Keywords

Summary



Keywords

1 Agriculture - Common agricultural policy - Financing by the EAGGF - Principles - Compatibility of expenditure with the Community rules - Burden of proof - Divided between the Commission and the Member State concerned

2 Agriculture - Common agricultural policy - Financing by the EAGGF - Principles - Compatibility of expenditure with the Community rules - Member States' duty of supervision - Scope

(Council Regulation No 729/70, Art. 8(1))

3 Agriculture - Common organisation of the markets - Export refunds - Conditions for granting - Products of sound and fair marketable quality - Concept - Definition by the Member States - Limits - Assessment of quality on the day of export

(Commission Regulation No 3665/87, Art. 13)

Summary

4 In the context of the procedure for the clearance of EAGGF accounts, the Commission is only permitted to charge to the EAGGF sums paid in accordance with the rules laid down in the various sectors of agricultural production, leaving the Member States to bear the burden of any other sum paid, and in particular any amounts which the national authorities wrongly believed themselves authorised to pay in the context of the common organisation of the markets. Whilst it is for the Commission to prove that there has been a breach of Community rules, it is for the Member State to demonstrate, if appropriate, that the Commission erred as to the financial consequences to be put into effect as a result.

5 The legality of a Commission decision refusing to charge certain expenditure to the EAGGF on the ground that the Member State has failed to satisfy certain requirements intended to avoid the risk of losses on the part of the EAGGF cannot be affected by the fact that those requirements are not expressly laid down by the Community rules. Article 8(1) of Regulation No 729/70, which defines the principles according to which the Community and the Member States are to ensure the implementation of Community decisions on agricultural intervention financed by the EAGGF and combat fraud and irregularities in relation to those operations, 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, to prevent and deal with irregularities and to recover sums lost as a result of irregularities or negligence, even if the specific Community act does not expressly provide for the adoption of particular supervisory measures.

6 Article 13 of Regulation No 3665/87 makes the payment of export refunds conditional on the products concerned being of sound and fair marketable quality. In the absence of Community rules providing a definition of that term, it is for the Member States themselves to adopt more precise provisions. However, such provisions may not conflict with the general scheme of the applicable Community rules, which require that products must be of a quality such that they can be marketed on normal terms.

In that connection, where a defect in quality is the result of a manufacturing defect and therefore affects the product on the day of export, it is of little importance that the defect only became apparent upon a later inspection, since taking the opposite view would result in the general public having to bear the consequences of the manufacturer's failure to fulfil its contractual obligations to deliver the product as specified and that is not the purpose of the refund scheme, which is intended solely to enable Community products to be exported where this course would not otherwise be financially viable for the exporter.