OPINION OFMRMISCHO —CASE C-281/89
OPINION OFMRADVOCATE GENERAL MISCHO
delivered on22November 1990 *
Mr President ,
Members ofthe Court ,
1.Inthepresent actiontheItalianRepublic
seeks theannulment ofCommission
Decision 89/418/EECof26June1989
amending Decision 88/630/EEConthe
clearance oftheaccounts presented bythe
Member Statesinrespect oftheEAGGF ,
Guarantee Section ,expenditure for1986
(OJ1989L192,p.33).
2.Asfarasthedetailed circumstances of
thecaseareconcerned ,Ishallmention only
thosenecessary formyreasoning andfor
therestrefertotheReport fortheHearing .
3.Regulation (EEC)No2794/831lays
downdetailed arrangements forplacing on
theinternal market,foruseinanimal feed,
450000tonnesofcommon wheatofbread-
making quality heldbytheItalian inter­
vention agency.
4.Inparticular ,thesecond paragraph of
Article 5provides thatinordertofacilitate
verification ofuseinanimal feed'theintervention agency concerned shall
colour theproduct sothatitcanbeiden­
tified.Colouring mustbecarried outat
minimum expense' .
Thedispute concerns thelatterrequirement .
5.According tothegeneral rulesonthe
financing ofagricultural intervention ,that
expenditure istobecharged totheEAGGF
butisinitially incurred bytheMember
States,which areentitled toreimbursement
undertheprocedure forclearance ofthe
accounts fortheyearinquestion .
6.Inthepresent case,on7June1985the
Commission decided toreimburse the
expenditure forcolouring onthebasisof
standard amounts setattherateofECU
1.17pertonneofcerealtreated,although
theItalian intervention agency had
determined atECU6.15pertonne the
expenditure incurred onthecolouring
operation required byRegulation No
2794/83andapplied forreimbursement on
thatbasisfromtheEAGGF .TheItalian
Government brought anactionbefore the
Courtwhich,byjudgment of4February
1988,2annulled thedecision of7June1985
insofarasitfixedastandard amount for
thereimbursement oftheexpenditure
incurred forcolouring .*Original language :French.
1—Commission Regulation (EEC)No2794/83o(6October
1983onthesaleontheinternal market of450000tonnes
ofcommon wheatofbread-making quality heldbythe
Italian intervention agency andamending Regulation
(EEC)No1687/76(OJ1983L274,p.18).2—Case256/85 Italian Republic vCommission [1988]
ECR521.
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ITALY vCOMMISSION
7.Inordertoimplement thatjudgment ,the
Commission sought additional information
astothecostsactually incurred bythe
Member States.Considering thattheItalian
authorities hadnotproved thatthemethod
adopted bythemwastheleastcostly
possible ,itfinallydecided ,bymeansofthe
contested decision ,tochargetotheEAGGF
theexpenditure declared byItalyonlyatthe
rateofECU1.17pertonneratherthanat
therateofECU6.15pertonne.
8.Itisthatpartofthedecision thatthe
applicant ischallenging ,onthebasisoftwo
pleasinlaw.
Thefirstpleainlaw
9.TheItalian Government considers that
thecontested decision isinbreach ofthe
principle of res judicata asregards the
judgment of4February 1988.
10.ItstatesthattheCounthendefinitively
settled thequestion oftheexpenditure in
respect ofthecolouring operations
prescribed byRegulation No2794/83.It
contends thatitiswellestablished thatthe
principle ofresjudicata applies notonlyto
thesubmissions madeinthecaseconcerned
butalsotothosewhichcouldhavebeen
made,including theoneonwhich the
Commission isrelying inthepresent case,
namely thatminimum expenditure must
beincurred .Anyother approach to
thatprinciple would allow parties to
recommence theiractions ad infinitem .
11.Theparties agreethatparagraph 18of
thejudgment towhichIhavejustreferred isoffundamental importance tothepresent
case.Itreadsasfollows:
'Sincecolouring cannot beregarded asa
material operation involved inwithdrawal
fromstockorprocessing ,itisnecessary to
refertotheonlyprovision dealing with
costsconnected withcolouring ,namely
Article 5ofRegulation No2794/83which
provides that"colouring mustbecarried out
atminimum expense".Thewording ofthat
article suggests thatthecostsconnected
withcolouring mustbereimbursed infull
provided thatthemethod adopted wasthe
leastcostlypossible ,apointnotraisedin
theproceedings' .
12.Bycontrast withtheapplicant ,Iamof
theopinion thatthelatter reservation
indicates veryclearly thattheCourt was
saying thatithadnotdealtwithany
problem thatmight ariseconcerning the
requirement ofminimum expenditure ;any
other interpretation conflicts withthe
ordinary meaning ofthewords. 3
13.Iamalsoprevented fromaccepting the
applicant's viewbythefactthatIconsider
thattheproblem resolved bytheCourtin
thatcasewasentirely different .Theissue
waswhether ,having regard tothegeneral
rulesgoverning thefinancing ofintervention
underthecommon agricultural policy,the
expenditure concerned couldberegarded as
fallingwithin thecategory ofexpenditure
capable ofbeingreimbursed bymeansof
standard amounts orwhether ,onthe
contrary ,itshould bereimbursed infull.
3—SeetheOpinion ofMrAdvocate General Roemer inCase
14/64Gualco nee BargevHigh Authority andthejudgment
inthatcaseat[1965]KCR51,fromwhichitisapparent
thatquestions inrespect ofwhichtheCourt madeno
express reservation arc reijudicata
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OPINION OFMRMISCHO —CASE C-281/89
TheCommission rightly emphasizes thatthe
question ofproving minimum expenditure ,
withwhichthepresent actionisconcerned ,
isanother problem which cannot arise
unless anduntiltheprinciple offull
payment isestablished .
14.Thepresent caseistherefore clearly
different fromtheprevious one;itisnota
question ofpleaswhich couldhavebeen
madeattheearliertime.Theprinciple ofres
judicata cannot therefore besetupagainst
theCommission sincethelatter's decision is
basedonafreshissuewhichwasexpressly
excluded bytheCourtfromitsprevious
judgment .
The second plea inlaw
15.The applicant claims that the
Commission should havegivenprecise and
detailed proofoftheminimum expenditure
thatcouldactually havebeenachieved in
theparticular circumstances prevailing in
Italyoratleastshould haveindicated
precisely whytheinformation provided by
Italywasunacceptable .
16.Itmaywellbetruethat,according to
previous decisions oftheCourt,4itis
incumbent ontheCommission toprovea
breach oftherulesonthecommon organ­
ization oftheagricultural market,
whereupon theMember Statemust,if
appropriate ,prove thattheCommission
made anerrorconcerning thefinancial
consequences thereof.Inthepresent case,
thatwould meanthattheCommission wasunder anobligation toprovetheirregu­
larity,namely thattheoperations werenot
carried outatthebestprice.Itmust,
however ,bepointed outthatthecontext in
thiscaseisdifferent ,inthatregard,from
thatofthecase-law justreferred to,inso
farasthedistinction drawnbytheCourt
therein between theirregularity andits
financial consequences isinappropriate in
thepresent case,wherethetwomatters are
identical sincetheinfringement consists
precisely inthefactthatthecostofthe
operation inquestion wasnotkepttothe
minimum .
17.Inthiscase,therefore ,thereisnoirreg­
ularity tobeproved whoseexistence could
bedistinguished fromthefinancial conse­
quences tobedrawn fromit,anareain
which theburden ofprooffallsonthe
Member State,asisshownbythecase-law
towhichIhavejustreferred .
18.Moreover ,suchasolution would not
onlybecontrary totheprinciple actori
incumbit probatio butwouldalsorequire the
Commission tofurnish negative evidence
whichwould beverydifficult toobtain,
whereas itmayreasonably beexpected that
adefendant Member State,being ex
hypothesi familiar withtheconditions under
whichitarranged fortheoperations in
question tobecarried out,would beina
position toproduce positive evidence inthat
regard.
19.Moreover ,inthepresent casethe
Commission hasproduced suchcopious and
varied evidence thatitmustbeconsidered
that,byallappearances ,theapplicant does
nothave agood caseandthatthis
adduction ofevidence would,ifnecessary ,
bringabout areversal oftheburden of
proof.4—Case347/85 United Kingdom vCommission [1988]
ECR1749,paragraph 14.SecalsoCase 262/87
Netherlands vCommission [1989]ECR225,paragraph 21,
andCaseC-335/87 Hellenic Republic vCommission [1990]
ECRI-2875.
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ITALY vCOMMISSION
20.Itistherefore certainly incumbent upon
Italytoprovethatitsmethod wastheleast
costlypossible .Itmustbestatedthatthe
ItalianGovernment ,although having proved
thatitincurred certain expenditure ,hasnot
shownthatsuchexpenditure represented the
actualcostoftheoperations inquestion and
stilllessthatthatwasthelowest possible
costavailable .Ithasmerelyproduced calcu­
lationstoshowtheamount ofthelumpsum
adopted bytheItalianintervention agency,
without determining theactual costofthe
colouring operation asawhole,whereas it
isapparent fromthejudgment inCase
256/85,supra ,thatitisonlythelattercost
thatcanbecharged totheEAGGF .
21.Itmustalsobeemphasized thatthe
applicant government hasnotproduced the
slightest evidence toallowacomparison to
bemadebetween thevarious waysofcarry
outthecolouring operation .The
Commission rightly stresses thatthevery
factthatthesecond paragraph ofArticle 5
ofRegulation No2794/83requires the
colouring operation tobecarried out'at
minimum expense' presupposes thata
comparative analysis mustbeundertaken ,
something whichtheItalianauthorities did
notdointhepresent case.
22.TheItalian authorities arecertainly
righttoclaimthattheywereundernoobli­
gation toconduct atendering procedure .
Butthere areotherwaysofensuring
competition ,suchasseeking quotations
fromdifferent companies ,aswasdonein
particular intheUnited Kingdom .Astothe
argument thattimewasshort,itisdifficult
toaccept sincetheoperations ofcolouring
thecereals werespread overaperiod of
threeyears,from26October 1983to
6October 1986,according toastatement
madebytheCommission which wasnot
contested .Moreover ,pressure oftimecannot berelied ontojustify an
infringement ofaCommunity regulation .
23.Itisalsotruethataccount mustbe
takenoftheexistence ofdiffering situations
intheMember States.However ,that
consideration alonecannot explain a34-fold
difference between thecostofcolouring in
theMember Statewheretheoperation was
leastcostly andthecostinItaly.
Furthermore ,theCommission referstothe
factthatthecolouring agentusedinItaly
wasconsiderably moreexpensive thanthat
usedelsewhere intheCommunity ,justasit
wasmorecostlytouseaprivate company to
monitor thecolouring operations rather
thanusing national civilservants ,the
procedure adopted bytheotherMember
States.Finally,itmustbeemphasized that
theexistence ofdiffering situations inthe
Member States innowayreleases the
Italian authorities fromtheobligation to
keepexpenditure toaminimum ,having
regard tothecircumstances prevailing in
Italy.
24.Aswehaveseen,theItalian authorities
haveproduced noevidence togivethe
impression thatsuchacomparative analysis ,
required byArticle 5ofRegulation No
2794/83,wasundertaken .Alltheyhave
doneistoexplain thattherewerepractical
advantages tobeobtained byentrusting the
colouring operations tothecompanies
responsible forstoring thecereals.Butthey
havenotshown howthatsolution was
necessarily theleastexpensive orthatother
possibilities wereconsidered .
25.Itcannot therefore beconsidered that
theapplicant hasproved thatthecolouring
operation wascarried out'atminimum
expense' .TheCommission wastherefore
righttoreject theentire expenditure
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OPINION OFMRMISCHO —CASEC-281/89
incurred orelsetoacceptonlypartofit,as
itisentitled todobyvirtueofprevious
decisions oftheCourt. 5
26.Having optedforthelattercourse of
action,should theCommission have
applied,inItaly'scase,thehighest amount
allowed foranother Member State,inthis
caseBelgium ,namely ECU2.00pertonne?
Initspreparatory working document of
6March 1985,itfollowed thatmethod and
estimated thecostsincurred bytheItalian
authorities byreference tothoseincurred in
theMember Stateinwhich,afterItaly,the
costshadbeenhighest,namely Germany .It
thusarrived atanestimated figure of
ECU1.38pertonne.
27.However ,thatamount wasthenincor­
porated inthecalculation ofaweighted
average forthewholeCommunity which,
initially ,wasECU1.14pertonnebutwas
thenraised,onthebasisoffreshinfor­
mation,toECU1.17pertonne.Itisthat
figure,determined in1985forthepurposeofmaking areimbursement totheMember
Statesonthebasisofastandard amount (a
decision declared voidbytheCourt)that
hasnowre-emerged tobeusedasabasis
foran exgratiareimbursement forItaly
(andFrance).
28.Should theCommission haveworked
outafreshweighted average ,based on
morerecentinformation ,anduseditfor
thoseMember Stateswhichfailedtoshow
thattheyhadcarried outthecolouring
operations 'atminimum expense' ?
29.Idonotthinkso.Itisapparent from
previous decisions oftheCourtthat,inthe
absence ofevidence tothecontrary from
theMember States,theCommission has
considerable latitude inestimating the
expenses tobecharged totheEAGGF ,the
calculation involved beingnecessarily hypo­
thetical .6Inthelastanalysis ,therefore ,I
consider thattheCommission cannot be
criticized foradopting thefigure of
ECU1.17pertonne,afigurewhich had
theadvantage ofcorresponding tothe
expenditure already charged totheEAGGF .
30.Foralltheforegoing reasons,Ipropose thattheCourtdismiss thepresent
actionandordertheapplicant topaythecosts.
5—Judgment inCase342/85 ItalyvCommission [1987]
ECR4677,paragraphs 19and20,andthejudgment in
Case347/85 United Kingdom vCommission ,supra ,para­
graphs 15and16.6—See,tothateffect,thejudgment inCaseC-334/87 Hellenic
Republic vCommission [1990]ECRI-2849 andthe
judgment ofthesamedateinproceedings between the
samepartiesinCaseC-335/87[1990]ECRI-2875.
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