Opinion of Mr Advocate General Gulmann delivered on 17 March 1992. - Hellenic Republic v Commission of the European Communities. - Clearance of EAGGF accounts - Expenditure for 1987. - Case C-385/89.



European Court reports 1992 Page I-03225



Opinion of the Advocate-General

++++

Mr President,

Members of the Court,

1. The Hellenic Republic seeks in this case partial annulment of the Commission decision on the clearance of the accounts presented by the Member States in respect of the expenditure for 1987 of the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (1) (hereinafter "the EAGGF").

2. In view of the fact that the Court has already dealt elsewhere with a number of the issues raised in the present case, (2) the Hellenic Republic has limited the scope of its application to a request that the Commission decision be declared void in so far as the Commission made the following financial adjustments in that decision:

° DR 213 801 319 for export refunds on 6 400 tonnes of durum-wheat meal;

° DR 258 108 000 for co-responsibility levy in respect of grain from the 1986/87 marketing year;

° DR 1 391 025 367 in respect of expenditure for storage of tobacco.

3. I would refer to the Report for the Hearing for a fuller account of facts of the case and the legal submissions and arguments of the parties. I shall refer to the parties' submissions only in so far as that is necessary to explain my views on the application by the Hellenic Republic.

Expenditure relating to export refunds on 6 400 tonnes of durum-wheat meal (3)

4. In the clearance of accounts for 1986 the Commission refused to allow the EAGGF to finance expenditure submitted by the Hellenic Republic in connection with export refunds in respect of 40 000 tonnes of meal. For technical reasons an adjustment in the 1986 accounts was made only in respect of 33 600 tonnes. An adjustment in respect of the balance of 6 400 tonnes was not made until the 1987 accounts were cleared. It is the latter adjustment with which this case is concerned.

5. In justification of its refusal the Commission claimed that the Greek Government, in breach of the rules governing the common organization of the market in cereals, had entered into a programme contract with the Central Office for the Management of National Produce ("the KYDEP") with regard to the export of 40 000 tonnes of meal. The Greek Government acknowledged the existence of that programme contract but denied that it had actually been performed, in so far as no export transactions had been carried out on the basis of that contract.

6. In its judgment in Case C-32/89 (4) the Court addressed the question whether the Commission had been entitled, in connection with the clearance of accounts for 1986, to refuse Community financing by reference to the programme contract. The Court ruled that:

"... the Commission must be held not to have acted in error in concluding that there was a fourth programme contract involving durum-wheat meal (paragraph 12) ...

In view of the foregoing, the Greek authorities must be held to have controlled KYDEP' s operations and covered its deficits during the period with which the present proceedings are concerned.

The Commission could therefore justifiably refuse to recognize the amounts in issue as chargeable to the fund on the ground that the Greek authorities took measures which interfered with Community policy in the cereals sector ..." (paragraphs 17 and 18).

7. The Greek Government has failed in the present case to submit any information or arguments capable of altering the basis for the result arrived at by the Court. I therefore propose that the Court should find in favour of the Commission on this point. (5)

Collection of the co-responsibility levy in the cereals sector (1986/87 marketing year) (6)

8. In the clearance of accounts for 1987 the Commission made a financial adjustment under which the Hellenic Republic was required to pay DR 258 108 000 (7) which, according to the Commission, it had failed to collect as co-responsibility levy in respect of 411 000 tonnes of cereals harvested in 1986/87.

9. In support of its application for the annulment of the Commission decision on this point, the Hellenic Republic argues that the Commission' s calculation of the co-responsibility levy which the Hellenic Republic ought to have collected was based on inaccurate statistical information.

I would like briefly to outline the factual and legal background to that application.

10. The co-responsibility levy for cereals was introduced by Council Regulation (EEC) No 1579/86 of 23 May 1986 amending Regulation (EEC) No 2727/75 on the common organization of the market in cereals. (8) The levy is payable in respect of cereals produced in the Community which undergo first processing, intervention buying or export in the form of grain. (9) The purpose behind the co-responsibility levy is to make producers more aware of market realities and thereby to prevent surplus production. The co-responsibility levy represents revenue for the EAGGF. It is collected by national authorities appointed by the Member States and is subsequently paid over to the EAGGF.

11. The Commission stated during the proceedings that the examination of whether Member States have correctly collected co-responsibility levy cannot be satisfied merely by relying on Member States' accounts of the amount of levy paid. The Commission is obliged to select a method of calculation by which it can check whether the Member States correctly applied Community law rules when collecting the co-responsibility levy. That is not a simple task since, inter alia, the levy is, as already mentioned, payable only if the cereals produced are used in certain ways. A supervisory calculation therefore presupposes not only knowledge of the total cereal production, but also knowledge of the quantities used for various purposes (quantities subject to and exempt from the levy).

12. The Commission prepared a method of calculation which it has set out in its Summary Report. (10)

It appears from the Report that the method of calculation is based on, inter alia, statistical information submitted at Member States' own risk and published by the European Community Statistical Office, Eurostat. Very roughly, the basis of the calculation is the figure for total domestic consumption; from this figure must be subtracted the amounts of cereals used for various purposes exempt from the levy, such as sales between producers, and to it must be added amounts of cereals sold into intervention or for the purposes of exportation.

13. The Hellenic Republic was informed by letter of 10 February 1989 of the results of the Commission' s calculations concerning the co-responsibility levy. (11) Those calculations had been made on the basis of information which the Greek authorities had sent to Eurostat and which had been published by Eurostat on 12 July 1988. By telex of 17 April 1989 the Greek authorities informed the Commission that they had received new statistical data which indicated that the Commission' s calculation of the co-responsibility levy would have to be amended. In their telex the Greek authorities gave a complete set of new figures and used them as the basis for calculating the co-responsibility levy. The Greek authorities also pointed out that the new figures were to be sent to Eurostat. (12) The Commission nonetheless chose to base its decision of 15 November 1989 on the statistical data which the Greek Government had originally submitted to Eurostat. On 6 December 1989 Eurostat published the amended statistical data which it had received from the Greek Government.

14. The Hellenic Republic claims that the Commission was wrong to base its decision on the figure of 5 141 000 tonnes for total domestic consumption, which was the amount which the Greek Government had first submitted to Eurostat. The Greek Government takes the view that the Commission ought to have based its decision on the subsequent figure of 4 489 000 tonnes.

15. In my opinion, the central problem in this case is the relatively straightforward one of whether the Commission was entitled in the particular circumstances to retain the figure originally submitted as the basis for calculating the co-responsibility levy, or whether it ought to have based that calculation on the figures which it subsequently received.

16. As part of its argument for the retention of the figures originally submitted, the Commission claims that any change in the calculation made on the basis of the later figures in respect of total domestic consumption would lead to the unusual result that too high a co-responsibility levy would have been collected in Greece. That argument appears to be correct. According to the calculation on which the Commission based its decision, too low a co-responsibility levy was collected in Greece only in respect of 411 000 tonnes of cereals, whereas if the figures given by the Hellenic Republic in its application are used as the basis, an adjustment would be necessary in respect of 652 000 tonnes of cereals. (13) Considered in isolation, that adjustment would have the result that excess co-responsibility levy was collected in Greece in respect of 241 000 tonnes of cereals. The Commission has pointed out that no practical purpose is served by referring to an excess collection of co-responsibility levy and it therefore takes the view that the result outlined can be used to support the view that the most recently submitted figures for total domestic consumption are incorrect.

17. However, I do not believe that the Court should accept that argument. It fails to take account of the fact that the Hellenic Republic, in the adjusted figures submitted to the Commission in the telex of 17 April 1989 already referred to and subsequently in its reply to the questions put by the Court, had amended not only the figures for total domestic consumption, but also several of the other figures used by the Commission in its calculations, and that this had the result that exactly the correct amount of co-responsibility levy had been collected in Greece. The Commission' s argument therefore appears to be based solely on the less than careful drafting of the Hellenic Republic' s pleadings, in which the Hellenic Republic does not dispute the Commission' s other figures.

18. As one of its objections to the submission made by the Hellenic Republic, the Commission claims that it was not under an obligation to base itself on the new figure for total domestic consumption, particularly in view of the fact that Eurostat did not publish the new figure until one month after the Commission had adopted its decision.

19. I believe that the Court ought to dismiss that objection. It is clear from the above telex of 17 April 1989 and from the Commission' s Summary Report that the Commission had been made aware of the new figures prior to the adoption of the decision and had been informed that those figures were to be submitted to Eurostat. The Commission has itself pointed out that Eurostat publishes figures received at the Member States' own risk (ie, without checking them) and therefore no significance can in my view be attached to the fact that publication itself does not occur until later.

On the other hand, the subsequent publication cannot be treated as constituting decisive proof of the accuracy of the figures either, as contended by the Hellenic Republic.

20. Furthermore, it is quite clear from the Commission' s Summary Report and from its pleadings that the real reason for the Commission' s refusal to base its decision on the new figures was because it did not believe that those figures were correct. Although the Commission, in its supervisory investigations, chose to base itself on information supplied at Member States' own risk, I see no reason why the Commission should uncritically rely on such information even where circumstances suggest that there is cause to doubt its accuracy.

In my opinion, therefore, the central question in this case is whether the Commission was entitled to doubt the new figures submitted by the Hellenic Republic.

21. In support of its contention that the Commission ought to have based its decision on the later figures submitted for total domestic consumption, the Greek Government argues in particular that

(i) the information submitted to Eurostat in 1988 was provisional and based on an estimate, (14) a fact which the Greek Government had expressly stressed, and

(ii) the amended information submitted to the Commission and Eurostat in 1989 was calculated on the basis of a detailed examination and was therefore an accurate reflection of total domestic consumption.

22. The Commission contends that the figure submitted by the Greek Government to Eurostat in 1988 ° one year after expiry of the marketing year ° must be treated as definitive, and it sets out the following grounds in support of that contention:

(i) it is difficult to imagine that the original figure for total domestic consumption could have changed by as much as 13% two years after the end of the relevant marketing year;

(ii) there had never been any similar amendments by the Greek authorities in respect of previous marketing years such as 1984/85 and 1985/86;

(iii) the figure submitted to Eurostat in 1988 is almost identical to that notified by the Greek authorities to the Commission' s Cereals Directorate in connection with the provisional annual statement;

(iv) the Greek authorities only submitted the amendments in question after the Commission, by letter of 10 February 1989, had already informed them of the manner in which the co-responsibility levy was to be calculated; and

(v) the Greek authorities have failed to produce any concrete facts in support of their contention that the information originally supplied was inaccurate.

23. Let me say at the outset that the arguments put forward by the Commission strike me as being correct. It is, in my opinion, not unreasonable to suggest that the most recent calculations of the Greek Government create the impression that, in the light of the Commission' s supervisory examination, there has been a deliberate attempt to present the figures in such a way as to "balance the books".

24. In this connection I attach most weight to the fact that the Greek Government, despite being requested by the Court to do so, did not come up with any plausible explanation as to how the figure for domestic consumption could have changed so markedly two years after expiry of the marketing year in comparison with the figure submitted as a basis one year after expiry of the marketing year in question. (15) In addition, there is no more detailed information concerning the results of the detailed examination which the Greek authorities claim to have carried out after being informed.

25. It must always be possible to require national authorities, after they have subsequently altered numerical information of decisive importance for the calculation of the co-responsibility levy, to provide an adequate and plausible explanation why the data originally submitted were incorrect. The Greek Government has in my view failed to satisfy that requirement and I would therefore propose that the Court should dismiss this head of claim of the Hellenic Republic.

Expenditure in respect of the storage of raw tobacco (16)

26. In its decision the Commission disallowed a total of DR 1 391 025 367 paid as expenditure in respect of the storage of 6 736 096 tonnes of tobacco, 6 295 290 tonnes of which were Burley tobacco and 440 806 tonnes oriental type tobacco. In its reply to the Court' s questions, the Hellenic Republic pointed out that it did not recognize any form of financial adjustment on this point and it must for that reason be assumed that it is claiming recovery of expenditure incurred in connection with the storage of tobacco of both the Burley and oriental types.

27. The reason given by the Commission for its refusal to allow the EAGGF to finance expenditure relating to the storage of raw tobacco was that the raw tobacco in question did not correspond to the minimum quality characteristics required at the time of sale into intervention.

28. Article 5 of Regulation (EEC) No 1467/70 of the Council of 20 July 1970 fixing certain general rules governing intervention on the market in raw tobacco (17) provides that only tobacco corresponding to the minimum quality characteristics to be defined on the basis of classification by variety and quality shall be bought in by the intervention agencies. Article 6 of Regulation (EEC) No 1727/70 of the Commission of 25 August 1970 on intervention procedure for raw tobacco (18) enlarges on this by providing that tobacco shall be considered as corresponding to the minimum quality characteristics mentioned if it does not have one or more of the characteristics listed in Annex III to the regulation. Those characteristics include badly damaged leaves, leaves with defects caused during drying and leaves with an unusually high moisture content.

29. Article 8 of Regulation (EEC) No 729/70 of the Council of 21 April 1970 on the financing of the common agricultural policy (19) imposes a general obligation on Member States to take the measures necessary, inter alia, to satisfy themselves that transactions financed by the EAGGF are actually carried out and are executed correctly. Article 9 of the regulation provides that Member States shall make available to the Commission all information required for the proper working of the EAGGF and shall take all suitable measures to facilitate the supervision which the Commission may consider it necessary to undertake.

30. The Commission based its assessment of the quality of the Greek tobacco on the results of an inspection carried out in December 1987. The inspection was made because the services of the EAGGF had received a variety of information which cast doubt on the quality of tobacco stored in Greek intervention depots. The Commission has pointed out that there had been a considerable increase in intervention storage of tobacco and that the prices reached at auctions for tobacco stored in intervention were abnormally low.

31. The inspections were carried out by Commission officials with the assistance of a German expert. The inspection consisted of a physical examination of selected bales of tobacco, and the taking of a number of samples which were then sent for examination to the SEITA laboratory at Bergerac (France).

The inspection showed that a small portion of the oriental tobacco examined did not satisfy the minimum conditions, but that an average 47% of the Burley tobacco examined failed to meet them. It was on this basis that the Commission decided to exclude the entire production of Burley tobacco from Community financing, while in the case of oriental type tobacco financial adjustments were made only in respect of those portions which had been checked.

32. The Hellenic Republic has raised a number of objections against the lawfulness of the Commission' s decision: (a) the inspection of the samples did not satisfy the requirements with which such examinations must comply; (b) the Commission was not itself entitled to carry out an inspection based on samples, and; (c) the Commission was not entitled in all the circumstances to draw such far-reaching consequences from the inspection.

33. The objection relating to the inspection of samples is in part directed against the method by which those samples were taken and partly against the number of samples taken, which the Hellenic Republic argues was insufficient in view of the fact that the samples merely amounted to between 0.013 and 0.033% of individual portions.

34. There is no simple way in which to deal with that objection, given that Community law does not contain any rules governing the conduct of such an inspection.

35. It may presumably be inferred from the case-law of the Court that it is possible for the Commission, in the absence of concrete rules, to apply the methods of inspection which it considers to be most appropriate, subject, however, to the general requirement that the methods chosen are reliable. (20)

36. According to the case-law of the Court, (21) it is for the applicant Member State in a case such as the present to prove that it has satisfied the conditions for the receipt of Community finance. It is therefore necessary to consider whether the Hellenic Republic has established that the Commission' s sample inspection was not carried out in a sufficiently reliable manner.

37. The Hellenic Republic argues that the Commission failed to follow international practice in this matter and lists certain features of the sample inspection which it believes prove this. However, the Hellenic Republic has failed to document, let alone cite, sources for its statement on what constitutes international practice in this area.

38. The Commission has stated that it is difficult to describe with precision a method of inspection which is consistently applied at international level; however, it also argues that the sample inspection was carried out in accordance with scientific methods and international practice. The Commission has described the method applied in its Summary Report and it provided an amount of additional information during the proceedings. Thus the Commission, inter alia, produced an extract from the report compiled by the expert who was in charge of the sample inspection and was assisted by Commission officials.

39. If there was an established international practice in this matter, it would have been natural to use this as the basis on which to determine what should be regarded as a valid and proper method for carrying out a sample inspection. However, neither of the parties has been able to establish what any such international practice consists of.

40. Since there is accordingly no standard by which the Commission' s sample inspection can be judged, it is necessary to examine whether the Hellenic Republic has otherwise made out a prima facie case that the inspection was not carried out in a reliable manner, by demonstrating, for example, on the balance of probabilities that the results of the sample inspection were incorrect.

41. This it has not done. For example, the Hellenic Republic has failed to supply results of the examination which Community rules require to be carried out by intervention bodies in connection with the buying-in of tobacco for intervention, (22) and has also failed to point to other circumstances which would suggest that the tobacco in fact satisfied the minimum quality characteristics laid down.

42. The Commission stated in its reply to the Court' s questions that it would have been possible to check a larger number of samples of Burley tobacco before extrapolating the results to the whole quantity inspected. However, the Commission contends that the correctness of the results obtained cannot be questioned.

43. To that I can add two points. In the first place, the Commission explained during the oral proceedings that the sample inspection had to be carried out in some haste as it had been informed that the Greek intervention agency had already begun to sell off the tobacco. Secondly ° and for me this is a key factor in the case ° the Commission told the Court that the raw tobacco was sold at 3% of the market price, a statement which the Hellenic Republic has not disputed. Other things being equal, this latter fact indicates that the Greek tobacco was of poor quality.

44. I therefore take the view that the Hellenic Republic has failed to adduce sufficient evidence to cast reasonable doubt on the reliability of the sample inspection carried out by the Commission.

45. As already mentioned, the Hellenic Republic also called in question the procedure followed by the Commission during its inspection. In the first place, it claims that the sample inspections ought to have been taken by the Hellenic Republic' s own experts and subsequently made available to the Commission and, secondly, that a representative of the Greek authorities attempted to take part in the sample inspection but was prevented from so doing by the Commission' s experts; as a result, the inspection was carried out without any participating representative of the Hellenic Republic.

46. Both of these points were only made at a late stage in the proceedings, that is to say, in the course of the reply to the Court' s questions and during the oral procedure. I believe that they ought for that reason to be dismissed, although I would like to comment on them briefly.

47. The Hellenic Republic relies in this connection on the judgment of the Court in Case C-366/88, (23) from which it concludes that a sample inspection made pursuant to Regulation No 729/70 must be carried out by a Member State' s own authorities. That case, as the Court will be aware, concerned the validity of internal instructions drawn up by the Commission which laid down certain administrative and technical procedures to be followed by "officials given powers by the Commission concerning sampling and analysis of products for the purposes of the management and control of the European Agricultural Guidance and Guarantee Fund". One of the reasons given by the Court for its decision annulling those instructions was that the system of inspection established by Regulation No 729/70 implied that the taking of samples, in so far as that should prove necessary, had to be carried out by the Member State in question and that the Commission could not therefore confer on itself, by way of such internal instructions, the power to take samples independently of the Member States.

48. Although I find that judgment slightly surprising on this point, it is unnecessary to embark on an examination of its significance for the present case. This is because it may be taken as established that the sample inspection was carried out without any protest from the competent Greek authorities and that it was conducted in close cooperation with those authorities.

The Commission has argued that the inspection, which was carried out at premises belonging to the National Tobacco Board (EOK), which is the responsible authority, was carried out with the agreement of officials of the EOK, that those officials were present during all the Commission' s inspections, and that they at no time raised objections, but on the contrary signed the report drawn up in connection with the sample inspection. That is substantiated by information in the Commission' s Summary Report, by information contained in a letter of 22 February 1989 from the Commission to the Permanent Representation of Greece, which was produced during the proceedings and contains an account of the results of the inspection undertaken, and by information in the extract produced from the report drawn up by the expert in charge of the sample inspection. The latter report stresses the special cooperation and helpfulness shown by the official of the EOK. The contrary information from the Greek Government on this issue was not produced until the oral proceedings and was in any event undocumented.

49. On the basis of the above considerations, it may be concluded that the Commission was entitled to base its decision relating to the clearance of accounts on the results of the sample inspection which it had carried out.

50. The question which then arises concerns the financial consequences which the Commission may draw from those results. There are two problems in this regard.

51. In the first place, the Hellenic Republic argued that the portions from which the samples were taken were not representative. The argument developed by the Hellenic Republic in this regard demonstrates that it is really contending that the Commission, in so far as Burley tobacco was concerned, was not entitled to apply the results obtained from samples taken in only three towns to the whole of tobacco production in Greece.

52. Secondly, the case indirectly raises the question of the extent to which the Commission was entitled to make financial adjustments not only in respect of the average 47% of Burley tobacco which failed to meet the minimum quality requirements, but also in respect of the total quantity of Burley tobacco bought in.

53. These two problems may be considered as one question concerning the extent to which the Commission may attach wider legal consequences to a finding that the conditions for the grant of Community financing have not been satisfied in respect of a more narrowly defined area.

54. So far as I can ascertain, the Court of Justice has in its case-law accepted that the Commission may justify a refusal to finance a number of uninspected portions by pointing out that certain other portions failed to meet the requirements as to quality. Under that case-law, it appears to be permissible in such circumstances for the Commission to base its decision on a finding that the conditions governing Community financing have not been satisfied in respect of some of the relevant batches, unless the Member State in question establishes that the batches which were not inspected did in fact satisfy the relevant conditions. (24)

55. In the light of that case-law, it is not difficult to dismiss the contention that the Commission decision must be unlawful on the ground that the samples taken are not representative. The Commission has pointed out ° without it being disputed by the Greek Government ° that the samples were taken in the three main centres of tobacco production in Greece, and the Greek Government has not adduced any evidence which would suggest that the results of sample inspections of tobacco stored outside these centres would have been in any way different.

56. The question whether the Commission was entitled to disallow in full Community financing on the basis of inspections which showed that an average 47% of the tobacco stored did not satisfy the requirements as to quality is a more difficult one. The Commission decision reflects the fact that the results of sample inspections constitute the evidential basis for finding that Member States have not complied with their obligation to ensure that expenditure financed by the EAGGF has been paid in accordance with the governing rules. This failure is "sanctioned" by a refusal of finance, which to that extent is separate from the actual consequences of this lack of supervision. If a refusal can be given on this basis, it is not necessary to distinguish between portions which have been inspected and those which have not.

In my opinion, the case-law of the Court provides support for the lawfulness of such a method of procedure.

57. I might refer to the judgment of the Court in Case C-8/88, (25) which concerned the validity of a Commission decision to disallow Community financing of certain amounts which the Federal Republic of Germany had paid by way of premiums to producers of sheepmeat and for the maintenance of the suckler cow herd. The Commission had based its decision on the opinion that there was no acceptable system of control and that it had not been established that a satisfactory control had in fact been carried out. The Court ruled, inter alia, as follows:

"In support of its conclusions with regard to the absence of any genuine overall organization of supervision in the Laender in question, the Commission cites a certain number of individual cases in which it found that the premiums in question had been granted without justification. In the applicant' s view, these individual cases, on the assumption that they be proven, cannot justify the blanket refusal by the Commission to allow EAGGF financing, but at the most, a disallowance of expenditure in respect of the individual cases in question.

That approach cannot be accepted. In fact those individual cases in which premiums were wrongly granted merely constitute an additional factor in support of the Commission' s allegation that, in the two aforementioned Laender, an effective set of measures for supervising and checking compliance with the conditions for the grant of the premiums did not in fact exist" (paragraphs 41 and 42).

In his Opinion in that case, Advocate General Van Gerven stated that:

"... the Commission can and must withhold Community financing, not only when, in relation to a region, there is no indication whether, if at all, a minimum standard of supervision exists over the expenditure of money in the name of the Community ... but also when several significant control requirements have not been fulfilled in a region, which inter alia may be apparent from a considerable number of defective dossiers. It is for the Member State to cast doubt on the Commission' s statement of reasons, which is inevitably based on suppositions and extrapolations, and to suggest that it is not supported by concrete facts with regard to the supervisory situation in question" (paragraph 30).

58. It may also be appropriate to cite two judgments in which the Court considered the validity of Commission decisions disallowing Community financing in respect of expenditure on aid for the processing of skimmed milk. In its judgment in Case 327/85, (26) the Court ruled that

"... In cases where Community rules authorize payment of aid only on condition that certain formalities relating to proof or supervision are observed, aid paid in disregard of that condition is not in accordance with Community law and the expenditure incurred therein may not therefore be charged to the EAGGF, even if it were established that no substantive irregularity has been committed" (paragraph 25).

59. In its judgment in Case C-197/90 (27) the Court again adopted the above premise and added:

"Since it follows from the foregoing that the inspections carried out by the Italian authorities do not constitute thorough inspections within the meaning of Article 10(2)(d) of Regulation No 1725/79, the Commission was entitled to disallow payment by the EAGGF of all the sums in question. Consequently, the Italian Government may not complain that the Commission limited itself to carrying out a standard abatement of 10%" (paragraph 39).

60. Member States have an indisputable obligation to ensure that requirements relating to quality have been complied with when buying in tobacco for intervention (see, inter alia, Regulation No 729/70, which imposes a general obligation on Member States to ensure that measures financed by the EAGGF are implemented in accordance with Community rules) and I see no reason why the case-law of the Court referred to above should not equally apply to compulsory measures of inspection in the case of intervention buying-in.

61. In my opinion, the sample inspection carried out by the Commission has raised a sufficient degree of probability that the inspection carried out at the time of intervention buying-in was inadequate, and that the Commission was in consequence entitled to disallow Community financing for the intervention storage of raw tobacco.

62. For the sake of completion, I would like to conclude by referring to the Hellenic Republic' s contention that the Commission decision is invalid on the ground that it is based on misapplication of Article 4 of Council Regulation (EEC) No 1883/78 of 2 August 1978 laying down general rules for the financing of interventions by the European Agricultural Guidance and Guarantee Fund, Guarantee Section. (28) So far as that submission is concerned, I would merely point out that the Hellenic Republic has failed to produce any evidence which would persuade me that the Commission did not correctly calculate the financial adjustments. I can refer in this regard to an internal memorandum of 17 July 1990, produced by the Commission, which contains an account of the principles of calculation applied.

63. For the reasons set out above, I propose that the Court dismiss the application for annulment made by the Hellenic Republic in so far as this part of the Commission' s decision is concerned.

Conclusion

Accordingly, I propose that the Court should rule in favour of the Commission and order the Hellenic Republic to pay the costs of the proceedings.

(*) Original language: Danish.

(1) ° Decision 89/627/EEC of 15 November 1989 (OJ 1989 L 359, p. 23).

(2) ° Judgments in Cases C-259/87, C-334/87 and C-335/87 Greece v Commission [1990] ECR I-2845, I-2849 and I-2875; judgment in Case C-35/88 Commission v Greece [1990] ECR I-3125; and judgment in Case C-32/89 Greece v Commission [1991] ECR I-1321.

(3) ° See Point 4.1.4.1 of the summary report drawn up by the Commission on the results of investigations carried out in connection with the clearance of EAGGF accounts for 1987 (hereinafter the Summary Report ), which is submitted as Annex 3 to the statement of defence.

(4) ° See note 2.

(5) ° That programme contract is also the subject of Case C-61/90, at present pending before the Court of Justice and brought by the Commission against the Hellenic Republic under Article 169 of the EEC Treaty, in which I delivered the Opinion on 12 February 1992.

(6) ° See point 4.2.2.2.3(1) of the Summary Report, which is included as Annex 10 to the statement of defence, along with point 4.2.2.2.3(1) and point 4.2.2.2.5 in Addendum 2(1) of the Summary Report, included as Annex 1 to the Commission' s reply to the questions put by the Court.

(7) ° The Hellenic Republic argued in its application that the Commission levied an excess amount of DR 409 456 000, even though it does not appear from the annexes submitted that the Commission was ever under an obligation to adjust that amount. That argument would also appear to have been withdrawn in the light of the Hellenic Republic' s reply to the questions put by the Court, in which the Hellenic Republic states that if the Commission' s calculations are used as a basis there must be an adjustment of DR 256 464 000 corresponding to the co-responsibility levy on 411 000 tonnes, and not one of DR 409 456 000. The Hellenic Republic' s view that the financial adjustment in respect of 411 000 tonnes of cereals amounts to DR 256 464 000 and not DR 258 108 000, the amount in which the Commission actually made the adjustment, may be explained by the fact that the Hellenic Republic calculated the rate of ECU 5.38/tonne at DR 624/tonne, whereas the Commission calculated it at DR 628/tonne. However, the Hellenic Republic has not disputed the rate applied by the Commission.

(8) ° OJ 1986 L 139, p. 29.

(9) ° Commission Regulation (EEC) No 2040/86 of 30 June 1986 (OJ 1986 L 173, p. 65), as amended by Commission Regulation (EEC) No 2572/86 of 12 August 1986 (OJ 1986 L 229, p. 25), lays down more detailed provisions governing the payment of the co-responsibility levy for cereals. Council Regulation (EEC) No 1584/86 of 23 May 1986 (OJ 1986 L 139, p. 41) set the amount of the co-responsibility levy for the 1986/87 marketing year at ECU 5.38/tonne.

(10) ° See point 4.2.2.2.1 and point 4.2.2.2.2 in the Summary Report (Annex 10 to the statement of defence).

(11) ° The letter is included in Annex 14 to the statement of defence.

(12) ° The telex is reproduced in Annex 12 to the statement of defence.

(13) ° This amount results from the fact that the Hellenic Republic states in its application that the Commission is seeking DR 409 456 000 too much in co-responsibility levy. That amount must be calculated as follows: 5 141 000 tonnes ° 4 489 000 tonnes = 652 000 tonnes x DR 628/tonne = DR 409 456 000.

(14) ° The Greek Government claims to have expressly pointed out that the figure was provisional inasmuch as certain information had to be confirmed before the figure could be regarded as definitive , but it fails to produce any documentary evidence in support of this. In its reply to the questions put by the Court of Justice, the Hellenic Republic stated that the figures were based on estimates of the future harvest; that does not make much sense, given that the figures must be calculated one year after the expiry of the marketing year in question. The Hellenic Republic stated during the oral proceedings that the misunderstanding was due to poor drafting.

(15) ° In its answer to one of the questions put by the Court, the Hellenic Republic stated that the estimate expressed in the figure first submitted had been particularly difficult to make by reason of the Chernobyl nuclear accident. As a result of that accident, the Commission prohibited the marketing of cereals contaminated by radioactivity and those products were accordingly stored away for more than two years in the depots of producers and wholesalers. The Hellenic Republic has been unable convincingly to explain in more detail the connection between the volume of cereals deposited and the reduction in total domestic consumption.

(16) ° See point 4.9.1 in the Summary Report, included as Annex 16 to the statement of defence.

(17) ° OJ, English Special Edition 1970 (II), p. 497.

(18) ° OJ, English Special Edition 1970 (II), p. 592.

(19) ° OJ, English Special Edition 1970 (I), p. 218.

(20) ° In its judgment in Joined Cases C-161/90 and C-162/90 Petruzzi and Longo [1991] ECR I-4845, which concerned examinations of the organoleptic characteristics of olive oil, the Court ruled as follows:

... the very effectiveness of subsequent checks on the original classification of the oil implies that the Commission must be free to apply any system of analysis which enables it to determine with certainty whether the classification of the oil, at the time when it was submitted for intervention, complied with the designation criteria referred to in the applicable Community rules.

... Community law entitles the Commission, for the purpose of verifying, under strict conditions of reliability, the regularity of intervention operations, to carry out an examination which is more than a mere repetition of the analysis made when the oil was submitted for intervention (paragraphs 17 and 18, my emphasis).

(21) ° See, inter alia, the judgments in the following cases: Case 49/83 Luxembourg v Commission [1984] ECR 2931, at paragraphs 29 and 30; Case 347/85 United Kingdom v Commission [1988] ECR 1749, at paragraph 14; Case C-8/88 Germany v Commission [1990] ECR 1-2321; Case C-197/90 Italy v Commission [1992] ECR I-1, at paragraph 15.

(22) ° The Hellenic Republic limited itself in this respect to replying, in its answer to the Court' s questions, that the Hellenic authorities cannot accept that there may be differences greater than 1.3% going beyond the assessments made by Greece .

(23) ° France v Commission [1990] ECR I-3571.

(24) ° The judgment of the Court in Case 214/86 (summary judgment) Greece v Commission [1989] ECR 367 concerned, inter alia, the validity of a decision by which the Commission, following a detailed analysis of samples taken by the Hellenic Republic, could only accept that 10% of the batches of durum wheat from which samples had been taken had been lawfully sold into Community intervention. So far as the remaining batches of durum wheat were concerned, Community financing was disallowed in full. In the case of these remaining portions, the Court merely pointed out that in so far as the Commission refused to allow the EAGGF to pay a range of expenditure on the ground that the expenditure was due to the fact that the Member State had failed to comply with rules of Community law, the Member State itself had to establish that the conditions necessary for the granting of Community finance had been satisfied. As Advocate General Van Gerven pointed out in his Opinion in Case C-8/88 (see note 21 above), it appears that the Court accepted in that judgment a principle of extrapolation.

(25) ° See note 21.

(26) ° Netherlands v Commission [1988] ECR 1065.

(27) ° See note 21.

(28) ° OJ 1978 L 216, p. 1.

Article 4 of Regulation No 1883/78 provides as follows:

1. Where an intervention measure referred to in Article 3 involves the buying-in and storage of products, the amount financed shall be determined by the annual accounts drawn up by the payment services or agencies, in which the various items of expenditure and revenue have been respectively debited and credited. ... .