Judgment — ECLI:EU:C:2000:255
Date: 2000-05-18
Language of the case: Dutch
Court formation: Sixth Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Agriculture and Fisheries;Beef and veal;Cereals;European Agricultural Guidance and Guarantee Fund (EAGGF)
Concepts: Statement of reasons;Procedure for clearance of accounts;Export refunds;Conditions subject to which expenditure is borne by the EAGGF
Procedure: Action for annulment - unfounded
Origin: Belgium

Summary Report on 
31 December 1996, largely informed by the 
remarks made in its conclusions of 8 and 
19 July 1996. 
12. The Summary Report was discussed in 
the Commission's EAGGF committee on 
3 March 1997. 
13. On 23 April 1997 the Commission 
adopted the contested decision on the basis 
of the Summary Report. For Belgium, 
France, Germany and the Netherlands the 
decision imposed flat-rate reductions of 
10% of reported expenditure in the cereals 
sector. For the prefinancing of export 
refunds for beef and veal, reductions were 
fixed at 5% for France, Germany, Italy and 
the Netherlands, but at 10% for Belgium. 
14. The Belgian Government takes the 
view that the Commission, in adopting 
the contested decision, has 
1. infringed Article 5(2) of Regulation 
(EEC) No 729/70,5 the principle of 
sincere cooperation resulting from 
Article 5 of the EC Treaty (now Arti­
cle 10 EC), Article 190 of the EC 
Treaty (duty to state reasons) (now 
Article 253 EC) and the duty of care by 
the fact that it disregarded the facts 
produced by the Belgian authorities 
without giving any reasons for doing 
so. If these submissions had been taken 
into account and examined, the Com­
mission would have had to refrain, 
completely or partly, from applying a 
flat-rate correction or to apply a lower 
correction factor. 
4 — Commission Decision of 1 July 1994 setting up a concilia­
tion procedure in the context of the clearance of the 
accounts of the EAGGF Guarantee Section (OJ 1994 L 182, 
p. 45). 
5 — Regulation (EEC) No 729/70 of the Council of 21 April 
1970 on the financing of the common agricultural policy 
(OJ, English Special Edition 1970 (I), p. 218), last amended 
by Council Regulation (EC) No 1287/95 of 22 May 1995 
amending Regulation (EEC) No 729/70 on the financing of 
the common agricultural policy (OJ 1995 L 125, p. 1). 
On the contents of Article 5 of Regulation No 729/70 see 
paragraph 21. 
I - 3428 
BELGIUM V COMMISSION 
2. imposed a flat-rate correction in breach 
of Regulations Nos 729/70 and (EEC) 
No 1723/726 and of the duty to state 
reasons under Article 190 of the EC 
Treaty. However, the Belgian system 
did not present deficiencies as a whole; 
a 10% reduction is not justified and, 
moreover, is applied to areas in which 
no deficiencies had been found. 
3. infringed the principle of legal cer­
tainty, the legal maxim patere legem 
quam ipse fecisti 7 and the provisions of 
Article 190 of the EC Treaty. The 
Commission set a correction factor of 
10%, contrary to the provisions in 
force and the guidelines it had itself 
set in place, without giving any reasons 
or justification for doing so. 
4. infringed the principle of equal treat­
ment and is in breach of the duty to 
state reasons since it has imposed a 
reduction of only 5% for other Mem­
ber States, but 10% for Belgium, with­
out giving sufficient reasons for doing 
so. 
15. The Kingdom of Belgium has therefore 
brought an action against the Commission 
and claims that the Court should: 
1. annul Commission Decision 97/333/ 
EC of 23 April 1997 on the clearance 
of the accounts presented by the Mem­
ber States in respect of the expenditure 
for 1993 financed by the Guarantee 
Section of the European Agricultural 
G u i d a n c e and G u a r a n t e e Fund 
(EAGGF) in so far as it disallowed, in 
respect of the applicant, Community 
f i n a n c i n g t o t h e a m o u n t of 
BEF 413 309 611 for expenditure on 
the prefinancing of export refunds; 
2. order the Commission to pay the costs. 
16. The Commission contends that the 
Court should: 
1. dismiss the action of the Kingdom of 
Belgium; 
2. order the Kingdom of Belgium to pay 
the costs. 
6 — Regulation (EEC) No 1723/72 of the Commission of 
26 July 1972 on making up accounts for the European 
Agricultural Guidance and Guarantee Fund, Guarantee 
Section (OJ, English Special Edition, Second Series HI, 
p. 109). 
7 — This legal maxim, which translates as 'Surfer the law which 
you yourself made', means that a body is hound by the rules 
which it has itself adopted. 
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OPINION OF MR ALBER — CASE C-242/97 
17. The Commission takes the view that 
the deficiencies it found in the Belgian 
control system justify a flat-rate reduction 
of 10% of the expenditure declared. The 
correction applied is, moreover, propor­
tionate and does not constitute unjustified 
discrimination. 
18. The further submissions of the parties 
are dealt with in the analysis below. 
C — Relevant legal provisions 
19. The provisions of Community law 
relevant in this case are listed below. In so 
far as these have to be returned to within 
the context of the Analysis, reference will 
be made to the paragraph numbers of this 
list. 
Basic provisions 
20. The basic provisions on the financing 
of the common agricultural policy are 
contained in Regulation No 729/70 (see 
footnote 5). Thus, under Article 2(1), the 
Guarantee Section of the European Agri­
cultural Guidance and Guarantee Fund 
(EAGGF) finances refunds on exports to 
third countries granted in accordance with 
the Community rules within the framework 
of the common organisation of the agricul­
tural markets. 
21. According to Article 5(2)(c), amended 
by Regulation No 1287/95 (see footnote 
5), the Commission decides on the expen­
diture to be excluded from Community 
financing where it finds that expenditure 
has not been effected in compliance with 
Community rules. Before any decision to 
refuse financing is taken, the results of the 
Commission's checks and the replies of the 
Member State concerned must be notified 
in writing. Moreover, under Article 5, the 
two parties are to endeavour to reach 
agreement on the conclusions to be drawn. 
If no agreement is reached, the Member 
State may request the initiation of a con­
ciliation procedure. Ultimately, the Com­
mission evaluates the amounts to be exclu­
ded having regard in particular to the 
degree of non-compliance found. In so 
doing, according to Article 5, it is to take 
into account the nature and gravity of the 
infringement and the financial loss suffered 
by the Community. 
22. Article 8(1) defines the obligations of 
the Member States as follows: 
'The Member States in accordance with 
national provisions laid down by law, 
I - 3430 
BELGIUM V COMMISSION 
regulation or administrative action shall 
take the measures necessary to: 
— satisfy themselves that transactions 
financed by the Fund are actually 
carried out and are executed correctly; 
— prevent and deal with irregularities; 
— recover sums lost as a result of irregu­
larities or negligence. 
23. According to Article 8(2), the financial 
consequences of irregularities or negligence 
attributable to administrative authorities or 
other bodies of the Member States are not 
to be borne by the Community. 
24. The basic rules governing the common 
organisation of the market for beef and 
veal are contained in Regulation (EEC) 
No 805/68, 8 and those for the cereals 
sector in Regulation (EEC) No 2727/75. 9 
According to both those regulations, export 
refunds can be allowed only if evidence is 
adduced that the products have been 
exported out of the Community. 
25. Exceptions to this principle arc provi­
ded, in particular by Regulation (EEC) 
No 565/80, 10 in which basic rules are laid 
down for the payment, prior to export, of a 
sum equal to the export refunds for beef 
and veal or cereals. This regulation gives 
two options for prefinancing — 'prefinan­
cing storage' and 'prefinancing processing'. 
On the prefinancing system 
26. Article 5 provides as follows: 
'( 1 ) An amount equal to the export refund 
shall, at the request of the party concerned, 
8 — Regulation (EEC) No 805/68 of the Council of 27 June 
1968 on the common organisation of the market in beer and 
veal (OJ, English Special Edition 1968 (I), p. 187). 
9 — Regulation (LLC) No 2727/75 of the Council of 29 October 
1975 on the common organisation of the market in cereals 
(OJ 1975 1. 281, p. 1). 
10 — Council Regulation (LLC) No 565/80 of 4 March 1980 on 
the prefinancing of export refunds in respect of agricultural 
products (OJ 1980 L 62, p. 5). 
I - 3 4 3 1 
OPINION OF MR ALBER — CASE C-242/97 
be paid as soon as the products or goods 
have been brought under the customs 
warehousing or free zone procedure with 
a view to their being exported within a set 
time-limit. 
(2) The arrangement provided for in this 
Article shall apply to products and goods 
intended for export without further proces­
sing when the products or goods are of a 
kind that can be stored. 
3 
This system is also called prefinancing 
storage. 
27. The second prefinancing option is given 
in Article 4: 
'(1) An amount equal to the export refund 
shall, at the request of the party concerned, 
be paid as soon as the basic products are 
placed under customs control ensuring that 
the processed products or the goods will be 
exported within a set time-limit. 
(2) The arrangement provided for in this 
Article shall apply to processed products 
and goods obtained from basic products 
provided that inward processing arrange­
ments are not prohibited for comparable 
products. 
...` 
This system is also called prefinancing 
processing. 
28. According to Article 2, for the pur­
poses of this regulation, the following 
definitions apply: 
'(a) — "products" means the products 
referred to in Article 1; 
— "basic products" means products 
intended to be exported after pro­
cessing into processed products or 
into goods; 
(b) "processed products" means products: 
— obtained from the processing of 
basic products, and 
I - 3432 
BELGIUM V COMMISSION 
— to which an export refund is 
applicable, 
...`. 
29. Title II, Chapter 3, of Regulation (EEC) 
No 3665/87 11 lays down the rules for 
advances on refunds where goods are 
processed or stored prior to export and 
thus for the application of Regulation 
No 565/80. 
On the payment declaration and the infor­
mation necessary for it 
30. Under Article 25(1), admission to the 
prefinancing processing or prefinancing 
storage systems is subject to the lodging 
with the customs authorities of a declara­
tion of intention (payment declaration) by 
the exporter. This request for payment is in 
practice referred to as the COM-7 declara­
tion. According to Article 25(2), this pay­
ment declaration must '... include all such 
particulars as are necessary for determining 
the refund and, where applicable, the 
monetary compensatory amount in respect 
of the products or goods to be exported, in 
particular: 
(b) the net mass of the product or goods, 
or, where applicable, the quantity 
expressed in the unit of measurement 
to be taken into account in calculating 
the refund or the monetary compensa­
tory amount; 
Furthermore, in cases where basic products 
are to be processed, the payment declara­
tion shall include: 
— a description of the basic products, 
— the quantity of basic products, 
11 — Commission Regulation (EEC) No 3665/87 of 27 Novem­
ber 1987 laying down common detailed rules for the 
application of the system of export refunds on agricultural 
products (OJ 1987 L 351, p. 1). 
I - 3433 
OPINION OF MR ALBER — CASE C-242/97 
— the rate of yield or similar informa­
tion.' 
31. Article 26(1) provides that '[A]t the 
time of acceptance of the payment declara­
tion, the products or goods shall be placed 
under customs control until they leave the 
customs territory of the Community or 
until they have reached their destination.' 
On the prefinancing processing system, and 
the principle of equivalence 
32. For prefinancing processing, Article 27 
provides as follows: 
'(1) In respect of processed products or 
goods obtained from basic products, the 
result of a scrutiny of the payment declara­
tion, whether or not combined with inspec­
tion of the basic products, shall be used for 
determining the refund and monetary com­
pensatory amount. 
(3) Basic products must form all or part of 
the processed products or goods which are 
exported. However, the basic products 
may, provided the competent authorities 
agree, be replaced by equivalent products, 
falling within the same subheading of the 
Combined Nomenclature, of the same 
commercial quality, having the same tech­
nical characteristics and meeting the 
requirements for the granting of an export 
refund. 
This provision contained in the third para­
graph is also called the principle of equiva­
lence. 
On the prefinancing storage system 
33. In connection with prefinancing sto­
rage, Article 28 provides as follows: 
'(1) In respect of products or goods to be 
exported after having been under a customs 
warehousing or free zone procedure, the 
result of the scrutiny of the payment 
declaration and of the products or goods 
themselves shall be used for determining 
the refund and the monetary compensatory 
amount. 
I - 3434 
BELGIUM V COMMISSION 
(4) Products or goods under a customs 
warehousing or free zone procedure may be 
subjected there, as provided by the compe­
tent authorities, to the following opera­
tions: 
(a) stocktaking; 
(b) the affixing to the goods or products 
themselves, or to their packings, of 
marks, seals, labels or other similar 
distinguishing signs, ... 
Any refund or monetary compensatory 
amount applicable to goods or products 
which have been subjected to the forms of 
handling referred to above shall be deter­
mined in accordance with the quantity, 
nature and characteristics of the goods or 
products on the date laid down for the 
calculation of the refund, in accordance 
with the provisions of Article 26. 
...' 
On special refunds 
34. Regulations (EEC) No 32/82 n and 
(EEC) No 1964/82 13 laid down conditions 
for the granting of special export refunds 
on certain cuts of beef and veal. Under the 
former regulation, exports to certain non-
member countries of fresh or chilled meat 
in the form of carcasses, half-carcasses, 
compensated quarters, forequarters and 
hindquarters are eligible for such refunds. 
Under the latter regulation, individually 
packaged boneless cuts from fresh or 
chilled hindquarters of adult male cattle 
are eligible. 
35. In both cases the applicant has to 
submit proof that the goods intended for 
export also meet the requirements of both 
regulations. In addition, the Member States 
are obliged to carry out checks to ensure 
that the provisions of both regulations are 
complied with. 
1 2 — Commission Regulation (F.F.C) No 32/82 of 7 January 
1982 laying down the conduions for granting special 
export refunds for beef and veal (OJ 1982 L «I, p. 11). 
1 3 — Commission Regulation (HFC) No 1964/82 of 20 July 
1982 laying down the conditions for granting special 
export refunds on certain cuts of boned meat of bovine 
animals (OJ 1982 1. 212, p. 48). 
I - 3435 
OPINION OF MR ALBER — CASE C-242/97 
On checks 
36. Article 3 of Regulation No 32/82 pro­
vides as follows: 
'The Member States shall lay down the 
conditions for checking the products and 
for issuing the certificate ... These condi­
tions may include the indication of a 
minimum quantity. 
The Member States shall take the necessary 
measures to ensure that no substitution of 
products takes place between the time they 
are checked and the time they leave the 
Community's geographical territory ... 
These measures shall include identification 
of each product by means of an indelible 
mark on each quarter or by individual seal 
on each quarter. The slaughter and identi­
fication shall take place in the abattoir 
indicated by the party concerned ...' 
37. According to Article 8 of Regulation 
No 1964/82, the Member States are to 
'... determine the conditions for supervision 
and shall inform the Commission accord­
ingly. They shall take all necessary mea­
sures to make substitution of the products 
in question impossible, in particular by 
identification of each piece of meat. 
The bags, cartons or other packaging 
material in which the boned cuts are placed 
shall be officially sealed by the competent 
authorities and bear particulars enabling 
the boned meat to be identified, in parti­
cular the net weight, the type and the 
number of the cuts and a serial number.' 
38. To regulate the monitoring carried out 
at the time of export of agricultural pro­
ducts receiving refunds or other amounts, 
Regulations (EEC) No 386/90 14 and (EEC) 
No 2030/90 15 were adopted. Article 1(1) 
of the former sets down 'certain procedures 
for monitoring whether operations confer­
ring entitlement to the payment of refunds 
on and all other amounts in respect of 
export transactions have been actually 
carried out and executed correctly.' 
39. The monitoring procedures to be car­
ried out by the Member States are laid 
down in Articles 2 and 3 of Regulation 
No 386/90. 
14 — Council Regulation (EEC) No 386/90 of 12 February 
1990 on the monitoring carried out at the time of export 
of agricultural products receiving refunds or other 
amounts (OJ 1990 L 42, p. 6), last amended by Council 
Regulation (EC) No 163/94 of 24 January 1994 amending 
Regulation (EEC) No 386/90 on the monitoring carried 
out at the time of export of agricultural products receiving 
refunds or other amounts (OJ 1990 L 24, p. 2). 
15 — Commission Regulation (EEC) No 2030/90 of 17 July 
1990 laying down detailed rules for the application of 
Council Regulation (EEC) No 386/90 as regards physical 
checks carried out at the time of export of agricultural 
products attracting refunds or other amounts 
(OJ 1990 L 186, p. 6). 
I - 3436 
BELGIUM V COMMISSION 
40. First, Article 2 states that: 
'Member States shall carry out: 
(a) physical checks on goods in accordance 
with Article 3 and Article 3(a), at the 
time the customs export formalities are 
completed and before authorisation is 
given for the goods in question to be 
exported, on the basis of documents 
submitted in support of the export 
declaration, and 
(b) scrutiny of the documents in the pay­
ment application file in accordance 
with Article 4.' 
41. This is followed by Article 3, which 
provides that: 
'(1) Without prejudice to any specific 
provisions which require more extensive 
checks, the physical checks referred to in 
Article 2(a) must: 
(a) take the form of spot checks conducted 
frequently and without prior warning; 
(b) in any event, relate to not less than 5% 
of the export declarations in respect of 
which applications are submitted for 
the amounts specified in Article 1(1). 
(2) In accordance with the detailed rules to 
be determined under the procedure referred 
to in Article 6, the rate mentioned in 
paragraph 1(b) shall apply: 
— per customs office, 
— per calendar year, and 
— per product sector. 
I - 3437 
OPINION OF MR ALBER — CASE C-242/97 
However, the rate of 5% per product sector 
may be replaced by a rate of 5% covering 
all sectors in so far as the Member State 
applies a selection system based on a risk 
analysis carried out in accordance with the 
procedure laid down in Article 6. In this 
case, a minimum rate of 2% shall be 
compulsory per product sector.' 
42. The second regulation mentioned in 
p a r a g r a p h 38 above , Regu la t ion 
No 2030/90, lays down the following 
regarding physical checks on goods in the 
detailed rules for implementation contained 
in Article 5(1): 
'The physical checks shall be carried out: 
(a) during the period between the lodging 
of the export declaration and autho­
risation to export the goods; and 
...'. 
43. According to Article 6(1), 'in cases 
where the refund is paid in advance in 
accordance with Articles 24 to 29 of Reg­
ulation (EEC) No 3665/87, the physical 
checks carried out at the time of or during 
storage and, where appropriate, at the time 
of processing may be taken into account for 
calculating the minimum rate of checks 
referred to in Article 3 of Regulation (EEC) 
No 386/90 provided the following condi­
tions are fulfilled: 
(a) the physical checks carried out prior to 
the completion of the customs export 
formalities meet the same criteria of 
intensity as those to be carried out 
normally during the periods referred to 
in Article 5, and 
(b) the products and goods which have 
been the subject of previous physical 
checks are identical to those which are 
the subject of the export declaration.' 
On the calculation of reductions (Belle 
Group Report) 
44. The Commission's Belle Group Report 
lays down guidelines to be followed when 
financial corrections must be applied to a 
Member State. In addition to three methods 
of calculating concrete reductions the Belle 
I - 3438 
BELGIUM V COMMISSION 
Group Report also sets out the following 
three categories of flat-rate corrections: 
'(a) 2 % of expenditure — where the defi­
ciency is limited to parts of the control 
system of lesser importance, or to the 
operation of controls which are not 
essential to the assurance of the regu­
larity of the expenditure, such that it 
can reasonably be concluded that the 
risk of loss to the EAGGF was minor. 
(b) 5 % of expenditure — where the defi­
ciency relates to important elements of 
the control system or to the operation 
of controls which play an important 
part in the assurance of the regularity 
of the expenditure, such that it can 
reasonably be concluded that the risk 
of loss to the EAGGF was significant. 
(c) 10% of expenditure — where the defi­
ciency relates to the whole of or 
fundamental elements of the control 
system or to the operation of controls 
essential to assuring the regularity of 
the expenditure, such that it can rea­
sonably be concluded that there was a 
high risk of widespread loss to the 
EAGGF.' 
45. Where there is doubt as to the correc­
tion factor to be applied, the guidelines also 
allow the following points to be taken into 
account as mitigating factors: 
'— whether the national authorities took 
effective steps to remedy the deficien­
cies as soon as they were brought to 
light; 
— whether the deficiencies arose from 
difficulties in the interpretation of 
Community texts.' 
46. According to the guidelines laid down 
in this Report it is thus essential for 
determining the level of correction to be 
applied to assess first of all the risk of loss 
to the EAGGF on the basis of the deficien­
cies found. This is done essentially by 
taking account of the effectiveness of the 
entire control system, of individual ele­
ments of supervision or of the implementa­
tion of such supervision. The gravity of the 
deficiencies and the steps taken to combat 
fraud are also to be taken into considera­
tion. 
47. The Commission may, according to the 
guidelines, apply flat-rate corrections 
where it is not possible to determine the 
precise amounts paid out to the detriment 
of the EAGGF. In this event it is considered 
sufficient if there was merely a risk of loss. 
I - 3439 
OPINION OF MR ALBER — CASE C-242/97 
D — Preliminary remark on the procedure 
for clearing the accounts — principles of 
case-law 
48. The first thing that has to be said is that 
the procedure for clearing the accounts is 
intended to guarantee that the means made 
available to the Member States have been 
used in compliance with the Community 
rules prevailing in connection with the 
common organisation of markets. 
49. According to the case-law of the Court 
of Justice, Article 8(1) of Regulation 
No 729/70 (see paragraph 22 above), 
which expressly lays down in that specific 
area the obligations imposed on Member 
States by Article 5 of the EC Treaty, defines 
the principles according to which the 
Community and the Member States must 
ensure the implementation of Community 
decisions on agricultural intervention 
financed by the EAGGF and combat fraud 
and irregularities in relation to those 
operations. It imposes on the Member 
States the obligation to take the measures 
necessary to satisfy themselves that the 
transactions financed by the EAGGF are 
actually carried out and are executed 
correctly, even if the specific Community 
act does not expressly provide for the 
adoption of particular supervisory mea­
sures. 16 
50. Where 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 respon­
sible, it is, under settled case-law, required 
not to demonstrate exhaustively that the 
information supplied by the Member States 
is inaccurate, but merely to adduce evi­
dence of serious and reasonable doubt on 
its part regarding the figures submitted by 
the national authorities. 17 Accordingly, if, 
when refusing to charge certain expendi­
ture to the EAGGF, the Commission asserts 
that there has been a breach of the rules of 
the common organisation of agricultural 
markets, it has to justify its decision and 
state how the absence of, or deficiencies in, 
the inspection procedures operated by the 
Member State concerned were detected. 18 
51. Consequently, it is for the Member 
State to demonstrate the inaccuracy of the 
Commission's calculations or statements 
and to adduce detailed and comprehensive 
evidence that its own data and figures are 
correct. 19 As transpires from the afore­
mentioned judgment, the Member State 
concerned cannot cast doubt on the Com­
mission's statements by mere allegations 
but must cite concrete facts capable for 
example of proving the existence of a 
reliable and operational control system. 
(The reason for this mitigation of the 
16 — See judgments in Case C-2/93 Exportslachterijen van 
Oordegem [1994] ECR 1-2283, paragraphs 17 and 18, 
and in Case C-235/97 France v Commission [1998] ECR 
1-7555, paragraph 45. 
17 — Thus most recently in the judgment in Case C-28/94 
Netherlands v Commission [1999] ECR 1-1973, paragraph 
40, with further case-law references. 
18 —Judgments in Case C-242/96 Italy v Commission [1998] 
ECR 1-5863, paragraph 58, and in Case C-8/88 Germany v 
Commission [1990] ECR I-2321, paragraph 23 . 
19 — Judgment in Case C-54/95 Germany v Commission [1999] 
ECR I-35, paragraph 35. 
I - 3440 
BELGIUM V COMMISSION 
burden of proof on the Commission is that 
it is the Member State which is best placed 
to collect and verify the data required for 
the clearance of the EAGGF accounts.) 
52. If the Member State fails to prove that 
the Commission's findings are incorrect, 
then they may cast serious doubts as to 
whether an appropriate and efficient sys­
tem of supervisory and control measures 
has been set up, doubts that are sufficient 
to warrant a reduction in payment. 20 
53. When refusing to charge expenditure to 
EAGGF funds, the Commission is in prin­
ciple not obliged to prove any actual loss. If 
it cannot adduce concrete evidence it is 
sufficient for it to prove the risk of loss for 
the EAGGF. 
54. Admittedly, this system of mitigating 
the burden of proof and of extrapolation, 
of taking as a basis the mere risk of loss 
rather than actual loss and of applying flat-
rate percentage deductions, presents, in its 
combined form, certain problems. It would 
fall to the legislature to define and improve 
this system as appropriate. 
E — Analysis 
1. First plea: Infringement of the principle 
of sincere cooperation, the principle of due 
care and the duty to state reasons 
55. In its first plea Belgium accuses the 
Commission of adopting the contested 
decision in breach of the principle embo­
died in Ar t ic le 5(2) of R e g u l a t i o n 
No 729/70 in conjunction with Article 5 
of the EC Treaty, of the principle that due 
care should be taken and of the duty to 
state reasons laid down in Article 190 of 
the EC Treaty. 
56. The Commission had not, or at least 
not carefully, examined the arguments 
submitted by Belgium in the pre-litigation 
and conciliation procedure and had not 
gone into them in either the Summary 
Report or the contested decision. Thus 
Belgium had several times refuted findings 
of fact by the Commission, without the 
latter having noticed. An important point 
here is the fact that the Commission had 
prepared a draft of the Summary Report 
even before the end of the conciliation 
procedure. In the final version of this 
Report and in the contested decision there 
is no trace of the Belgian authorities' 
arguments. 
20 — See judgments in Case C-242/96 Italy v Commission (cited 
in footnote 18) and C-8/88 Germany v Commission (cited 
in footnote 18). 
I - 3441 
OPINION OF MR ALBER — CASE C-242/97 
57. In detail, 15 points are involved, as 
follows: 
Beef and veal sector (points 1 to 11) 
First point 
58. The Commission stated in its Summary 
Report that the Dendermonde customs 
warehouse, in which goods under the 
prefinancing system are stored, was opened 
in the morning and not locked again until 
evening. The movements of goods therefore 
could not be effectively monitored. 
59. The Belgian Government argues in this 
connection that what was involved here 
was a private warehouse, opened and 
closed by customs. The warehouse was 
opened and closed only for the inward or 
outward transfer of goods. The official 
responsible for supervision accompanied 
each lorry, opened the warehouse, was 
present during the loading or unloading 
and closed the warehouse again after 
leaving it. The Belgian authorities had 
pointed this out already in their letter of 
22 May 1995. Although the Belgian provi­
sions allowed exceptions to the rule that 
the official responsible for supervision was 
to lock the warehouse immediately after 
leaving it, no such exception applied in this 
case. 
60. The Commission's response to this is 
that it had informed the Belgian authorities 
of its findings as early as 2 March 1995. 
The Belgian authorities' letter of 22 May 
1995 had merely confirmed that the cus­
toms locked the warehouse premises in 
question, but had not supplied any infor­
mation to the effect that the warehouse was 
closed immediately upon the official's 
departure. 
61. It may be seen from the correspondence 
between the Commission and the Belgian 
authorities which is annexed to the appli­
cation that this problem had been the 
subject of detailed discussion between the 
parties. This correspondence does not, 
however, prove, as the Belgian Government 
claims, that the warehouse concerned was 
opened only for the purposes of inward or 
outward movements of goods and immedi­
ately locked again. The Commission's 
remarks that the warehouse was opened 
in the morning and not closed again until 
evening could not therefore be invalidated. 
In particular, the Belgian Government 
could not prove the Commission's findings 
wrong. 
62. It must therefore be concluded that the 
Belgian Government's submissions do not 
invalidate the Commission's complaint in 
this respect. 
I - 3442 
BELGIUM V COMMISSION 
Second point 
63. In its Summary Report the Commission 
states that because of a lack of staff and 
equipment it was not possible to carry out 
physical checks of the goods effectively. 
Thus, in Dendermonde, only one official 
was responsible for carrying out checks on 
the exports of three large Belgian exporters 
of beef and veal. What is more, the customs 
office did not have a service vehicle at its 
disposal, so that no unannounced checks 
could be made. Nor had there been appro­
priate scales for weighing the cartons. 
The Belgian Government submits in this 
connection that although there had been no 
scales in the Dendermonde customs office 
capable of weighing the 20 kg cartons 
accurately this was irrelevant since 90% 
of the meat for export had been stored in 
the Sivafrost and Vandenavenne ware­
houses, 21 where there had been a sufficient 
number of scales to enable the prescribed 
checks to be made upon the inward and 
outward movement of goods. Besides, the 
Belgian rules ensured that the remaining 
10%, not intended for immediate export, 
were also weighed. The Belgian checks also 
met the requi rements of Regulat ion 
N o 386/90 (see paragraphs 38 to 41 
above), according to which the customs 
authorities had to carry out spot checks on 
only 5 % of export declarations. The checks 
made by the inspector or official responsi­
ble for supervision upon the departure of 
the goods from the Sivafrost warehouse 
therefore satisfied the requirements intro­
duced by Regulation No 386/90. The ser­
vice vehicle which the Commiss ion 
required the Dendermonde customs office 
to have was not indispensable. In this 
connection the Belgian Government had 
stated in its application that when the 
inspector decides to carry out a physical 
check of goods, he accompanies the regis­
tered lorry from the customs office where 
registration took place to the warehouse. 
The goods intended for delivery therefore 
cannot be substituted before being physi­
cally checked. The inspector makes his 
decision to carry out a physical check of 
goods independently and without notifying 
the haulage contractor beforehand. Such a 
decision is not made until registration in 
the customs office. Thus the contractor can 
never know whether or not the inspector 
will be accompanying him for a physical 
check of the goods. 
64. Finally, the Belgian Government points 
out that three officials entrusted with 
carrying out checks work in Dendermonde. 
Their task — according to the Belgian 
Government — is 'carrying out adminis­
trative formalities'. Furthermore, there is 
an inspector employed there who is respon­
sible exclusively for carrying out physical 
checks of the goods. In its reply the Belgian 
Government staled, however, that physi­
cally checking goods also involves 'carrying 
out administrative formalities'; the princi­
pal task of the inspector is therefore to 
carry out unannounced spot checks in the 
warehouses. 22 
21 — Both these warehouses are located approximately 15 km 
from the Dendermonde customs office. 22 — My emphasis. 
I - 3443 
OPINION OF MR ALBER — CASE C-242/97 
65. The Commission, on the other hand, 
takes the view that certain categories of 
beef and veal for export are not weighed. 
The customs offices concerned are, how­
ever, obliged under the Community rules to 
carry out checks also of the weight of the 
goods. If, however, a customs office is not 
in a position to check weight because of a 
lack of equipment, this is clearly a defi­
ciency of the control system. The reference 
to weight checks carried out previously in 
the warehouses also cannot alter this, since 
it cannot be ruled out that the stored goods 
have lost weight in the interim. Since it had 
not been possible to carry out effective 
weight checks, there was a risk in the 
present case of goods having been substi­
tuted. 
66. As far as the question of unannounced 
spot checks is concerned, the Commission 
points to the contractual relations existing 
between the warehouse administrator and 
the undertaking depositing the goods. Since 
the inspector has no service vehicle at his 
disposal, unannounced checks are not pos­
sible. The Belgian Government also pointed 
out in its letter of 17 January 1996 that — 
contrary to what is stated in its applica­
tion — the inspector lets himself be driven 
to the warehouse by a warehouse official 
and not by an employee of the undertaking 
to be checked. Since, therefore, either the 
warehouse administrator or, at the very 
least, the undertaking to be checked itself 
had been informed in advance of the check 
to be carried out, the unannounced check 
required under Article 3(l)(a) of Regula­
tion No 386/90 had not been possible. 
67. As far as the question of insufficient 
staff in the Dendermonde customs office is 
concerned, the Commission observes that it 
was only in the context of the present 
action that Belgium stated that there were 
three officials and an inspector employed in 
that customs office. However, even this 
does not alter the fact that the Commission 
had found deficiencies in the control sys­
tem, since it was impossible to weigh 
certain categories of meat under the pre­
financing regime. Besides, it remains 
unclear how the various tasks are distrib­
uted amongst the persons entrusted with 
supervision. 
68. It should first be observed that it is an 
undisputed fact that the Dendermonde 
customs office lacked suitable scales for 
checking the weight of 20 kg cartons. 
Under Regulations Nos 32/82 and 
1964/82, however, the Member States are 
obliged to carry out effective checks. In this 
connection, it should be noted in particular 
that, under Article 3(1) and (2) of Regula­
tion No 386/90, unannounced spot checks 
are to be made on a representative selection 
of at least five per cent of export declara­
tions in every customs office. These checks 
have in particular to cover every product 
sector. The Belgian Government is, how­
ever, unable to prove by its submission that 
such a check could be carried out effec­
tively despite the lack of suitable scales. 
However, the fact that certain weight 
I - 3444 
BELGIUM V COMMISSION 
checks could not be carried out casts 
considerable doubt on the effectiveness of 
all the physical checks made. 
69. Contrary to the arguments of the 
Belgian Government, even an unannounced 
physical check was impossible. Since the 
inspector had to contact the warehouse 
administrator or at least the undertaking to 
be checked some time before the actual 
check, in order to be taken with them in 
their vehicle, there was a possibility that the 
goods could be substituted — perhaps less 
so with regard to those being delivered by 
that vehicle but definitely in the case of the 
other goods to be checked. At any rate the 
checks were not — as prescribed — unan­
nounced. 
70. With regard to the shortage of staff in 
the Dendermonde customs office, it should 
be noted that the Belgian Government's 
objection that there were three officials 
entrusted with supervision employed in 
that customs office was first made in the 
context of the present action. It must 
therefore be dismissed as having been 
submitted too late since, because of the 
preceding conciliation procedure, the rele­
vant date is that of the adoption of the 
contested decision. Furthermore, the Bel­
gian Government was unable to dispel the 
existing doubts in so far as the distribution 
of tasks amongst the persons entrusted with 
supervision remains unclear. There cannot 
be said to be an effective physical check of 
goods if the person responsible for the 
check firstly does not have the necessary 
equipment at his disposal and, secondly, 
has other duties to perform as well. 
71. The Belgian Government's submission 
must be rejected in this respect too. 
Third point 
72. The Commission stated in its Summary 
Report that the customs authorities took as 
the basis for their checks neither the 
payment declara t ion nor the export-
declaration of the undertaking applying 
for payment (see paragraph 30); instead 
the basis for a quantity control was solely a 
list of the number of cartons and their 
weight drawn up by the undertaking con­
cerned itself. What is worse, the customs 
staff did not arrive on the premises until 
after the weighing process. The net weight 
of the products or goods therefore could 
not have been determined with certainty. 
73. The Belgian Government first of all 
points out that these findings of fact related 
only to the Beauraing customs office and 
did not entail any risk of unjustified 
payments. This follows in particular from 
the fact that an inspector from the Belgian 
customs office was always present when 
the goods were deposited at the warehouse. 
Using the list prepared by the commercial 
operator depositing the goods, the inspec­
tor systematically checked the weight of the 
I - 3445 
OPINION OF MR ALBER — CASE C-242/97 
goods delivered. Wrong information could 
thus have been filtered out. Even if the 
payment declaration was not completed 
until later, this did not alter the accuracy of 
the checks carried out. In particular, a 
representative selection of at least five per 
cent was ensured for the spot checks. 
Furthermore, all the meat stored was 
inspected beforehand by a veterinary sur­
geon, under whose supervision the packing, 
sealing and weight checks were also carried 
out. The customs checks had therefore 
provided additional security. In this con­
nection the Commission has in particular 
not been able to prove that there was an 
increased risk of abuse. In addition, the 
Belgian Government points to national 
provisions of criminal law which would 
make punishable any supply of false infor­
mation on the weight lists. 
74. The Commission points to the risk of 
manipulation that exists, since the inspec­
tor was not present during the weighing 
operation. It was therefore not certain that 
the quantities of stored goods as stated 
actually corresponded with the batches 
present. Thus, in particular, during one 
check carried out by the Commission, an 
error came to light in the list drawn up by 
the undertaking concerned. The Commis­
sion saw a further opportunity to commit 
fraud in the fact that initially only a list of 
goods was drawn up by the undertaking, 
and only after this had been inspected did 
the actual declaration follow, on the basis 
of which payment was arranged. 
75. In detail, the Commission found the 
following individual deficiencies in the 
control system in the Beauraing customs 
office, in the order given below: 
— checks are based purely on a list of 
goods drawn up by the firm concerned 
and not on the payment declaration — 
the application for a pre-financing 
payment — or the export declaration; 
— the inspector is not present during the 
weighing; 
•— the customs staff would not open the 
cartons concerned; 
— no quality control had taken place; 
— the checks carried out were referred to 
as physical checks but the quantities 
indicated had not been verified; 
— the meat had not been weighed before 
the net weight was entered on the 
I - 3446 
BELGIUM V COMMISSION 
certificate prescribed by Regulation 
No 32/82, the weight having been 
calculated instead by means of a coef­
ficient; 
— it was moreover possible for the Com­
mission staff carrying out the inspec­
tion to open the cartons without dama­
ging the packaging or labels; 
— there was no indication on the packa­
ging of the basic products or quantities 
of basic products; 
— there were not enough reports on the 
physical checks. 
76. With regard to the provisions of crim­
inal law mentioned by the Belgian Govern­
ment, the Commission takes the view that 
problems could arise during any criminal 
proceedings because, on the one hand, the 
list of goods submitted by the undertaking 
does not constitute an official application 
for an export refund (payment declaration) 
and, on the other hand, intent must be 
proven. 
77. On this point it should first be observed 
that the Belgian Government was unable to 
prove that the Commission had taken 
incorrect factual information as its basis. 
In particular, it follows from the parties' 
submissions that no complete weight check 
by means of weighing took place in the 
customs office. Merely verifying a list 
drawn up by the undertaking concerned 
can in particular not be regarded as a 
physical check in accordance with the 
relevant provisions of Community law. 
What was required, according to Arti­
cle 5(1) of Regulation No 2030/90 (see 
paragraph 42 above), was that physical 
checks be carried out during the period 
between the lodging of the export declara­
tion and the release of the goods for export. 
Since, however, as the Belgian authorities 
themselves concede, an inspection could 
also take place even before the lodging of 
the payment declaration, using the weight 
list drawn up by the undertaking con­
cerned, it cannot be said that there were 
effective checks. Likewise, the Commis­
sion's findings show that it would be 
possible to substitute goods, which is 
exactly what the provisions in force arc 
intended to exclude. The Belgian Govern­
ment's reference to spot checks of five per 
cent of the goods for export is also not 
convincing. Since the inspectors did not 
carry out any effective weight check in the 
customs office themselves, there could be 
no guarantee of a proper physical check in 
this case either. In particular, the net weight 
of the goods for export was never deter­
mined. This, however, constitutes an infrin­
gement of Article 5(1 )(b) of Regulation 
No 2030/90 in conjunction with Article 3 
of Regulation No 386/90 (sec paragraph 
43 above). The reference to the Belgian 
provisions of criminal law is also, in the 
end, not convincing. It is obvious that 
falsification of payment or export declara­
tions with intent to deceive must be punish­
able. This does not, however, mean that the 
I - 3447 
OPINION OF MR ALBER — CASE C-242/97 
threat of punishment constitutes an effi­
cient control system. 
78. It therefore follows from the foregoing 
that this submission of the Belgian Govern­
ment must also be rejected. 
Fourth point 
79. In its Summary Report the Commission 
states in connection with the physical 
checks under Article 6 of Regulation 
No 2030/90 (see paragraph 42 above) that 
the Belgian checks in the context of pre­
financing had not been carried out with the 
same intensity — according to the wording 
of Article 6 — as was customary in the case 
of export refunds and had not related to the 
products and goods previously checked. 
80. The Belgian Government, on the other 
hand, felt that the customs offices of 
Beauraing and Dendermonde had, as part 
of the physical checks of the representative 
5%, sufficiently verified the weight and 
seals of the cartons upon entry into the 
warehouse and upon export. These checks 
had met the requirements laid down in 
Regulations No 386/90 and No 2030/90. 
81. The Commission claims in this respect 
that its officers had found that the inspector 
in Beauraing had weighed only a few boxes 
upon their arrival at the warehouse and 
none at all upon departure. Likewise, 
quality control was not always carried 
out. What was more, the Commission staff 
carrying out the inspection could have 
substituted goods. In some cases it had 
not been easy to reconcile payment declara­
tions and export declarations for the pro­
ducts. The Commission regards all these 
findings as deficiencies of the control 
system, since they made it possible for 
goods to be substituted. 
82. Here again, the Belgian Government is 
unable to adduce evidence that the Com­
mission's findings did not correspond to the 
facts. In particular, it is to be assumed that 
the weight checks under the prefinancing 
system had not been carried out with the 
same intensity as was customary in the case 
of export refunds. In this respect the 
Belgian Government could only make 
assertions, which cannot amount to evi­
dence. Its submission must therefore be 
rejected. 
Fifth point 
83. According to what is said in the 
Summary Report, it was possible in the 
Dendermonde customs office to remove the 
labels from several of the boxes of male 
I - 3448 
BELGIUM V COMMISSION 
cattle hindquarters in storage and affix 
them again without damaging them. 
84. Although the Belgian Government 
acknowledges that it was possible to 
remove labels without damaging them, it 
disputes the fact that this was effortless and 
points out that at temperatures of -18 °C in 
the cold store it was impossible to remove 
them undamaged. Moreover, this was not a 
representative spot check since approxi­
mately 400 boxes were stored there in 
total. Moreover, the boxes had additionally 
been sealed. Substituting goods was practi­
cally impossible also because there was a 
veterinary surgeon present at all times in 
the skinnery, whilst in the customs offices 
there were inspectors present upon the 
arrival and departure of goods. 
85. For the Commission, however, it is 
clear that in this respect serious deficiencies 
came to light. Thus it was possible to 
remove labels and reaffix them without 
damaging them in the process. Further­
more, the labels displayed only the number 
of the abattoir and not the weight or type 
of meat. In any event, the Commission 
official managed to open boxes and close 
them again without damaging the labels. 
86. Here again, Belgium's comments can­
not undermine the Commission's findings. 
On the basis of the aforementioned inci­
dents it must therefore be assumed that 
there was a considerable risk of the boxes 
being substituted. The mere assertions to 
the contrary by Belgium are in any event 
not sufficient to constitute evidence to the 
contrary. 
Sixth point 
87. As regards the Belgian Government's 
complaint that in its Summary Report the 
Commission wrongly assumed that meat 
from female instead of male cattle had been 
found during its checks, it must be observed 
that the Commission had first made these 
remarks in Annex II of 20 March 1997 to 
its Summary Report. 
88. In its defence and rejoinder the Com­
mission has withdrawn this complaint, 
which had proven only in retrospect, on 
the basis of DNA analyses, to be false. 
Moreover, according to the Commission, 
the contested decision was not based on 
this point. 
89. Even if the Commission's initial find­
ings did not correspond with the facts, the 
Belgian authorities' comments were taken 
into consideration and therefore had no 
negative repercussions as regards the cor­
rection. 
I - 3449 
OPINION OF MR ALBER — CASE C-242/97 
Seventh point 
90. It is stated in the Summary Report that 
in the Sivafrost warehouse in Dendermonde 
the only means of identifying the various 
cartons was a ticket bearing the COM-7 
number fixed to a pallet. It was therefore 
not possible to positively identify the car­
tons stored there. 
91. The Belgian Government states in 
response to this that labels were affixed to 
the cartons stored there, indicating the 
type, weight and number of the products. 
What is more, the customs offices used 
warehouse lists containing the same details 
as on the labels. This ensured that it could 
be checked whether the cartons intended 
for export did also leave the warehouse. 
Although the obligation to draw up such 
lists has existed only since 1995, they have 
been used since 1994, including in the 
Sivafrost warehouse. It was certainly not 
possible to substitute the goods. 
92. However, the Commission is still sure 
that there was a risk of substitution. The 
ticket in question with the COM-7 number 
was on the pallet. It was quite possible 
simply to attach this piece of paper to 
another pallet. Likewise, individual boxes 
from different pallets could have been 
exchanged. The labels mentioned by Bel­
gium had made no allusion to the payment 
declarations relating to these goods. Fur­
thermore, the system of warehouse lists did 
not come into force until May 1995. 
93. Here, again, the Belgian Government 
cannot adduce any evidence to show that 
the Commission's statements of fact were 
incorrect. In particular, it could not invali­
date the complaint that the pallets had been 
inadequately labelled. The system of keep­
ing detailed packing lists did not come into 
force until May 1995. In the present case, 
however, the inspections carried out in 
1994 related to the 1993 financial year, 
with the result that it is not clear whether 
the system of warehouse lists could have 
been effective during that period already 
since Belgium did not claim to have been 
using this system in 1993. 
94. Belgium's submission in this respect 
must therefore be rejected. 
Eighth point 
95. In its Summary Report, the Commis­
sion objected that the weight checks to be 
carried out under Regulation No 1964/82 
had been carried out inadequately by 
official veterinary surgeons. Although they 
had been present at the boning, they had 
not determined the net weight of the goods. 
I - 3450 
BELGIUM V COMMISSION 
96. The Belgian Government points out 
that the veterinary surgeons had been 
present throughout the boning and also at 
the weighing of the goods. They had 
supervised the automatic weighing opera­
tion and checked the indications of weight 
on the labels. Even though, during its 
checks, the Commission had found a pack 
containing meat that was not fit for human 
consumption, this was still only one pack 
out of a total of 379. Moreover, spot checks 
in October/November 1996 had shown 
that the meat stored at Sivafrost had been 
of the best quality. 
97. The Commission stands by the findings 
in its Summary Report. When checking 
three or four packs, it found one containing 
meat unfit for human consumption. The 
mere presence of a veterinary surgeon at 
the boning and weighing certainly does not 
rule out the possibility that goods can be 
substituted. All told, it cannot be said that 
there were adequate checks of net weight. 
98. In the result, the Commission's submis­
sion must be upheld. The Belgian Govern­
ment could not adequately prove that net 
weight had been determined in such a way 
as to make substitution of the goods 
impossible. The mere presence of a veter­
inary surgeon at the boning itself is not 
sufficient since it cannot be concluded from 
this alone that there is efficient monitoring. 
Ninth point 
99. It is stated in the Summary Report that 
in Beauraing the net weight to be entered 
on the certificate issued in accordance with 
Regulation No 32/82 (see paragraph 36 
above) was calculated by applying a coeffi­
cient (83.3%) to the weight indicated on 
the certificate in accordance with Regula­
tion No 1964/82. The latter had, however, 
been determined only by means of a list of 
goods drawn up by the commercial opera­
tor depositing them. This procedure docs 
not constitute a proper determination of 
net weight in accordance with Article 2(3) 
of Regulation No 1964/82 (sec paragraph 
34). 
100. Belgium submits first of all that this 
method of calculating weight was applied 
only in Beauraing. The use of a coefficient 
is ultimately irrelevant for the payment of 
refunds since what matters for that purpose 
is the net weight of the boneless pieces of 
meat, which are weighed automatically. 
The certificate issued in accordance with 
Regulation No 32/82, however, concerns 
meat that has not been boned. What is 
more, the indication of weight on the 
certificate issued in accordance with Reg­
ulation No 32/82 is optional. Moreover, 
the coefficient was not set too high since 
the exported meat had the weight indi­
cated. 
101. The Commission states in response to 
this tha t Article 2(3) of Regula t ion 
No 1964/82 first of all provides that the 
net weight of the hindquarters to be boned 
I - 3 4 5 1 
OPINION OF MR ALBER — CASE C-242/97 
is to be established. Since, however, even 
this was not done in accordance with the 
relevant provision, applying a coefficient 
increased the risk of fraud. Moreover, it 
meant that no effective weight check had 
been carried out on the boned meat. Should 
discrepancies have in fact arisen, they 
would not have been noticed. 
102. In this respect it should be noted that 
the Belgian authorities, by not weighing the 
boned meat, but merely calculating its 
weight by means of a coefficient, denied 
themselves an effective means of control. 
Since, moreover, the basis for the calcula­
tion (the value according to the certificate 
under Regulation No 1964/82) was not — 
as has been shown — adequately verified, 
there were also deficiencies in the control 
system in this respect too which brought 
with them the risk of fraud. 
Tenth point 
103. It is stated in the Summary Report 
that in Dendermonde the veterinary sur­
geon from the Zele abattoir was able to tell 
the Commission's staff neither who had 
determined the net weight indicated on the 
certificate issued in accordance with Reg­
ulation N o 32/82, nor on what basis he 
could have checked the accuracy of the 
weight certified by him. 
104. The Belgian Government's explana­
tion for this is that the weighing took place 
not in the abattoir, but in the skinnery. The 
veterinary surgeon present there was 
entrusted with checking the weight. This 
complaint cannot therefore be used to 
justify the financial corrections. 
105. The Commission wonders in this 
connection why neither the veterinary sur­
geon questioned nor the Belgian authorities 
had initially been able to give a satisfactory 
answer. Despite an exchange of letters 
relating to this problem too, the Belgian 
Government first mentioned it in its request 
for conciliation. It remains however an 
infringement of the provisions of Regula­
tions N o 32/82 and No 1964/82 since the 
veterinary surgeon responsible did not 
carry out the weight check himself, but 
was merely present at the weighing. 
106. Since, here too, Belgium could not 
invalidate the Commission's findings, its 
submission taken as a whole must be 
rejected as unproven and accordingly 
unfounded. 
Eleventh point 
107. On this point, it is stated in the 
Summary Report that the individual pieces 
of meat for export were not stamped 
individually, with the result that customs 
I - 3452 
BELGIUM V COMMISSION 
could not tell whether the meat registered 
had been checked beforehand by a veter­
inary surgeon. 
108. The Belgian Government points out 
that there was always a veterinary surgeon 
present in the skinnery who checked that 
the carcasses had been male cattle with nine 
ribs and marked with an 'M' . The carcasses 
were then, under the supervision of the 
responsible veterinary surgeon, cut up and 
the pieces packaged individually. A label 
was affixed bearing the following data: 
Belgium, number of the abattoir and EEC. 
The customs offices were therefore able to 
tell whether the meat had been checked 
beforehand by veterinary surgeons. There 
was no legal basis for requiring any addi­
tional stamp. 
109. The Commission, however, felt there 
was a risk that goods could be substituted. 
It had not been possible on the basis of the 
details on the label to verify whether each 
packaged piece had previously been sub­
jected to a check corresponding to the 
provisions of Regulation No 1964/82. 
Thus, checked goods could have been 
replaced later with unchecked goods. 
110. On this issue it should be noted that 
u n d e r A r t i c 1 e 8 ( 1 ) of R e g u l a t i o n 
No 1964/82 the very purpose of supervi­
sion by the Member States is to ensure that 
the products in question cannot be substi­
tuted, with identification of each piece of 
meat being mentioned in particular as an 
appropriate measure. This did not seem 
possible, however, with the label used in 
Belgium if it stated only 'Belgium, the 
number of the abattoir and EEC', and not 
the net weight, type or number of pieces of 
meat. Positive identification of each piece 
of meat was therefore not possible. 
111. The Belgian Government's arguments 
are consequently insufficient to show that 
the Commission's objections in this respect 
are mistaken. 
Cereals sector (Points 12 to 15) 
Twelfth point 
112. Regarding the results of the investiga­
tions in the cereals sector the Summary 
Report states first of all that the EAGGF 
staff had come to the conclusion that the 
customs checks carried out had been inade­
quate for identifying the goods stored 
under the prefinancing system in the period 
1992 to 1994. The Commission is referring 
here to the number — in its opinion too 
low — of physical checks carried out by the 
customs offices of Aalst and Leuven prior 
to export. 
I - 3453 
OPINION OF MR ALBER — CASE C-242/97 
113. The Belgian Government doubts the 
sense of such checks where goods are stored 
with a view to being processed. In view of 
the particular nature of the goods (cereals), 
the Belgian control system puts the main 
emphasis on a strict licensing system, 
constant checks of the quantity and com­
position of the goods and (subsequent) 
verification of export documents combinée! 
with systematic checks of goods upon 
export. 
114. Payment under the prefinancing sys­
tem is tied to possession of a corresponding 
licence. The granting of this licence has to 
be approved by the Ministry of Agriculture, 
the Ministry of Economic Affairs and the 
customs administration. Thus the commer­
cial operators are to a certain extent pre­
selected. The licence indicates the ware­
house in which the goods are to be found. 
A warehouse register and worksheet are 
also to be used. This enables the move­
ments of goods to be recorded in chron­
ological order. The customs offices and 
other supervisory agencies are thus in a 
position to trace the route taken by the 
products. The respective supervisory mea­
sures are also indicated in the licence. 
115. This system has been in existence 
since 1988 and has undergone only techni­
cal adjustments in 1994. There is also a 
storage licence, issued by the customs 
administration, for goods not intended for 
processing. Physical checks of goods are 
therefore unnecessary since the licensing 
system as a whole makes the movement of 
goods transparent and capable of being 
checked. 
116. Moreover, the question of the number 
of physical checks was first mentioned in 
the Summary Report with the result that 
the Commission could not make use of it 
for the purpose of corrections. 
117. The licensing system guarantees con­
tinuing monitoring of the quantity and 
composition of the goods. Customs are 
therefore at all times aware of the quanti­
ties in stock. Thus checks are possible 
during both storage and processing. 
118. Under this system the central customs 
office and the Belgian Office for Interven­
tion and Reimbursement (Bureau Beige 
d'Intervention et de Restitution, hereinafter 
referred to as BBIR) are also informed 
about the export declarations. The BBIR 
checks the declarations systematically and 
in detail. Physical checks of the goods are 
also carried out by the customs offices and 
the BBIR upon export. Finally, every 
licence-holder has to prove, using the 
business documentation, that the goods 
have actually been exported. 
I - 3454 
BELGIUM V COMMISSION 
119. The Commission submits that the 
licensing system has considerable weak­
nesses, inter alia as far as the storage of 
goods not intended for processing is con­
cerned. In such a case the licence is to be 
applied for by the warehouse operator and 
not the exporter. Furthermore, it was 
found — and Belgium has not seriously 
disputed this too — that, all in all, too few 
physical checks had taken place. The 
deficiencies considered to exist by the 
Commission had been dealt with in detail 
in correspondence prior to the conciliation 
procedure. Thus, amongst other things, the 
objection was made that the customs 
offices would not exchange information 
with each other and did not know what 
overall quantities were registered and 
stored in which warehouse. Thus goods 
were even found on railway wagons which, 
although registered for export, were not 
included in the quantity stored. Nor did the 
check reports allow any conclusions to be 
drawn about the way the checks had been 
carried out. In a few customs offices there 
had sometimes been no physical checks 
made at all. Nor did subsequent verifica­
tion of business documentation provide any 
certainty as the goods concerned had 
already been exported by then. 
120. On this point it is to be noted that it 
follows from the correspondence between 
the Commission and the Belgian authori­
ties, which has been produced, that those 
authorities had been informed early on of 
the deficiencies criticised by the Commis­
sion. They had the opportunity to comment 
on the objections made and to have them 
heard in the conciliation proceedings. 
However, what they said could not cast 
doubt on the Commission's factual find­
ings. Even if the licensing system described 
by Belgium exists in the form stated this 
does not alter the fact that physical checks 
during storage were carried out — if at-
all — only to a very limited extent. What 
makes matters worse is that no information 
was exchanged between the individual 
customs offices on the goods and quantities 
stored overall. Thus, according to what the 
Commission said, the individual customs 
offices could not have a full overview of the 
goods registered for export. Since, however, 
according to the Community provisions on 
the prefinancing system, it is of fundamen­
tal importance to be informed at all times 
about the actual stock and the composition 
of the products, it is essential to carry out a 
sufficient number of checks here too. Since, 
according to what has been said hitherto, 
this was not the case, Belgium's submission 
cannot be taken as proof that the Commis­
sion's findings in the Summary Report arc 
incorrect. 
Thirteenth point-
121. In the Summary Report the Commis­
sion charges the Belgian authorities with 
abusing the principle of equivalence2 ' by 
applying it also to processed products. 
According to the Belgian Government, it 
is not clear from the relevant provision of 
Article 27(3) of Regulation No 3665/87 
whether the equivalent products had to be 
23 — See Article 27(3) of Regulation No .No 3665/87, paragraph .32 
above. 
I - 3455 
OPINION OF MR ALBER — CASE C-242/97 
basic products or processed products. Cer­
tainly the Belgian authorities had assumed 
that replacement was also possible by 
processed products. Since there is also an 
adequate and efficient control system 
(licences), there is no obvious risk of abuse. 
Although physical checks were expressly 
provided for, they could be carried out at 
any time. 
122. The Commission sees no problems in 
interpreting Article 27(3) of Regulation 
N o 3665/87, since the wording of the 
provision clearly refers to basic products. 
The Commission also found that under 
Belgian law the principle of equivalence 
was not applicable solely to basic products. 
Under the Belgian rales it was, in particular, 
possible for goods not to be registered until 
after processing for prefinancing purposes, 
with the result that the provisions of 
Article 27(3) of Regulation N o 3665/87 
were worthless. In any event an adequate 
check of the basic products was no longer 
possible at that point. 
123. Regarding this point it is to be noted 
that it follows from Article 27(3) of Reg­
ulation N o 3665/87 that basic products 
can be replaced by equivalent products, 
falling within the same subheading of the 
Combined Nomenclature, of the same 
commercial quality, having the same tech­
nical characterist ics and meeting the 
requirements for the granting of an export 
refund. However, only products processed 
to the same degree can be of the same 
commercial quality and have the same 
technical characteristics. This means, how­
ever, that basic products can in principle 
only be replaced by other basic products. 
The spirit and purpose of Article 27(3) are 
just as clear as the wording. In principle, 
according to the first sentence of the third 
paragraph, at least parts of the basic 
products must be found in the processed 
products to be exported. For economic 
reasons it should, however, be possible for 
exporters to substitute basic products for 
processing. In order to ensure, however, 
that the processed goods for export corre­
spond in composition and quantity to the 
goods originally registered, substitution can 
only be allowed if the products to be 
exchanged are essentially the same. Thus 
a basic product can only be replaced by 
another basic product of the same quality 
and with the same characteristics. No other 
meaningful interpretation of this provision 
seems possible here. 
124. Since the Belgian authorities have, 
however, allowed basic products to be 
substituted by processed goods, this must 
be seen as an infringement of Article 27(3) 
of Regulation N o 3665/87. The Belgian 
Government therefore could not prove that 
the Commission's statements in the Sum­
mary Report were incorrect. 
I - 3456 
BELGIUM V COMMISSION 
Fourteenth point 
125. The Commission stated in the Sum­
mary Report that it was possible in Belgium 
that the person responsible at the customs 
office did not check on receipt of the 
payment declaration whether there was 
sufficient warehouse capacity, i.e. whether 
the goods were actually there. 
126. Belgium gives as the reason for this 
that it was not possible to have a complete 
overview of all goods stored (under the 
prefinancing processing system). This 
would require constant physical checks 
which were, however, not necessary under 
the relevant provisions. Besides this, how­
ever, checks were made in the case of large 
firms as to whether the registered stocks 
existed. For smaller firms this was not 
necessary as any irregularities would be 
noticed. Under the current Community 
provisions it is not necessary for the 
customs offices to keep an inventory. By 
contrast, however, a list of the payment 
declarations is kept. 
127. The Commission sees the Belgian 
Government's method of proceeding as 
consti tut ing an infringement of Arti­
cle 26(1) of Regulation No 3665/87. If 
goods are to be placed under customs 
control the customs offices also have to 
ensure that the goods are actually present. 
In any event, all goods registered for 
prefinancing have to be recorded, irrespec­
tive of where they arc stored. If it were 
stipulated — as in this case — that the 
goods are to be stored under customs 
control, such control must actually be 
exercised. 
128. In this connection it is to be noted that 
it follows from Article 26(1) of Regulation 
No 3665/87 that the products or goods are 
to be placed under customs control at the 
time of acceptance of the payment declara­
tion until they leave the customs territory 
of the Community or have reached their 
destination. This means that in this respect 
the Belgian Government's argument that 
there do not necessarily have to be constant 
physical checks has to be accepted. On the 
other hand — and here the Commission's 
argument must prevail — effective and 
efficient customs control docs have to be 
guaranteed. This may, however, mean 
nothing more than that the customs autho­
rities always have to be kept informed 
about what quantities of goods arc stored 
under the prefinancing system. In particu­
lar, it must not be possible for non-existent 
quantities of goods to be declared. In order 
to prevent this happening, the customs 
offices are obliged to satisfy themselves of 
the actual existence of the quantity of 
goods stated in the payment declaration. 
Even if this means greater — not negligi­
ble — expenditure, such control alone is 
suitable and essential for detecting any 
abuse at the payment declaration stage 
and for taking appropriate action. Since it 
thus follows that customs control — even if 
not constant — is essential from the date of 
I - 3457 
OPINION OF MR ALBER — CASE C-242/97 
acceptance of a payment declaration for 
products and goods going into storage, it is 
clear that the Belgian provisions are not in 
conformity with the Community provi­
sions. 
129. The Belgian Government's submission 
is therefore to be dismissed in this respect 
as well. 
Fifteenth point 
130. On the last point disputed in detail by 
Belgium, it is stated in the Summary Report 
that it is possible for exporters who still 
have no destination for their goods to 
deposit an export declaration marked 
'Third country warehouse' and an IM-7 
certificate (temporary entry to customs 
warehouse) on the last day of the prefinan­
cing period. This is allowed by the customs 
offices for extending the prefinancing per­
iod. 
131. The Commission pointed out in both 
its defence and its rejoinder that this was 
not taken into account for the purposes of 
the financial correction in the contested 
decision. The Commission's view was that 
although the way Belgium operates here is 
undesirable it does not constitute an infrin­
gement of current Community law. 
132. Since this point thus did not serve as a 
basis for the contested decision, there is no 
need to go into it further here. 
133. Overall, however, it can be said on all 
the aforementioned points that the submis­
sions of Belgium are not capable of show­
ing the Commission's factual findings to be 
wrong. Furthermore, it follows from the 
extensive correspondence between the 
Commission and the Belgian authorities, 
which has been produced, that those 
authorities were informed early on of the 
alleged deficiencies found in the control 
system. It was obvious from this corre­
spondence that there had been a lively 
exchange of information which, although it 
had not led to the Commission's revising its 
opinion on the existing shortcomings, does 
show that the Commission had examined 
each individual point. There can therefore 
be no question of an infringement of the 
principles of sincere cooperation and due 
care. 
134. It can be inferred from the concilia­
tion body's final report, also mentioned at 
the hearing and referring generally to the 
conciliation proceedings with Italy, Ger­
many, the Netherlands, Belgium and 
France, that — apart from the alleged 
discovery of meat from female animals — 
Belgium did not dispute the Commission's 
main findings during the conciliation pro­
cedure. The criticisms made by the Member 
States affected by the corrections are con-
I - 3458 
BELGIUM V COMMISSION 
fined to arguing that the Commission's 
inspections were not representative, the risk 
of fraud was overestimated and there was 
no appropriate legal basis for the checks 
demanded by the Commission. Even the 
conciliation body assumed that the checks 
by the Member States were not adequate. 
Moreover, the Commission's inspections 
were representative and the deficiencies 
reported so important and generalised that 
they could not be assumed to be mere 
exceptions to the normal practice of super­
vision in the Member States. This led to a 
risk of losses for the EAGGF. Admittedly it 
was not fully proven that there was always 
a very high risk, and the Member States 
also announced measures to improve the 
situation. However, the steps taken by the 
Commission were imperative since the 
same or similar deficiencies had already 
been the subject of complaints in previous 
years. 
135. This also shows that even during the 
conciliation procedure Belgium had been 
unable to cast any doubt on the Commis­
sion's factual findings although it had 
known about them. The criticism that the 
Commission had not cooperated sincerely 
with the Belgian authorities and had not 
examined the latter's submissions with due 
care, is therefore unfounded. 
136. With regard to the alleged infringe­
ment of the duty to state reasons laid down 
in Article 190 of the EC Treaty it is to be 
noted that according to settled case-law 
this duty depends on the nature of the act in 
question and on the context in which it was 
adopted. 24 
137. In the particular context of the pre­
paration of decisions relating to the clear­
ance of the accounts, the statement of 
reasons for a decision is to be regarded as 
sufficient if the Member State to which the 
decision is addressed was closely involved 
in the process by which it came about and 
was aware of the reasons for which the 
Commission took the view that it should 
not charge the sum in dispute to the 
EAGGF. 25 
138. Since in the present case, however, it is 
clear from the extensive written correspon­
dence between the Commission and the 
Belgian authorities that the Belgian Gov­
ernment was involved in the preparation of 
the contested decision and thus knew the 
reasons why the Commission was of the 
opinion that the disputed sum should not 
be charged to the EAGGF, there is no 
infringement of the duty to state reasons. 
24 — Judgment in Case C-28/94 (cited in footnote 17, paragraph 
81), and judgment in Case C-54/91 Germany v Commis­
sion |1993] ECR I-3399, paragraph 10. 
25 — Judgment in Case C-28/94 (cited in footnote 17, paragraph 
82), and judgment in Case C-27/94 Netherlands v 
Commission [1998] ECR I-5581, paragraph 36. 
I - 3459 
OPINION OF MR ALBER — CASE C-242/97 
139. It follows from the foregoing that the 
Belgian Government's first plea must be 
rejected in its entirety as unfounded. 
2. Second plea: Infringement of Regulations 
No 729/70 and No 1723/72 and of the 
duty to state reasons in accordance with 
Article 190 of the EC Treaty 
140. In this plea (for the text of the 
regulations, see paragraph 20 et seq.) the 
Belgian Government states that the Com­
mission made an error in applying a linear 
correction since no irregular payments had 
been made in respect of prefinancing. The 
Commission, moreover, mistakenly 
assumed that the entire Belgian control 
system displayed deficiencies, with the 
result that a 10% flat-rate reduction is said 
to be justified and applicable to all sectors 
for which expenditure was declared. The 
Commission also failed to give adequate 
reasons for its negative decision in the 
Summary Report. This constitutes an 
infringement of the provisions of Regula­
tion No 729/70 and No 1723/72 and of 
Article 190 of the EC Treaty. 
141. According to Belgium, the checks 
carried out by the Commission concerned 
only four customs offices. Even though no 
irregular payments were discernible, the 
Commission still extrapolated the alleged 
deficiencies to the entire Belgian territory. 
Moreover, these deficiencies were disputed 
and yet still used as a basis by the 
Commission. 26 
142. Even though, of course, no control 
system could function 100% perfectly, the 
Commission was not justified in applying a 
flat-rate reduction of the level mentioned, 
since its checks were not representative. 
Thus, for example, there were 54 customs 
offices in Belgium, of which 15 were 
regularly involved in prefinancing. The 
Commission, however, checked only four 
customs offices. The alleged deficiencies 
therefore could not be extrapolated to the 
other customs offices. The Commission has 
in any case provided no evidence of the 
legality of its method of proceeding. 
143. Nor were parallel deficiencies 
observed simultaneously in all the customs 
offices checked. They were therefore not 
systematic deficiencies of the control sys­
tem. 
144. Also, in the individual customs 
offices, only the goods of individual firms 
were inspected; the other products were not 
also subjected to a check. In the cereals 
sector checks were made only in respect of 
a few budget items — malt (item No 1001) 
and other cereals (item No 1003) — and 
not at all in respect of others. 
26 — What is involved here is essentially the Commission's 
factual findings as already examined. 
I - 3460 
BELGIUM V COMMISSION 
145. The Commission also, when assessing 
risk, started out from incorrect factual 
findings and was thus unable to demon­
strate a causal link between the deficiencies 
and the losses to be feared. There is there­
fore a grave procedural error here as 
insufficient reasons were given for the risk 
of losses alleged by the Commission. 
146. The Commission's method of pro­
ceeding is therefore to be regarded overall 
as an infringement of Article 5(2)(c) of 
Regulation No 729/70, of its own princi­
ples on cooperation and loss assessment as 
laid down in the Belle Group Report and of 
the duty to state reasons. 
147. The Commission takes the view that 
the reductions were applied lawfully. The 
deficiencies it found in the Belgian control 
system justified a flat-rate reduction. In 
particular, the extrapolation of the short­
comings to the entire system cannot be 
criticised. The inspections it carried out 
were, all in all, representative. In the beef 
and veal sector, firms had been checked 
which had received 22.8% of the advances 
for 1993. Also, when selecting the customs 
offices, it chose those which had dealt with 
over 2 5 % of the advances. In the cereals 
sector too, the checks concerned 32 .3% of 
expenditure. Since, moreover, the current 
Belgian provisions had been valid for the 
entire territory, extrapolation was in con­
formity with the law in this case too. 
148. Inadequate physical checks were like­
wise a cause for objection; in the individual 
customs offices there was a substantial risk 
of loss also because of the opportunities for 
substitution. Moreover, Belgium had been 
obliged to demand the return of money 
since, during the checks, meat had been 
found that was not fit for human consump­
tion. 
149. In the present case a flat-rate reduc­
tion is possible also under case-law of the 
Court of Justice since the Belgian control 
system did not meet the requirements of 
Community law. Moreover, Belgium has 
not been able to adduce evidence that the 
conditions existed for charging the expen­
diture to the EAGGF. 
150. On this point it is to be noted that, 
according to settled case-law of this Court, 
the EAGGF finances only those interven­
tions within the framework of the common 
organisation of the agricultural markets 
carried out in accordance with the Com­
munity provisions. The Commission thus 
has to prove that there has been an 
infringement of the rules of the common 
organisation of agricultural markets. 
151. In the present case, the Commission 
was able to prove several such infringe­
ments. The Belgian Government, on the 
other hand, could not provide any evidence 
that the Commission's findings were incor­
rect. Consequently, serious doubts remain 
as to whether an appropriate and effective 
I - 3 4 6 1 
OPINION OF MR ALBER — CASE C-242/97 
system of measures for monitoring and 
checking had been introduced. 
152. In particular, the Commission carried 
out its checks to a sufficient extent and 
inspected a representative proportion of the 
customs offices and undertakings con­
cerned. On the basis of its spot checks the 
Commission was able to draw conclusions 
about the control system in Belgium as a 
whole. The subject of the investigation was 
the entire control system, and the extent of 
turnover involved in the Commission's 
inspections is as such sufficiently represen­
tative to allow extrapolation to the whole. 
Whether the spot checks are representative 
does not depend only on the number of 
customs offices inspected; it is sufficient if 
the percentage of the amount or extent of 
prefinancing checked is sufficiently high to 
enable representative conclusions to be 
drawn for the overall situation. Since in 
the present case no concrete (individual) 
payment or export declarations were criti­
cised, but the control system in Belgium 
displayed deficiencies as a whole, the 
Commission could quite legitimately refuse 
to recognise expenditure of an amount 
calculated by extrapolating its own results. 
153. The Belgian authorities were given 
adequate opportunity to comment. The 
Commission's method of proceeding was 
perfectly valid also with regard to the 
guidelines laid down in the Belle Group 
Report. It was able to justify its risk 
assessment by the extent of the deficiencies 
found. N o evidence of actual loss is 
required by the current rules or the case-
law of the Court (see above, paragraphs 48 
to 54). 
154. A flat-rate reduction of the expendi­
ture declared is therefore lawful. 
155. The Belgian Government has argued 
in the alternative that the Commission 
should not have applied the disputed cor­
rection to all sectors for which refunds had 
been paid under the prefinancing scheme, 
but only to those which had also been 
inspected. 
156. Firstly, a flat-rate correction was also 
extended to export refunds for common 
wheat even though no applications for 
refunds had been made for the years 1993 
and 1994 by the firms inspected and there­
fore no deficiencies in control could have 
been found here. If the Commission wanted 
to apply reductions here too it would have 
had to check other undertakings in this 
field. 
157. This also follows from the Belle 
Group Report, according to which flat-rate 
corrections must only be applied to the 
expenditure sector for the region or admin­
istrative area in which deficiencies were 
found, unless it is proven that the same 
deficiency is also to be found in other 
I - 3462 
BELGIUM V COMMISSION 
regions or throughout the entire territory of 
the Member State. In the present case, the 
findings on other budget items should not 
have been carried over to the common 
wheat sector. The alleged deficiencies are 
not systematic and do not entail any risk of 
loss for the EAGGF. 
158. Moreover, in response to the Com­
mission's request, it had been possible to 
demonstrate that this sector (common 
wheat) had its own particular control 
system. 
159. Finally, the Commission's spot checks 
also have to be representative, which was 
not the case here since the common wheat 
sector did after all account for 2 7 % of 
overall expenditure on prefinancing for 
cereals. 
160. The Commission first of all points out 
that the correction applied concerns only 
advance payments made by Belgium within 
the framework of the prefinancing scheme. 
This method of proceeding is justified, even 
according to the Belle Group Report, since 
the export refunds had concerned the beef 
and veal and cereals sectors. The Commis­
sion's inspections did not target individual 
undertakings but were intended to shed 
light on the entire control system in the 
sectors mentioned. 
161. The subject of the investigations was 
therefore the checks carried out by the 
customs offices. If, however, the entire 
control system in the cereals sector displays 
deficiencies, a correction can also be 
applied to the budget item 'common 
wheat'. 
162. Belgium's argument that special pro­
visions on control apply to the prefinancing 
of common wheat must be rejected as out 
of time since it was put forward for the first 
time at the reply stage in the present action. 
163. The Belgian Government's arguments 
are not convincing in this respect either. 
First, the passage of the Belle Group Report 
mentioned refers to geographical and 
administrative areas and not to different 
budget items, with the result that it cannot 
be concluded on this basis that the Com­
mission acted unlawfully. Next, the Com­
mission's checks related to both the beef 
and veal and the cereals sectors. Since 
considerable deficiencies were found there, 
the Commission was in principle entitled to 
apply flat-rate reductions, in particular 
even where no specific losses to the detri­
ment of the EAGGF through unjustified 
payments under the export refund scheme 
could be demonstrated. 
164. At the time when the Summary 
Report and the contested decision were 
I - 3463 
OPINION OF MR ALBER — CASE C-242/97 
issued, the Commission had been com­
pelled, for lack of other information, to 
assume that the deficiencies found in the 
control system concerned the entire cereals 
sector. The fact that other provisions might 
apply to common wheat was put forward 
by the Belgian Government for the first 
time at the reply stage of the proceedings 
and must therefore be rejected as submitted 
out of time under Article 42 of the Rules of 
Procedure of the Court of Justice.27 
165. Since, therefore, the Commission's 
inspections concerned the cereals sector as 
a whole, and deficiencies were found in the 
related control system, a correction in 
respect of all expenditure declared was 
justified. 
166. Secondly, Belgium criticises (in the 
alternative) the correction for the beef and 
veal sector. The Commission only pointed 
out deficiencies in the checks for the special 
refund scheme in accordance with Regula­
tions No 32/82 and No 1964/82 (see para­
graph 34). In this area, however, there were 
specific demands in respect of checks. It 
cannot automatically be concluded from 
deficiencies found in this area that there 
were deficiencies in supervision in other 
areas of the beef and veal sector too. Any 
financial correction would therefore have 
required separate examination and justifi­
cation. Thus, in particular, the checks in 
respect of export refunds with regard to 
beef and veal from female cattle are 
fundamentally different from those to be 
carried out in respect of special refunds. 
167. In the Commission's view, there are 
no errors of law to be found in this respect 
either. Its checks had related to the entire 
control system in the beef and veal sector. 
Above all, the shortcomings which had 
emerged in the on-the-spot checks, such as 
shortage of staff in the customs offices and 
lack of (testing) equipment, are indepen­
dent of the type of refund system. These 
deficiencies emerged at every check, regard­
less of context. Other exporters too had 
conducted their business in the customs 
offices checked, with the result that the 
deficiencies found had also had repercus­
sions on them. The Commission's inspec­
tions were also directed to compliance with 
the provisions of Regulation No 565/80, 
concerning the prefinancing of meat from 
female cattle and forequarters of male 
cattle. 
168. In response to this criticism it has to 
be said that, since the Commission's inspec­
tions related to the entire beef and veal 
sector and are for this reason to be regarded 
as representative, the financial correction 
27 — This provision reads: 
'1 . In reply or rejoinder a parry may offer further evidence. 
The party must, however, give reasons for the delay 
offering in it. 
2. No new plea in law may be introduced in the course of 
proceedings unless it is based on matters of law or of fact 
which come to light in the course of the procedure. 
I - 3464 
BELGIUM V COMMISSION 
was rightly applied to the entire sector. 
Moreover, deficiencies were found in the 
control system which would inevitably 
have an unfavourable effect on any control 
procedure. The lack of staff and equipment 
give rise to considerable doubts as to 
whether effective checks could be carried 
out. These doubts could not be dispelled by 
the Belgian Government's submission, with 
the result that a financial correction for the 
beef and veal sector investigated seems 
justified. 
169. Thirdly, the Belgian Government 
claims (in the alternative) in its application 
that it had already, during the conciliation 
procedure, pointed out that a correction in 
the cereals sector should not be applied to 
expenditure that could not be attributed to 
the system of prefinancing export refunds. 
Since the Commission's inspections had 
only concerned such prefinancing, other 
areas should not have been included in the 
correction. In its reply it further states that 
the inspections related only to prefinancing 
processing. For this reason, Belgium had 
cleared the accounts for cereals not inten­
ded for processing. These sums, for pre­
financing storage, had mistakenly not been 
indicated by Belgium in the conciliation 
procedure. This information had, however, 
been available to the Commission during 
the conciliation procedure, as is shown by a 
BBIR document dated 25 September 1996. 
170. The Commission explains in this 
respect that the correction was applied 
with regard to the prefinancing system. 
The Commission was guided by the data 
and documents made available by the 
Belgian authorities. The inspections had 
concerned both the prefinancing processing 
and the prefinancing storage systems. Both 
the firm Boormalt, which made use of the 
latter, and the Sobegra customs warehouse, 
which belonged to the Antwerp customs 
office, were checked. Belgium's argument 
that the prefinancing storage system should 
not have been taken into consideration was 
put forward for the first time in this form in 
the reply and must thus be rejected as being 
submitted out of time. 
171. In the final analysis, the Commission's 
submission must be upheld. According to 
the documents produced, inspections had 
been carried out in the aforementioned 
areas of prefinancing. The correction could 
therefore be applied to both systems. The 
Belgian Government's further plea, calling 
for the prefinancing storage system to be 
left out of consideration, must be rejected 
as put forward too late, since it was 
introduced only at the reply stage of the 
proceedings and therefore neither had to be 
taken into consideration when the decision 
mentioned was adopted nor needs to be 
considered when the Court makes its 
decision according to Article 42(2) of the 
Rules of Procedure. 
I - 3465 
OPINION OF MR ALBER — CASE C-242/97 
172. Moreover, the Member States are 
obliged to make the necessary information 
available to the Commission, so that in the 
present case the Commission did not need 
to have any knowledge of the BBIR docu­
ments. 
173. It follows from the foregoing that the 
three heads of the Belgian Government's 
alternative plea must also be rejected. A 
flat-rate correction could therefore lawfully 
be applied by the Commission. 
3. Third plea: Infringement of the principle 
of legal certainty, of the legal maxim patere 
legem quam ipse fecisti and of the duty to 
state reasons 
174. By this plea the Belgian Government 
essentially criticises the fact that the Com­
mission, in both its Summary Report and 
the contested decision, disregarded the 
guidelines it had itself set in place in the 
Belle Group Report — see paragraphs 44 
to 47 above — without stating adequate 
reasons for doing so. The Commission 
therefore committed an error at law in 
arriving at the result of a 10% flat-rate 
reduction for the beef and veal and cereals 
sectors. 
175. The Belgian Government feels that it 
already follows from its arguments in 
support of the first two pleas that a 10% 
correction could not be justified. Thus, 
neither deficiencies in the entire control 
system, or essential elements thereof, nor 
the risk of very high losses for the EAGGF 
had been proven. Neither did the Commis­
sion take into account in its considerations 
the fact that Belgium tried taking effective 
action to remedy the shortcomings criti­
cised. For example, an improved check 
report system was introduced, and attempts 
were made to improve the inspectors' 
working methods. Additional provisions 
were brought into force in respect of 
physical checks and the application of the 
principle of equivalence, and the instruc­
tions relevant to the beef and veal sector 
have been updated. Moreover, as the sub­
missions in the first and second plea 
(principle of equivalence, physical checks) 
show, problems arose in the interpretation 
of Community provisions since the word­
ing was sometimes unclear and there were 
several possible interpretations. 
176. Finally, the financial correction 
should have been confined to the areas 
inspected and not applied to the entire 
Belgian territory. 
177. The Commission points out that it did 
not apply the highest possible correction as 
it could even, under certain circumstances, 
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BELGIUM V COMMISSION 
have refused all of the expenditure. Besides, 
a 10% reduction had been decided also for 
Germany, France, Italy and the Nether­
lands in the cereals sector. It was only in the 
beef and veal sector that the reduction for 
the other Member States concerned was 
lower. 
178. In the case of Belgium it was found 
that the deficiencies affected either the 
control system as a whole or essential 
elements thereof. Because of the lack of 
checks or because of shortcomings in the 
checks it was not possible to guarantee that 
the expenditure was actually justified. 
179. For the beef and veal sector there was 
a considerable risk of substitution, with the 
result that goods could have been exported 
in smaller quantities and of a lower weight 
than registered. 
180. A similar risk arose in the cereals 
sector, compounded by the fact that the 
cus toms offices concerned were not 
informed about the actual warehouse 
stock. 
181. The main objections justifying the 
correction applied were listed in the Sum­
mary Report. 
182. In 1993, expenditure on prefinancing 
totalled ECU 1 600 million, corresponding 
to 15.8% of total expenditure on export-
refunds. Belgium was one of six Member 
States in receipt of the majority of this. If 
considerable deficiencies were found, this 
entailed the risk of very high losses. Since 
there had been no doubts about a 10% 
correction, no mitigating circumstances 
had been taken into consideration either. 
Furthermore, there had not been any. The 
same deficiencies as had come to light in 
the 1994 inspections had been the subject 
of repeated reminders in the Summary 
Reports of previous years (1987, 1988, 
1989, 1990 and 1992). 
183. There was no trace of the improve­
ments mentioned by Belgium either — at 
least not by November 1994. Nor were 
there any problems of interpretation as the 
Commission had already advised on the 
current interpretation and application of 
the provisions in previous years in its 
Summary Reports and circulars. 
I - 3467 
OPINION OF MR ALBER — CASE C-242/97 
184. As already stated in paragraph 49, it is 
settled case-law of the Court that the 
EAGGF only finances interventions within 
the framework of the common organisation 
of the agricultural markets carried out in 
accordance with Community provisions. 
Since the Member State concerned is in 
the best position to provide and verify the 
information necessary for clearing the 
accounts of the EAGGF, it is for that State 
to prove in full detail the accuracy of its 
figures and where necessary to demonstrate 
the inaccuracy of the Commission's calcu­
lations. 
185. As far as the level of financial correc­
tion is concerned, it clearly follows from 
case-law of the Court that the Commission 
could even refuse all costs incurred if it 
finds that there are no adequate control 
mechanisms in place. 
186. Moreover, the Member State must 
prove that the criteria applied by the 
Commission for treating irregularities dif­
ferently — according to the extent of the 
lack of checks and the degree of risk for the 
EAGGF — are arbitrary and unfair. The 
Belgian Government was, however, unable 
to provide such evidence. 
187. The deficiencies found by the Com­
mission related at the least to essential 
elements of the control system or to the 
implementation of checks of vital impor­
tance for assuring the legality of expendi­
ture. 
188. The Commission was also able to 
prove the risk of correspondingly higher 
losses for the EAGGF. In view of the high 
sums of expenditure in the area of pre­
financing and the deficiencies found, the 
Commission rightly had to assume that the 
risk was considerable. 
189. A flat-rate correction of 10% was, in 
view of all the foregoing, justified. The 
Belgian Government's submission in this 
respect must be rejected. 
4. Fourth plea: Infringement of the princi­
ple of equal treatment and the duty to state 
reasons 
190. In the beef and veal sector the Com­
mission applied a reduction of 10% for 
Belgium, but only 5% for Germany, 
France, Italy and the Netherlands. 
I - 3468 
BELGIUM V COMMISSION 
191. The Belgian Government sees this as 
unjustified discrimination. Although the list 
of the essential objections was longer for 
Belgium than for the other Member States 
it was legally flawed since it was based on 
incorrect factual findings. 
192. Similar deficiencies were found for the 
Netherlands but the level of correction was 
lower. The situation of both Member States 
is comparable but resulted in different 
assessments. The other Member States also 
displayed comparable deficiencies, but the 
sanctions against Belgium are higher. 
193. In the Commission's view, a mere look 
at the list of deficiencies, which was longer 
for Belgium than for the other Member 
States, suffices to show that the Commu­
nity provisions had been infringed to a 
greater extent in that State. 
194. For example, besides deficiencies in 
the implementation of checks, shortcom­
ings in staffing and equipment had been 
found in particular. These problems were 
not observed in the other Member States. 
195. In particular, the checks under Reg­
ulations No 32/82 and No 1964/82 were 
much more efficient in the other Member 
States investigated. In the latter, inspectors 
were present at the boning, who had 
stamped the pieces of meat, monitored 
exports, determined weight and applied 
seals. Such tight control was not observed 
in Belgium. 
196. In this respect it is to be noted that a 
prohibited inequality of treatment could 
only occur if the same circumstances were 
treated differently without any objective 
justification. However, this is not the case 
here. As the Belgian Government has itself 
conceded, the list of deficiencies for this 
Member State is longer than for the other 
Member States investigated. Moreover, it 
has transpired that the deficiencies and 
shortcomings of the Belgian control system 
were greater than in the other Member 
States affected by the contested decision. 
Since, therefore, the circumstances are not 
in fact comparable, there cannot be any 
infringement of the principle of equal 
treatment. 
I - 3469 
OPINION OF MR ALBER — CASE C-242/97 
197. Nor is there any infringement of the 
duty to state reasons, as the Belgian autho­
rities knew in good time about the Com­
mission's criticisms and had been given the 
opportunity to comment on them. 
198. It therefore follows from the fore­
going that the Belgian Government's action 
must be dismissed in its entirety as unfoun­
ded. 
Costs 
199. Under Article 69(2) of the Rules of 
Procedure the unsuccessful party is to be 
ordered to pay the costs, if applied for by 
the successful party. Since the Commission 
has applied for costs against the Kingdom 
of Belgium, the latter, as the unsuccessful 
party, must pay the costs. 
F — Conclusion 
200. For the reasons given above, it is proposed that the Court decide as follows: 
(1) The action is dismissed. 
(2) The Kingdom of Belgium shall pay the costs of the proceedings. 
I - 3470