2.

The dispute before us shows the delicate nature of this appraisal and the need to exercise great caution. The Commission complains that the Italian Republic has failed to pay the refunds ‘promptly’. The term is vague. In fact the Community regulations do not prescribe a definite period within which the payments must be made. Indeed they provide, as I have said, that the refund shall be paid upon proof of the export's leaving the geographical territory of the Community or of reaching its destination, and payment in advance may be made as soon as the customs formalities are completed. Those provisions, however, leave a considerable discretion to Member States to determine which documents constitute proof of those various operations; consequently it is not surprising that the decisions of States in these matters display differences in the relative speed with which the refunds are paid. Contrary to the Commission's view, in this case the Italian Republic has never admitted the alleged delay, and to read such an admission into the letter sent on 22 April 1968 (that is, before the pre-litigation stage) by the Minister for Agriculture is to stretch its meaning. Thus in its rejoinder the Commission is obliged to support its argument by various documents which I shall now consider. I must say at the outset that these documents do not seem to me very persuasive. — First, there is nothing to support what the rejoinder terms facts published in Italy in the specialist press. There is only an extract from a journal of 6 November 1968 referring to another publication which further alludes to information from Brussels to the effect that delays in excess of a year sometimes occur in the Italian State's payment of refunds for cereals. — Secondly, the ‘difficulties revealed by the industrial representatives of the producer Member States in the Management Committees’ are invoked. This concerns a complaint by the representative of the rice-milling industry about the difficulties encountered in obtaining payment of refunds in Italy. — The copious information received by the Commission's departments from Italian exporters is also invoked, without however supplying further details. — On the other hand, it is more relevant that two actions were initiated against the Italian Minister for Finance by two unnamed companies to recover considerable, though unspecified, sums payable as refunds. I do not dispute the existence of those actions but only two have been cited and since the competent court has not ruled that they are well founded they can scarcely be employed to prove the defendant's alleged delay. — Finally, the Commission invokes in support of its case the requests for payments in advance made by the Italian Republic for the accounting periods 1967-1968 and 1968-1969 which prove the non-payment of the refunds for certain products and partpayment for others. I shall not dwell on these documents which we shall come across again later in another form. I shall also leave aside the replies given by the Member States, especially by the defendant, at an investigation made in March 1967 by the Commission on the delay in paying the refunds. This investigation relates to the period prior to 1 July 1967 which is outside the dispute. It appears that the Court found this evidence as unconvincing as I did since, after the opening of the oral procedure, it requested detailed information from the parties on the progress made by the Italian authorities in paying the refunds from 1 July 1967 to 1970. This information made it possible to calculate the exact extent of the delay alleged against the defendant and to see whether it had put a new system into operation. You were given two replies. One, from the Italian Government, relates to the amount of payments made during the periods 1 July 1967 to 30 June 1968, 1 July 1968 to 30 June 1969 and 1 July 1969 to 31 December 1969, but gives comprehensive figures which do not specify the date of the exportations which led to those payments. During the oral procedure the Commission expressed its dissatisfaction with the schematic manner in which this evidence was presented in that it did not give the clear picture which would have emerged from a comparison of the claim for payment from all the exporters with the payments made; those are factors with which it must remain unacquainted so long as the Member State does not reveal them. But it must not be forgotten that it is for the applicant to provide proof of the delay which it wishes the Court to find. The Commission claims that such proof is further substantiated by the reply which it has given you in the form of a table of payments of refunds drawn up on the basis of the six-monthly requests for payments in advance lodged by the Italian Republic. Let us examine this table more closely. It sets out in four columns the refunds paid for each product and for each of the four six-monthly periods between 1 July 1967, the date of the first common organizations, and 30 June 1969. For the first six-monthly period in 1968 it shows the total amount of refunds for each product and the proportion pertaining to the operations of the foregoing six-monthly period; for the second half of 1969 it gives the total amount and the part pertaining to the period from 1 July 1967 to 30 June 1968 thus indicating a delay of a year; for the six-monthly period in 1969 the total amount and the portion pertaining to the same period from 1 July 1967 to 30 June 1968 thus indicating a delay of 18 months. This document indeed constitutes a laudable attempt to follow as precisely as possible the progress of the refunds and delays occurring in connexion with them. Nevertheless I do not think, after considering the table in detail, that the conclusions which the Commission draws from it can be admitted without reservations. — In the first place, it should be noted that during the second half of 1967, the first period considered, payments were made. They were inconsiderable which is normal considering that the first common organizations were established on 1 July 1967, but they were made despite the Commission's allegation in its letter of 27 February 1968 to the effect that no payment had yet been made at that date. — During the first half of 1968 the refunds amounted to 6841 million lire of which only 5 million related to operations in the preceding six-monthly period. — With regard to the second half of 1968, the payments amounted to 10442 million lire of which 4044 million pertained to the period from 1 July 1967 to 30 June 1968 and the Commission considers that this latter figure indicates a delay of one year. I cannot agree with this as the information regarding the dates when the exports were effected and the refunds paid are insufficiently precise to justify such conclusions. Let us suppose for example that an export was effected on 1 May 1968 for which a refund was paid on 1 August 1968, that is, after three months; it would only appear in the column for payments made for exports in the period from 1 July 1967 to 30 June 1968 which is held to indicate a delay of one year. If we now pass on to the first half of 1969, we find 6950 million lire of which 1169 million pertained to operations in the first half of the 1967/1968 period and are thus held to reflect a delay of 18 months. The same reservations on this method of calculation may be made here as in the case of the preceding six-monthly period, but in addition we find that of the said 1169 million lire, 718 million pertain to refunds for milk products. I find this quite incomprehensible as milk products were only brought under the single market system on 29 July 1968 and consequently there cannot be any compulsory refunds for those products, the only ones referred to in the application, for the period 1967 to 1968. We should, no doubt, understand the table, drawn up on the basis of requests for payments in advance from the Italian Republic, as including refunds made optionally under the earlier system which might indeed be reimbursed by the Community. But this finding deprives the figures supplied by the Commission and the consequences which it draws from them of much of their force. What must be concluded from this? A general impression may perhaps be gained from the file to the effect that the refunds were not paid immediately, but what is the reason for this delay? Was it caused by a lack of credits, by the inertia of the departments or merely by the difficulties inherent in initiating machinery the complexity of which is reflected by Regulation No 1041/67? It is indeed difficult to say. Nor do I consider very illuminating the comparisons which the Commission claims may be made with the dispatch displayed by the other Member States; the data supporting those comparisons is too old and moreover lacks figures. There thus remains the information which the applicant gave in response to the Court's request; but far from supporting its argument, this information rather appears to show that it is impossible to draw really firm conclusions from it. Consequently the outcome seems to me clear. Whilst an abnormal delay, longer than a reasonable period, may constitute a failure to fulfil an obligation under the Treaty, for you to give a judgment to this effect as you are empowered by Article 171, the Commission must provide you with the certainty, not merely impressions, of the delay. To censure the course of action of a Member State, with the wide margin of error involved in appraising a course of action, is a responsibility not lightly to be undertaken. For my part I do not find the Commission's argument sufficiently persuasive for me to recommend you to undertake such a responsibility.