Keywords

Summary



Keywords

1. Agriculture — EAGGF — Clearance of accounts — Disallowance of expenditure arising from irregularities in the application of the Community rules — Disputed by the Member State concerned — Burden of proof — Shared by the Commission and the Member State — (Council Regulation No 729/70)

2. Agriculture — Common organisation of the markets — Oils and fats — Olive oil — Production aid — Olives used for purposes other than the production of olive oil — Excluded — (Council Regulation No 2261/84)

3. Agriculture — EAGGF — Clearance of accounts — Disallowance of expenditure arising from irregularities in the application of the Community rules — Assessment of the losses incurred by the EAGGF — Disputed by the Member State concerned — Burden of proof — (Council Regulation No 729/70)

4. Agriculture — Common organisation of the markets — Oils and fats — Olive oil — Production aid — Implementation through the intermediary of recognised producer groups — Mandatory withdrawal of recognition where there is inadequate capacity to check their member ' s production — (Council Regulations Nos 136/66 and 2261/84)

5. Agriculture — EAGGF — Clearance of accounts — Disallowance of expenditure arising from irregularities in the application of the Community rules — Financial correction not carried out by the Commission in a given year despite the fact that irregularities were found — No effect on the right to impose corrections in a subsequent year — (Council Regulation No 729/70)

6. Agriculture — Common organisation of the markets — Oils and fats — Olive oil — Production aid — Register of olive cultivation — Administration ' s own official departments — Definition — (Council Regulation No 154/75, Art. 3(5))

7. Approximation of laws — Procedures for the award of public contracts — Scope — Contracts awarded by a contracting authority to a non-independent body — Excluded

8. Agriculture — Common organisation of the markets — Oils and fats — Olive oil — Consumption aid — Withdrawal of approval of packaging undertakings where aid improperly applied for — Compliance with the principle of proportionality — (Commission Regulations Nos 2677/85, Arts 12(6), and 643/93)

9. Agriculture — Common agricultural policy — EAGGF financing — Dried fodder — Member State ' s inspection systems — Setting of a minimum moisture content — Possible but not exclusive means — (Council Regulations Nos 729/70, Art. 8(1), and 1117/78)

10. Actions for annulment — Pleas in law — Lack of evidence put forward as a specific plea — Not permissible — (EC Treaty, Art. 173 (now, after amendment, Art. 230 EC))

Summary

1. With regard to financing of the common agricultural policy by the EAGGF, it is for the Commission, when it intends to disallow expenditure declared by a Member State, to prove an infringement of the rules on the common organisation of the agricultural markets. The Commission is therefore obliged to give reasons for its decision finding an absence of, or defects in, inspection procedures operated by the Member State in question. However, the Commission is required not to show exhaustively that the checks carried out by the national authorities were inadequate or that the figures they have transmitted are irregular, but to produce evidence of its serious and reasonable doubt regarding such checks or figures. The Member State, for its part, cannot rebut the Commission ' s findings by mere assertions which are not substantiated by evidence of a reliable and operational supervisory system. If it is not able to show that they are inaccurate, the Commission ' s findings can give rise to serious doubts as to the existence of an adequate and effective series of supervisory measures and inspection procedures. The reason for this mitigation of the 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 EAGGF accounts; consequently, it is for that State to adduce the most detailed and comprehensive evidence that its checks have been carried out and its figures are accurate and, if appropriate, that the Commission ' s assertions are incorrect.

see paras 46-49

2. The production aid provided for by Regulation No 2261/84 laying down general rules on the granting of aid for the production of olive oil and of aid to olive oil producer organisations is to be granted in respect of olive oil and may not be granted in respect of the production of olives used for purposes other than the production of olive oil. Where some of the olives have been used for such purposes the aid must be paid in proportion to the olives intended only for the production of olive oil. Consequently, calculation of production aid for olive oil without deducting trees intended for the production of table olives must be regarded as a serious shortcoming which must be penalised by withdrawal of recognition of a recognised producer group.

see paras 70, 138

3. In the context of its task of clearing the EAGGF accounts, the Commission is not required to prove that there has been a loss but may simply adduce sound evidence of such loss. For those difficult cases where the extent of the losses cannot be ascertained precisely, the losses to the Community funds must be determined by an evaluation of the risk to which they are exposed by the deficiency in the controls. Although it is for the Commission to prove that the rules of the common organisation of the agricultural markets have been infringed, once it has established such an infringement it is for the Member State to demonstrate, if appropriate, that the Commission made an error as to the financial consequences to be attached to that infringement. The Member State must then adduce the most detailed and comprehensive evidence possible that its figures are accurate and, if appropriate, that the Commission ' s calculations are incorrect.

see paras 146-147

4. Under Article 20 of Regulation No 136/66 on the establishment of a common organisation of the market in oils and fats, recognised producer groups should be capable of verifying the olive and olive oil production of their members and recognition will be withdrawn from a group or association, in accordance with the procedure laid down in Article 5(3) of Regulation No 2261/84 laying down general rules on the granting of aid to olive oil producer organisations, where the conditions for recognition have not been fulfilled or are no longer fulfilled. It is clear that, in order to carry out improved checks on olive growers ' production and, hence, in order to ensure effective management of the system of aid, the finding that a recognised producer group has inadequate capacity to check the production of olives and oil by its members is sufficient to justify withdrawal of recognition. Failure to withdraw recognition represents an infringement of the relevant Community rules in force and the most appropriate way of ensuring that aid is not used for purposes other than those for which it has been granted is to exclude offending recognised producer groups from financing, unless it can be shown that the olive growers who are members of those groups are not the perpetrators of any irregularity that would affect all or part of the Community financing.

see paras 162-165, 174

5. If the Commission does not take financial action in one year on deficiencies established, that does not preclude it from doing so in subsequent years, particularly if those deficiencies have persisted, and newly-established deficiencies can also be taken into account in determining the level of the flat-rate correction.

see para. 177

6. A body which, although set up as a limited company subject to the rules of private law, and despite its financial and accounting autonomy is entirely subject to State control, must be regarded as one of the national administration ' s own official departments, within the meaning of the first subparagraph of Article 3(5) of Regulation No 154/75 on the establishment of a register of olive cultivation in the Member States producing olive oil

see paras 186-187

7. It is sufficient in principle, in order for a contract to constitute a public contract within the meaning of the directives on public procurement that the contract has been concluded between a local authority on the one hand and a person legally separate from the latter on the other hand. The only case where it is otherwise is where, at the same time, the local authority exercises over that person control similar to that which it exercises over its own departments and where the person carries out most of its activity with the authority or authorities which own it. That is so in the case of a State company in which local authorities may invest by acquiring shares in its capital, and which, being an instrument and a technical service of the national administration, is required to implement, itself or using its subsidiaries, only work entrusted to it by the general administration of the State, local authorities or the public bodies subject to them.

see paras 204-205

8. It is clear from Article 12(6) of Regulation No 2677/85 laying down implementing rules in respect of the system of consumption aid for olive oil. in its original version, that the competent authority is required to take into consideration the seriousness of the infringement committed by an approved packaging undertaking and is thus obliged to comply with the principle of proportionality. Article 12(6) as amended by Regulation No 643/93 merely lays down the criteria which, in the Commission ' s view, should guide application of the principle of proportionality in the event of the prescribed penalties being imposed. In the new version of that provision the penalty of withdrawal of approval applies only where the quantity in respect of which consumption aid has been improperly applied for exceeds the checked quantity for which entitlement to aid has been recognised by at least 20%.

see para. 226

9. Under Article 8(1) of Regulation No 729/70 on the financing of the common agricultural policy, Member States are to take the measures necessary to satisfy themselves that 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. The inspection systems introduced by the Member States must therefore be able to detect fraud where processing undertakings receive production aid for artificially-dried fodder but the fodder produced has been dried in the sun and the artificial-drying operation was symbolic or non-existent, like the costs generated by that operation. To prescribe a minimum moisture content, although there is no provision to that effect in the Community rules, in order to facilitate the identification of such fraudulent practices by setting an objective and physically measurable criterion, would be a way of combating the risk of aid being awarded improperly for the production of dried fodder but is not the only possible way of avoiding fraud.

see paras 257-259

10. In the context of an action for annulment brought by a Member State against a Commission decision with regard to the clearance of EAGGF accounts, the lack of evidence cannot be put forward as a specific plea without any connection with a specific situation. The matter of whether or not evidence was adduced forms part of the consideration of the pleas on which the claimant Member State bases its case.

see para. 266