WRITTEN QUESTION E-1843/97 by Daniela Raschhofer (NI) to the Commission (30 May 1997)

Subject: Milk quotas in Italy

It has emerged from the work of a committee of inquiry of the Italian parliament into milk quotas in Italy that producers have been making false declarations of volumes produced for years, quoting amounts that do not actually exist.

How long has Italy been submitting false declarations on the level of milk quotas?

What damage has the EU suffered as a result?

What action has the Commission taken to prevent such fraud in future?

What penalties have been imposed on Italy?

Has Italy been fined?

If so, by how much and have the fines been paid?

Have there been similar incidents in other Member States, in particular Austria?

How does the Commission normally deal with a country's internal documents revealing misuse of EU funds?

Answer given by Mr Fischler on behalf of the Commission (17 July 1997)

Before 1993-94 Italy did not apply milk quotas correctly. In particular individual quotas were not assigned and figures for deliveries to purchasers came not from the purchasers' declarations but from national statistics or producer associations.

The implications of this failure emerged with clearance of the European Agricultural Guidance and Guarantee Fund (EAGGF) Guarantee Section accounts and were quantified on the basis of common conclusions of the Council and Commission of 21 October 1994. Italy paid the Community an additional levy for 1989 to 1993 of some LIT 3 620 billion.

The first year of proper application of milk quotas in Italy was 1993/94. For assignment of individual quotas the reference periods were 1989 (A quota) and 1992 (B quota). In the first year quota allocations substantially exceeded the national guaranteed quantity (12.5 instead of 9.9 million tonnes) but the requirement to fall within the national quota by 1 April 1995 was met.

It is only since then, i.e. from 1995/96 onwards, that any additional levy due on overrun of the national quota has had to be paid by producers instead of by the Italian Treasury as previously.

From the data notified in the questionnaire included in Article 8 of Regulation (EEC) No 536/93 ((OJ L 57, 10.3.1993. )) the EAGGF has determined the supplementary levy amount due by Italy for 1995/96 to be LIT 356 billion. An amount of LIT 366 billion has already been credited to the Commission, LIT 316 billion by the State and LIT 50 billion by the debtors.

A visit by Commission inspectors to Italy from 9 to 13 June 1997 found that payments made by debtors amounted to LIT 72 billion, i.e. 20% of the total, and that this percentage was merely an average: some purchasers had paid almost all of the additional levy and others who had appealed to the regional administrative tribunal had paid nothing.

It was possible to verify that in the case of producers and purchasers who had lodged an appeal the additional levy was secured by a bank guarantee.

The doubts raised by the findings of the Italian Government's committee of inquiry relate to two important aspects of the milk quota system, i.e. assignment of quotas to producers and the figures for delivered quantities declared by purchasers for 1995/96.

To clarify the situation the committee of inquiry asked purchasers once again to provide, on a new form, their figures for 1995/96 and 1996/97, specifying the delivery invoices and herds involved and the signature of each producer against the data. The committee's conclusions are not yet finalized. Italy will have to notify any fraud or irregularity found and act in accordance with the law in force at both Community and national level.

Irrespective of the outcome of this exercise there is no risk of loss of funds to the EAGGF budget since the additional levy due has already been credited for 1995/96 and the earlier period (1989/93). Through its accounts clearance procedure the Commission will not fail to monitor further developments.

As regards other Member States, generally speaking inspections are made to verify that the checks required by Community legislation are being properly executed by the national authorities.

In Austria, the first period of application of the milk quota system was 1995/96. An inspection visit from 11 to 14 November 1996 revealed no significant problems.

Member States are required to make quarterly notification of irregularities known to them affecting Community resources. The Commission closely monitors the recovery of all irregular charges to the Community budget.