­
ried out and were executed correcdy, including 
those measures not specifically laid down by 
the Community legislation in force in 1991. 33 
Moreover, the facts show that the German 
authorities did not need to wait for Regula­
tion N o 2342/92 to be adopted before issuing 
the more stringent rules on supervision con­
tained in the communication dated 14 October 
1991. In accordance with the case-law of the 
Court of Justice therefore, the refunds in issue 
— which were disbursed in breach of the 
obligation to set in place appropriate checks 
on the performance and genetic value of pure­
bred breeding animals of the bovine species 
— failed to meet the requirements of Com­
munity law and the relevant expenditure 
cannot be borne by the EAGGF. 34 
36. The German authorities have further 
argued, in the alternative, that the financial 
correction decided upon by the Commission 
in respect of the refunds in question was far 
higher than the latter could lawfully impose. 
The expenditure declared by Germany ought 
to have been charged to the EAGGF at least 
on the basis of the lower rate of refund appli­
cable to cattle for slaughter (see points 18 and 
20 above). 35 I would point out here that, on 
the basis of the serious and reasonable doubts 
concerning irregularities raised by the Com­
mission, and in the absence of evidence to the 
contrary furnished by the German authorities 
(see point 25 above), it seems legitimate and 
right to conclude that the exports in issue 
were of a speculative nature (as defined above; 
see point 19). Therefore, when clearing the 
accounts, the Commission's concern could 
not simply be to avoid the unjustified enrich-
32 — See footnote 30 above and the relevant section of this 
Opinion. 
33 — Similarly, and specifically in accordance with the principle 
that the Member States have príme responsibility for the 
strict observance of the rules governing the administration 
of EAGGF financing, a further argument raised by the 
German Government with reference to the application of 
Article 5 of Regulation N o 3665/87 (see footnote 12 and 
points 30 and 31 above) has, in my view, to be rejected. 
According to the Federal Republic of Germany, the Com­
mission failed to fulfil its own duty of genuine cooperation 
under Article 5 of the Treaty: although harbouring 'serious 
doubt as to the true destination of the product', the Com­
mission omitted 'to ask the Member Sutes to apply the pro­
visions of paragraph 1 (of Article 5)' — as required under 
the second subparagraph of Article 5(2) — and at any event 
failed to perform its own supplementary role in relation to 
the system of supervision set up by Regulation N o 729/70. 
I take the view, however that although the Commission has 
the power to do this, it was not required to address to Ger­
many the request provided for in the second subparagraph 
of Article 5(2). The obligation to implement Article 5(1) is 
incumbent on the Member States and is an independent 
requirement that does not have to be triggered by a prior 
request from the Commission (and in this case there is some 
doubt as to whether there would have been any point in 
making such a request). 
34 — See Case C-8/88 Germany v Commission (cited in footnote 
29 above), paragraphs 16 to 21, according to which, if the 
Commission ascertains that there is, in a Member Sute, no 
comprehensive system of checks necessary to guarantee the 
proper observance of the substantive and formal conditions 
for the grant of premiums or the system introduced is defec­
tive to the point of giving rise to doubts as to compliance 
with those conditions, it is entitled to disallow certain 
expenditure incurred by the Member Sute in question. It is 
entitled to disallow expenditure even where it is esublished 
that no substantive irregularity has been committed (see 
Case 327/85 Netherlands v Commission [1988] ECR 1065, 
paragraph 25. See also Case C-197/90 Italy v Commission 
(cited in footnote 5 above) paragraph 38. 
35 — The German Government did noty however, argue that the 
expenditure on the refunds in issue incurred during 1991 
ought to have been charged to the EAGGF at least to the 
level of the number of animals lawfully exported during the 
subsequent financial year (1992: 9 300 head) or the previous 
financial year (1990: 166 head). 
I - 57 
O P I N I O N OF MR LA PERGOLA — CASE C-54/95 
ment of the German economic operators, as 
it would have been required to do had the 
difference between the product stated in the 
customs declaration and the product actually 
exported resulted from factors beyond the 
control of the exporters. 3 6 
That is not the case here: the exporters know­
ingly received sums of money by way of 
refunds for transactions involving cattle fraud­
ulently declared to be pure-bred breeding 
animals of the bovine species but which were 
not in fact of the 'sound and fair marketable 
quality' promised, as they subsequendy turned 
out to be simply cattle for slaughter. Above 
all, since the customs declarations were not 
amended post clearance to reflect the real state 
of affairs — and they could, for example, have 
been amended had the German authorities 
carried out the checks on the declarations 
provided for by Article 78 of Regulation N o 
2913/92 (see point 20 above) — to have 
accepted Germany's claims would have 
resulted in the anomalous situation of charging 
to the EAGGF, in relation to exports (offi­
cially) of breeding cattle, sums which ought, 
on the basis of the rules in force, to have been 
paid by way of export refunds for live cattle 
for slaughter. I therefore consider that the 
refunds in question were disbursed in breach 
— as regards both form and substance — of 
the rules established by Regulations Nos 
1544/79 and 3665/87. Consequendy, pursuant 
to Article 2 of Regulation N o 729/70, the 
cost of those refunds could not be borne by 
the EAGGF and had to be charged in their 
entirety to Germany. 3 7 I therefore consider 
that the second plea submitted by the German 
Government must also be rejected. 
IV — Third plea: the correction of DEM 
56 692 508.70 in respect of irregularities (fal­
sification of evidence of arrival at destination 
and manipulation of quantities) committed 
by IMEX during the period 1981—1987 in 
relation to exports of livestock to the Near 
and Middle East is unlawful 
(i) Correction of DEM 22 Oil 281.10 for the 
delay on the part of the German authorities 
in carrying out thorough checks on the law-
fulness of the transactions carried out by IMEX 
after 1 January 1986: the Commission finding 
is unfounded in substance and fails to provide 
a sufficient statement of reasons 
37. The German Government denies having 
been significantly late in adopting the mea­
sures required to safeguard the interests of 
the EAGGF, in breach of its own duty of 
genuine cooperation, and criticises the Com-
36 — See Case 288/85 Hauptzollamt Hamburg-Jonas v Piange 
Kraftfutterwerke [1987] ECR 611, paregraphs 16 to 19, 
which concerns limiting the obligation to repay amounts 
unduly paid, where expon refunds nave been paid in advance, 
to the difference (to which a standard 2 0 % supplement is 
applied) between the refund already paid for the goods 
declared to have been exported and the refund that the 
exporter ought in fact to have been paid for the goods actu­
ally exported (in that case mixed cereal feed for sheep with 
a cereal content below the 6 5 % by weight declared). 
According to the Court of Justice a similar limit has a for­
tiori to apply where the product actually exported — although 
having different characteristics (in the relevant case, flour 
with a considerably higher ash content) from those men-
Boned in the payment declaration — is basically the same 
product, as demonstrated by the fact that it occupies the 
same position in the Common Customs Tariff: sec joined 
Cases C-5/90 and C-206/90 Bremer Rolandmūhlt Erling v 
Hauptzoliamt Hamburg-Jonas [1992] ECR I-1157, para­
graphs 33-37. 
37 — See, among many. Case 18/76 Germany v Commission [1979] 
ECR 343 and Case 56/83 Italy v Commission [1985] ECR 
703. 
I - 5 8 
GERMANY v COMMISSION 
mission for having been unable to cite in detail 
and give a sufficient statement of the reasons 
for its allegations of infringements committed 
by the German authorities. The customs inves­
tigation unit could not have been expected to 
act differently because sufficient evidence to 
bring charges against IMEX had to be gath­
ered in a way that avoided arousing suspi­
cions that could have led IMEX to mask its 
criminal activities involving sophisticated fal­
sification techniques. That is why, although 
investigative measures were adopted as far 
back as December 1985, it was not possible 
to put a stop to the manipulation of quanti­
ties by IMEX until after the Munich police 
had transmitted, in October 1987, the results 
of their investigation into the falsification of 
the customs stamps used. The Commission's 
refusal to charge the sum in question to the 
EAGGF, in accordance with Article 8(2) of 
Regulation N o 729/70, 38 on the ground of 
negligence on the part of the German authori­
ties in preventing and prosecuting the irregu­
larities, is therefore unlawful. 
(ii) The failure to charge to the EAGGF the 
refunds disbursed between 1981 and 1987 on 
the ground that auxiliary customs officers had 
manipulated the quantities: the correction of 
DEM 25 024 493 is unlawful to the extent that 
it goes beyond the findings of the criminal 
court 
38. The German Government maintains that, 
when calculating the expenditure to be charged 
to Germany in relation to refunds disbursed 
unlawfully, the Commission was bound by 
the finding of the Munich Landgericht (125 
instances in which auxiliary customs officer 
H falsified the quantities, at the Hamburg 
loading centre, resulting in loss totalling DEM 
11 745 714). N o financial correction could be 
imposed on the basis of other irregularities 
that were merely presumed to have taken 
place. 
39. The Commission points out that, for the 
purposes of establishing whether or not expen­
diture incurred by the Member States in rela­
tion to CAP financing meets the requirements 
of Community law — the objective of the 
clearance of accounts procedure — there is 
no reason to consider the findings of a national 
court decisive. Since it is not necessary for the 
infringement to be established and penalised 
in the criminal courts before expenditure 
incurred in breach of Community rules can 
be charged to the Member State, the Com­
mission was fully entided to refer to the out­
come of the inquiry conducted by the Munich 
customs investigation unit (284 instances in 
which quantities had been manipulated 
resulting in loss totalling DEM 25 024 493), 
which was not called into question or refuted. 
(iii) Illegality of charging to the Federal 
Republic of Germany the sum of 
DEM 9 656 734.74, equivalent to 10% of the 
payments made after 1 January 1986, on the 
ground that the national authorities had failed 
to meet the deadline for transmitting addi­
tional information 
40. The German Government also challenges 
that part of the decision limiting the reduc-
38 — Article 8(2) provides: 'In the absence of total recovery (of 
the sums lost), the financial consequences of irregularities or 
negligence shall be borne by the Community, with the 
exception of the consequences of irregularities or negligence 
attributable to administrative authorities or other bodies of 
the Member States'. 
I - 5 9 
OPINION OF MR LA PERGOLA — CASE C-54/95 
tion in the sum charged to Germany to 90% 
of the relevant amounts. That limitation — 
based on the German authorities' failure to 
meet the deadline for forwarding to the Com­
mission the additional information on the 
state of progress in and likely outcome of the 
procedures for recovery of the refunds dis­
bursed after 1 January 1986 for export trans­
actions in respect of which the true quanti­
ties had been manipulated by auxiliary customs 
officers — is tantamount to an additional 
penalty and is unlawful because there is no 
legal basis for it. The communication sent to 
the Commission by the German authorities 
on 27 May 1984 was not actually covered by 
Article 1(3) of Regulation N o 1723/72 con­
cerning the forwarding by the Member States 
of the additional information needed for clear­
ance. 39 That communication actually formed 
part of the information system set in place by 
Council Regulation (EEC) N o 595/91 of 4 
March 1991 concerning irregularities and the 
recovery of sums wrongly paid in connection 
with the financing of the common agricul­
tural policy and the organisation of an infor­
mation system in this field and repealing 
Regulation (EEC) N o 283/72 (hereinafter 
'Regulation N o 595/91') and in particular 
Article 5(2) thereof. 40 The significance of that 
distinction is that, in the context of Article 
5(2) of Regulation N o 595/91, it is the Member 
States which may, at their discretion, take the 
initiative of notifying the Commission, which 
does not therefore have the power to set a 
deadline (far less to penalise any 'late' notifi­
cation). It is actually only the Member State 
concerned that is able, in the final analysis, to 
assess the real possibilities of recovering sums 
wrongly paid, in the light of the state of 
progress and developments in the procedures 
for recovery that could or have already been 
set in motion. 
Furthermore, any deadline set by the Com­
mission for forwarding additional informa­
tion within the meaning of Article 1(3) of 
Regulation N o 1723/72 can encompass only 
that information that Community law requires 
to be included in the clearance of accounts 
for each financial year. It is only following 
notification under Article 5(2) that the infor­
mation forwarded to the Commission could 
be included in the procedure for the clearance 
of accounts for a specific year. Therefore, the 
Commission actually reversed the order of 
the procedure laid down in Article 5(2), by 
assessing the situation itself (and concluding 
that it was impossible to recover the sums in 
question) and deciding that the refunds 
wrongly paid to IMEX should be included in 
the clearance of accounts for 1991. However, 
the conclusion that Germany was in breach 
of obligations arising out of Regulation N o 
595/91 — which the Commission based on 
the finding that the deadline of 31 January 
1994 (set for the forwarding of additional 
information for the 1991 financial year) had 
not been observed — is unlawful. Had the 
Commission intended to plead that (alleged) 
39 — Sec footnote 3 above and the relevant section of the Opinion. 
40 — OJ 1991 L 67, p. 11. According to Article 5(2): 
"Where a Memoer State considers that an amount (wrongly 
Eaid) cannot be totally recovered, or cannot be expected to 
e totally recovered, it shall inform the Commission, in a 
special notification, of the amount not recovered and the 
reasons why the amount should, in its view, be borne by the 
Community or by the Member State. 
This information must be sufficiently detailed to enable the 
Commission to decide who shall bear the financial conse­
quences, in accordance with Article 8(2) of Regulation (EEC) 
N o 729/70. ...' 
I - 6 0 
GERMANY v COMMISSION 
failure to fulfil an obligation, it ought in any 
event to have applied the procedure provided 
for by Article 169 of the Treaty. 
41. The Commission's response is that a dis­
tinction has to be made between the for­
warding of the information requested on the 
state and likely outcome of the recovery pro­
cedure and the special notification provided 
for by Article 5(2) of Regulation 595/91, 
inappropriately cited by the German Govern­
ment. In any case, though the special notifica­
tion is not subject to a deadline, it is never­
theless the case that the Member States may 
not use it to delay unduly the procedure for 
the clearance of accounts, as happened in this 
instance. The Commission in fact used the 
powers accorded to it by Regulation 1723/72, 
by requesting Germany (and the other 
Member States), by decision of 21 January 
1994, to forward to it within ten days all the 
additional information needed for the clear­
ance of accounts procedure in respect of the 
abovementioned financial year (see point 2 
above). In the interests of sound administra­
tion, it was perfectly legitimate to set a rea­
sonable deadline for forwarding the informa­
tion on the procedures for recovering the 
refunds disbursed after 1 January 1986 which 
the Commission was prepared to charge to 
the EAGGF — provided the legal require­
ments were met. The deadline set (by deci­
sion of 21 January 1994) for forwarding addi­
tional information was also appropriate in the 
light of the many requests for that informa­
tion that the Commission had addressed to 
the German authorities before October 1993. 
Moreover, once that deadline had expired, the 
Commission was at liberty to undertake clear­
ance on the basis of the information it pos­
sessed at that time: that would have resulted 
in 100% of the expenditure in issue being 
charged to Germany. The decision imposed 
no additional penalty on Germany and was 
consistent with the Commission's previous 
administrative practice of limiting to 90% of 
the sums in question the amount it proved 
necessary to charge to the EAGGF in the 
light of fresh information that the Member 
State concerned had forwarded belatedly. 
42. In regard to the alleged inadequate state­
ment of the reasons for that part of the deci­
sion that criticises Germany for being slow to 
carry out proper checks to ensure that the 
transactions carried out by IMEX after 1 
January 1986 complied with the rules (see 
point 37 above), I do not consider that the 
German Government's criticism can be 
accepted. Setting aside the actual wording of 
the Summary Report, Germany must have 
been perfectly well aware of the exact scope 
of the infringement recorded in that section 
of the decision in issue, not least because of 
the correspondence exchanged with the Com­
mission services during the procedure that led 
up to the decision. Moreover, it is clear from 
the consistent case-law of the Court of Jus­
tice that a decision on clearance of accounts 
in which the Commission refuses to charge to 
the EAGGF a proportion of the expenditure 
declared by the Member State concerned does 
not require a detailed statement of the rea­
sons where the government concerned was 
closely involved in the process by which the 
decision was made and was therefore aware 
of the reason for that refusal. 41 
41 — Sec, among many, Case 819/79 Germany v Commission 
[1981] ECR 21, paragraphs 19 to 21. 
I - 61 
OPINION OF MR LA PERGOLA — CASE C-54/95 
43. I am similarly unconvinced by the plea 
that the rinding that the applicant was late in 
adopting the supervisory measures necessary 
to protect the Community's financial inter­
ests is in substance unfounded. I would refer 
to the points made above concerning the divi­
sion of responsibilities between the Commis­
sion and the Member States, provided for by 
the Community legislature in relation to the 
adoption of measures designed to ensure that 
expenditure is in compliance with the rules 
(see point 34 above). In this case, did Ger­
many adopt such measures as were required 
under Article 5 of the Treaty and Article 8(1) 
of Regulation N o 729/70? The documents 
before the Court indicate that it did not: it is 
true that the competent national authorities 
did not actually sit back and do nothing, but 
nor were the measures they took conspicuous 
by their effectiveness. I would point out that 
in the IMEX affair 'the buck was passed' ini­
tially and repeatedly from one customs inves­
tigation unit to another for alleged reasons of 
territorial responsibility. Moreover, the 'ini­
tial' administrative checks carried out by the 
Hamburg customs office in relation to the 
breeders of the pure-bred breeding animals 
from whom IMEX obtained its stock, were 
organised in such a way as to be completely 
useless because they focused on the (merely 
estimated rather than established) weight of 
the cattle purchased by the exporter instead 
of the number of head — the information 
that mattered for export purposes. Further­
more, the German authorities did not con­
sider it appropriate to set in place a reliable 
system for weighing the cattle or to carry out 
physical checks on a large scale. Although 
such checks seemed reasonable, given the very 
small number of exporters suspected of fraud­
ulent practices (IMEX and Südfleisch) — as 
the Commission pointed out — they were 
attempted on two occasions only, one of 
which (the monitoring of a consignment 
exported by air) was doomed to failure from 
the outset (compulsory weighing of the ani­
mals before they were loaded on the aircraft 
making it extremely easy to establish whether 
the quantities had been manipulated). How­
ever, the freedom of the Member States, cited 
by the German Government, to choose at 
their own discretion the measures most appro­
priate to protect the Community's financial 
interests and the scope of those measures, 
which have to be commensurate with the 
gravity of the conduct under investigation, 
cannot and must not in any way be inter­
preted as some kind of permission to relax 
and reduce the frequency of the checks 
designed to prevent irregularities in EAGGF-
financed transactions. As the Court of Justice 
has had occasion to point out in the case of 
supervisory measures adopted at the national 
level in order to implement Community rules 
regarding the common agricultural policy, the 
national authorities must act with the same 
degree of care as they exercise in imple­
menting the corresponding national legisla­
tion, in order to prevent any erosion of the 
effectiveness of Community law. 42 
44. Above all, it seems to me — and this also 
applies to the objection that the correction 
made on the basis of the manipulation of 
quantities by auxiliary customs officers is 
unlawful in so far as it goes beyond the 
irregularities established by the criminal court 
(see point 38 above) — that the supervision 
exercised by the German authorities was hap­
hazard and lacking in effectiveness because 
there was a failure clearly to distinguish 
between criminal prosecution of the irregu­
larities in question and preventing, from the 
financial point of view, unjustified impover­
ishment of the Community budget. In that 
context, it is clear that evidence that carried 
some weight was not acted upon because it 
was considered insufficiendy detailed to allow 
a criminal investigation to be set in motion. 
42 — See Case C-2/93 (cited in footnote 31 above), paragraph 19. 
I - 62 
GERMANY v COMMISSION 
Furthermore, the illegal payment of Commu­
nity funds came to an end, followed imme­
diately by the winding-up of IMEX, in the 
wake of the investigation instituted by the 
German authorities on 28 October 1987, that 
is to say barely a week after the person who 
had supplied the exporters with the falsified 
stamps had made his statement to the Munich 
police. 43 The Member State's claim that, in 
relation to the administration of EAGGF 
financing, the full and uniform application of 
Community law, based on checks that the 
transactions being financed have actually taken 
place and have been carried out in accordance 
with the rules, remains subject to the condi­
tions governing the implementation of national 
criminal legislation, seems to be irremediably 
at odds with the principles set down by the 
Court of Justice in its case-law concerning 
the primacy of Community law and the 
Member States duty of genuine cooperation. 44 
My view, however, contrary to that of the 
German Government, is that the prevention 
of a negative financial impact on the Com­
munity budget is an objective that co-exists 
with but is quite separate from that of estab­
lishing and bringing a criminal prosecution in 
respect of an offence. In relation to the clear­
ance of accounts it is only the former objec­
tive that matters. 
45. For that same reason, the fact that the list 
of infringements established by the customs 
investigation unit and, at a criminal level, that 
established by the Munich Landgericht do 
not tally (see point 38 above) does not at all 
justify the claim that the correction made by 
the Commission was excessive. In this case, 
moreover, it is clear on closer examination 
that the accuracy and veracity of the data 
transmitted by the national authority is not in 
dispute: the figures on which the decision is 
based are in fact drawn from the final report 
of the inquiry into IMEX by the Munich 
customs investigation unit, dated 23 June 1989. 
Germany is relying, however, on a general 
principle of law, according to which only 
those irregularities established by the criminal 
courts may be considered proven and give 
rise to corrections of the relevant expendi­
ture. Such a principle is, however completely 
incompatible with the rationale — never mind 
the letter — of the system of supervision set 
up by Regulation N o 729/70. It is no coinci­
dence that no trace of it is to be found in the 
subsequent Regulation N o 595/91, mentioned 
above (see point 40), which clearly equates 
the establishment of irregularities by the 
administrative authorities with the finding of 
irregularities by the courts, and merely pro­
vides in the third subparagraph of Article 1 
that: 'This Regulation shall not affect the 
application, in the Member States, of rules 
relating to criminal proceedings or mutual 
assistance between Member States at judicial 
level in criminal matters'. I therefore consider 
that Germany has not succeeded in proving 
that the conditions for obtaining the financing 
withheld under the decision are met, in terms 
of the particular aspect discussed above. 
46. We have, finally, to analyse the plea con­
cerning the charging to Germany of a sum 
equivalent to 10% of the payments made after 
1 January 1986 because of the delay in trans-
43 — Incidentally, the swift action taken by the relevant German 
authorities, once they were aware that there was sufficient 
evidence to incriminate the representatives of IMEX, would 
seem to confirm the legitimacy of the Commission's deci­
sion to charge to Germany the expenditure incurred for the 
irregular transactions earned out from 1 January 1986, even 
though the EAGGF had first drawn the attention of the rel­
evant German authorities to the exporters' activities only 40 
days earlier, by letter of 20 November 1985. 
44 — See, among many, Case 106/77 Amministrazione delle Finanze 
dello Stato v Simmenthai [1978] ECR 629, paragraph 17 and 
Case C-213/89 The Queen v Secretary of 'State for Transport, 
ex parte Facotortame and Others [1990] ECR I-2433, para­
graphs 18 and 19. 
I - 63 
OPINION OF MR LA PERGOLA — CASE C-54/95 
mitting additional information on the state 
and likely outcome of the procedures for 
recovery the national authorities had set in 
motion. The arguments Germany puts for­
ward on that point seem to me to be formal-
istic and to some extent contradictory: the 
applicant Government claims that the com­
munication of 27 May 1994 was made in 
accordance with Article 5(2) of Regulation 
N o 595/91 and therefore constitutes a 'special 
notification' to be given by the Member States 
of their own initiative and without being sub­
ject to deadlines. There is, however, reason to 
doubt that that was the nature of the com­
munication in question: the German authori­
ties appear to forget that they had been asked 
to provide the information in issue on several 
occasions, including prior to the decision of 
21 January 1994. In particular, the Commis­
sion had informed them, by letter of 10 
October 1993 — six years after the financial 
year during which the irregularities had been 
committed, and four years after the adoption 
of the final report by the Munich customs 
investigation unit — that it intended closing 
the file on IMEX under the 1991 clearance of 
accounts procedure, in view of the fact that 
the procedures for recovery undertaken had 
failed to yield results. 
47. Setting aside the debate on the legal basis 
for the Commission's action, in the final 
analysis the 'crux' of this plea seems to me to 
be whether, while procedures for recovery are 
pending, it is for the Commission or the 
Member States to decide once and for all that 
particular payments are not recoverable (in 
whole or in part) and to which financial year 
the sums wrongly paid are to be charged, for 
the purposes of clearing the accounts. I con­
sider that the solution currently advanced by 
Germany has no basis in the legislation. Article 
5(2) of Regulation N o 595/91 certainly allows 
the Member States to notify the Commission 
of those national procedures which they con­
sider fruitless so that the Commission is able 
to take a decision on charging (to the EAGGF 
or the Member State concerned) the financial 
consequences thereof. However, that provi­
sion does not at all preclude — as alleged by 
the German Government — the power of the 
Commission to 'provoke', so to speak, the 
Member State into taking a view, possibly by 
making use of the powers provided for under 
Article 1(3) of Regulation N o 1723/72. How 
can the existence of a power of that nature be 
denied, particularly when, despite objective 
signs that the procedure has failed, the national 
authorities fail to take the initiative of giving 
special notification, in breach of the duty to 
exercise general diligence required by Article 
5 of the Treaty and Article 8(1) of Regulation 
N o 729/70? 
48. Moreover, it is essential that the Com­
mission — even when requesting the for­
warding of information concerning the 
recovery procedures under way needed for 
the clearance of accounts for a given financial 
year — should abide by the principles of 
sound administration, such as the principle 
that there must be a certain and predictable 
financial relationship between the Commis­
sion itself and the Member States. Compli­
ance with that principle generally implies that 
the Commission should make clear to the 
national authorities the financial consequences 
that it may attach, on expiry of a reasonable 
deadline, to their inaction or failure to fulfil 
I - 6 4 
GERMANY v COMMISSION 
precisely identified Community obligations. 45 
It is my view that in this case the Commis­
sion cannot be accused of having neglected 
the requirements of sound administration: 
since the Commission had informed the 
German authorities a long time previously of 
its intention to settle the IMEX dossier under 
the 1991 clearance of accounts — at the time 
the decision of 21 January 1994 was notified 
— the German authorities could not have 
failed to realise that the additional informa­
tion requested as part of the abovementioned 
procedure specifically included information 
as to the likely success of the national proce­
dures for recovery that had been commenced. 
For that reason, once the ten-day deadline — 
which was short but, in my view, reasonable 
and not arbitrary — had expired, the Com­
mission could actually have charged to Ger­
many 100% of the sums that could not be 
recovered (see points 8-11 above). 
49. It has also been the contention of the 
German Government that where a breach of 
the obligations arising out of Regulation N o 
595/91 has been ascertained, the Commission 
cannot use its power to set a deadline under 
Article 1(3) of Regulation N o 1723/72 but 
must bring an action for failure to fulfil an 
obligation under the Treaty. That argument 
does not, however, hold good. Although 
meeting different needs and purposes, the 
procedure provided for under Article 169 of 
the Treaty and the procedure for the clear­
ance of national accounts in relation to 
EAGGF-financed expenditure are held to be 
equivalent by the Court of Justice: both are 
of an adversary nature, entailing the right to 
be heard, and may culminate in proceedings 
before the Court. 46 I consider that the third 
plea submitted by Germany has therefore to 
be rejected. 
V — The fourth plea: the correction of DEM 
997 814 in respect of irregularities committed 
by the Südfleisch company in 1991 con­
cerning exports of beef to Lebanon is illegal 
50. The fourth plea submitted by the German 
Government concerns the Südfleisch com­
pany. After it had exported some 628.75 
tonnes of beef during March 1991, Südfleisch 
provided the German authorities on 1 July of 
that same year — on final closure of the pre­
financing procedure which had been left in 
abeyance — with a customs clearance certifi­
cate for the goods on entry into the United 
Arab Emirates (hereinafter the 'UAE'). That 
document — which Südfleisch had received 
from Al Fatha Goldstore, whose principal 
place of business is in Doha (Qatar) and with 
which it had previously had a commercial 
relationship — subsequently proved to be 
false. The exporter then managed to provide, 
by the annual deadline, evidence that 364.185 
tonnes of the product had been placed on the 
market in Lebanon. As regards the remaining 
282.565 tonnes, however, that evidence was 
not furnished until 1 July 1992, after the 
Principal Customs Office had on several occa­
sions extended the relevant deadline. Süd­
fleisch was therefore paid the refunds appli­
cable at the time to exports of beef to Lebanon 
(equivalent to DEM 294.27 per 100 kg net 
weight of exported product), a rate substan­
tially lower than the refund applicable to 
exports to the UAE (equivalent to DEM 
423.75 per 100 kg). 
45 — See Case C-34/89 Italy v Commission [1990] ECR I-3603, 
paragraph 14. 
46 — See Case C-334/87 Greece v Commission [1990] ECR I-2849, 
paragraph 31. 
I - 65 
OPINION OF MR LA PERGOLA — CASE C-54/95 
The Commission singled out for criticism the 
wrongful exercise by the German authorities 
of the discretion accorded to them by Article 
47(4) of Regulation N o 3665/87. For the pur­
poses of payment of the refund, that article 
provides that further time may be granted for 
the production of the documents proving that 
the product has been cleared through cus­
toms for release for consumption in the third 
country concerned have been completed. The 
deadline may be extended in the case of an 
exporter who, although he has acted with all 
due diligence, has not produced the above-
mentioned documents to the authorities within 
12 months of the date on which the export 
declaration was accepted. 
(i) Fulfilment of the conditions governing the 
granting of an extension of the deadline 
51. According to the German Government, 
the principle of equality laid down in the 
German Constitution required the Principal 
Customs Office, when deciding on the basis 
of the information available whether the con­
ditions laid down by Article 47(4) of Regula­
tion N o 3665/87 for extending the deadline, 
as requested by Südfleisch, were met, to pro­
ceed on the assumption that the exporter had 
made every possible effort to obtain proof 
that the goods had arrived at their destina­
tion. Indeed, the initial attempts to obtain 
that evidence date back to May 1991 when 
Südfleisch commissioned a Mr Hoffmann, an 
insurance agent, to inquire into the move­
ments of the vessel that had transported the 
goods and to ascertain in particular whether 
it .'had unloaded the whole of its cargo in 
Beirut. It is, moreover, quite possible that 
Südfleisch was misled by Al Fatha Goldstore 
about the true final destination of the meat. 
Above all, the fact of granting an extension of 
the deadline would not have made it impos­
sible to refuse subsequently to pay the refunds, 
were it later to emerge that some of the con­
ditions for an extension were not met. 
52. The Commission points out that the fact 
that Südfleisch instructed an insurance agent 
to inquire into whether the goods had been 
correctly transported barely two months after 
they had been dispatched and that it sent three 
of its employees to the UAE to investigate in 
June 1991 (see below), indicates that the 
exporter more or less immediately had doubts 
as to the true destination of the products 
exported. In the light of that circumstance, 
the Commission insists that the production in 
July 1991 of false evidence that the goods had 
arrived in the UAE was fraudulent or at least 
grossly negligent. Although it suspected that 
its product had been placed on the market in 
a country other than that for which it was 
intended, the exporter nevertheless decided to 
transmit the documentation in its possession. 
The request for an extension of the deadline 
under Article 47(4) of Regulation N o 3665/87 
was not in fact submitted until 24 September 
1991, after the German authorities had dis­
covered that the document was false, and the 
company was faced with the prospect of 
having to repay all of the refunds already 
received. Furthermore, the German Govern­
ment's assertion that Südfleisch had acted 
with all due diligence to obtain the proof 
required during the 12 months following the 
date of acceptance of the export declaration is 
also belied by the unprofessional nature of 
the investigation which the company's three 
employees carried out in the port of Ajman. 
As far as the German authorities were able to 
ascertain, the three representatives were not 
I - 6 6 
GERMANY v COMMISSION 
able to be present when the goods were actu­
ally given customs clearance for placement on 
the market in the UAE because the day sched­
uled for verification was a religious festival. 
The representatives therefore did no more 
than establish that the cargo holds of the 
vessel used to transport the goods were more 
or less full of Südfleisch containers with their 
seals intact. 
(ii) Exercise by the national authorities of the 
discretion accorded to them by Article 47(4) of 
Regulation No 3665/87 
53. According to the German Government, 
whether the exporter acted in good or bad 
faith — an issue that has no relevance for the 
purposes of entitlement to the refunds (pro­
vided the documentary evidence is furnished 
within the annual deadline) — also has abso­
lutely no bearing on the process of arriving at 
the decision to extend the deadline. An exten­
sion of that kind could therefore also be 
granted to an exporter that had, fraudulently 
or as a result of gross negligence, submitted 
to the competent national authorities falsified 
customs clearance certificates, except where 
the delay in seeking the evidence was actu­
ally a result of the exporter's initial fraudu­
lent or negligent conduct. Inasmuch as Com­
munity law grants the national authorities 
discretion, the Commission cannot impose its 
own view of how that discretion has to be 
exercised without provoking serious legal 
uncertainty that would be damaging to the 
Member States and all the economic opera­
tors concerned. 
In any event, even if it were correct that the 
German authorities ought to have taken 
account of the subjective factor of the con­
duct of Südfleisch when taking their decision 
on the request to extend the deadline, the 
Principal Customs Office could not in any 
case have refused that extension, as it was not 
in a position to know whether exporter had 
acted deliberately or with gross negligence 
Neither the criminal investigations nor the 
investigations by the customs authorities were 
able to establish that representatives of Süd­
fleisch were responsible for falsifying the 
documents or making fraudulent use of them. 
54. The Commission denies having sought to 
substitute its own decisions for those adopted 
by the national authorities on the basis of 
their discretion. That discretion is, however, 
subject to limitations arising direcdy out of 
Community law and must be exercised taking 
into account the spirit and objectives of such 
legislation. Article 47(4) of Regulation N o 
3665/87 — a provision in the nature of a 
derogation that has as such to be interpreted 
restrictively — allows the Member States to 
extend deadlines only if it has not been pos­
sible to produce the necessary documents in 
due time as a result of objective factors unre­
lated to the exporter's conduct. By failing to 
comply with those criteria, the Principal Cus­
toms Office has clearly exceeded the limits of 
its discretion in this case. 
55. The Commission also points out that an 
official from the German customs investiga­
tion unit took part in the mission — about 
which it informed the Federal Finance Min-
I - 67 
O P I N I O N OF MR LA PERGOLA — CASE C-54/95 
istry directly — that the Commission services 
carried out in Beirut in June 1991. During 
that mission it emerged that refunds had been 
illegally disbursed in relation to some 2 500 
tonnes of beef intended for the UAE but 
diverted to Lebanon. Consequently, despite 
the need — as claimed by the German Gov­
ernment — for further investigations on com­
pletion of the mission, at the time the exten­
sion was granted the Principal Customs Office 
must by then have been aware that the cus­
toms clearance certificate for the goods on 
entry into the UAE, produced by the com­
pany almost three months earlier, had been 
falsified and that Südfleisch knew (or at least 
suspected) that the document was not 
authentic. Above all, the Commission finds it 
very surprising that the extension was autho­
rised well ahead (six months ahead) of the 
expiry of the original annual deadline and 
unusually swiftly (on the very day on which 
Südfleisch made its request, namely 24 Sep­
tember 1991). The fact, moreover, that autho­
risation came just one day before the official 
outcome of the investigative mission to Beirut 
was transmitted to the German authorities is 
in itself a remarkable coincidence to say the 
least. 
56. Lastly, the Commission contends that, 
contrary to what is maintained by the German 
Government, the establishment of possible 
criminal responsibility is an issue completely 
separate from verification of the requirements 
provided for by Article 47(4) of Regulation 
N o 3665/87. The process of verification cer­
tainly includes the need, however, to ascertain 
whether an extension that allows an exporter 
to continue to search for the 'right docu­
ments' — in circumstances such as those of 
the instant case and following the discovery 
that the quantities have been manipulated — 
is compatible with Article 47(4). 
57. I take the view that, within the context of 
Article 47(4) of Regulation N o 3665/87, estab­
lishing whether the exporter has exercised all 
due diligence and is therefore entitled to be 
granted extensions of the deadline, must be 
linked to the legal concept of force majeure. 
Moreover, implicit reference to the concept of 
force majeure is to be found in the twenty-
fourth recital in the preamble to the regula­
tion, and Article 47(4) has to be interpreted 
in the light of this. 4 7 While the fact that a 
case of force majeure exists does not relieve 
the exporter of the obligation to produce 
within the statutory deadline the documenta­
tion concerning payment of the refund, 
including the documentary evidence 
requested, it may enable him to continue col­
lecting and submitting evidence and therefore 
to obtain payment of sums that could not 
otherwise be disbursed. It therefore seems to 
me appropriate to examine whether the failure 
of Südfleisch to produce the documentary 
evidence before the deadline was extended 
was in fact the result of force majeure (I shall 
leave aside for the moment the clear anomaly, 
pointed out by the Commission, that this was 
a deadline extended six months before it was 
due to expire, without awaiting the outcome 
of an investigation that was under way). 
58. According to the consistent case-law of 
the Court of Justice, the concept of force 
47 — The 24th recital in the preamble to Regulation N o 3665/87 
states: 'whereas no refund is granted if the tūne-limits ... for 
submitting the proof required for obtaining payment of the 
refund are not complied with; ... the rules at present in force 
should, however, be relaxed; ... measures should accordingly 
be adopted pursuant to Commission Regulation (EEC) No 
2220/85 (laying down common detailed rules for the appli­
cation of the system of securities for agricultural products) 
(OJ 1985 L 205, p. 5), as amended by Regulation (EEC) N o 
1181/87 (OJ 1987 L 113. p. 31)' (my italics). Article 19 of 
Regulation (EEC) N o 2220/85, as amended by Article 1 of 
Regulation (EEC) N o 1181/87, provides — for the purpose 
of release of a security — that if the deadline for showing 
final entitlement to the sum granted has passed without pro­
duction of evidence of entitlement, it may be postponed in 
a case of force majeure. 
I - 6 8 
GERMANY v COMMISSION 
majeure differs in its scope in different areas 
of the law and must be defined by reference 
to the particular legal context in which it is 
intended to operate. 48 The legal context I 
described above (see points 50 to 57) seems to 
me not dissimilar in substance to the situa­
tions referred to the Court of Justice in the 
abovementioned Cases 109/86 49 and 
C-334/87 50, in which the Court ruled that 
'whilst that concept (force majeure) does not 
presuppose absolute impossibility, it never­
theless requires the non-performance of the 
act in question to be due to circumstances 
beyond the control of the person claiming 
force majeure which are abnormal and unfore­
seeable and of which the consequences could 
not have been avoided despite the exercise of 
all due care'. 
It seems to me highly significant that, in 
attempting to justify extending the deadline 
granted to Südfleisch, Germany has been 
unable to cite any specific external event that 
was abnormal, unforeseeable and unavoidable 
notwithstanding the diligence exercised by 
the exporter in its efforts to obtain the docu­
mentary evidence within the period fixed. 
Indeed, closely considered, it is the very affir­
mation that the company acted in accordance 
with the normal criteria of due diligence and 
care that is, in my view, contradicted by the 
facts established by the Commission (see point 
53 above), even setting aside the question 
whether Südfleisch can be held responsible 
for falsifying the customs clearance certificate 
in the UAE or for its fraudulent use. 51 
How then has the German Government 
explained the difficulties encountered by Süd­
fleisch in obtaining proof of export? All that 
can be gleaned from the documents before 
the Court are accusations as veiled as they are 
vague of breaches of the contractual obliga­
tions entered into by the carrier of the goods 
and Al Fatha Goldstore (whose role in rela­
tion to the contract of sale in issue is in any 
case unclear). It can only be one or the other 
of those operators (or both of them), but in 
any event not Südfleisch, that has to be held 
responsible for taking the initiative of 
re-exporting the meat to Lebanon. But even 
if we wished to accept the German Govern­
ment's view that Südfleisch acted with the 
utmost diligence, and even if the accusations 
directed against the other parties to the con­
tract with that exporter were underpinned 
and substantiated by specific facts, the alleged 
failure to fulfil contractual obligations cannot 
48 — See, among many, Case 109/86 Theodorakis v Greek State 
[1987] ECR 4319, paragraph 6. 
49 — Cited in footnote 48 above and the relevant section of this 
Opinion (concerning the claim by the Theodorakis com­
pany, which had obtained an export licence for olive oil in 
return for the required security, to have the obligation to 
export annulled and the security released on grounds of 
force majeure, after the contract of sale had been cancelled 
due to non-performance by the purchaser; see paragraphs 7 
and 8). 
50 — Cited in footnote 46 above and the relevant section of this 
Opinion (concerning, in the part of relevance to the instant 
case, the financial correction applied by the Commission in 
respect of the extension of the original period of validity of 
an export certificate on grounds o f force majeure, granted by 
the Greek authorises when the contract of sale was termi­
nated because of non-performance (failure of the Sudanese 
Government to open a credit line to fund the transaction). 
That extension resulted in the continuing application of a 
rate of refund higher than that in force on the date the cus­
toms formalities were completed; see paragraphs 21, 34 and 
35). 
51 — Furthermore, in the light of the points I have made above 
concerning the need to distinguish between preventing 
unduly detrimental financial effects having to be borne by 
the Community budget and criminal prosecution of the 
irregularities in question (see point 44), I consider it super­
fluous to discuss the argument raised by the German authori­
ties, according to which, since neither the criminal investiga­
tion nor that carried out by the customs investigation unit 
uncovered evidence of responsibility on the part of company 
representatives, it has to be accepted that Südfleisch acted 
with all due diligence for the purposes of Article 47(4) of 
Regulation N o 3665/87 (see point 53 above). 
I -69 
OPINION OF MR LA PERGOLA — CASE C-54/95 
in any event be encompassed by the concept 
of force majeure. As the Court has ruled, 
again in the abovementioned Cases 109/86 
and C-334/87, although such a disruption to 
the performance of a contract may be described 
as a circumstance outside the control of the 
exporter, it is nonetheless neither abnormal 
nor unforeseeable. Such an event is an ordi­
nary commercial risk inherent in commercial 
transactions: whether or not the exporter acted 
in good faith is immaterial. It is, however, for 
the exporter, who is fully at liberty to select 
such trading partners as his interests may dic­
tate, to take the appropriate precautions either 
by including the requisite clauses in the con­
tract or by effecting appropriate insurance. 
Similar principles apply to any fraudulent 
practices involving the re-introduction into 
the Community of goods in respect of which 
the exporter has obtained a refund. 52 
59. Finally, the case-law that I have cited here 
has also made clear that the Member States 
remain subject to Commission supervision 
regarding the manner in which they make use 
of the power of recognising specific circum­
stances as cases of force majeure, thereby 
making it possible to extend the period of 
validity of an export licence or an export 
deadline. According to the Court, of Justice, 
that power of supervision by the Commis­
sion is needed to ensure that Community law 
is properly applied; 53 I see no reason why, 
the necessary changes being made, that power 
cannot come into play where, at their discre­
tion, the national authorities are granting an 
extension to the deadline for submitting docu­
mentary proof pursuant to Article 47(4) of 
Regulation N o 3665/87. The further argu­
ment raised by the German Government, 
according to which the Commission may not 
impose upon the Member States its own con­
cept of the way in which the discretion in 
issue has to be exercised, appears therefore 
also to be without merit. The Commission in 
fact properly decided that the Principal Cus­
toms Office ought at least to have awaited the 
imminent communication of the outcome of 
the investigative mission before taking its own 
decision, and that it was only on expiry of 
the original annual deadline (in March 1992) 
that the German authorities would have been 
in a position fully to assess whether Südfleisch 
had exercised due diligence, by reference to 
all the circumstances that had occurred after 
the date on which the export declaration was 
accepted. Similarly — and leaving aside the 
non-existence of a case of force majeure — 
the Commission was right to take into con­
sideration also the economic consequences of 
the decision to grant the extension: the aim of 
such an extension ought simply to be to make 
it possible for exporters to overcome the dif­
ficulties that they may encounter in obtaining 
the documentary proof requested, and may 
not in any event permit the parties concerned 
to limit the damaging economic effects attrib­
utable to their own misconduct, or even avoid 
them all together, as seems to have happened 
in this case. I therefore conclude that the 
fourth plea must be rejected: the fact that the 
extension of the annual deadline accorded to 
Südfleisch was unlawful both on the ground 
that the requirement of force majeure was not 
met and on the ground that the national 
authorities misused their own discretionary 
powers, means that the company was late in 
submitting its proof. In those circumstances, 
the expenditure on the refund in issue could 
not be charged to the EAGGF. 54 
52 — Such practices therefore result in the right to refunds being 
lost even if the exporter did not take part in the fraud or 
acted in good faith: see Case C-347/93 Belgian State v Bot¬ 
erlux [1994] ECR I-3933. 
53 — See Case 334/87 Greece v Commission (cited in footnote 46 
above), paragraph 30. 
54 — See Case 56/83 Italy v Commission (cited in footnote 37 
above). 
I - 7 0 
GERMANY v COMMISSION 
VI — Fifth plea: the correction of DEM 
518 181 for irregularities in relation to exports 
of beef to Zimbabwe by the Barfuß company 
in 1986 and 1987 is unlawful 
60. During a mission to Zimbabwe in Feb­
ruary and March 1990, the German customs 
investigation unit uncovered German certifi­
cates of fitness for consumption relating (inter 
alia) to consignments of beef that Barfuß had 
declared it had exported to the Republic of 
South Africa and in respect of which it had 
obtained the relevant export refunds. At the 
time, there was no refund provided for the 
export of the product in question to Zim­
babwe. The German authorities had been very 
indecisive in setting about recovering the 
refunds paid to Barfuß: in particular, the rel­
evant procedure was not set in motion by the 
Principal Customs Office until July 1991, one 
year after it had been notified of the outcome 
of the abovementioned mission. After agreeing 
to the request to defer the matter to the clear­
ance of accounts for the next financial year, 
submitted by the German authorities in order 
to allow them to attempt, in the meantime, to 
secure repayment of the sums wrongly paid, 
the Commission decided in 1994, on the basis 
of Article 8(2) of Regulation N o 729/70, 55 to 
make the correction in issue in respect of the 
irregularities established (export of the product 
to the Republic of South Africa and its sub­
sequent re-export to Zimbabwe, followed by 
re-import into the Community under the 
arrangements for exemption from customs 
duties pursuant to the Third Lomé Conven­
tion). 
61. The German Government considers the 
Commission's finding that the payments in 
issue were unlawful to be arbitrary and 
unfounded. The German certificates of fitness 
for consumption uncovered in Zimbabwe 
merely demonstrate that the goods exported 
by Barfuß were sound but do not indicate the 
route they took. Those documents are not in 
any event such as to deprive of all probative 
value the customs clearance documents for 
the Republic of South Africa or the docu­
ments accompanying the meat. It cannot, in 
particular, be ruled out that the products 
exported by Barfuß were placed on the market 
in South Africa and that the certificates in 
issue — issued in Germany and stamped in 
Zimbabwe — were fraudulently attached to 
other consignments of meat, in the course of 
subsequent commercial transactions, specifi­
cally after the product was imported into 
Africa. The delay in initiating the procedure 
for recovery, therefore, was actually the result 
of doubts as to its legality and likelihood of 
success, given that the documents submitted 
by the customs investigation unit — on which 
the procedure had to be based — were con­
sidered to be without probative value. Simi­
larly, the procedure was closed because the 
Principal Customs Office was persuaded that 
the measures taken to recover the sums ille­
gally disbursed could have been successfully 
challenged in the courts. 
62. That argument was considered unaccept­
able by the Commission, since it would imply 
— contrary to what emerges from the case-law 
of the Court of Justice — that procedures for 
recovery are possible only where it is proven 
with absolute certainty that the goods exported 
were placed on a market other than that of 
the country of destination. In this case, in the 
Commission' view it was for Barfuß to fur­
nish incontrovertible proof that the goods had 55 — See footnote 38 above 
I - 71 
OPINION OF MR LA PERGOLA — CASE C-54/95 
been placed on the market of the declared 
country of destination (South Africa), by pro­
ducing documents other than the customs 
clearance certificates, the probative value of 
which had been called into question by the 
discovery in Zimbabwe of certificates of fit­
ness for consumption concerning the selfsame 
consignments of beef. In the absence of such 
proof, the refunds already disbursed had of 
necessity to be recovered. 
63. In the light of the interpretation guidance 
that emerges clearly from the earlier case-law 
of the Court of Justice (and more particularly 
the decision in Dimex), 56 there was then no 
point in further suspending the procedure for 
recovery — as decided by the Principal Cus­
toms Office in August 1991, when Barfuß 
raised an objection — in order to await the 
decision of the Court of Justice on the request 
for a preliminary ruling in the Möllmann-
Fleisch case submitted to it by the Finanzger­
icht Hamburg. 57 Finally, for no good reason, 
according to the Commission, the German 
authorities declined to implement the deci­
sion to recover adopted on 1 July 1991 and 
closed that procedure by decision of 7 June 
1994. The Commission contends that, even if 
the Principal Customs Office were genuinely 
persuaded that the order against Barfuß for 
repayment of sums illegally disbursed was 
itself unlawful, that view was unfounded in 
the light of the Court's abovementioned deci­
sions. The real reason why the procedure was 
closed without yielding any result was in fact 
because the originals of the certificates of fit­
ness for consumption had been lost by the 
Principal Customs Office, to which the docu­
ments had been transmitted as attachments to 
the customs investigation unit's mission report 
dated 5 June 1990. Contrary to the German 
Government's assertions, the original certifi­
cates could not have been validly replaced 
with the unauthenticated photocopies which 
the Principal Customs Office had obtained 
from the EU Commission, because the pho­
tocopies had no probative value under the 
German rules of evidence. 
64. Under Article 8(2) of Regulation N o 
729/70, refunds that have been paid to an 
exporter and have not been recovered may 
legitimately be charged to a Member State if 
it is clear that, having first disbursed the sums 
in question negligently or incorrectly, the 
national authorities also failed to act swiftly 
to rectify the irregularities. To justify the lack 
of decisiveness and the 'hiccups' that occurred 
in the procedure for recovery, the German 
Government has cited the doubts of the 
German authorities as to •whether the pay­
ments to Barfuß were in fact irregular, as 
alleged by the Commission. Those doubts 
were said to be founded on the provisions of 
national law (and the case-law of the Bundes­
gerichtshof) on the burden of proof (see point 
61 above) to which Article 8(1) of Regulation 
56 — See Case 89/83 Dimex [1984] ECR 2815, paragraph 11. 
57 — See Case C-27/92 Möllmamn-Fleisch [1993] ECR I-1701, 
paragraph 11. 
I -72 
GERMANY v COMMISSION 
N o 729/70 refers. 58 However, it seems to me 
indisputable that national legislation may be 
relied on only to the extent necessary to 
implement Community law and always pro­
vided that the application of national legisla­
tion does not jeopardise the scope and effec­
tiveness of the relevant Community rules and 
make possible the kind of speculation the 
latter are meant to eliminate. 59 
65. In accordance with the principles estab­
lished by the Court of Justice in the Dimex 
and Möllmann-Fleuch cases (see footnotes 56 
and 57), the discovery in Zimbabwe of cer­
tificates of fitness for consumption relating to 
consignments of meat which, according to 
Barfuß, had been exported to South Africa 
was such as to arouse reasonable and justifi­
able doubts as to whether the objective of the 
differentiated export refunds had actually been 
achieved. 60 Therefore the German authorities 
could and ought to have asked Barfuß to 
prove, by furnishing one or more of the 
documents listed in Article 20(4) of Commis­
sion Regulation N o 2730/79 of 29 November 
1979 laying down common detailed rules for 
the application of the system of export refunds 
on agricultural products, 61 applicable at the 
time of these events, that the meat had in fact 
been placed on the market in the territory of 
the country indicated in the customs clear­
ance certificate and the accompanying docu­
ments. In the absence of such proof, it has to 
be concluded that Barfuß obtained the refunds 
in issue wrongly and that the German authori­
ties should have acted promptly to recover 
those monies. 
66. As the Court of Justice has long made 
clear, in contrast to the relationship between 
the national intervention agencies and the 
economic operators — which is governed by 
national law, within the limits imposed by 
compliance with Community law, in accor­
dance with Article 8(1) of Regulation N o 
729/70, 62 — the relationship between the 
Member States and the Commission, and 
therefore responsibility for any negligence, is 
governed by Community law in accordance 
with Article 8(2) of the regulation. 63 It fol­
lows from the general obligation to exercise 
diligence laid down in Article 5 of the Treaty 
— which finds expression, in the specific 
sector of CAP financing, in Article 8 of Regu­
lation N o 729/70 6 4 — both that the national 
authorities cannot justify a failure to fulfil 
their obligation to rectify irregularities quickly 
58 — See Joined Cues 205 to 215/82 (cited in footnote 28 above), 
paragraph 36. 
59 — See Case C-28/89 Germany v Commission [1991] ECR 
I-581, paragraph 33, and Joined Cases 146/81, 192/81 and 
193/81 BayWa and Others v BALM [1982] ECR 1503, para­
graph 29. 
60 — See Case 125/75 Milch-, Feu- und Eier-Kontor v Haupttol­
lamt Hamburg-Jonas [1976] ECR 771, paragraph 6, in which 
the Court stated that the raison d'être of the system of 
varying the refund would be disregarded if, in order to 
qualify for payment of the refund at a higher rate, it was suf­
ficient for tne goods simply to be unloaded at a port of the 
country of destination without actually reaching the import 
market. 
61 — OJ 1979 L 317, p. 1, as subsequently amended. Regulation 
N o 2730/79 was repealed, with effect from 1 January 1988, 
by Article 50 of Regulation N o 3665/87, which 1 have cited 
on several occasions. 
62 — See footnote 58 above and the relevant section of this 
Opinion. 
63 — See Case 34/89 Italy v Commission (cited in footnote 45 
above), paragraphs 9 to 11. The Court pointed out that the 
reply to the question whether the Member State concerned 
or the Community had to bear the financial burden of sums 
wrongly paid had direct consequences for the Community 
budget and could not be determined by national law, which 
differed from one Member State to another. It would be 
contrary to the uniform nature of the CAP if the Member 
States were able to alter its financial consequences by means 
of their national rules. 
64 — See footnote 34 above and the relevant section of this 
Opinion. 
I - 73 
OPINION OF MR LA PERGOLA — CASE C-54/95 
by relying on 'the length of administrative or 
judicial proceedings commenced by an eco­
nomic agent'; 6 5 and that the Member States 
must take steps to rectify irregularities 
promptly because 'with the passage of time, 
recovery of sums wrongly paid is likely to 
become complicated or impossible for rea­
sons such as the fact that undertakings may 
have ceased trading or accounting documents 
may have been lost'. 66 
The German Government claims to have acted 
with the requisite diligence, but, in my view, 
the facts belie this: the procedure for recov­
ering the sums wrongly disbursed was not set 
in motion by the Principal Customs Office 
until one year after the irregularity had been 
established and was immediately suspended; 
more particularly, it remained suspended for 
a further year awaiting the Court's ruling in 
Möllmann-Fleisch. Finally, the loss of the 
originals of the certificates of fitness for con­
sumption made it permanently impossible to 
enforce the order for recovery (see points 60 
and 63 above). 
67. Furthermore, I do not consider that the 
Commission can be criticised for having failed 
to respect, in this case, the need for its finan­
cial relationship with the Member States to be 
certain and predictable, which I have already 
mentioned. 67 Apart from the fact that the 
German authorities could not reasonably have 
been unaware that their inertia was likely to 
have damaging financial repercussions, it is 
clear from the documents in the case that, 
even before the Summary Report was drawn 
up, the Commission had made known its 
intention not to charge the sum in question 
to the EAGGF on the ground that the German 
authorities had failed to fulfil their obligation 
to act diligently and to recover the sums 
wrongly paid promptly (see point 60 above). 
The fifth plea must therefore be rejected also. 
VII — Sixth plea: the correction of DEM 
3 118 563.54 in respect of irregularities linked 
to the granting of the special premium for 
beef producers is unlawful 
68. I propose that the Court should disre­
gard the last plea concerning the financial 
correction, at the flat rate of 4%, applied by 
the Commission — because of the extremely 
limited opportunities for inspection, the poor 
quality of the checks carried out on the iden­
tification of the animals and the non-existence 
of reliable administrative controls — to the 
expenditure relating to the special premium 
for beef producers declared in 1991 (on the 
basis of applications submitted in September 
1990) by Bavaria, Baden-Württemberg and 
Lower Saxony. Indeed, the German Govern­
ment stated at the hearing that it was with­
drawing that plea. That the arguments adduced 
by the German Government should be dis­
regarded is absolutely clear from the Court's 
judgment of 3 October 1996 in Case C-41/94 
Commission v Germany 68 — delivered after 
the written procedure in this case had been 
completed — in relation to a similar plea sub­
mitted by Germany in connection with the 65 — Sec Case C-28/89 Germany v Commission (cited in footnote 
59 above),paragraph 32. 
66 — Sec Case C-34/89 Italy v Commission (cited in footnote 45 
above), paragraph 12. 
67 — See footnote 45 above and the relevant section of this 
Opinion. 68 — [1996] ECR I-4733, paragraphs 6 to 73. 
I - 7 4 
GERMANY v COMMISSION 
Commission Decision on the clearance of the 
accounts presented by the Member States in 
respect of the expenditure for 1990 of the 
European Agricultural Guidance and Guar­
antee Fund, Guarantee Section. In that judg­
ment, the Court rejected all of the arguments 
reproduced by the German Government in 
its sixth plea in these proceedings. 
VIII — Conclusions 
In the light of the foregoing I p ropose that the C o u r t : 
— dismiss the application; and 
— orde r the Federal Republ ic of G e r m a n y to p a y the costs. 
I - 75