Opinion of the Advocate General — ECLI:EU:C:2004:731
Date: 2004-11-18
Language of the case: Portuguese
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Agriculture and Fisheries;Beef and veal;European Agricultural Guidance and Guarantee Fund (EAGGF)
Procedure: Action for annulment - unfounded
Origin: Portugal

summary report in which the shortcomings with regard to animal identification are summarised. Local inspectors apparently accept handwritten identification numbers without any problems. Such a practice does not comply with Article 6(1) of Regulation No 3887/92 (18) which stipulates: ‘Administrative and on-the-spot checks shall be made in such a way as to ensure effective verification of compliance with the terms under which aids and premiums are granted.’ 31. In the third part of its plea, the Portuguese Government complains that the Commission made an incorrect assessment of the relevant facts because it failed to make allowances for actual circumstances. As justification for its application of the financial correction, the Commission alleges that some animals wore eartags supplied by the producer and bore an identification number used by the producer which differed from the number allocated by the competent authorities. The Commission is of the opinion that this practice increases the risk of more than one premium being paid for the same animal. According to the Portuguese Government, the Commission should have given some weight to the circumstances in which the practice occurred. It involved only six producers in one region. It is claimed that this region has certain characteristics that differentiate it from the rest of the country. Cattle holdings in Alentejo are extensive, which allegedly makes it more difficult for producers to control the animals. It is claimed that the sample used was therefore not representative. 32. The Commission points out that while a region may indeed have specific characteristics, there must nevertheless still be compliance with Community rules. Appraisal 33. In the first part of its second plea, the Portuguese Government calls into question the year to which the flat-rate corrections relate. It argues that the results of the checks should have been taken into account for the 2000 selling season and not for the 1999 selling season. 34. Article 5(2)(c) of Regulation No 729/70 gives the Commission the power, contrary to what the Portuguese Government alleges, to refuse financing for expenditure incurred during the 24 months before the Commission gives written notification of the results of the verification exercise to the Member State concerned. The Commission was therefore able to take the results of the checks performed into account for the 1999 selling season. 35. Moreover, the Portuguese Government did not deny, in its application and reply, that various animals were only marked with handwritten identification numbers. This is contrary to Article 4(1) of Regulation No 820/97. This provision stipulates that ‘[a]ll animals on a holding born after 1 January 1998 or intended for intra-Community trade after 1 January 1998 shall be identified by an eartag approved by the competent authority, applied to each ear’. I do not consider the justification given by the Portuguese Government, namely that a handwritten identification number is only an interim solution, to be convincing proof that the identification of the animals is sufficiently assured. 36. Furthermore, the Portuguese Government claims that the shortcomings observed in the Alentejo region are specific to that region and cannot be extrapolated to other regions. 37. It is settled case-law that, in order to prove a breach of the rules concerning the common organisation of the agricultural markets, the Commission is not required to demonstrate exhaustively that the checks carried out by the national administrations are inadequate or that the figures presented by them are irregular, but only to provide evidence of the serious and reasonable doubt it entertains about such checks and figures. The reason for this mitigation of the burden of proof on the Commission is that it is the Member State itself which is best placed to collect and verify the data required for the clearance of EAGGF accounts, and it is the Member State which is consequently required to adduce detailed and comprehensive evidence that checks have been carried out and that figures are correct and, where appropriate, that the Commission’s assertions are incorrect. (19) 38. The Member States are themselves responsible for breaches of the rules concerning the joint regulation of agricultural markets, as is apparent from Article 8(1) of Regulation No 729/70 which imposes a general obligation on Member States to take the necessary measures to satisfy themselves that the measures financed by the EAGGF are actually and correctly implemented, to prevent and to deal with irregularities, and to recover monies lost as a result of irregularities or negligence. 39. The extrapolation of data from a given region to other regions is therefore not forbidden in principle. It must however still be justified by the facts. 40. In this regard it should be pointed out that the Portuguese Government has not adequately challenged the Commission’s contentions regarding the inadequate identification of the animals. According to the case-law cited above, it is for the Portuguese Government to prove that the Commission’s doubts were unfounded by adducing detailed and comprehensive evidence of the authenticity of its checks and figures. Merely referring to the fact that the situation is different in every region is not enough. 41. Based on the aforementioned considerations, the applicant’s arguments in respect of the rejection of certain expenditure within the framework of the premium for the maintenance of the suckler-cow herd should in my opinion also not be upheld. C – Third plea: Breach of the obligation to state reasons under Article 253 EC 42. The Portuguese Government claims that the Commission did not state in its decision which aspects of the conduct of the Portuguese authorities were regarded as contrary to Community law and which Community legislation was infringed thereby. Thus, according to the Portuguese authorities, the decision does not comply with the minimum requirements necessary to fulfil the obligation to provide reasons. Those minimum requirements are even stricter when at issue are decisions that impose sanctions or entail adverse consequences, especially of a financial nature, as in the present case. In such situations, the fulfilment of the obligation to provide reasons is essential in order to guarantee the rights of defence of the person or body affected by the negative consequences of the measure. 43. The extensive correspondence between the Portuguese Republic and the Commission shows, according to the Commission, that the complaint of the Portuguese Republic is unfounded. In addition, the contested decision provides an overview of the legal grounds and reasons. Moreover, the seventh recital states that: ‘As regards the cases covered by this Decision, the assessment of the amounts to be excluded on grounds of non-compliance with Community rules was notified by the Commission to the Member States and is set out in a summary report on the subject.’ The summary report provides a detailed account of the Commission’s reasons for making the flat-rate corrections. Appraisal 44. The third plea of the Portuguese Government, alleging an inadequate statement of reasons, can also not be upheld. The Court has already held that: ‘In the particular context of the preparation of decisions relating to the clearance of accounts, the statement of reasons for a decision must be regarded as sufficient if the Member State to which the decision was addressed was closely involved in the process by which the decision came about and was aware of the reasons for which the Commission took the view that it must not charge the sum in dispute to the EAGGF.’ (20) 45. The Portuguese authorities were closely involved in the preparation of the contested decision. The reasons for the Commission’s findings were set out both in correspondence from the Commission to them and in the aforementioned summary report, and were also made clear to the Portuguese Government during conciliation. The last plea must therefore in my opinion be rejected. V – Conclusion 46. In view of the above, I recommend that the Court should: (1) dismiss the action; (2) order the Portuguese Republic to pay the costs. 1 – Original language: Dutch. 2 – OJ L 124, p.45. 3 – Opinion in Case C-332/01 Greece v Commission [2005] ECR I-0000 points 4 to 9 and 18 to 22; judgment of 4 March 2004 in Case C-344/01 Germany v Commission [2004] ECR I-0000, paragraphs 2 to 14. 4 – Commission Regulation (EC) No 1663/95 of 7 July 1995 laying down detailed rules for the application of Council Regulation (EEC) No 729/70 regarding the procedure for the clearance of the accounts of the EAGGF Guarantee Section, OJ 1995 L 158, p. 6. 5 – Council Regulation (EEC) No 805/68 of 27 June 1968 on the common organisation of the market in beef and veal, OJ, English special edition 1968(I), p. 187, as amended by Council Regulation (EC) No 2222/96 of 18 November 1996 (OJ 1996 L 296, p. 50). 6 – Commission Regulation (EEC) No 3886/92 of 23 December 1992 laying down detailed rules for the application of the premium schemes provided for in Council Regulation (EEC) No 805/68 on the common organisation of the market in beef and repealing Regulation (EEC) No 1244/82 and Regulation (EEC) No 714/89, OJ 1992 L 391, p. 20, as amended by Commission Regulation (EC) No 2311/96 of 2 December 1996, OJ 1996 L 313, p. 9. 7 – Council Regulation (EEC) No 3508/92 of 27 November 1992 establishing an integrated administration and control system for certain Community aid schemes, OJ 1992 L 355, p. 1. 8 – Commission Regulation (EEC) No 3887/92 of 23 December 1992 laying down detailed rules for applying the integrated administration and control system for certain Community aid schemes, OJ 1992 L 391, p. 36. 9 – Council Regulation (EC) No 1254/1999 of 17 May 1999 on the common organisation of the market in beef and veal, OJ 1999 L 160, p. 21. 10 – Commission Regulation (EC) No 2342/1999 of 28 October 1999 laying down detailed rules for the application of Council Regulation (EC) No 1254/1999 on the common organisation of the market in beef and veal as regards premium schemes, OJ 1999 L 281, p. 30. 11 – Commission Regulation (EEC) No 3887/92 of 23 December 1992 laying down detailed rules for applying the integrated administration and control system for certain Community aid schemes, OJ 1992 L 391, p. 36. 12 – OJ 1994 L 182, p. 45. 13 – Commission Regulation (EC) No 1678/98 of 29 July 1998 amending Regulation (EEC) No 3887/92 laying down detailed rules for applying the integrated administration and control system for certain Community aid schemes, OJ 1998 L 212, p. 23. 14 – The provision – in amended form – is applicable to aid applications submitted on or after 1 January 1999. 15 – Commission Regulation (EC) No 2801/1999 of 21 December 1999 amending Regulation (EEC) No 3887/92 laying down detailed rules for applying the integrated administration and control system for certain Community aid schemes, OJ 1999 L 340, p. 29. 16 – OJ 1995 L 125, p. 1. 17 – Commission Regulation (EC) No 2629/97 of 29 December 1997 laying down detailed rules for the implementation of Council Regulation (EC) No 820/97 as regards eartags, holding registers and passports in the framework of the system for the identification and registration of bovine animals, OJ 1997 L 354, p. 19. 18 – Quoted in footnote 8. 19 – Case C-377/99 Germany v Commission [2002] ECR I-7421, paragraph 95; Case C-278/98 Netherlands v Commission [2001] ECR I-1501, paragraphs 39 to 41, and Case C-329/90 Spain v Commission [2003] ECR I-6103, paragraph 68. 20 – See, inter alia, Case C-27/94 Netherlands v Commission [1998] ECR I-5581, paragraph 36, and the Opinion of Advocate General Mischo in Case C-133/99 Netherlands v Commission [2002] ECR I-4943, points 125 to 127.