61976CJ0015_EN
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Parties
IN JOINED CASES 15 AND 16/76,
FRENCH GOVERNMENT, REPRESENTED BY GUY LADREIT DE LACHARRIERE, ACTING AS AGENT, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE FRENCH EMBASSY, 2 RUE BERTHOLET,
APPLICANT,
V
COMMISSION OF THE EUROPEAN COMMUNITIES, REPRESENTED BY ITS LEGAL ADVISERS, JEAN AMPHOUX AND GOTZ ZUR HAUSEN ( IN CASE 15/76 ) AND BERNARD PAULIN AND GIULIANO MARENCO ( IN CASE 16/76 ), ACTING AS AGENTS, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF ITS LEGAL ADVISER, MARIO CERVINO, JEAN MONNET BUILDING, KIRCHBERG,
DEFENDANT,
Subject of the case
APPLICATION FOR THE ANNULMENT OF COMMISSION DECISIONS 76/142/EEC AND 76/148/EEC OF 2 DECEMBER 1975 CONCERNING THE DISCHARGE OF THE ACCOUNTS PRESENTED BY THE FRENCH REPUBLIC IN RESPECT OF THE EUROPEAN AGRICULTURAL GUIDANCE AND GUARANTEE FUND ( EAGGF ), GUARANTEE SECTION, EXPENDITURE FOR 1971 AND 1972 ( OFFICIAL JOURNAL L 27 OF 2 FEBRUARY 1976, P . 6 AND P . 17 ) IN SO FAR AS THE COMMISSION FAILED TO RECOGNIZE AS CHARGEABLE TO THE EAGGF SUMS OF FF 1 240 514 AND FF 72 590 447.69 RELATING TO AID FOR SKIMMED-MILK POWDER EXPORTED TO ITALY FOR ANIMAL FEED AND THE DISTILLATION OF TABLE WINES RESPECTIVELY,
Grounds
1BY TWO APPLICATIONS LODGED ON 13 FEBRUARY 1976 THE GOVERNMENT OF THE FRENCH REPUBLIC SEEKS THE PARTIAL ANNULMENT UNDER THE FIRST AND THIRD PARAGRAPHS OF ARTICLE 173 OF THE EEC TREATY OF COMMISSION DECISIONS 76/142 AND 76/148 OF 2 DECEMBER 1975 CONCERNING THE DISCHARGE OF THE ACCOUNTS IN RESPECT OF THE EUROPEAN AGRICULTURAL GUIDANCE AND GUARANTEE FUND, GUARANTEE SECTION, EXPENDITURE FOR 1971 AND 1972 ( OFFICIAL JOURNAL L 27 OF 2 FEBRUARY 1976, P . 5 AND P . 17 ).
2AS THE TWO CASES HAVE BEEN JOINED FOR THE PURPOSES OF THE PROCEDURE THEY SHOULD ALSO BE JOINED FOR THE PURPOSES OF THE DECISION .
AIDS FOR SKIMMED-MILK POWDER USED FOR ANIMAL FEEDING-STUFFS
3THE APPLICANT GOVERNMENT COMPLAINS THAT THE COMMISSION REFUSED TO CHARGE TO THE EAGGF FOR THE 1971 FINANCIAL YEAR THE AMOUNT OF FF 1 240 514 PAID BY THE FRENCH AUTHORITIES AS AID TO SKIMMED-MILK POWDER EXPORTED FROM FRANCE TO ITALY AND INTENDED FOR USE AS ANIMAL FEED ON THE GROUND THAT THE FORMAL REQUIREMENTS AS TO PROOF LAID DOWN BY THE RELEVANT COMMUNITY RULES HAD NOT BEEN COMPLIED WITH .
4UNDER REGULATION ( EEC ) NO 986/68 OF THE COUNCIL OF 15 JULY 1968 LAYING DOWN GENERAL RULES FOR GRANTING AID TO SKIMMED MILK ( OFFICIAL JOURNAL, ENGLISH SPECIAL EDITION 1968 ( I ), P . 260 ), AS AMENDED BY SUBSEQUENT COUNCIL REGULATIONS, AND UNDER COMMISSION REGULATIONS ON DETAILED RULES FOR THE GRANT OF THAT AID :
- THE AID WAS, IN PRINCIPLE, TO BE PAID BY THE INTERVENTION AGENCY OF THE MEMBER STATE WITHIN WHOSE TERRITORY WAS SITUATED THE CONCERN WHICH DENATURED THE SKIMMED-MILK POWDER OR USED IT IN THE MANUFACTURE OF COMPOUND FEEDINGSTUFFS ;
- AS A TEMPORARY MEASURE, VALID UNTIL 30 JUNE 1971, WHERE SKIMMED-MILK POWDER PRODUCED IN ONE MEMBER STATE WAS DENATURED OR USED IN ANOTHER MEMBER STATE, THE FORMER MEMBER STATE WAS AUTHORIZED TO PAY THE AID ;
- THE DECISIVE DATE FOR THE PAYMENT OF THE AID BY THE EXPORTING STATE WAS THE DAY WHEN EACH CONSIGNMENT OF THE PRODUCT WAS PLACED UNDER CONTROL IN THE TERRITORY OF THE IMPORTING MEMBER STATE ;
- PROOF THAT THE GOODS HAD BEEN PLACED UNDER CONTROL IN THE IMPORTING MEMBER STATE COULD BE ADDUCED ONLY BY PRODUCING THE CONTROL COPY OF THE COMMUNITY TRANSIT DOCUMENT, CERTAIN SECTIONS OF WHICH HAD TO BE COMPLETED IN A SPECIFIC MANNER .
5THE AMOUNTS IN ISSUE RELATE TO CASES IN WHICH THE COMMISSION HELD THAT THE AID HAD BEEN PAID BY THE COMPETENT FRENCH AGENCY EVEN THOUGH THE ORIGINALS OF THE CONTROL COPIES OF THE COMMUNITY TRANSIT DOCUMENT HAD NOT BEEN PRODUCED OR HAD NOT BEEN COMPLETED IN THE PRESCRIBED MANNER .
6THE APPLICANT GOVERNMENT CHALLENGES THE LEGALITY OF THE COMMISSION ' S REFUSAL TO ACCEPT FINANCIAL RESPONSIBILITY FOR THOSE AMOUNTS, ARGUING THAT THE ANOMALIES FOUND TO EXIST CONTRAVENE ONLY SUBSIDIARY FORMAL REQUIREMENTS AND THAT THEY WERE, MOREOVER, RECTIFIED SUBSEQUENTLY .
7AS REGARDS THE RELEVANCE OF SUBSEQUENT RECTIFICATION IT SHOULD BE OBSERVED THAT IN THE CONTEXT OF AN APPLICATION FOR ANNULMENT UNDER ARTICLE 173 OF THE TREATY THE LEGALITY OF THE CONTESTED MEASURE MUST BE ASSESSED ON THE BASIS OF THE ELEMENTS OF FACT AND OF LAW EXISTING AT THE TIME WHEN THE MEASURE WAS ADOPTED .
8RECTIFICATION SUBSEQUENT TO THAT DATE CANNOT THEREFORE BE TAKEN INTO ACCOUNT FOR THE PURPOSES OF SUCH AN ASSESSMENT .
9WITH REGARD MORE PARTICULARLY TO THE ASSESSMENT OF THE LEGALITY OF DECISIONS OF THE COMMISSION CONCERNING THE DISCHARGE OF ACCOUNTS PRESENTED BY THE MEMBER STATES IN RESPECT OF EXPENDITURE FINANCED BY THE EAGGF IT SHOULD BE RECALLED THAT THE OBJECTIVE OF SUCH A DECISION IS TO ASSESS WHETHER IT MAY BE ACCEPTED THAT THE EXPENDITURE WAS INCURRED BY THE NATIONAL AUTHORITIES IN ACCORDANCE WITH COMMUNITY PROVISIONS .
10IN CASES WHERE THE COMMUNITY RULES AUTHORIZE PAYMENT OF AN AID ONLY ON CONDITION THAT CERTAIN FORMALITIES RELATING TO PROOF ARE COMPLIED WITH AT THE TIME OF PAYMENT, AID PAID IN DISREGARD OF THAT CONDITION IS NOT IN ACCORDANCE WITH COMMUNITY LAW AND THE RELATED EXPENDITURE CANNOT, THEREFORE, IN PRINCIPLE BE CHARGED TO THE EAGGF WHEN THE ACCOUNTS FOR THE FINANCIAL YEAR IN QUESTION ARE DISCHARGED, WITHOUT PREJUDICE TO ANY POSSIBILITY ON THE PART OF THE COMMISSION TO TAKE ACCOUNT, DURING ANOTHER FINANCIAL YEAR, OF THE SUBSEQUENT PRODUCTION OF THE REQUISITE PROOF .
11IT FOLLOWS THAT THE RECTIFICATION OF THE FORMAL REQUIREMENTS RELATING TO PROOF FOLLOWING PAYMENT OF THE AID BY THE COMPETENT NATIONAL AGENCY IS NOT SUCH AS TO INVALIDATE THE COMMISSION ' S REFUSAL TO CHARGE THE EXPENDITURE TO THE EAGGF .
12IT IS FURTHER NECESSARY TO EXAMINE THE APPLICANT GOVERNMENT ' S ARGUMENT THAT THE ANOMALIES ARE MERELY SUBSIDIARY AND SHOULD NOT THEREFORE BE RELIED ON TO REFUSE TO ALLOW COMMUNITY FINANCING OF THE AID GRANTED .
13IN THIS RESPECT IT SHOULD BE OBSERVED THAT WHATEVER THE IMPORTANCE IN COMMUNITY LAW OF THE DISTINCTION BETWEEN ESSENTIAL AND SUBSIDIARY ADMINISTRATIVE FORMALITIES THE DISTINCTION IS NOT APPLICABLE TO THE PROOF REQUIRED IN THIS CASE .
14THE COMMUNITY RULES IN THIS FIELD ARE DRAWN UP IN TERMS WHICH DO NOT GIVE THE NATIONAL AUTHORITIES THE OPTION OF ACCEPTING ANY OTHER PROOF THAT THE GOODS HAVE BEEN PLACED UNDER CONTROL IN THE IMPORTING COUNTRY THAN THE FORMAL PROOF PROVIDED BY THE CONTROL COPY OF THE TRANSIT DOCUMENT CORRECTLY COMPLETED AND STAMPED .
15AS THE OBJECTIVE OF THE REGULATORY PROVISIONS IN QUESTION IS TO EXCLUDE THE POSSIBILITY OF DOUBLE PAYMENT AND THE POSSIBILITY OF THE GOODS BEING RETURNED TO ORDINARY COMMERCIAL CHANNELS, THE FORMALITIES RELATING TO PROOF MUST BE STRICTLY ADHERED TO FOR THAT PURPOSE, AND IN PARTICULAR TO FORESTALL ANY FRAUDULENT PRACTICE INTENDED TO EVADE THE SUPERVISORY MEASURES .
16WITHOUT GOING INTO A DETAILED ANALYSIS OF THE ANOMALIES NOTED BY THE COMMISSION IT MAY BE STATED THAT THEY ALL INVOLVE A DISREGARD OF THE STRICT REQUIREMENTS AS TO PROOF LAID DOWN BY COMMUNITY RULES .
17IT MUST THEREFORE BE CONCLUDED THAT THE COMMISSION ' S REFUSAL TO CHARGE THE EXPENDITURE IN QUESTION TO THE EAGGF IS NOT UNLAWFUL .
AIDS FOR THE DISTILLATION OF WINE
18THE APPLICANT GOVERNMENT COMPLAINS THAT THE COMMISSION REFUSED TO CHARGE TO THE EAGGF FOR THE 1972 FINANCIAL YEAR THE SUM OF FF 72 590 447.90 PAID BY THE FRENCH AUTHORITIES AS AID FOR THE DISTILLATION OF WINE ON THE GROUND THAT THAT EXPENDITURE WAS NOT INCURRED IN ACCORDANCE WITH THE RELEVANT COMMUNITY RULES .
19ARTICLE 7 OF REGULATION ( EEC ) NO 816/70 OF THE COUNCIL OF 28 APRIL 1970 LAYING DOWN ADDITIONAL PROVISIONS FOR THE COMMON ORGANIZATION OF THE MARKET IN WINE ( OFFICIAL JOURNAL, ENGLISH SPECIAL EDITION 1970 ( I ), P . 234 ) PROVIDES THAT WHERE THE GRANTING OF AID TO PRIVATE STORAGE OF TABLE WINES ALONE IS UNLIKELY TO BE EFFECTIVE IN RESTORING PRICE LEVELS MEASURES MAY BE ADOPTED FOR DISTILLATION .
20TAKING THE VIEW THAT THAT CONDITION WAS FULFILLED FOLLOWING THE ABUNDANT HARVEST OF 1970/1971 THE COUNCIL DECIDED, IN REGULATION NO 766/72 OF 17 APRIL 1972 LAYING DOWN GENERAL RULES GOVERNING THE DISTILLATION OF TABLE WINES DURING THE PERIOD FROM 24 APRIL 1972 TO 27 MAY 1972 ( JOURNAL OFFICIEL L 91 OF 18 APRIL 1972, P . 1 ), TO OPEN A DISTILLATION SEASON AND TO SET UP A SYSTEM OF AIDS FOR THAT PURPOSE .
21THE FRENCH GOVERNMENT TOOK THE VIEW THAT THE MINIMUM PRICE AND THE AMOUNT OF THE AID FIXED UNDER THAT SCHEME WERE INSUFFICIENT AND, AS A NATIONAL MEASURE, MADE PROVISION FOR ADDITIONAL AIDS .
22THE COMMISSION REGARDED THAT MEASURE AS INCOMPATIBLE WITH THE RELEVANT COMMUNITY RULES AND IN JULY 1972 IT INITIATED AGAINST FRANCE THE PROCEDURE UNDER ARTICLE 169 OF THE TREATY FOR FAILURE TO FULFIL AN OBLIGATION UNDER THE TREATY .
23HOWEVER, IN MAY 1973 THE COMMISSION INFORMED THE FRENCH GOVERNMENT THAT AS THE MEASURES IN QUESTION RELATED TO THE PAST IT HAD DECIDED NOT TO PURSUE THE PROCEDURE UNDER ARTICLE 169 WHICH HAD BEEN INITIATED, WHILST ADDING THAT THAT DECISION DID NOT PREJUDGE THE FINAL CLOSURE OF THE ACCOUNTS TO BE CARRIED OUT ANNUALLY BY THE COMMISSION ON BEHALF OF THE EAGGF .
24IN THE COURSE OF THE PRESENT PROCEEDINGS THE FRENCH GOVERNMENT ARGUED THAT THE COMMISSION MISUSED THE PROCEDURE BY REOPENING THE MATTER ON THE OCCASION OF THE DISCHARGE OF THE ACCOUNTS ONCE IT HAD DISCONTINUED THE PROCEDURE FOR FAILURE TO FULFIL TREATY OBLIGATIONS .
25THAT ARGUMENT, HOWEVER, CANNOT BE UPHELD .
26IN FACT THE TWO PROCEDURES ARE INDEPENDENT OF EACH OTHER AS THEY SERVE DIFFERENT AIMS AND ARE SUBJECT TO DIFFERENT RULES
27THE PROCEDURE UNDER ARTICLE 169 OF THE TREATY ON THE GROUND OF FAILURE TO COMPLY WITH TREATY OBLIGATIONS IS FOR THE PURPOSE OF OBTAINING A DECLARATION THAT THE CONDUCT OF A MEMBER STATE INFRINGES COMMUNITY LAW AND OF TERMINATING THAT CONDUCT ; THE COMMISSION REMAINS AT LIBERTY, IF THE MEMBER STATE HAS PUT AN END TO THE ALLEGED FAILURE, TO DISCONTINUE THE PROCEEDINGS BUT SUCH DISCONTINUANCE DOES NOT CONSTITUTE RECOGNITION THAT THE CONTESTED CONDUCT IS LAWFUL .
28AS COMMUNITY LAW NOW STANDS THE PROCEDURE FOR THE DISCHARGE OF THE ACCOUNTS, ON THE OTHER HAND, SERVES TO DETERMINE NOT ONLY THAT THE EXPENDITURE WAS ACTUALLY AND PROPERLY INCURRED BUT ALSO THAT THE FINANCIAL BURDEN OF THE COMMON AGRICULTURAL POLICY IS CORRECTLY APPORTIONED BETWEEN THE MEMBER STATES AND THE COMMUNITY AND IN THIS RESPECT THE COMMISSION HAS NO DISCRETIONARY POWER TO DEROGATE FROM THE RULES REGULATING THE ALLOCATION OF EXPENSES .
29THE SUM IN QUESTION WHICH, IN THE OPINION OF THE FRENCH GOVERNMENT, SHOULD BE CHARGED TO THE EAGGF, REPRESENTS, IN RESPECT OF ALL THE QUANTITIES OF WINE WHICH HAVE BEEN DISTILLED, THAT PROPORTION OF THE AID GRANTED WHICH CORRESPONDS TO THE RATES FIXED BY COMMUNITY RULES WHILST THE PROPORTION CORRESPONDING TO THE ADDITIONAL NATIONAL AID SHOULD BE BORNE BY FRANCE .
30THE COMMISSION OBJECTS TO SUCH A CALCULATION, ARGUING THAT THE NATIONAL MEASURE HAD THE EFFECT OF DISTORTING THE DISTILLATION OPERATION BY EXTENDING IT, IN FRANCE, TO FAR GREATER QUANTITIES OF WINE THAN WOULD HAVE BEEN DISTILLED ON THE BASIS OF THE COMMUNITY MEASURE ALONE .
31IN APPLYING COMMUNITY RULES THE MEMBER STATES CANNOT UNILATERALLY ADOPT ADDITIONAL MEASURES WHICH ARE SUCH AS TO COMPROMISE THE EQUALITY OF TREATMENT OF TRADERS THROUGHOUT THE COMMUNITY AND THUS TO DISTORT COMPETITIVE CONDITIONS BETWEEN THE MEMBER STATES .
32AS THE FRENCH NATIONAL MEASURE IN QUESTION IS THEREFORE INCOMPATIBLE WITH COMMUNITY LAW IT IS IMPOSSIBLE TO ASCERTAIN TO WHAT EXTENT THE TOTAL EFFECT OF THE COMBINED NATIONAL AND COMMUNITY MEASURES IS DUE TO ONE OR OTHER COMPONENT PART .
33IT IS, IN PARTICULAR, IMPOSSIBLE TO ESTABLISH WITH CERTAINTY WHAT QUANTITIES OF WINE WOULD HAVE BEEN DISTILLED IN FRANCE IF THE NATIONAL MEASURE HAD NOT BEEN ADOPTED .
34CONSEQUENTLY NEITHER THE METHOD OF CALCULATION USED BY THE FRENCH GOVERNMENT NOR A METHOD BASED ON THE DISTILLATION ESTIMATES RELIED ON BY THE COMMISSION WHEN SETTING UP THE OPERATION MAKES IT POSSIBLE TO APPORTION THE EXPENSES CHARGEABLE TO THE COMMUNITY AND TO THE MEMBER STATE RESPECTIVELY .
35IN THOSE CIRCUMSTANCES THE COMMISSION HAD NO CHOICE BUT TO REFUSE TO CHARGE TO THE EAGGF THE EXPENDITURE INCURRED BY THE FRENCH AUTHORITIES .
36THE APPLICATION FOR ANNULMENT LODGED BY THE FRENCH GOVERNMENT MUST THEREFORE BE DISMISSED .
Decision on costs
COSTS
37ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE PROVIDES THAT THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS IF THEY HAVE BEEN ASKED FOR IN THE SUCCESSFUL PARTY ' S PLEADING .
38THE APPLICANT GOVERNMENT HAS BEEN UNSUCCESSFUL IN ITS SUBMISSIONS .
39IT SHOULD THEREFORE BE ORDERED TO PAY THE COSTS .
Operative part
ON THOSE GROUNDS,
THE COURT
HEREBY :
1 . DISMISSES THE APPLICATIONS .
2 . ORDERS THE APPLICANT GOVERNMENT TO PAY THE COSTS .