WRITTEN QUESTION E-1227/01

by António Campos (PSE) and Paulo Casaca (PSE) to the Commission

(26 April 2001)

Subject: Wine fraud in Portugal

On 29 March 2001 the Portuguese press reported that 25 million litres of wine had been confiscated by the Portuguese authorities on grounds of serious presumption of fraud.

Did the Portuguese authorities inform the EU institutions of this? Has the Commission monitored this procedure? Could it provide an estimate of the volume of suspected adulterated wine held by the company in question? Can it guarantee that this company will not be granted any Community subsidy so long as such strong suspicions remain or in the event that they are confirmed?

Does the Commission not consider that this case has further highlighted the urgent need for immediate administrative and legislative action to be taken to combat fraud and adulteration of foodstuffs, such as milk, wine, oil and meat, given that such activities have taken on enormous proportions and had an extremely harmful effect on consumers, farmers, the Community budget and the reputation of Community institutions worldwide?

Supplementary answer given by Mr Fischler on behalf of the Commission

(10 September 2001)

The European Anti-Fraud Office (OLAF) says that it asked the Portuguese authorities on 10 April 2001 for further particulars following various reports in the Portuguese press in March. The Portuguese authorities replied that the information in their possession led them to conclude that the case did not involve any Community monies; they also pointed out that the case was sub judice. The case did not need to be communicated under Council Regulation (EEC) No 595/91 of 4 March 1991 concerning irregularities and the recovery of sums wrongly paid in connection with the financing of the common agricultural policy and the organisation of an information system in this field and repealing Regulation (EEC) No 283/72(1). The Regulation stipulates that, during the two months following the end of each quarter, Member States are to communicate to the Commission a list of irregularities which have been the subject of initial administrative or legal findings.

Member States have the prime responsibility for ensuring that payments under the European Agricultural Guidance and Guarantee Fund (EAGGF) - Guarantee Section have been made correctly and that a given benficiary does not constitute an excessive risk. That entails, if necessary, taking the measures provided for in Council Regulation (EC) No 1469/95 of 22 June 1995 on measures to be taken with regard to certain beneficiaries of operations financed by the Guarantee Section of the EAGGF(2) and Commission Regulation (EC) No 745/96 of 24 April 1996 laying down detailed rules for the application of Council Regulation (EC) No 1469/95(3).

The risk of fraud and abuse is constantly borne in mind when drafting Community legislation and implementing rules. All regulations setting up aid schemes define the products or beneficiaries eligible for aid and stipulate the type and frequency of controls to be carried out by Member States. A balance always has to be struck between a scheme's estimated risk and the control provisions to be laid down. In some instances 100 % control rates may be justified, and these are in fact occasionally imposed. This would clearly not be justified as a general rule, however, as the cost would far outweigh the benefit.

Under the common agricultural policy (CAP), legislation - including control provisions - has been improved over time to reduce the risk of fraud and abuse. Control rates are clearly defined and some schemes (such as aid for liquid skimmed milk used in feed and consumption aid for olive oil) have been abolished inter alia because of their inherent risk. It should be pointed out that there are instances in which the outcome of negotiations at the Council has been to alter the initial Commission proposal such that the legislation finally adopted is more open to abuse than if the Commission proposal had been left unchanged.

The radical shift in the CAP towards far more direct aid to farmers and far less aid through market measures has also made it possible to set up the highly effective Integrated Administration and Control System (IACS).

The above points demonstrate how the Commission takes fraud prevention into account and, where necessary, proposes the requisite legal and administrative measures. Although the Commission does not share the Honourable Members' view that there is an urgent need to take further measures, it continues to pay close attention to preventing fraud and product adulteration.

(1) OJ L 67, 14.3.1991.

(2) OJ L 145, 29.6.1995.

(3) OJ L 102, 25.4.1996.