Keywords

Summary



Keywords

1. Agriculture - EAGGF - Clearance of accounts - Quantities missing from the stockpile when checked and quantities in store shown by tests to be ineligible - Financial correction - Basis of calculation - Amounts accounted for in the application - Burden of proof

(Council Regulation No 1766/92; Commission Regulation No 689/92)

2. Agriculture - Common organisation of the markets - Oils and fats - Olive oil - Consumption aid - Withdrawal of approval from packaging undertakings where aid improperly applied for - Date of taking effect - Consideration in the light of the purpose of the sanction - Date at which the conditions for applying the sanction are satisfied - No unlawful retrospective effect

(Commission Regulations Nos 2677/85, Art. 12(6), and 643/93)

3. Agriculture - EAGGF - Clearance of accounts - Disallowance of expenditure arising from irregularities in the application of the Community rules - Flat-rate correction of 25% - No unlawful retrospective effect

(Council Regulation No 729/70)

4. Agriculture - Common agricultural policy - EAGGF financing - Principles - Conformity of expenditure with the Community rules - Burden of proof - Divided between the Commission and the Member State concerned

(Council Regulation No 729/70, Arts. 2 and 3)

5. Acts of the institutions - Statement of reasons - Obligation - Scope - Decision relating to the clearance of accounts in respect of expenditure financed by the EAGGF

(EC Treaty, Art. 190 (now Art. 253 EC))

Summary

1. For the clearance of expenditure in respect of quantities charged to the EAGGF, it is not the amount actually present which must be taken into account, but the amount accounted for and charged to the EAGGF. Therefore, although the tests showed that the durum wheat in store at the time of the check was not of a quality eligible for intervention, the correction must be made by the Commission on the basis of the amount accounted for. In accordance with the apportionment of the burden of proof, including the mitigation of the burden of proof on the Commission where it refuses to charge certain expenditure to the EAGGF on the ground that it was incurred as a result of breaches of Community rules for which a Member State can be held responsible, it is for that Member State to show that the amounts missing at the time of the check were eligible for intervention.

( see paras. 9, 20 )

2. Article 12(6) of Regulation No 2677/85 laying down implementing rules in respect of the system of consumption aid for olive oil, as amended by Regulation No 643/93, provides that, where the amount for which aid, which is granted only to approved olive oil packaging undertakings, has been improperly applied for exceeds the checked amount for which the entitlement to aid is recognised by at least 20%, the Member State shall withdraw the relevant approval. However, it does not specify from what date that withdrawal must take effect. Even if the sanction of withdrawal is made subject to a finding by the competent authority of the fact that the application for consumption aid covers an amount greater than that for which the entitlement to aid has been recognised, the wording of the said Article 12(6) does not specify whether the finding in question is declaratory or dispositive.

In that regard, consideration of the purpose of the sanction constituted by the withdrawal of approval shows that the reinforcement of the sanctions in cases of excessive applications for consumption aid for olive oil arises in the context of the campaign against fraud. The preamble to Regulation No 643/93, which rewrote the wording of Article 12(6) of Regulation No 2677/85, establishes a link between the smooth operation of the aid scheme [for the consumption of olive oil] and the necessity of extending the system of sanctions against packaging undertakings which apply for excessive quantities of aid. The efficacity and the deterrent effect of such sanctions cannot therefore be ignored in the context of determining the effect and temporal scope of the sanction constituted by withdrawal of approval.

Taking account of those circumstances, the payment of consumption aid by the EAGGF cannot be allowed if that aid corresponds to a period later than the date at which the conditions for applying the sanction under the second paragraph of Article 12(6) of Regulation No 2677/85 were satisfied. The impact of the sanction constituted by withdrawal would be diminished if a packaging undertaking, having lodged, in the course of a given marketing year, applications for excessive quantities within the meaning of those provisions, could lodge further applications in the course of the following years, with nothing to fear until the possible making of the formal report of a control check. Withdrawal under the second paragraph of Article 12(6) of Regulation No 2677/85, taking effect from the date on which the conditions for applying the sanction are satisfied, therefore seems necessary to ensure the efficacity of that system. The withdrawal decision still does not acquire any unlawful retrospective effect since, under that interpretation, the sanction applies simply from the moment when its conditions of application are satisfied and not from the check relating to the meeting of its conditions of application.

( see paras 37-42 )

3. The application by the Commission of a flat-rate correction of 25% of the premiums for sheepmeat and goatmeat paid to the producers of Sicily and Calabria for the 1993 and 1994 marketing years cannot be characterised as retrospective or unlawful. In the absence of precise rules, with regard to the amounts to disallow, in the penultimate subparagraph of Article 5(2)(c) of Regulation No 729/70 on the financing of the common agricultural policy, as amended by Regulation No 1287/95, it is necessary to take into consideration the guidance concerning the evaluation of the financial consequences during the preparation of the decision to clear the accounts, adopted by the Commission in Report No VI/216/93 of 1 June 1993, known as the Belle Report. That guidance provided that, in exceptional circumstances, the Commission could make a flat-rate correction at a rate higher than those normally laid down, that is to say 2%, 5% or 10% of the expenditure.

( see para. 53 )

4. Articles 2 and 3 of Regulation No 729/70 permit the Commission to charge to the EAGGF only 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. Although it is therefore for the Commission to prove an infringement of the Community rules, it is for the Member State concerned, in an appropriate case, to demonstrate that the Commission made an error as to the financial consequences to be attributed to it.

( see para. 54 )

5. In the particular context of the preparation of decisions on the clearance of accounts in respect of expenditure financed by the EAGGF, the reasons for a decision applying a flat-rate correction must be considered adequate if the Member State to which the decision is addressed was closely involved in the decision-making process and is therefore aware of the reasons why the Commission considered that it was not required to charge the sum in dispute to the EAGGF.

( see paras 57, 61 )