Judgment of the Court of First Instance (Third Chamber) of 7 November 2002. - Vela Srl and Tecnagrind SL v Commission of the European Communities. - Agriculture - EAGGF. - Joined cases T-141/99, T-142/99, T-150/99 and T-151/99.



European Court reports 2002 Page II-04547



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

1. Economic and social cohesion - Structural assistance - Community funding for national projects - Powers of the Commission to carry out on-the-spot checks and inspections - Scope

(Art. 158 EC; Council Regulations Nos 2052/88 and 4253/88, Art. 23(2))

2. Economic and social cohesion - Structural assistance - Community funding for national projects - Powers of the Commission to carry out on-the-spot checks and inspections - Legal basis

(Council Regulations Nos 4253/88, 2988/95 and 2185/96)

3. Economic and social cohesion - Structural assistance - Community funding for national projects - Decision to suspend, reduce or withdraw assistance initially granted - Failure of Member State to take the opportunity to submit its comments within a fixed period - Duty of the Commission to state that fact in its decision - None

(Council Regulation No 4253/88, Arts 23 and 24)

4. Acts of the institutions - Statement of reasons - Obligation - Scope

(Art. 253 EC)

5. Economic and social cohesion - Structural assistance - Community funding for national projects - Examination by the Commission of the lawfulness of any invoice declared to relate to a subsidised project - Expenditure invoiced by subcontractors to a recipient of EAGGF assistance - Included

6. Economic and social cohesion - Structural assistance - Community funding for national projects - Applicants for, and recipients of, EAGGF financial assistance required to provide information and to act in good faith

7. Community law - Principles - Protection of legitimate expectations - Protection refused to any person committing a manifest infringement of the rules in force

8. Economic and social cohesion - Structural assistance - Community funding for national projects - Commission decisions withdrawing EAGGF financial assistance as a result of irregularities - Infringement of the principle of legal certainty - None

(Council Regulation No 4253/88, Art. 23(2))

9. Community law - Principles - Proportionality - Withdrawal of financial aid granted by the EAGGF on account of the recipients' non-compliance with the financial conditions for the investment laid down in the decisions granting the aid - Infringement - None

(Council Regulation No 4253/88, Art. 23(2))

Summary

$$1. Under Article 23(2) of Regulation No 4253/88 laying down provisions for implementing Regulation No 2052/88 as regards coordination of the activities of the different Structural Funds between themselves and with the operations of the European Investment Bank and the other existing financial instruments, as amended by Regulation No 2082/93, Commission officials or servants may carry out on-the-spot checks, including sample checks, in respect of operations financed by the Structural Funds.

It is clear from the general nature of its wording that Article 23(2) provides the Commission's officials and servants with a legal basis for checking projects which are receiving or have received assistance from a Structural Fund. In the absence of any indication to the contrary, it must be held that the provision applies to operations financed by any Structural Fund whatsoever, including the EAGGF, Guidance Section. There is no reason for claiming that the provision under consideration applies only to operations which are the subject of financial assistance decided by the Member State concerned, or by the authorities designated by it, and submitted to the Commission by that Member State, and not to projects which receive financial assistance decided by the Commission.

In the absence of clear information to the contrary, it must also be held that an on-the-spot check based on Article 23(2) of Regulation No 4253/88 may be carried out by any Commission official or servant, may take place during the implementation of the project concerned - for example, after a request for payment of an instalment of assistance -, or subsequently, and may examine both whether the project has been carried out in accordance with the objectives laid down by the Community legislation and by the decision granting the aid, and also whether the conditions for implementing the project, particularly those relating to its financial and accounting management, are in order.

There is no basis for inferring from Article 23(2) of Regulation No 4253/88 that the Commission is prevented from carrying out another on-the-spot check, pursuant to that provision, after the project has actually been completed, even though it has already been the subject of one or more checks of that nature, for example, in connection with requests for payment of the assistance. Nor are Commission officials or servants precluded from carrying out, pursuant to the aforementioned provision, cross-checks relating simultaneously to several projects subsidised by the EAGGF.

Any other reading of Article 23(2) of Regulation No 4253/88 would have the consequence of rendering redundant the Commission's obligation, under Regulation No 2052/88, to contribute to the effectiveness of the operation carried out by the Community with the help of the Structural Funds in order to attain the objective of economic and social cohesion specified in Article 158 EC.

( see paras 97-101 )

2. The provisions of Regulations No 2988/95 on the protection of the European Communities' financial interests and No 2185/96 concerning on-the-spot checks and inspections carried out by the Commission in order to protect the European Communities' financial interests against fraud and other irregularities establishing the Commission's powers to carry out on-the-spot checks and inspections are designed to apply on a supplementary basis, without prejudice to the Community sectoral rules such as Regulation No 4253/88 laying down provisions for implementing Regulation No 2052/88 as regards coordination of the activities of the different Structural Funds between themselves and with the operations of the European Investment Bank and the other existing financial instruments. Those provisions cannot therefore set aside the legal bases which those rules afford to the Commission for carrying out on-the-spot checks in order to protect the Community's financial interests.

( see para. 115 )

3. Article 24(1) of Regulation No 4253/88 laying down provisions for implementing Regulation No 2052/88 as regards coordination of the activities of the different Structural Funds between themselves and with the operations of the European Investment Bank and the other existing financial instruments requires the Commission - if an operation or measure appears to justify neither part nor any of the assistance allocated and causes it to carry out a suitable examination of the case - to request the Member State concerned to submit its comments within a specified period of time. That provision must be interpreted as requiring the Commission to give the Member State concerned the opportunity of submitting its comments within a given period of time and not to take any decision before the end of that period, in order not to negate the effectiveness of the obligation. On the other hand, once the time-limit has expired, the Commission is justified, if the examination which it has carried out has confirmed the existence of an irregularity, in adopting one or other of the measures provided for in Article 24 of that regulation even though the Member State has not taken the opportunity it has been offered to submit comments within a certain period of time. Any other interpretation would be tantamount to allowing a Member State to block indefinitely the adoption of a Commission decision by failing to respond to a letter from the Commission inviting it to submit its comments.

Moreover, although it is true that the duty to state reasons requires the Commission to reply, where appropriate, in the decision suspending, reducing or withdrawing the assistance, to any observations made by the Member State concerned during the administrative procedure, neither the provisions of Articles 23 and 24 of Regulation No 4253/88, which the applicants allege, in the part of the plea now under consideration, has been infringed, nor the duty to state reasons require the Commission to state that the national authorities concerned have not submitted comments during that procedure.

( see paras 156-158 )

4. Since the statement of reasons required by Article 253 EC must be appropriate to the act at issue, decisions which have serious consequences for the applicants must show clearly and unequivocally the reasoning of the Community authority which adopted the measure so as to inform the persons concerned of the justification for the measure adopted so that they may defend their rights and to enable the Court to exercise its powers of review. Moreover, the requirement to state reasons must be appraised on the basis of the particular features of the case in point, such as the content of the measure in question and the nature of the reasons given. It is not required that the reasoning should go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 253 EC must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question.

( see paras 168-170 )

5. If a project receives Community funding, the Commission is entitled to examine the lawfulness of any invoice declared to relate to that project and, if appropriate, to declare that there is an irregularity, whether the invoice was issued by the beneficiary of the funding or by a natural or legal person whom it used in connection with the implementation of the subsidised project. To deprive the Commission of the opportunity to review the lawfulness of expenditure invoiced by subcontractors to a beneficiary of EAGGF aid would risk that beneficiary receiving undue payments on the basis of statements of expenditure whose economic basis could not be verified.

( see para. 270 )

6. Applicants for, and beneficiaries of, EAGGF aid are required to satisfy themselves that they are submitting to the Commission reliable information which is not liable to mislead it, since otherwise the system of controls and evidence established to determine whether the conditions for granting the aid are fulfilled cannot function properly. In the absence of reliable information, projects which do not fulfil the conditions required could become the subject of aid. It follows that the obligation on applicants for, and beneficiaries of, aid to provide information and act in good faith is inherent in the EAGGF aid system and essential for its effective functioning.

( see para. 322 )

7. The right to rely on the principle of protection of legitimate expectations extends to any economic operator to whom an institution has given justified hopes. However, the principle of protection of legitimate expectations may not be relied upon by an undertaking which has committed a manifest infringement of the rules in force.

( see paras 387-388 )

8. The principle of legal certainty, which requires that legal rules be clear and precise and aims to ensure that situations and legal relationships governed by Community law remain foreseeable, cannot be regarded as infringed by Commission decisions withdrawing EAGGF aid, since the applicable legislation provides for the possibility for the Commission - in the event that irregularities are proved - to withdraw the financial aid and request reimbursement of the sums unduly paid by the EAGGF.

( see para. 391 )

9. Given the very nature of financial aid granted by the Community, the obligation to comply with the financial conditions for the investment as indicated in the decision granting the aid constitutes one of the essential duties of the beneficiary, in the same way as the obligation actually to carry out the project, and is therefore a condition for the award of Community aid. Moreover, it is essential for the proper working of the system for carrying out checks and acquiring evidence to verify that the conditions for the grant of the aid are being fulfilled, for Community aid applicants and beneficiaries to provide information which is reliable and not likely to mislead the Commission.

In the light of the serious breaches of obligations committed by the beneficiaries, it was reasonable for the Commission to take the view that any sanction other than the total withdrawal of the aid and recovery of the sums paid by the EAGGF might invite fraud, in that potential beneficiaries would be tempted either artificially to inflate the amount of the expenditure charged to the project with the aim of evading their obligation to provide part-financing and of obtaining the maximum amount of EAGGF aid provided for in the decision granting the aid, or to provide false information or conceal certain data, with the aim of obtaining aid or of increasing the amount of aid requested, and risk only that the aid would be reduced to the level at which it would have been if the beneficiary had declared the correct amount of the expenditure and/or the information it gave the Commission had been accurate.

( see paras 399-400, 402 )

Parties

In Joined Cases T-141/99, T-142/99, T-150/99 and T-151/99,

Vela Srl, established in Milan (Italy),

Tecnagrind SL, established in Barcelona (Spain),

represented by G.M. Scarpellini, lawyer, with an address for service in Luxembourg,

applicants,

v

Commission of the European Communities, represented by C. Cattabriga, acting as Agent, assisted by M. Moretto, lawyer, with an address for service in Luxembourg,

defendants,

APPLICATION, in Case T-141/99, for the annulment of Commission Decision C (1999) 540 of 9 March 1999 withdrawing the assistance granted to Vela Srl by Commission Decision C (92) 1494 of 30 June 1992, concerning grant of a contribution from the European Agricultural Guidance and Guarantee Fund (EAGGF), Guidance Section, pursuant to Council Regulation (EEC) No 4256/88 of 19 December 1988, laying down provisions for implementing Regulation (EEC) No 2052/88 as regards the EAGGF Guidance Section (OJ 1988 L 374, p. 25), in connection with Project No 92.IT.06.001 entitled Action in the form of a demonstration project for the introduction and promotion of cylindrical luffa in disadvantaged European areas'; in Case T-142/99, for the annulment of Commission Decision C (1999) 541 of 4 March 1999 withdrawing the assistance granted to Sonda Srl by Commission Decision C (93) 3401 of 26 November 1993, concerning grant of an EAGGF, Guidance Section, contribution pursuant to Regulation No 4256/88, in connection with Project No 93.IT.06.057 entitled Pilot demonstration project for the reduction of production costs and fertiliser costs in sunflower cultivation'; in Case T-150/99, for the annulment of Commission Decision C (1999) 532 of 4 March 1999 withdrawing the assistance granted to Tecnagrind SL by Commission Decision C (93) 3395 of 26 November 1993, concerning grant of the EAGGF, Guidance Section, contribution pursuant to Regulation No 4256/88, in connection with Project No 93.ES.06.031 entitled Demonstration project for the multiple optimisation of Vetiver (Vetiveria Zizanoides) in the Mediterranean area'; and, in Case T-151/99, for the annulment of Commission Decision C (1999) 533 of 4 March 1999 withdrawing the assistance granted to Tecnagrind SL by Commission Decision C (96) 2235 of 13 September 1996, concerning grant of the EAGGF, Guidance Section, contribution pursuant to Regulation No 4256/88, in connection with Project No 95.ES.06.005 entitled Demonstration project for the processing of castor-oil plants (Ricinus Communis) in agricultural undertakings for the extraction of aromatic essences',

THE COURT OF FIRST INSTANCE

OF THE EUROPEAN COMMUNITIES (Third Chamber),

composed of: M. Jaeger, President, K. Lenaerts and J. Azizi, Judges,

Registrar: J. Palacio González, Administrator,

having regard to the written procedure and further to the hearing on 20 February 2002,

gives the following

Judgment

Grounds

Legal background

1 In order to strengthen economic and social cohesion within the meaning of Article 158 EC, Council Regulation (EEC) No 2052/88 of 24 June 1988 on the tasks of the Structural Funds and their effectiveness and on coordination of their activities between themselves and with the operations of the European Investment Bank and the other existing financial instruments (OJ 1988 L 185, p. 9), entrusted the Structural Funds with the tasks, in particular, of promoting the development and structural adjustment of the regions whose development was lagging behind, speeding up the adjustment of agricultural structures and promoting the development of rural areas with a view to reform of the common agricultural policy (Article 1, points 1 and 5(a) and (b)). That regulation was amended by Council Regulation No 2081/93 of 20 July 1993 (OJ 1993 L 193, p. 5).

2 In its original version, Article 5(2)(e) of Regulation No 2052/88 provided that financial assistance could be provided by the Structural Funds in the form of support for technical assistance and studies in preparation for operations. In the version as amended by Regulation No 2081/93, it provides that financial assistance may be provided by the Structural Funds in the form of support for technical assistance, including the measures to prepare, appraise, monitor and evaluate operations, and pilot and demonstration projects.

3 On 19 December 1988, the Council adopted Regulation (EEC) No 4256/88 laying down provisions for implementing Regulation (EEC) No 2052/88 as regards the (EAGGF) Guidance Section (OJ 1988 L 374, p. 25). That regulation was amended by Council Regulation (EEC) No 2085/93 of 20 July 1993 (OJ 1993 L 193, p. 44).

4 Article 8 of Regulation No 4256/88 stated, in its original version, that EAGGF assistance for the measures provided for in Article 5(2)(e) of Regulation No 2052/88 may cover, in particular, carrying out pilot projects for promoting the development of rural areas, including the development and exploitation of woodland (first indent) and carrying out demonstration projects to show farmers the real possibilities of systems, methods and techniques of production which are in accordance with the objectives of the reform of the common agricultural policy (fourth indent). In the version as amended by Regulation No 2085/93, that article provides that, in achieving its tasks, the EAGGF may devote up to 1% of its annual budget to financing, notably, pilot projects for adjusting agricultural and forestry structures and promoting rural development, and demonstration projects, including projects for developing and exploiting forests and projects for processing and marketing agricultural products, to show the real possibilities of systems, methods and techniques of production and management which are in accordance with the objectives of the common agricultural policy.

5 On 19 December 1988 the Council also adopted Regulation (EEC) No 4253/88 laying down provisions for implementing Regulation No 2052/88 as regards coordination of the activities of the different Structural Funds between themselves and with the operations of the European Investment Bank and the other existing financial instruments (OJ 1988 L 374, p. 1). That regulation was amended by Council Regulation No 2082/93 of 20 July 1993 (OJ 1993 L 193, p. 20).

6 According to the 12th recital in the preamble to Regulation No 4253/88 Community assistance from the structural funds should be provided mainly in the form of part-financing of operational programmes. Detailed rules for the provision of that assistance are laid down in Article 17 of the regulation, as amended.

7 Regulation No 4253/88, as amended, also lays down provisions relating to payment of the financial assistance (Article 21), control of the operations financed (Article 23) and the reduction, suspension and cancellation of assistance (Article 24).

8 Article 23(2) of Regulation No 4253/88, as amended, provides, as regards financial checks:

Without prejudice to checks carried out by Member States, in accordance with national laws, regulations and administrative provisions and without prejudice to the provisions of Article 206 of the Treaty or to any inspection arranged on the basis of Article 209(c) of the Treaty, Commission officials or servants may carry out on-the-spot checks, including sample checks, in respect of operations financed by the Structural Funds and management and control systems.

Before carrying out an on-the-spot check, the Commission shall give notice to the Member State concerned with a view to obtaining all the assistance necessary. If the Commission carries out on-the-spot checks without giving notice, it shall be subject to agreements reached in accordance with the provisions of the Financial Regulation within the framework of the partnership. Officials or servants of the Member State concerned may take part in such checks.

The Commission may require the Member State concerned to carry out an on-the-spot check to verify the regularity of payment requests. Commission officials or servants may take part in such checks and must do so if the Member State concerned so requests.

The Commission shall ensure that any checks that it carries out are performed in a coordinated manner so as to avoid repeating checks in respect of the same subject matter during the same period. The Member State concerned and the Commission shall immediately exchange any relevant information concerning the results of the checks carried out.'

9 Article 24 of Regulation No 4253/88, as amended, provides, as regards the reduction, suspension and cancellation of assistance:

1. If an operation or measure appears to justify neither part nor the whole of the assistance allocated, the Commission shall conduct a suitable examination of the case in the framework of the partnership, in particular requesting that the Member State or authorities designated by it to implement the operation submit their comments within a specified period of time.

2. Following this examination, the Commission may reduce or suspend assistance in respect of the operation or measure concerned if the examination reveals an irregularity or a significant change affecting the nature or conditions for the implementation of the operation or measure for which the Commission's approval has not been sought.

3. Any sum received unduly and to be recovered shall be repaid to the Commission. Interest on account of late payment shall be charged on sums not repaid in compliance with the provisions of the Financial Regulation and in accordance with the arrangements to be drawn up by the Commission pursuant to the procedures referred to in Title VIII.'

The facts

10 The present cases relate to four of the five projects presented, pursuant to Article 8 of Regulation No 4256/88, between January 1992 and March 1995 by a series of companies owned by a small group of individuals.

11 Case T-141/99 relates to the project presented by the Italian company Vela Srl (Vela') for the introduction and promotion of cylindrical luffa in disadvantaged European areas. Case T-142/99 concerns the project presented by the Italian company Sonda Srl (Sonda') for whom Vela acts as promoter, which is designed to reduce the production costs and fertiliser costs in sunflower cultivation. Case T-150/99 concerns the project presented by the Spanish company Tecnagrind SL (Tecnagrind') for the purpose of optimising vetiver in the Mediterranean area. Case T-151/99 concerns the project presented by Tecnagrind relating to the processing of castor-oil plants in agricultural undertakings for the extraction of natural aromatic essences. During the period mentioned in the previous paragraph, the Italian company Faretra Srl (Faretra') also presented a project designed to develop tree pasture'.

The Luffa Project

12 On 17 January 1992, Vela applied to the Commission for Community assistance for a land-management and commercial-development demonstration project for the introduction and promotion, in certain disadvantaged European areas, of cylindrical luffa, a cucurbitaceous plant whose fruit, when it reaches maturity, produces a particularly resistant fibrous pulp (Project No 92.IT.06.001, the Luffa Project').

13 It is apparent from that application that the Luffa Project was to be implemented on Mr Troglia's farm in Alghero in the province of Sassari, Italy. The aim of the project was to replace chemical and synthetic products with biodegradable products in non-food applications. Vela stated that it had acquired extensive professional expertise in materials and was engaged in research in that field. It indicated that it was in touch with the agronomy faculty of the University of Sassari and with the Sassari Provincial Farming and Woodland Inspectorate, which had both expressed interest in the project.

14 As far as labour was concerned, the Luffa Project required a project manager for a period of 26 man months, a product manager for a period of 28 man months, a technical manager for the same length of time, an agronomist for a period of 24 man months and agricultural workers for a period of 140 man months. The total budget of the Luffa Project was ECU 2 310 000. Vela requested Community financing of 75%, that is, ECU 1 732 500. It intended to finance, with Mr Troglia's farm, 10% of the project, that is, ECU 231 000, and to obtain financing from regional funds for the remaining 15%. It said that it had been assured that the Italian company SoFIM (SoFIM') would guarantee up to a maximum of 25% of the amount of the part-financing of the Luffa Project, by opening a current account credit facility in the event of late payment of the aid by the Sardinian regional authorities.

15 By Decision C (92) 1494 of 30 June 1992 (the decision granting aid for the Luffa Project'), the Commission granted Vela an EAGGF, Guidance Section, contribution for the Luffa Project (Article 1).

16 Under Article 2 of that decision, the period for implementing the Luffa Project was set at 45 months from the date of the decision, that is, 30 June 1992 to 31 March 1996.

17 Under Article 3 of the above decision, the whole cost of the Luffa Project, estimated to be ECU 2 310 000, was eligible and the Community's maximum financial contribution had been fixed at ECU 1 470 000. That provision added that, if the costs eventually borne were lower than the eligible cost originally forecast, the amount of the aid would be reduced accordingly when the balance of the aid was paid.

18 The financial plan contained in Annex I to the decision granting aid for the Luffa Project shows that the balance of the financing for the Luffa Project was to be paid by the Sassari Provincial Inspectorate and by Vela, which would provide ECU 350 000 and ECU 490 000 respectively.

19 In accordance with the financial terms laid down in Annex II to the decision, the Commission was authorised, for the purposes of verifying the financial information relating to the various items of expenditure, to ask to inspect any original documentary evidence or a certified copy, and to carry out that inspection directly on-the-spot or to ask for the documents in question to be sent to it (point 5). It was also stipulated that, if any of the conditions mentioned in the Annex were not observed or if measures not provided for in Annex I were taken, the Community could suspend, reduce or cancel the aid and call for the reimbursement of any payments made (point 10).

20 On 24 September 1992, the Commission paid Vela a first instalment of ECU 584 000.

21 On 3 May 1993, Vela requested payment of a second instalment, in the amount of ECU 438 000. After carrying out an administrative and financial on-the-spot check and visiting the demonstration fields between 19 and 23 July 1993, and finding no specific anomaly, the Commission paid the second instalment.

22 By letters dated 11 and 23 March 1994, Vela informed the Commission that, since the Sassari Provincial Inspectorate had not granted it the financing of ECU 350 000 provided for in the decision granting aid for the Luffa Project, the amount of financing put at its disposal by SoFIM had been increased from ECU 580 000 to ECU 840 000.

23 On 11 June 1996, the Commission received from Vela a request for payment of the balance of the Community assistance, that is ECU 438 000.

24 Between 22 and 26 July, it carried out another on-the-spot check. Apart from the fact that some costs were ineligible, no specific anomaly was revealed on that occasion.

25 On 17 December 1996, the Commission paid Vela the balance of the Community assistance.

The Girasole Project

26 On 8 September 1993, Sonda applied to the Commission for Community assistance for a demonstration pilot project designed to reduce the production costs and fertiliser costs in sunflower cultivation (Project No 93.IT.06.057, the Girasole Project').

27 It is apparent from that application that the Girasole Project was to be implemented on the Santa Margherita farm situated in the province of Sassari, Italy. The aim of the project was to reduce technical and energy costs in sunflower cultivation by means of the mulching' process, which consists in spreading waterproof tarpaulins over the fields; this prevents weeds from growing, thus making it possible to save a significant amount of irrigation water. At least 14 collaborators were needed to implement it.

28 By Decision C (93) 3401 of 26 November 1993 (the decision granting aid for the Girasole Project'), the Commission granted Sonda an EAGGF, Guidance Section, contribution for the Girasole Project (Article 1).

29 Under Article 2 of that decision, the period for implementing the Girasole Project was set at 26 months from the date of the decision, that is, 1 November 1993 to 31 December 1995.

30 The total cost of the Girasole Project was ECU 1 235 000. Article 3 of the decision provided that the eligible cost was ECU 1 036 000 and the Community's maximum financial contribution had been fixed at ECU 777 000. The provision added that, if the costs eventually borne were lower than the eligible cost originally forecast, the amount of the aid would be reduced accordingly when the balance of the aid was paid.

31 The financial plan contained in Annex I to the decision granting aid for the Girasole Project shows that the balance of the financing for the Girasole Project, ECU 458 000, was to be paid by Sonda.

32 In accordance with the financial terms laid down in Annex II to the decision, the Commission was authorised, for the purposes of verifying the financial information relating to the various items of expenditure, to ask to inspect any original documentary evidence or a certified copy, and to carry out that inspection directly on-the-spot or to ask for the documents in question to be sent to it (point 5). It was also stipulated that, if any of the conditions mentioned in the Annex were not observed or if measures not provided for in Annex I were taken, the Community could suspend, reduce or cancel the aid and call for the reimbursement of any payments made (point 10).

33 On 11 January 1994, the Commission paid Sonda a first instalment of ECU 310 800, that is, 40% of the Community contribution. On 11 January 1995, it paid Sonda a second instalment, in the amount of ECU 233 100. On 31 May 1996, it paid it the balance of the Community contribution.

34 In 1997 Sonda was taken over by Vela by merger.

The Vetiver Project

35 On 15 September 1993, Tecnagrind applied to the Commission for Community assistance for a demonstration project concerning possible ways of optimising vetiver, a plant with particularly resistant and fibrous roots, in the Mediterranean area (Project No 93.ES.06.031, the Vetiver Project').

36 According to that application, the aim of the Vetiver Project was to optimise vetiver, a plant with particularly resistant and fibrous roots, in the Mediterranean area (Project No 93.ES.06.031, hereinafter the Vetiver Project').

37 The Vetiver Project involved the leasing of a 10-hectare plot of land for 30 months, work to prepare the land for growing vetiver, technical advice and monitoring costs estimated at 10 man months, the leasing of a mobile turbodistillation unit for extracting the essences, the purchase of the instruments and equipment needed to monitor the plants and the end product, personnel costs estimated at 10 man months, and also sundry costs relating to the involvement of outside laboratories, certifications and the services of specialist technicians and researchers.

38 By Decision C (93) 3395 of 26 November 1993 (the decision granting aid for the Vetiver Project'), the Commission granted Tecnagrind an EAGGF, Guidance Section, contribution for the Vetiver Project (Article 1).

39 Under Article 2 of that decision, the period for implementing the Girasole Project was set at 30 months, from January 1994 to June 1996.

40 The total cost of the Vetiver Project was ECU 1 261 131. Article 3 of the decision provided that the eligible cost was ECU 1 237 125 and the Community's maximum financial contribution had been fixed at ECU 927 843. The provision added that, if the costs eventually borne were lower than the eligible cost originally forecast, the amount of the aid would be reduced accordingly when the balance of the aid was paid.

41 The financial plan contained in Annex I to the decision granting aid for the Vetiver Project provided that the balance of the financing for the Vetiver Project, ECU 333 288, was to be paid by Tecnagrind.

42 In accordance with the financial terms laid down in Annex II to the decision, the Commission was authorised, for the purposes of verifying the financial information relating to the various items of expenditure, to ask to inspect any original documentary evidence or a certified copy, and to carry out that inspection directly on-the-spot or to ask for the documents in question to be sent to it (point 5). It was also stipulated that, if any of the conditions mentioned in the Annex were not observed or if measures not provided for in Annex I were taken, the Community could suspend, reduce or cancel the aid and call for the reimbursement of any payments made (point 10).

43 On 13 January 1994, the Commission paid Tecnagrind a first instalment of ECU 371 137, which was 40% of the Community contribution to the Vetiver Project.

44 On 19 January 1995, it paid the second instalment, in the amount of ECU 278 352, which was 30% of the Community contribution.

45 On 24 December 1996, Tecnagrind submitted its final report on the Vetiver Project to the Commission. It forwarded relevant additional documentation on 12 February and 27 March 1997.

46 On 20 March 1997, it asked the Commission to pay the balance of the assistance, ECU 278 353. On 5 June 1997, it repeated its request to the Commission.

47 On 12 June 1997, the Commission informed Tecnagrind that it had started a general technical and accounting inspection of all the projects financed under Article 8 of Regulation No 4256/88 and approved by the Commission, and that, in view of the scale of that operation, it would be unable to pay the balance for about five months.

The Ricino Project

48 On 31 March 1995, Tecnagrind applied to the Commission for Community assistance for a demonstrative project relating to the processing of castor-oil plants in agricultural undertakings for the extraction of natural aromatic essences (Project No 95.ES.06.005, the Ricino Project').

49 According to that application, the aim of the Ricino Project was to grow castor-oil plants and to process them in order to obtain, by a process of natural fermentation, a peach essence which is very expensive to produce from the fruit. The Ricino Project was designed to demonstrate that castor-oil plant cultivation was profitable and to create jobs. The Andalusian cooperative company Campo de Paterna had been given the task of implementing it. Two other Spanish companies, Codema, SA (Codema') and Genforsa, SA (Genforsa') were to participate in the Ricino Project by providing 5% each of the part-financing.

50 By Decision C (96) 2235 of 13 September 1996 (the decision granting aid for the Ricino Project'), the Commission granted Tecnagrind an EAGGF, Guidance Section, contribution for the Ricino Project (Article 1).

51 Under Article 2 of that decision, Community financing was to be provided for the period between 1 September 1996 and 30 June 1999.

52 Implementation of the Ricino Project was to take 28 months, between September 1996 and December 1998. The total cost of the project was estimated at ECU 1 264 674. Article 3 of the decision provided that the eligible cost was ECU 1 262 674 and the Community's maximum financial contribution had been fixed at ECU 947 005. The provision added that, if the costs eventually borne were lower than the eligible cost originally forecast, the amount of the aid would be reduced accordingly when the balance of the aid was paid.

53 The financial plan contained in Annex I to the decision granting aid for the Ricino Project provided that the balance of the financing for the Ricino Project was to be paid by Tecnagrind, Codema and Genforsa, which would provide ECU 191 401, ECU 63 134 and ECU 63 134 respectively.

54 In accordance with the financial terms laid down in Annex II to the decision, the Commission was authorised, for the purposes of verifying the financial information relating to the various items of expenditure, to ask to inspect any original documentary evidence or a certified copy, and to carry out that inspection directly on-the-spot or to ask for the documents in question to be sent to it (point 5). It was also stipulated that, if any of the conditions mentioned in the Annex were not observed or if measures not provided for in Annex I were taken, the Community could suspend, reduce or cancel the aid and call for the reimbursement of any payments made (point 10).

55 On 20 January 1997, the Commission paid Tecnagrind a first instalment of ECU 378 802, which was 40% of the Community contribution to the Ricino Project.

56 On 15 May 1997, Tecnagrind submitted its intermediate technical progress report on the Ricino Project to the Commission.

57 On 9 July 1997, it asked the Commission to pay the second instalment of the Community contribution.

The Pascolo Arboreo Project

58 On 8 September 1993, Faretra applied to the Commission for Community assistance for a demonstration pilot project to develop a large environmentally-friendly Mediterranean animal-rearing centre, called tree pasture' (Project No 96.IT.06.058, the Pascolo Arboreo Project'). By decision of 26 November 1993, the Commission granted Faretra an EAGGF contribution of ECU 890 625 for the Pascolo Arboreo Project. The contribution was paid to Faretra in full.

The on-the-spot checks conducted in July and November 1997

59 Following an inspection of an Irish project made in January 1997 by the Court of Auditors of the European Community (the Court of Auditors'), the Commission decided to carry out a series of checks concerning a certain number of projects receiving financial assistance under Article 8 of Regulation No 4256/88, because it suspected that a network had been set up with the aim of fraudulently obtaining Community subsidies. The Luffa, Girasole, Pascolo Arboreo, Vetiver and Ricino Projects were subject to those checks.

60 By letters dated 10 June 1997, the Commission informed Vela, Sonda and Tecnagrind of its intention to carry out on-the-spot checks of the project(s) for which they were responsible, pursuant to Article 23 of Regulation No 4253/88.

61 The on-the-spot check in respect of the Vetiver and Ricino Projects was carried out between 22 and 25 July 1997. It was conducted by officials from the Commission's Directorate-General (DG) for Agriculture and Directorate-General for Financial Control, and from the Unit on Coordination of Fraud Prevention (UCFP). The officials of the Financial Control DG and UCFP subsequently prepared reports containing their findings. An official from the Intervención General del Estado (a department of the Spanish Ministry of Finance) attended the inspections carried out by the Community officials.

62 On the basis of the findings contained in the reports mentioned in the previous paragraph, the Commission considered that it had sufficient evidence for opening the procedure to withdraw the assistance relating to the Vetiver and Ricino Projects and decided to carry out a check on the Italian projects.

63 By letters dated 23 September 1997, the Commission informed Vela and Sonda that, pursuant to Article 23 of Regulation No 4253/88, it intended to carry out an on-the-spot check of the Luffa and Girasole Projects, starting on 10 November 1997. An identical letter was sent to Faretra in respect of the Pascolo Arboreo Project.

64 That check took place between 10 and 14 November 1997 in Milan and then in Sassari. Its aim was to check the Luffa, Girasole and Pascolo Arboreo Projects and to complete the check carried out in July 1997 in respect of the Vetiver and Ricino Projects. It was conducted by officials from the Agriculture DG, the Financial Control DG and UCFP. Officials from the Ragioneria Generale dello Stato (Italian general accounts department) took part in the check. Following the check, the official from the Financial Control DG drew up a report recommending the initiation of the procedure for withdrawing the assistance for the projects concerned and recovering the sums wrongly paid for those projects. The officials from the Italian authority also compiled a record of a series of findings made during the check carried out between 10 and 12 November 1997 at Vela's seat in Milan.

Administrative procedure

65 By letters dated 3 April 1998, the Commission informed Vela, Sonda and Tecnagrind that, pursuant to Article 24 of Regulation No 4253/88, it was at the time carrying out an inspection of the financial assistance which had been granted to them for the project(s) for which they were responsible and that, since that inspection revealed matters which might constitute irregularities, it had decided to initiate the procedure laid down by the aforementioned article of Regulation No 4253/88 and by point 10 of Annex II to each of the award decisions. Those details were set out in the letters.

66 The Commission gave Vela, Sonda and Tecnagrind six weeks in which to furnish the explanations and accounting and administrative documents which would show full compliance with the obligations imposed on them when the EAGGF assistance had been granted.

67 At the same time, it sent a request for observations to the Italian Republic, in respect of the Luffa and Girasole Projects, and to the Kingdom of Spain, in respect of the Vetiver and Ricino Projects.

68 By letters dated 19 June 1998, observations were submitted in reply by Vela, in respect of the Luffa and Girasole Projects, and by Tecnagrind in respect of the Vetiver and Ricino Projects.

The contested decision in Case T-141/99

69 By decision of 9 March 1999 (the contested decision in Case T-141/99'), the Commission, in accordance with Article 24(2) of Regulation No 4253/88, withdrew the financial assistance granted to Vela and claimed reimbursement of the sum of EUR 1 470 000.

70 In that decision, the Commission stated, in particular, as follows:

1. Under the award decision, the proportion of the admissible expenditure in respect of the [Luffa] project not covered by the Community contribution, namely ECU 840 000, was to be the subject of financing to be arranged by the beneficiary. The findings made during the inspection visit [November 1997] raised doubts regarding the part-financing of the [Luffa] project.

2. A joint inspection of the accounting documents relating to the project at issue and to the other four projects, which also received Community assistance within the meaning of Article 8 of Regulation No 4256/88, revealed a system of internal financial exchanges between the beneficiary companies of the five projects, certain partners in those companies and other undertakings associated with them. The projects in question (and the corresponding beneficiary companies) are the project at issue (beneficiary: Vela Srl), project No 9[3].IT.06.057 (beneficiary: Sonda Srl), project No 93.IT.06.058 (beneficiary: Faretra Srl), project No 93.ES.06.031 (beneficiary: Tecnagrind SL), project No 95.ES.06.005 (beneficiary: Tecnagrind SL). The relevant partners are Claudio Zarotti and Marco Troglia. The undertakings associated with the partners in the beneficiary companies are AITEC Srl, Noesi Sas and l'Azienda agricola Barrank. The financial exchanges made between the companies, the partners and the associated undertakings involve a sum of approximately ITL 10 000 000 000, which is about 65% of the expenditure declared to the Commission (or forecast expenditure, in the case of the uncompleted projects) for all five projects. The Commission's staff effected a reconstruction of all the internal financial exchanges, which revealed that the companies involved belong, for the most part, to the same small group of individuals. Systematic subcontracting between the beneficiary companies of the five projects and the undertakings associated with them had the effect of creating an item of income which has no established economic basis and unjustifiably constitutes the beneficiary's share of the part-financing.

3. The expenditure invoiced to the beneficiary by Faretra Srl, Sonda Srl, AITEC Srl, Mr Baldassar[r]e, l'Azienda agricola Barrank and Mr Claudio Zarotti, for a sum (approximately ITL 3 000 000 000) representing 60% of the total expenditure declared in respect of the project, is not justified. The participation of the four subcontractors (Faretra Srl, Sonda Srl, AITEC Srl, Mr Baldassar[r]e) was covered by contracts involving the supply of specific personnel, equipment and expertise. The checks carried out on the books and stocklists of those four subcontractors have revealed that they had neither specific personnel nor equipment. They therefore lacked expertise and there was nothing to justify their participation in the implementation of the [Luffa] Project. Furthermore, those various undertakings have not incurred expenditure which might justify the invoicing.

4. Many invoices, issued by other companies, are not adequately substantiated or reveal a lack of proportion between the price paid and the service provided. This relates, in particular, to the following invoices:

(a) the invoice for the sum of ITL 61 882 002 (about ECU 29 000) paid to Magenta Finance in respect of an "Information Manual for Farmers"; the manual was not available to the Commission's inspectors;

(b) the invoice for the sum of ECU 20 939 paid to Detentor in respect of "fees" for a feasibility study, and of plans and designs for a prototype press for the low-temperature compression of "luffa" husks;

(c) the invoice for a total sum of ECU 133 057 paid to Cedarcliff in respect of, amongst other items, a list of 160 undertakings with which the beneficiary was to carry out dissemination operations. The beneficiary was unable to produce an explanation of the price invoiced in the light of the service provided.'

The contested decision in Case T-142/99

71 By decision of 4 March 1999 (the contested decision in Case T-141/99'), the Commission, in accordance with Article 24(2) of Regulation No 4253/88, withdrew the financial assistance granted to Sonda and claimed reimbursement of the sum of EUR 770 000.

72 In that decision, the Commission stated, in particular, as follows:

1. Under the award decision, the proportion of the admissible expenditure in respect of the [Girasole] project not covered by the Community contribution, namely ECU 458 000, was to be the subject of financing to be arranged by the beneficiary. The findings made during the inspection visit [in November 1997] raised doubts regarding the part-financing of the [Girasole] project.

2. A joint inspection of the accounting documents relating to the project at issue and to the other four projects, which also received Community assistance within the meaning of Article 8 of Regulation No 4256/88, revealed a system of internal financial exchanges between the beneficiary companies of the five projects, certain partners in those companies and other undertakings associated with them. The projects in question (and the corresponding beneficiary companies) are the project at issue (beneficiary: Sonda Srl), project No 92.IT.06.001 (beneficiary: Vela Srl), project No 93.IT.06.058 (beneficiary: Faretra Srl), project No 93.ES.06.031 (beneficiary: Tecnagrind SL), project No 95.ES.06.005 (beneficiary: Tecnagrind SL). The relevant partners are Claudio Zarotti and Marco Troglia. The undertakings associated with the partners in the beneficiary companies are AITEC Srl, Noesi Sas and l'Azienda agricola Barrank. The financial exchanges made between the companies, the partners and the associated undertakings involve a sum of approximately ITL 10 000 000 000, which is about 65% of the expenditure declared to the Commission (or forecast expenditure, in the case of the uncompleted projects) for all five projects. The Commission's staff effected a reconstruction of all the internal financial exchanges, which revealed that the companies involved belong, for the most part, to the same small group of individuals. Systematic subcontracting between the beneficiary companies of the five projects and the undertakings associated with them had the effect of creating an item of income which has no established economic basis and unjustifiably constitutes the beneficiary's share of the part-financing.

3. The expenditure invoiced by two companies (Faretra Srl, for an amount of approximately ITL 1 155 000 000 and Noesi Sas, for an amount of approximately ITL 830 000 000), which represents 90% of the total expenditure declared in respect of the project (ITL 2 255 934 354), is not justified.

The participation of the two companies was covered by contracts involving the supply of specific personnel, equipment and expertise. Checks carried out on the books and stocklists of the two companies have revealed that they had neither specific personnel nor equipment. They therefore lacked expertise and there was nothing to justify their participation in the carrying out of the project under consideration. Furthermore, those undertakings have not incurred expenditure which might justify the invoicing.'

The contested decision in Case T-150/99

73 By decision of 4 March 1999 (the contested decision in Case T-150/99'), the Commission, in accordance with Article 24(2) of Regulation No 4253/88, withdrew the financial assistance granted to Tecnagrind for the Vetiver Project and claimed reimbursement of the sum of EUR 649 490.

74 In that decision, the Commission stated, in particular, as follows:

1. A joint inspection of the accounting documents relating to the project at issue and to the other four projects, which also received Community assistance within the meaning of Article 8 of Regulation No 4256/88, revealed a system of internal financial exchanges between the beneficiary companies of the five projects, certain partners in those companies and other undertakings associated with them. The projects in question (and the corresponding beneficiary companies) are the project at issue (beneficiary: Tecnagrind SL), project No 92.IT.06.001 (beneficiary: Vela Srl), project No 93.IT.06.057 (beneficiary: Sonda Srl), project No 9[5].ES.06.005 (beneficiary: Tecnagrind SL), project No 93.IT.06.058 (beneficiary: Faretra Srl). The relevant partners are Claudio Zarotti and Marco Troglia. The undertakings associated with the partners in the beneficiary companies are AITEC Srl, Noesi Sas and l'Azienda agricola Barrank. The financial exchanges made between the companies, the partners and the associated undertakings involve a sum of approximately ITL 10 000 000 000, which is about 65% of the expenditure declared to the Commission (or forecast expenditure, in the case of the uncompleted projects) for all five projects. The Commission's staff effected a reconstruction of all the internal financial exchanges, which revealed that the companies involved belong, for the most part, to the same small group of individuals. Systematic subcontracting between the beneficiary companies of the five projects and the undertakings associated with them had the effect of creating an item of income which has no established economic basis and unjustifiably constitutes the beneficiary's share of the part-financing.

2. Statements made in the aid application do not reflect the true position:

(a) In the application, it is stated that "[Tecnagrind] provides agricultural services". However, the company was formed on 25 January 1993 and the grant application was sent to the Commission on 15 September 1993. Moreover, the company has not operated.

(b) Furthermore, the application mentioned that a certain amount of research and testing in the area in conjunction with the physical geography department of the University of Murcia and with the La Alberca branch of the agricultural research centre for the Murcia region had been carried out. Mr Troglia, Tecnagrind's director and the project leader, said at the time of the inspection [July 1997] that the research and testing work had been carried out exclusively by those bodies, and that the beneficiary had taken no part in it.

3. During the inspection visit, [Tecnagrind] was unable to present any document to prove that it had provided 25% of the part-financing for the project, as required under point 7 of the decision granting the aid.

4. In the final report, it is stated that the area used for growing the vetiver in order to produce and distil its roots is two hectares. During the on-the-spot check, the Commission's staff found that only half a hectare had been cultivated.

5. The invoice from the owner of the leased land shows that the area of the plot was 4 hectares, not 10 hectares as stated in the project and the final report. Also, according to the various invoices presented at the time of the check, the leasing costs were ESP 712 000, although the budgetary item earmarked for that part of the expenditure was ESP 10 934 772. The difference was used to meet other costs, without obtaining the prior consent of the Commission as required in point 1 of Annex 2 of the decision.

6. Certain costs corresponding to the company's general expenses - such as the fees paid to Asedem (accounting and tax consultancy) and telephone bills (Mr Troglia's Italian mobile telephone) are charged to the project, at the rate of 50%, with no justification. Also, invoices have been charged to the project for services which were provided after the final stage of the project and therefore could not be taken into account for the part-financing.'

The contested decision in Case T-151/99

75 By decision of 4 March 1999 (the contested decision in Case T-151/99'), the Commission, in accordance with Article 24(2) of Regulation No 4253/88, withdrew the financial assistance granted to Tecnagrind for the Ricino Project and claimed reimbursement of the sum of EUR 378 802.

76 In that decision, the Commission stated, in particular, as follows:

1. A joint inspection of the accounting documents relating to the project at issue and to the other four projects, which also received Community assistance within the meaning of Article 8 of Regulation No 4256/88, revealed a system of internal financial exchanges between the beneficiary companies of the five projects, certain partners in those companies and other undertakings associated with them. The projects in question (and the corresponding beneficiary companies) are the project at issue (beneficiary: Tecnagrind SL), project No 92.IT.06.001 (beneficiary: Vela Srl), project No 93.IT.06.057 (beneficiary: Sonda Srl), project No 93.ES.06.031 (beneficiary: Tecnagrind SL), project No 93.IT.06.058 (beneficiary: Faretra Srl). The relevant partners are Claudio Zarotti and Marco Troglia. The undertakings associated with the partners in the beneficiary companies are AITEC Srl, Noesi Sas and l'Azienda agricola Barrank. The financial exchanges made between the companies, the partners and the associated undertakings involve a sum of approximately ITL 10 000 000 000, which is about 65% of the expenditure declared to the Commission (or forecast expenditure, in the case of the uncompleted projects) for all five projects. The Commission's staff effected a reconstruction of all the internal financial exchanges, which revealed that the companies involved belong, for the most part, to the same small group of individuals. Systematic subcontracting between the beneficiary companies of the five projects and the undertakings linked to them had the effect of creating an item of income which has no established economic basis and unjustifiably constitutes the beneficiary's share of the part-financing.

Mr Troglia, Director of [Tecnagrind] and the person in charge of the project, told the inspectors, during the [July 1997] check that [Tecnagrind] did not have the practical experience needed for installing a small processing plant to meet the farmers' operational requirements, which was why it had subcontracted that activity and, more generally, the whole industrial stage of the project to Vela. In the course of an inspection carried out by the Commission's services on the premises of [Vela], a beneficiary of assistance granted under Article 8 of Regulation No 4256/88, it became apparent that that company had neither personnel or specific equipment. It therefore did not seem to process the practical knowledge needed and the intervention of [Vela] as subcontractor was not justified.

2. It seems that several contracts were concluded with Mr De Bartolomeis and with Cedarcliff for a total value of ECU 155 800, that is to say, more than 12% of the total cost of the project. According to Mr Troglia, the activities subcontracted to Cedarcliff relate to the dissemination stage of the project. Those invoices could not be charged to the project when it began, since dissemination was to take place at the end of the project.

3. During the inspection visit, he was unable to present any document to prove that the beneficiary company was in a position to provide 25% of the part-financing for the project, as required under point 8.3 of Annex I to the decision granting the aid.

4. Certain costs corresponding to the company's general expenses - such as the fees paid to Asedem (accounting and tax consultancy) and telephone bills (Mr Troglia's Italian mobile telephone) were charged to the project, at the rate of 50%, with no justification.'

Procedure

77 By applications lodged at the Registry of the Court of First Instance on 10 June 1999, Vela brought two actions, seeking, respectively, the annulment of the contested decision in Case T-141/99 and the annulment of the contested decision in Case T-142/99.

78 By applications lodged at the Court Registry on 21 June 1999, Tecnagrind brought two actions, seeking, respectively, the annulment of the contested decision in Case T-150/99 and the annulment of the contested decision in Case T-151/99.

79 At the request of the parties, the President of the Third Chamber of the Court of First Instance stayed proceedings in the four cases, in accordance with Article 77(c) of the Rules of Procedure of the Court of First Instance, first until 12 January 2000, by orders dated 12 November 1999, and then until 12 April 2000, by orders dated 10 January 2000. The written procedure was closed on 14 March 2001.

80 After the parties had been heard on the point, the President of the Third Chamber of the Court of First Instance, by orders dated 29 November 2001, joined the cases for the purposes of the oral proceedings and the judgment, in accordance with Article 50 of the Rules of Procedure.

81 Upon hearing the report of the Judge-Rapporteur, the Court of First Instance (Third Chamber) decided to open the oral procedure. As measures of organisation of procedure, it requested the parties to submit certain documents and to reply to certain questions. The parties complied with those requests within the time-limits set.

82 The hearing, which was originally fixed for 10 January 2002, was adjourned to 20 February 2002 at the request of the applicants, who stated that the communication from the Court Registry containing the written questions put by the Court of First Instance and the notice of the date of the hearing had reached them belatedly.

83 At the hearing held on 20 February 2002, the parties presented oral argument and their answers to the questions put by the Court.

Forms of order sought by the parties

84 In each of the cases the applicant claims that the Court should:

- annul the contested decision and, in the alternative, reduce the amount of the grant to be repaid to the Commission to such extent as may be decided in the course of the proceedings;

- grant the request for measures of inquiry formulated in the application;

- order the Commission to pay the costs.

85 In each of the cases the Commission contends that the Court should:

- dismiss the application;

- order the applicant to pay the costs.

Substance

86 At the hearing, the applicants stated that, as shown in their pleadings, the sole object of these actions is to seek the annulment of the contested decisions. They added that the summary arguments relating to compensation for damage are formulated as a purely protective measure and, in the context of these cases, are not tantamount to a claim for compensation. The Court took formal note of that.

87 Furthermore, after the cases had been joined for the purposes of the oral procedure and the judgment, the applicants, which are represented by the same counsel, and the defendant, which is also represented by the same counsel in all four cases, had access to all the material contained in the files relating to those cases. The Court took formal note of that. In the circumstances, that material must be regarded as forming a single file relating to the four cases.

88 The actions for annulment are based, in all four cases, on four identical pleas. The first plea alleges infringement and misapplication of the Treaty and of secondary Community law, and misuse of powers. The second plea alleges failure to state adequate reasons, and errors of assessment. The third plea alleges breach of the principles of legal certainty and of the protection of legitimate expectations. The fourth plea alleges breach of the principle of proportionality.

I - The first plea, alleging infringement and misapplication of the Treaty and of secondary Community law, and misuse of powers

89 In the four cases, this plea is subdivided into two parts. Under the first part, the applicants maintain that the Commission wrongly based the checks of July and November 1997 on Article 23 of Regulation No 4253/88, and its letters of 3 April 1998 and the contested decisions on Article 24 of the same regulation, and that it misused its powers. Under the second part, which is presented in the alternative, they claim that the Commission misapplied the aforementioned provisions of Regulation No 4253/88.

The first part of the plea

90 The applicants maintain, first, that the Commission could not rely on the provisions of Articles 23 and 24 of Regulation No 4253/88 as the legal basis for the checks carried out in July and November 1997 and for the contested decisions. Points 5 and 10 of Annex II to the decisions granting the aid had, in fact, precluded application of those general provisions. In Case T-141/99, Vela adds that, given that the Commission had carried out checks in July 1993 and July 1996 before paying, respectively, the second instalment and the balance of the contribution to the Luffa Project, it had exhausted the powers of inspection conferred by point 5 of Annex II to the decision granting the aid for the Luffa Project.

91 The applicants maintain that, in actual fact, the aim of the checks carried out in July and November 1997 was not to verify that the projects had been carried out in accordance with Article 8 of Regulation No 4256/88. Those checks were part of a general investigation into fraud. They were designed to investigate the financial links between the companies involved in the various projects and had focused on the administrative and accounting aspects of the projects, principally on methods of providing the part-financing. The applicants argue that they should therefore have been based on Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European Communities' financial interests (OJ 1995 L 312, p. 1), and Council Regulation (Euratom, EC) No 2185/96 of 11 November 1996 concerning on-the-spot checks and inspections carried out by the Commission in order to protect the European Communities' financial interests against fraud and other irregularities (OJ 1996 L 292, p. 2).

92 In that regard, the Court notes that the parties agree that the checks carried out in July and November 1997 were based on Article 23 of Regulation No 4253/88.

93 Furthermore, it is apparent from the Commission's letters of 10 June and 23 September 1997, referred to in paragraphs 60 and 63 above, and from the reports produced to the Court by the Commission and drawn up, respectively, on 30 September 1997 by UCFP following the July 1997 check (the UCFP report of 30 September 1997') and on 18 December 1997 by the Financial Control DG at the end of the November 1997 check (the Financial Control DG's report of 18 December 1997'), that the checks consisted in establishing that the projects concerned had actually been carried out and investigating the administrative, financial and accounting management of the projects, in particular whether the declared expenditure was in order and whether the beneficiary company had complied with the obligation to provide part-financing laid down in the decisions granting the aid. The Financial Control DG's report of 18 December 1997 also states that, [O]n the basis of the finding that checks carried out in the past on certain projects taken in isolation had not revealed evidence of the existence of irregularities or fraud, the investigation team opted to take an overall approach, preferring to carry out cross-checks between the various projects, the various beneficiaries and the other parties concerned' (page 4 of the report).

94 By its letters of 3 April 1998, referred to in paragraph 65 above, the Commission informed Vela, Sonda and Tecnagrind that, pursuant to Article 24 of Regulation No 4253/88, it was at that time carrying out a review of the assistance which had been granted to them by the EAGGF. It added that the review revealed matters which could constitute irregularities and that it had therefore decided to initiate the procedure provided for in Article 24 of the aforementioned regulation and in point 10 of Annex II to each of the decisions granting the aid.

95 Since it considered that the review of the files relating to the projects had confirmed the existence of irregularities, the Commission, on the basis of Article 24(2) and (3) of Regulation No 4253/88, adopted the contested decisions withdrawing the assistance which was the subject of the award decisions and claiming repayment of the sums received from the EAGGF by the beneficiary companies.

96 It must be determined whether the Commission was justified in relying on Articles 23 and 24 of Regulation No 4253/88 as a basis for the checks and the decisions taken in the cases in point.

97 Under Article 23(2) of Regulation No 4253/88, as amended, Commission officials or servants may carry out on-the-spot checks, including sample checks, in respect of operations financed by the Structural Funds.

98 It is clear from the general nature of its wording that Article 23(2) of Regulation No 4253/88, as amended, provides the Commission's officials and servants with a legal basis for checking projects which are receiving or have received assistance from a Structural Fund. In the absence of any indication to the contrary, it must be held that the provision applies to operations financed by any Structural Fund whatsoever, including the EAGGF, Guidance Section. There is no reason for claiming, as the applicants appear to do in their pleadings, that the provision under consideration applies only to operations which are the subject of financial assistance decided by the Member State concerned, or by the authorities designated by it, and submitted to the Commission by that Member State, and not to projects such as those to which the contested decisions refer, which receive financial assistance decided by the Commission.

99 In the absence of clear information to the contrary, it must also be held that an on-the-spot check based on Article 23(2) of Regulation No 4253/88 may be carried out by any Commission official or servant, may take place during the implementation of the project concerned, - for example, after a request for payment of an instalment of assistance -, or subsequently, and may examine both whether the project has been carried out in accordance with the objectives laid down by the Community legislation and by the decision granting the aid, and also whether the conditions for implementing the project, particularly those relating to its financial and accounting management, are in order.

100 There is no basis for inferring from Article 23(2) of Regulation No 4253/88 that the Commission is prevented from carrying out another on-the-spot check, pursuant to that provision, after the project has actually been completed, even though it has already been the subject of one or more checks of that nature, for example, in connection with requests for payment of the assistance. Nor are Commission officials or servants precluded from carrying out, pursuant to the aforementioned provision, cross-checks relating simultaneously to several projects subsidised by the EAGGF.

101 Any reading of Article 23(2) of Regulation No 4253/88 other than that set out in the two previous paragraphs would have the consequence of rendering redundant the Commission's obligation, under Regulation No 2052/88, to contribute to the effectiveness of the operation carried out by the Community with the help of the Structural Funds in order to attain the objective of economic and social cohesion specified in Article 158 EC.

102 In those circumstances, it must be held that the Commission was permitted, in the cases in point, to use Article 23 of Regulation No 4253/88 as a basis for the on-the-spot checks carried out in July and November 1997 in respect of the projects which are the subject of the contested decisions.

103 Under Article 24(1) of Regulation No 4253/88, as amended, if an operation or measure appears to justify neither part nor the whole of the assistance allocated, the Commission is entitled to conduct an appropriate examination of the case, in particular requesting that the Member State or authorities designated by it to implement the operation submit their comments within a specified period of time.

104 It must therefore be held that the Commission, since it suspected, following the on-the-spot checks carried out in July and November 1997, that irregularities had occurred in the cases in point, was justified in invoking Article 24(1) of Regulation No 4253/88 in order to initiate the examination procedure referred to in its letters to Vela, Sonda and Tecnagrind on 3 April 1998.

105 Under Article 24(2) of Regulation No 4253/88, the Commission may, following the examination referred to in Article 24(1), reduce or suspend assistance in respect of the operation or measure concerned if the examination reveals an irregularity or a significant change affecting the nature or conditions of the operation or measure for which the Commission's approval has not been sought. As the case-law has made clear (judgment of the Court of Justice of 24 January 2002 in Case C-500/99 P Conserve Italia v Commission [2002] ECR I-867, paragraphs 85 to 91), that provision also authorises the Commission to cancel the assistance if the examination provided for under Article 24(1) of Regulation No 4253/88 reveals an irregularity.

106 Article 24(3) of Regulation No 4253/88 provides that any sum received unduly and to be recovered is to be repaid to the Commission, and that interest may be charged on account of late payment.

107 In the light of what has been said in the two previous paragraphs, it must be held that, in the cases in point, the Commission, since it considered that the examination procedure had confirmed the existence of the irregularities suspected following the checks carried out in July and November 1997, was justified in basing the contested decisions, adopted at the end of that examination, on Article 24 of Regulation No 4253/88.

108 The applicants' argument that points 5 and 10 of Annex II to the decisions granting the aid had precluded application of Regulation No 4253/88 to the cases in point, cannot be accepted.

109 Point 5 of Annex II to the decisions granting the aid provides: For the purpose of verifying financial information relating to the various items of expenditure, the Commission may ask to examine any original documentary evidence or a certified copy. The Commission may carry out such an examination directly on the spot or by asking for the documents to be sent to it ...'. Such a provision does no more than make explicit the Commission's power, under Article 23(2) of Regulation No 4253/88, to carry out on-the-spot checks in order to verify, at any moment, whether the financial and accounting management of the project concerned is in order, including after the project has actually been implemented and even if it has been the subject of previous on-the-spot checks.

110 Point 10 of Annex II to the decisions granting the aid states: If any of the aforementioned [financial] conditions is not observed or if actions for which provision is not made in Annex I are undertaken, the Community may suspend, reduce or cancel its own contribution and require reimbursement of the sums paid. If such reimbursement is considered necessary, the Community may require payment of interest. In those circumstances, the beneficiary will be given the opportunity to submit its observations within a time limit set by the Commission before it suspends, reduces or cancels the assistance or requests reimbursement.' As the applicants themselves state in their application, that provision repeats the wording of Article 24(2) and (3) of Regulation No 4253/88.

111 Accordingly, the provisions contained in points 5 and 10 of Annex II to the decisions granting the aid must be regarded not as constituting an independent legal basis such as to oust application of the general provisions of Articles 23 and 24 of Regulation No 4253/88, but as offering the Commission an additional basis on which to adopt the measures and decisions which it took in the cases in point. The Commission was therefore right to invoke, in its letters of 3 April 1998, both Article 24 of Regulation No 4253/88 and point 10 of Annex II to the decisions granting the aid as forming the basis of its decision to initiate the examination procedures in respect of the Luffa, Girasole, Vetiver and Ricino Projects.

112 The applicants' contention that the checks carried out in July and November 1997 should have been based on Regulations Nos 2988/95 and 2185/96 likewise cannot be upheld.

113 Apart from the fact that that contention demonstrates the inconsistency in the reasoning of the applicants, who maintain, on the one hand, that the Commission could not rely on points 5 and 10 of Annex II to the decisions granting the aid and, on the other hand, that it should have invoked the provisions of the regulations referred to in the previous paragraph, it should be noted that, according to the 13th recital in the preamble to Regulation No 2988/95, the provisions laid down by that regulation apply to supplement existing provisions'. Under Article 9(2) of the regulation, the Commission may carry out checks and inspections on the spot under the conditions laid down in the sectoral rules'; Article 10 of the regulation states that additional general provisions relating to checks and inspections on the spot shall be adopted later'.

114 Those additional general provisions were laid down by Regulation No 2185/96. According to the sixth recital in that regulation, they do not affect the application of Community sectoral rules as referred to in Article 9(2) of the said Regulation [No 2988/95]'. Article 1 of the same regulation provides that [t]his Regulation lays down the additional general provisions within the meaning of Article 10 of Regulation ... No 2988/95' and that, [w]ithout prejudice to the provisions of the Community sectoral rules, [it] shall apply to all areas of the Communities' activity'.

115 It is clear from what has been said in the two previous paragraphs that the provisions of Regulations Nos 2988/95 and 2185/96 establishing the Commission's powers to carry out on-the-spot checks and inspections are designed to apply on a supplementary basis, without prejudice to the Community sectoral rules. They cannot therefore set aside the legal bases which those rules afford to the Commission for carrying out on-the-spot checks in order to protect the Community's financial interests.

116 Since, in the cases in point, Article 23 of Regulation No 4253/88 - the regulation whose categorisation as Community sectoral legislation in the sense contemplated in the aforementioned provisions of Regulations Nos 2988/95 and 2185/96 is not called into question by the applicants - affords the Commission a suitable legal basis for the on-the-spot checks carried out in July and November 1997, it did not need to invoke those latter provisions for that purpose.

117 At the end of the above analysis (paragraphs 92 to 116), it is clear that Articles 23 and 24 of Regulation No 4253/88 provided a suitable and adequate legal basis for the on-the-spot checks conducted by the Commission in July and November 1997 in respect of the projects which are the subject of the contested decisions, for the initiation of an examination procedure relating to those various projects and also for the adoption of the contested decisions. The applicants' arguments set out in paragraphs 90 and 91 above must therefore be rejected.

118 Second, the applicants maintain that the Commission should have informed them properly of the legal basis, objective and context of the checks carried out in July and November 1997, and also of the legal basis on which it intended to found the contested decisions, so as to allow them to verify the legality of the measures the Commission intended to take and to organise their defence effectively. They maintain that, as they did not know that the checks were going to relate to the method of part-financing the projects, they were unable to secure the cooperation of accounting and administrative experts and legal advisers who would have helped them to provide the requisite explanations.

119 However, so far as concerns, first of all, the advising of Vela, Sonda and Tecnagrind of the legal basis, objective and context of the checks carried out in July and November 1997, the Court observes, with regard to Cases T-141/99 and T-142/99, that the Commission, in its letters to Vela and Sonda dated 10 June 1997 notifying them of its intention to carry out an on-the-spot check of the Luffa and Girasole Projects (see paragraph 60 above), stated that the basis for the planned check was Article 23 of Regulation No 4253/88. It asked Vela and Sonda to arrange for its officials to have access, during the check, to all the documentation, especially that relating to the accounts, and supporting documents connected with their project and to meet the persons able to explain them.

120 In its letters to those companies dated 23 September 1997 (see paragraph 63 above), the Commission informed them that, starting on 10 November 1997, its staff would carry out an on-the-spot check of the Luffa and Girasole Projects pursuant to Article 23 of Regulation No 4253/88. It stated that, during that check, its officials wished to talk to their legal representatives and to the persons responsible for the technical and administrative aspects of the project. It asked them to make available to its officials, at the time of the inspection, the originals of a series of documents mentioned in an appendix, relating to the company responsible for the project and to the project itself, and also any other document relating to the above documents which proved necessary to the check. It also informed them that it would be represented by, amongst others, staff from the Financial Control DG and UCFP, and that representatives of the Ragioneria Generale dello Stato were required to participate in the check. Finally, it asked them to forward to it immediately a copy of their balance sheets - for the years 1992 to 1996, in the case of Vela, and 1993 to 1996, in the case of Sonda -, a copy of the detailed statement of expenditure itemised in accordance with the financial plan contained in the decisions granting the aid for the Luffa and Girasole Projects respectively, and a copy of the statement of expenditure relating to the contracts concluded by Vela with Tecnagrind, Sonda and Faretra, in respect of the Luffa Project, and to the contracts concluded by Sonda with Tecnagrind, Vela and Faretra, in respect of the Girasole Project.

121 As regards Cases T-150/99 and T-151/99, the Court points out that the Commission, in its letter to Tecnagrind of 10 June 1997 announcing its intention to carry out an on-the-spot check of the Vetiver and Ricino Projects (see paragraph 60 above), informed the company that the check, which was planned for 22 and 23 July 1997, would be conducted pursuant to Article 23 of Regulation No 4253/88. It stated that, at the time of the check, it wished to meet the company's legal representative and also the persons responsible for the technical, administrative and financial implementation of the project. It requested that, at the time of the inspection, its officials should be provided with the originals of a series of documents mentioned in an appendix, relating to the company responsible for the project and to the project concerned, and also any other document relating to the above documents which proved necessary to the check. It also informed them that it would be represented by, amongst others, staff from the Financial Control DG and UCFP, and that representatives of the Intervención General de la Administración del Estado were required to participate in the check.

122 It should be added, as far as concerns Case T-150/99, that Tecnagrind has produced to the Court the copy of the letter sent to it by the Commission on 12 June 1997, which shows that the Commission, in reply to Tecnagrind's request for payment of the balance of the EAGGF grant for the Vetiver Project, stated, as its reason for deciding to suspend the payment, that it was carrying out a general technical and accounting inspection of the projects financed under Article 8 of Regulation No 4256/88 (see paragraph 47 above).

123 It is clear from what has been said in the four previous paragraphs that Vela, Sonda and Tecnagrind received sufficiently clear and precise notification of the fact that the on-the-spot checks planned by the Commission were based on Article 23 of Regulation No 4253/88 and would consist in monitoring the financial and accounting management of the projects overall, including compliance with the obligation to provide part-financing laid down in the decision granting the aid. That information also enabled the companies to realise that the Commission's officials intended to carry out cross-checks on the various projects of which the companies were the instigators.

124 The fact that it was only after the July and November 1997 checks that the Commission, in its letters of 3 April 1998, expressed criticism - in the light of the findings made during those checks - of the method of part-financing adopted by the beneficiary companies and invited them to submit their comments on the matter cannot be regarded as indicating a lack of clarity in the Commission's letters of 10 June and 23 September 1997 with regard to the objective of the checks announced therein.

125 Next, as far as concerns the advising of Vela, Sonda and Tecnagrind of the legal basis on which the Commission intended to adopt the contested decisions, the Court notes, with respect to Cases T-141/99 and T-142/99, that, in its letters to Vela and Sonda dated 10 June 1997 (see paragraph 60 above), the Commission drew their attention to the measures which might be taken under Article 24 of Regulation No 4253/88 following the examination procedure.

126 It is also clear from the letter which the Commission sent to Vela, Sonda and Tecnagrind on 3 April 1998 (see paragraph 65 above) that it told them that it was at the time carrying out an examination within the meaning of Article 24 of Regulation No 4253/88 and that it had decided, in the light of matters which might constitute irregularities, to initiate the procedure laid down by that provision and by point 10 of Annex II to the aid decision concerned. After stating its objections, it pointed out that they might constitute an irregularity or significant change within the meaning of the aforementioned provision of Regulation No 4253/88. It also drew the attention of the beneficiary companies to the measures which it might find it necessary to take pursuant to paragraphs 2 and 3 of that provision if, at the end of the examination, the irregularities were confirmed.

127 The information reproduced in the two previous paragraphs was sufficiently clear and specific to enable Vela, Sonda and Tecnagrind to ascertain the legal basis on which the Commission was initiating the examination procedure and the decisions it was likely to take at the end of that procedure. It should also be noted that, in their letter of 19 June 1998 containing their comments on the claims made by the Commission in its letters of 3 April 1998 (see paragraph 68 above), the applicants were already maintaining that the Commission was wrong to rely on Articles 23 and 24 of Regulation No 4253/88, which goes to show that they were clearly aware of the provisions on which the Commission based its action.

128 From the foregoing analysis (paragraphs 119 to 127), it is clear that the applicants' arguments set out in paragraph 118 above must be rejected.

129 Third, the applicants argue that the difference between the declared basis and aim of the July and November checks, on the one hand, and the actual basis and aim of those checks, on the other, reveals a misuse of powers justifying annulment of the contested decisions.

130 In that regard, the Court points out that misuse of powers has a specific definition in Community law and that it refers to the adoption, by a Community institution, of a measure taken with the exclusive purpose, or at any rate the main purpose, of achieving an end other than that stated or evading a procedure specifically prescribed by the Treaty for dealing with the circumstances of the case (see, in particular, Case C-248/89 Cargill v Commission [1991] ECR I-2987, paragraph 26; Case C-285/94 Italy v Commission [1997] ECR I-3519, paragraph 52; Case T-143/89 Ferriere Nord v Commission [1995] ECR II-917, paragraph 68, and Joined Cases T-551/93 and T-231/94 to T-234/94 Industrias Pesqueras Campos and Others v Commission [1996] ECR II-247, paragraph 168).

131 In the present case, it is clear that the on-the-spot checks made by the Commission in July and November 1997 were based - as the Commission told Vela, Sonda and Tecnagrind in its letters informing those companies of its intention to carry out the checks - on Article 23 of Regulation No 4253/88 and sought to verify that the financial and accounting management of the project was being properly conducted in accordance with the provisions of that article.

132 The applicants' argument alleging misuse of powers must therefore be rejected.

133 In the light of the above considerations, the first part of the first plea must be rejected.

The second part of the plea

134 The applicants claim that the Commission misapplied the provisions of Articles 23 and 24 of Regulation No 4253/88 in the present cases.

135 First, Vela maintains, in Cases T-141/99 and T-142/99, that, contrary to the requirements laid down by Article 23 of Regulation No 4253/88, the Commission did not carry out sample checks during the November 1997 check. Furthermore, that check was a repeat of the checks carried out in July 1993 and July 1996.

136 However, the Court points out, first, that the first subparagraph of Article 23(2) of Regulation No 4253/88 provides that Commission officials or servants may carry out on-the-spot checks, including sample checks', in respect of operations financed by the Structural Funds. That provision refers to the technique of sample checking by way of example and therefore does not preclude the Commission's officials or servants from carrying out more thorough on-the-spot checks than sample checks, depending on the circumstances.

137 Second, it should be pointed out that, under the fourth subparagraph of Article 23(2) of Regulation No 4253/88, the Commission is to ensure that any checks that it carries out are performed in a coordinated manner so as to avoid repeating checks in respect of the same subject matter during the same period'.

138 Without its being necessary to consider whether a possible repetition of the Commission's checks in respect of the same subject-matter during the same period is capable, as such, of affecting the legality of those checks and of the decision taken by the Commission at the end of them, it should be pointed out that, in the present case, there is nothing before the Court to show that the Luffa and Girasole Projects were subject, in November 1997, to checks by the Commission other than the on-the-spot check carried out by officials of the Agriculture DG, the Financial Control DG and UCFP.

139 As regards the on-the-spot checks made by the Commission in July 1993 and July 1996, it must be observed, first, that those checks related to a different period from the November 1997 check.

140 Next, as Vela itself points out in its application in Case T-141/99, they sought to verify compliance with the conditions laid down in Annex II to the decision granting the aid for the Luffa Project, fulfilment of which was a prerequisite for payment of the second instalment of the assistance for that project, in the case of the July 1993 check, and payment of the balance of the assistance, in the case of the July 1996 check. By contrast, the aim of the November 1997 check was to verify the regularity of the accounting and financial management of the Luffa and Girasole Projects in the light of new matters - which might reveal irregularities in that management - revealed during a check on an Irish project made by the Court of Auditors in January 1997 and during the check carried out by the Commission at Tecnagrind in July 1997 in respect of the Vetiver and Ricino Projects.

141 Finally, the checks carried out in July 1993 and July 1996 related exclusively to the Luffa Project, so that Vela's argument that the November 1997 check is a repeat check has no factual basis in so far as concerns Case T-142/99.

142 Vela's argument set out in paragraph 135 above must therefore be rejected.

143 Second, the applicants maintain that the Commission did not inform them, at the time, whether a copy of the letters which it had sent them of 3 April 1998 had been sent to the national authorities concerned and whether those authorities had been given a time-limit for submitting their observations on the allegations made in those letters. They learned only through the contested decisions that the Commission had asked the national authorities to submit such observations.

144 Stressing the fundamental importance, under Article 23 of Regulation No 4253/88 and the case-law, of the duty to consult the Member State at the administrative procedure stage, the applicants claim that, by involving the national authorities only at the stage of the submission of observations on its claims of irregularity and by not informing the applicants, during that procedure, that it had invited the authorities to submit its observations, the Commission prevented a proper exchange of arguments between the applicants and those authorities.

145 However, the Court points out, first, that the letters sent by the Commission on 10 June 1997 to Tecnagrind (see paragraph 60 above) and on 23 September 1997 to Vela and Sonda (see paragraph 63 above) respectively, the UCFP report of 30 September 1997 and the Financial DG report of 18 December 1997 corroborate the fact that representatives of the Spanish authorities - officials from the Intervención General de la Administración del Estado - and the Italian authorities - officials from the Ragioneria Generale dello Stato - took part in the July 1997 check and the November 1997 check respectively.

146 Those facts show that, in accordance with the second subparagraph of Article 23(2) of Regulation No 4253/88, the Commission, before carrying out the on-the-spot checks, informed the Member States concerned, which were consequently able to be represented at those checks by officials from their administrative authorities, and are such that the applicants' claim that the Member States had been involved in the procedure leading to the adoption of the contested decisions only at the stage of the submission of observations on the claims of irregularities made by the Commission following the checks must be rejected.

147 Next, the Court points out that Article 24(1) of Regulation No 4253/88 requires the Commission to request the Member State concerned to submit its comments within a specified period of time on the case which it submits to a suitable examination if it considers that the implementation of the operation or measure in question does not justify the assistance allocated. On the other hand, Article 24 of the regulation does not require the Commission to inform the beneficiary of the assistance that it has complied with that obligation. In those circumstances, the applicants' argument alleging infringement of Article 24 of Regulation No 4253/88 owing to the Commission's failure to inform them in its letters of 3 April 1998 that it had invited the national authorities concerned to submit, within a specified period of time, their comments on the claims made in those letters has no legal basis and must therefore be rejected.

148 For the sake of completeness, it should be pointed out that the Commission had told Vela, Sonda and Tecnagrind, in its letters of 3 April 1998, that it was carrying out an examination of the assistance pursuant to Article 24 of Regulation No 4253/88 (see paragraph 65 above). In their letters of 19 June 1998 (see paragraph 68 above), the applicants reproduced in full the provisions of Article 24(1) of the regulation. They were therefore aware of the fact that the Commission was required to request the Member States concerned to submit their comments within a specific period of time. In those circumstances, it was open to them to contact the competent authorities in their Member States in order to confirm that that obligation had been fulfilled and to initiate, if they considered it necessary, an exchange of arguments with those authorities before the end of the period allowed by the Commission for submitting comments on the claims contained in its letters of 3 April 1998.

149 In their reply, the applicants deny that the documents enclosed by the Commission with its defence in order to show that the national authorities concerned were requested, on 3 April 1998, to submit their comments on the contents of the letters sent on the same day to Vela, Sonda and Tecnagrind, have any evidential value.

150 In Cases T-141/99 and T-142/99, Vela points out, first, that the document on this point enclosed by the Commission with the defence it lodged in those two cases is neither dated nor signed.

151 However, the Court notes that, in an annex to its rejoinders lodged in the two cases concerned, the Commission produced a copy of a letter dated 3 April 1998, signed by Mr G. Legras, the Director-General of the Agriculture DG, addressed to the Permanent Representation of the Italian Republic at the European Union, inviting that representation to submit its comments on the claims of irregularities in respect of the Luffa and Girasole Projects. The objection raised by Vela must therefore be rejected.

152 In all four cases, the applicant points out, secondly, that the copies, enclosed with the Commission's pleadings, of its letters of 3 April 1998 to the Permanent Representations of the Italian Republic and the Kingdom of Spain are not accompanied by an acknowledgment of receipt confirming that they were actually received by those representations. The applicants maintain that, consequently, the Commission has not proved that it has complied with its obligation under Article 24(1) of Regulation No 4253/88.

153 However, in connection with a measure of organisation of procedure, the Commission produced to the Court a copy of the fax sent to it on 18 February 2002 by the Permanent Representation of the Italian Republic confirming that the Commission's letter of 3 April 1998 requesting it to submit its comments on the claims of irregularities in respect of the Luffa and Girasole Projects arrived at the Representation on 9 April 1998 and was registered under number 1781. The Commission also produced a copy of the letter sent to it on 12 February 2002 by the Permanent Representation of the Kingdom of Spain affirming, and attaching the document proving the point, that the Commission's letter of 3 April 1998 requesting it to submit its comments of the claims of irregularities in respect of the Vetiver and Ricino Projects was received by the Representation on 7 April 1998 and registered under number A 14-13535.

154 The applicants' argument that there was no proof that the Commission's letters of 3 April 1998 were actually received by the Permanent Representations concerned must therefore be rejected.

155 Third, the applicants claim that the contested decisions do not specify whether and, if appropriate, to what extent, the Commission took into account the comments made by the national authorities concerned.

156 In that regard, the Court points out, first, that Article 24(1) of Regulation No 4253/88 requires the Commission - if an operation or measure appears to justify neither part nor any of the assistance allocated and causes it to carry out a suitable examination of the case - to request the Member State concerned to submit its comments within a specified period of time.

157 That provision must be interpreted as requiring the Commission to give the Member State concerned the opportunity of submitting its comments within a given period of time and not to take any decis