No C 56/80 Official  Journal  of the European  Communities 7.3.77 
Opinion  on the  proposal  for  a Council  Directive  on the  scrutiny,  by Member  States 
of transactions  forming  part  of the system  of financing  by the Guarantee  Section  of the 
European  Agricultural  Guidance  and  Guarantee  Fund 
The text  referred  to the  Committee  has  been  published  in Official  Journal  of the 
European  Communities  No  C 200  of 26 August  1976,  page  6. 
A. LEGAL  BASIS  FOR  THE  OPINION 
On 17 August  1976,  the Council  referred  the abovementioned  proposal  to the Economic 
and Social  Committee  in accordance  with  Article  198  oif uhe  Treaty  establishing  the 
European  Economic  Community. 
B. OPINION  OF  THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  prepared  its opinion  on the  above  matter  at its 
144th  plenary  session,  held  in Brussels  on 15 and  16 December  1976. 
The full  text  of the opinion  is as follows: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to  the  Treaty  establishing  the 
European  Economic  Community,  and  in particular 
Article  198  thereof, 
Having  regard  to the  request  for  an opinion  made 
by the  Council  of the  European  Communities  on 
17 August  1976, 
Having  regard  to the  decision  taken  by its Bureau 
on 26 October  1976,  instructing  the  Section  for 
Agriculture  to prepare  the Committee's  work  on the 
matter, 
Having  regard  to  the  report  submitted  by  the 
rapporteur,  Mr Lapie, 
Having  regard  to the  opinion  issued  by the  Section 
for Agriculture  at its meeting  of 2 December  1976, 
Having  regard  to the discussions  at its 144th  plenary 
session  held  on 15 and  16 December  1976  (meeting 
of 15 December  1976), 
HAS  ADOPTED  THE  FOLLOWING  OPINION 
with  no votes  against  and  one  abstention: The Committee  approves  the  proposal,  subject  to 
the comments  set out below. 
1. General  comments 
1.1. The  Committee  welcomes  the  initiative  taken 
by the  Commission  but  considers  that  the  present 
proposal  does  not  solve  all the  problems  concerning 
the Guarantee  Section  of the  BAGGF,  one  outstand-
ing problem  being  the  deadlines  for  payment  of 
sums  due  to beneficiary  businesses. 
1.2. The  term  'irregularity',  as used  'in legal  practice 
in the  Community,  takes  in all illegal  dealings  by 
firms,  whether  or not there  is fraudulent  intent. 
1.3. The  Committee  is pleased  that  the  Com-
mission's  proposal  has  taken  the  form  of  a 
Directive,  rather  than  a Regulation,  ais this  gives  the 
Member  States  greater  freedom  in deciding  how  to 
achieve  the desired  objectives. 
1.4. The  Committee  considers  that  it is normal 
according  to  inspection  that  inspections  should 
commence  with  documents  relating  to the commercial 
transactions  that  have  given  rise  to EAGGF  subsidies. 
Where  necessary,  the inspections  could  subsequently 
be extended  to cover  the  firm's  other  commercial 
documents. 
7. 3.77 Official  Journal  of the European  Communities No C 56/81 
2. Specific  comments 
2.1. The  Committee  would  like  a fourth  citation  to 
be added  as follows: 
'Having  regard  to the  opinion  of the  Economic 
and Social  Committee.' 
2.2. Article  2 
The Committee  wonders  whether  the extent  to which 
the competent  authorities  of the  Member  States  are 
given  freedom  to use  their  own  discretion  is not 
incompatible  with  an  effective  alignment  of the 
scrutiny  procedures  used  in the Community. 
The Committee  proposes  that,  in the  fifth  line  of 
Article  2 (1),  the  words  'in liaison  with  the  Com-
munity  authorities'  be added  after  'the  Member 
States'. 
2.3. Article  3 
The Committee  approves  Article  3, in its present 
form.  It considers  that  systematic  checks  on  the 
quantities  of products  held  in stock  could  prove  to 
be disproportionately  expensive  to the  amount  of 
money  to be recuperated  should  irregularities  be 
discovered. 
2.4. Article  4 
The Committee  considers  that  it is reasonable  to fix 
the period  during  which  businesses  are to retain  their 
commercial  documents  at five  years,  even  though 
some  Member  States  require  longer  periods. 
2.5. Article  5 
The Committee  proposes  that  a third  paragraph  be 
added,  reading  as follows: '3. The  Member  States  shall  take  all necessary 
measures  to ensure  that  heads  of 'businesses  are 
under  an obligation  to answer  questions  from 
officials  responsible  for the inspection.' 
2.6. Article  6 
The Committee  accepts  the need  to oblige  the Mem-
ber States  to initiate  'forthwith  procedures  for  the 
recovery  of payments  illegally  acquired  but  cannot, 
however,  approve  the  wording  of Article  6, which 
would  give  officials  carrying  out  routine  inspections 
the right  to seize  certain  commercial  documents. 
The Committee  proposes  that  Article  6 be amended 
to read  as follows: 
.. the officials  responsible  for  the  inspection 
shall  have  the  right  to have  the  commercial 
documents  concerned  seized  by  persons 
empowered  to carry  out such  seizures/ 
2.7. Articles  10 and 11 
The Committee  considers  that  some  Member  States 
need  more  than  one  year  in which  to incorporate 
the necessary  measures  into  their  national  laws. 
It is therefore  proposed  that  the period  stipulated  in 
Article  11 be extended  to 24 months  and  the  period 
stipulated  in Article  10 be reduced  to two  yeans. 
Done  at Brussels,  15 December  1976. 
The Chairman 
of the Economic  and  Social  Committee 
Basil  de FERRANTI 
Opinion  on the proposal  for a Council  Regulation  concluding  the agreement  establishing 
a European  laying-up  fund  for inland  waterway  vessels,  and  adopting  the provisions 
for its implementation 
The text  referred  to the  Committee  has  been  published  in Official  Journal  of the 
European  Communities  No  C 208  of 3 September  1976,  page  2. 
A. LEGAL  BASIS  FOR  THE  OPINION 
On 9 August  1976,  the Council  referred  the abovementioned  proposal  to the Economic 
and Social  Committee  in accordance  with  Article  75 of the  Treaty  establishing  the 
European  Economic  Community.