CELEX: 62002CC0287
Language: en
Date: 2005-01-20
Title: Opinion of Mr Advocate General Jacobs delivered on 20 January 2005. # Kingdom of Spain v Commission of the European Communities. # EAGGF - Clearance of accounts - 2001 financial year - Detailed implementing rules. # Case C-287/02.

OPINION OF ADVOCATE GENERAL
      JACOBS
      delivered on 20 January 2005 (1)
      
      Case C-287/02
      Kingdom of Spain
      v
      Commission of the European Communities
      1.     In the present case, Spain seeks the partial annulment of Commission Decision 2002/461/EC of 12 June 2002 on the clearance
         of the accounts of Member States’ expenditure financed by the European Agricultural Guidance and Guarantee Fund (EAGGF), Guarantee
         Section, for the 2001 financial year (‘the contested decision’). (2)
      
      2.     Specifically, Spain contests the issuing of amendments under the procedure for clearance of the accounts of certain nationally
         accredited paying agencies and the correction issued for the accounts of one such paying agency, Castilla-La Mancha. 
      
       The legislative framework 
      3.     The Common Agricultural Policy is financed according to the rules set out in Regulation No 1258/99 (‘the Basic Regulation’) (3) which provides that the Guarantee Section shall finance intervention intended to stabilise the agricultural markets, undertaken
         according to Community rules within the framework of the common organisation of those markets. (4)
      
      4.     The preamble to the Basic Regulation states that:  ‘two types of decisions should be established, one concerning the clearance
         of the Guarantee Section of the Fund, the other determining the consequences, including financial corrections, to be drawn
         from the results of the checks on conformity, with Community rules, of the expenditures’. (5)
      
      5.     The first type of decision, on clearance, is governed by Article 7(3) of the Basic Regulation and the second type of decision,
         on compliance, is governed by Article 7(4) of that regulation. 
      
      6.     With regard to decisions on clearance, Article 7(3) requires the Commission to clear the accounts of the paying agencies before
         30 April of the year following the financial year concerned, on the basis of the information referred to in Article 6(1)(b). 
         That provision requires Member States to transmit to the Commission annual accounts of the paying agencies relating to transactions
         financed by the Guarantee Section, accompanied by the information required for clearance and an attestation regarding the
         integrality, exactitude and veracity of the accounts transmitted.
      
      7.     Article 7(3) further provides that the accounts clearance decision may not prejudice the adoption of a subsequent decision
         by the Commission regarding compliance with Community rules of expenditure. 
      
      8.     Such decisions on compliance are governed by Article 7(4), the first paragraph of which requires the Commission to ‘decide
         on the expenditure to be excluded from … Community financing … where it finds that expenditure has not been effected in compliance
         with Community rules’. 
      
      9.     Decisions on compliance are to be taken in accordance with the following procedure set out in Article 7(4): 
      ‘Before a decision to refuse financing is taken, the results of the Commission’s checks and the replies of the Member State
         concerned shall be notified in writing, after which the two parties shall endeavour to reach agreement on the action to be
         taken.
      
      If no agreement is reached, the Member State may ask for a procedure to be initiated with a view to mediating between the
         respective positions within a period of four months, the results of which shall be set out in a report sent to and examined
         by the Commission, before a decision to refuse financing is taken.
      
      The Commission shall evaluate the amounts to be excluded having regard in particular to the degree of non-compliance found. 
         The Commission shall take into account the nature and gravity of the infringement and the financial loss suffered by the Community.’
         
      
      10.   In addition to the procedures provided in the Basic Regulation, an accounts clearance decision and a decision on compliance
         with Community rules of expenditure are, according to Article 7(5) of that regulation, to be further regulated by detailed
         rules adopted separately.  Such additional rules have been adopted in Regulation No 1663/95 (‘the Implementing Regulation’). (6)  With regard to the accounts clearance decision, the following further rules are delineated. 
      
      11.   The information to be supplied by the MemberState, (7) which includes annual accounts of expenditure charged to the Guarantee Section, shall be sent to the Commission by 10 February
         of the year following the end of the financial year which they concern. (8)
      
      12.   The accounts clearance decision pursuant to Article 7(3) of the Basic Regulation is to determine the amount of annual expenditure
         effected in each MemberState which shall be recognised as being chargeable to the EAGGF, without prejudice to a later decision
         on compliance with Community rules of expenditure. (9)  Article 7(1) of the Implementing Regulation continues: 
      
      ‘The amounts which, as a result of the above decision, are recoverable from, or payable to, each Member State shall be established
         by deducting the advances paid in respect of the financial year concerned from the expenditure recognised for the same year
         according to the first subparagraph.’ 
      
      13.   Article 7(2) of the Implementing Regulation provides that: 
      ‘The Commission shall communicate to the MemberState concerned the results of its verifications of the information supplied,
         together with any amendments it proposes, before 31 March following the end of the financial year.’ 
      
      14.   With regard to a decision on compliance with Community rules of expenditure pursuant to Article 7(4) of the Basic Regulation,
         Article 8(1) of the Implementing Regulation provides the following detailed rules relating to the negotiation procedure between
         the MemberState concerned and the Commission which leads to the adoption of such a decision: 
      
      ‘If, as a result of an enquiry, the Commission considers that expenditure has not been effected according to Community rules,
         it shall notify the Member State concerned of the results of its checks and indicate the corrective measures to be taken to
         ensure future compliance. 
      
      The communication shall refer to this regulation.  The MemberState shall reply within two months and the Commission may modify
         its position in consequence … 
      
      After expiry of the period allowed for reply, the Commission shall invite the MemberState to a bilateral discussion and the
         parties shall endeavour to reach agreement on the measures to be taken and on an evaluation of the gravity of the infringement
         and the financial loss to the Community.  Following that discussion and any deadline after the discussion fixed by the Commission,
         after consultation of the Member States, for the provision of further information or, where the Member State does not accept
         the invitation to a meeting before the deadline set by the Commission, after that deadline has passed, the Commission shall
         formally communicate its conclusions to the Member State …  Without prejudice to the fourth subparagraph of this paragraph,
         that communication shall include an evaluation of any expenditure the Commission intends to exclude under Article 7(4) of
         Regulation (EC) No 1258/99. 
      
      The MemberState shall inform the Commission as soon as possible of the corrective measures adopted to ensure compliance with
         Community rules and the date of their entry into force.  The Commission shall, as appropriate, adopt one or more decisions
         under Article 7(4) of Regulation (EC) No 1258/99 to exclude expenditure affected by non-compliance with Community rules up
         to the date of entry into force of the corrective measures.’ 
      
        
       Factual background 
      15.   After receiving annual accounts of expenditure effected by the Spanish paying agencies for the 2001 financial year, the Commission
         communicated to the Spanish authorities the results of its checks in a letter of 27 March 2002.  That letter stated that it
         was a communication pursuant to both Article 7(2) and Article 8(1) of the Implementing Regulation.  It proposed that the accounts
         of several paying agencies including Navarra would be cleared before 30 April.  The Commission did not at that time propose
         clearance of the accounts of paying agencies FEGA, Castilla-La Mancha, Baleares, La Rioja, and Pais Vasco, for which further
         investigation and information were required before an accounts clearance decision could be made.  An annex to the letter specified
         in each case the nature of any further investigation and information required prior to a proposal for clearance, together
         with the results of the Commission’s checks. 
      
      16.   At a meeting of the EAGGF Committee on 19 April 2002 attended by the Spanish authorities, the Commission circulated a Summary
         Report containing the results of its checks and a draft of the contested decision. 
      
      17.   The Spanish authorities subsequently sent several responses to the Commission’s letter of 27 March and to the Summary Report
         and draft decision.  In a letter dated 22 April 2002, the Spanish authorities communicated to the Commission their observations
         on the draft decision and on the report.  In a letter dated 25 April 2002, the Spanish authorities conveyed observations to
         the Commission concerning the accounts of Castilla-La Mancha.  Based on a written communication issued in response to the
         draft decision on 23 April 2002 by its certifying body, those observations related both to the clearance of its accounts for
         the financial year 2001 and to the procedure governing any later decision on compliance.  The Spanish authorities noted that
         the certifying body claimed to have obtained sufficient guarantees that the accounts were complete, accurate and true; that
         it proposed their clearance; and that the correction proposed by the Commission should be revised since the error related
         simply to set-aside subsidies for irrigated maize and not additionally to compensatory allowances as suggested by the Commission. 
         The Spanish authorities therefore contended that the correction should be assessed at EUR 17 855 rather than at EUR 1 831 526.
         
      
      18.   On 11 June 2002, the Spanish authorities sent to the Commission documents relating to the accounts of the paying agency Navarra
         and their compliance with Community rules of expenditure. 
      
      19.   The Commission issued the contested decision on 12 June 2002. The decision, which stated that it was based on Article 7(3)
         of the Basic Regulation, cleared the accounts of all Spanish paying agencies except for those of FEGA and Pais Vasco, and
         included amendments to the cleared accounts.  The amendments appear to address errors in certain payments made by Castilla-La
         Mancha, Navarra and Pais Vasco which were identified in the Summary Report. 
      
      20.   Subsequently, the Spanish authorities made further replies to the Commission’s letter of 27 March 2002, sending documents
         to the Commission which related to the accounts of Castilla-La Mancha and Pais Vasco and their compliance with Community rules
         of expenditure. 
      
      21.   Spain then brought the current proceedings seeking partial annulment of the contested decision on the grounds, first, that
         it infringed the Implementing Regulation and, secondly, that the correction proposed for the accounts of Castilla-La Mancha
         was incorrect. 
      
        
       Alleged infringement of the Implementing Regulation 
       Principal plea in law 
      22.   Spain alleges that the contested decision has been tainted by an infringement of the Implementing Regulation in that its authorities
         were not properly consulted by the Commission on the nature of the amendments contrary to Article 8(1) of that regulation. 
         In particular the Commission infringed that provision by adopting the contested decision without considering the Spanish authorities’
         response to the proposed decision, without inviting Spain to a bilateral discussion to evaluate the gravity of the accounting
         error and without allowing it the opportunity to request the initiation of a conciliation procedure if relevant. 
      
      23.   The Commission submits that the accounts clearance procedure, which is regulated by Article 7(3) of the Basic Regulation and
         Article 7 of the Implementing Regulation, should be distinguished from the procedure relating to checks on compliance with
         Community rules of expenditure, which is regulated by Article 7(4) of the Basic Regulation and Article 8 of the Implementing
         Regulation.  The contested decision, the preamble to which states that it is ‘without prejudice to further examination according
         to Article 7(4) of [the Basic] Regulation’, (10) is governed by the accounts clearance procedure, which was followed in all respects before the decision was issued. 
      
      24.   The Commission then considers the alleged infringement of Article 8(1) of the Implementing Regulation.  It notes that the
         procedure set out in that provision to check compliance with Community rules of expenditure was initiated by its letter of
         27 March 2002.  However, given the distinction between that procedure and the accounts clearance procedure, it emphasises
         that the correction contained in the contested decision is provisional.  A definitive decision to refuse financing can be
         made only following the exchange of views required under Article 8(1). 
      
      25.   As confirmation of its competence to propose amendments in the accounts clearance decision which are essentially provisional
         until completion of the Article 8(1) procedure, the Commission refers to case-law in which the Court has made clear the Commission’s
         entitlement, while awaiting the final decision on the clearance of accounts, to reduce the payment of amounts due under advances
         when it has established that the national body had, contrary to Community law, effected certain expenditure chargeable to
         the Fund. (11)  The judgments cited pre-dated the establishment of parallel procedures separately governing the accounts clearance decision
         under Article 7(3) of the Basic Regulation and the decision to refuse financing on the ground of non-compliance with Community
         rules of expenditure under Article 7(4) thereof.  The Commission submits that, by analogy with the system so endorsed by the
         Court of provisional deductions pending final clearance, it is similarly entitled to effect provisional deductions in the
         clearance decision pending a definitive refusal to finance.
      
        
       Assessment 
      26.   At the outset, it should be noted that the Commission’s submission that it adhered to the accounts clearance procedure is
         not entirely accurate.  The contested decision was issued on 12 June 2002, and not before 30 April 2002 as required by Article
         7(3) of the Basic Regulation.  However, the applicant does not challenge the decision on that ground, nor is it even mentioned
         in its submissions. 
      
      27.   Subject to that reservation, I consider that the Commission’s understanding of the legislative framework governing clearance
         of accounts is correct.  Article 7(3) of the Basic Regulation explicitly states that the clearance of accounts decision ‘shall
         not prejudice the adoption of a subsequent decision’ on the expenditure to be excluded from Community financing on the ground
         that it has not been effected in compliance with Community rules. Article 7(1) of the Implementing Regulation repeats the
         point and states that the amounts which, as a result of the accounts clearance decision, are recoverable from each MemberState
         are to be established by deducting the advances paid from the expenditure recognised.  Manifestly therefore the accounts clearance
         decision may provide for amendments. 
      
      28.   If further confirmation of the legality of the Commission’s conduct should be required, it may be provided in particular by
         the following two points. 
      
      29.   First, Article 7(2) of the Implementing Regulation indicates that, where relevant, proposed amendments to the annual accounts
         of paying agencies may be issued before clearance, so long as the proposals are communicated to the MemberState concerned
         before 31 March.  The corrections proposed for the accounts of Castilla-La Mancha and Pais Vasco were communicated in the
         letter of 27 March 2002 in satisfaction of that requirement. 
      
      30.   Second, duly proposed amendments to annual accounts containing expenditure effected contrary to Community rules for the common
         organisation of the market concerned are not simply permitted under Article 7(2) but are in fact required according to the
         general rule, cited by the Commission, that the Commission is not entitled to commit funds in such a case. (12)  That the rule was established in judgments concerning the payment of monthly advances is of no present importance.  As the
         Commission notes, it was explicitly stated by the Court to be of general application. (13)  Moreover the case-law demonstrates that it has been so applied. (14)
      
      31.   Those two factors confirm the interpretation of the legislative framework governing clearance which is offered by the Commission
         and with which I concur. 
      
      32.   I am therefore of the view that there has been no infringement of the accounts clearance procedure, other than the failure
         to issue the contested decision by 30 April 2002 as required by Article 7(3) of the Basic Regulation. 
      
      33.   I also share the view of the Commission that there has been no infringement of Article 8(1) of the Implementing Regulation.
         
      
      34.   The letter of 27 March 2002 sent by the Commission to the applicant explicitly states that it constitutes a communication
         under that provision, indicating corrective measures to be taken to ensure future compliance with Community rules of expenditure. 
         The Spanish authorities appear to have acknowledged the status of the letter of 27 March 2002 in sending several replies in
         which they responded to the correction proposed by the Commission in accordance with the procedure under Article 8(1). 
      
      35.   Spain’s submission that the Commission’s failure to call a bilateral discussion and, had it been appropriate, to allow it
         recourse to a conciliation procedure in order to seek agreement on the correction was an infringement of Article 8(1) of the
         Implementing Regulation is in my view unfounded.  The procedure for finalising corrections set out in that provision had not
         run its course at the time Spain lodged its application, and hence it was premature to allege infringement of that procedure. 
         In fact, in subsequent compliance with the procedure, the Commission issued an invitation to Spain to a bilateral discussion
         on the correction in a letter dated 10 December 2002. 
      
      36.   I therefore conclude that neither the accounts clearance procedure nor the procedure, under Article 8(1) of the Implementing
         Regulation, concerning any later decision on compliance has been infringed by the contested decision. 
      
        
       Additional arguments on the alleged infringement of the Implementing Regulation 
      37.   Spain submits three further arguments relating to its allegation that the Implementing Regulation was infringed. 
      38.   First, it argues that the failure to follow the procedure laid down by Article 8(1) of the Implementing Regulation and hence
         allow the Spanish authorities to express their view regarding the amendments was contrary to their rights of defence.  In
         response, the Commission submits that the amendments proposed in the contested decision were purely provisional, pending a
         decision on the conformity of expenditure under Article 8(1) of that regulation, and that its letter of 27 March 2002 launched
         that procedure, which gives Member States the right to be heard before adoption of such a decision; (15)  there was accordingly no infringement of Spain’s rights of defence.  In any event, the Commission notes that Spain was able
         to communicate its views concerning the proposed decision both at the EAGGF committee meeting of 19 April 2002, having received
         in advance a copy of the proposed decision and the related Summary Report, and in its written communications to the Commission
         prior to the adoption of the contested decision.  That the Commission finally adopted the amendments originally proposed notwithstanding
         the Spanish authorities’ observations is, in its view, another matter. 
      
      39.   It might initially be noted that Article 7(2) of the Implementing Regulation does not explicitly refer to the right of the
         MemberState to communicate its views regarding amendments.  Respect for the rights of defence is a fundamental principle of
         Community law which the Court has on several occasions held must be guaranteed even in the absence of any rules governing
         the proceedings in question. (16)  That principle requires that the addressees of decisions which significantly affect their interests should be placed in
         a position in which they may effectively make known their views before the decision is taken.  Given the importance attached
         to respect for the rights of defence, and for the sake of clarity, it might be expected that Article 7(2) would expressly
         permit the Member State, in protection of its financial interests, to respond to any proposal made by the Commission under
         the clearance procedure. 
      
      40.   On the one hand, it could conversely be argued that since amendments under the clearance procedure are merely provisional,
         and the compliance procedure expressly provides for the right to be heard with regard to definitive corrections, there is
         no need for a separately articulated right of defence.  On the other hand, it seems to me that its reiteration would be consistent
         with the aim of maintaining a distinction between the two procedures each of which is coherent in itself. 
      
      41.   However, nothing in the present case turns on that issue. 
      42.   I am convinced that the opportunities of which the Spanish authorities availed themselves to communicate their views to the
         Commission on the proposed amendments afforded them adequate rights of defence.  Spain’s oral and written communications to
         that end demonstrate implicit recognition by both parties of Spain’s ability to contest the proposals before clearance.  The
         alleged infringement of its rights of defence is thus not substantiated. 
      
      43.   Spain goes on to allege, secondly, that the Commission failed to communicate the correction in the context of the clearance
         procedure and, thirdly, that the Summary Report is not available in Spanish, which constitute substantial infringements of
         the clearance procedure.  Both allegations were introduced in its reply, and therefore qualify as new grounds introduced in
         the course of proceedings. 
      
      44.   Under Article 42, paragraph 2, of the Court’s Rules of Procedure, introduction of a new ground in the course of proceedings
         is prohibited unless it is based on matters of law or of fact which come to light in the course of the procedure.  That is
         not the case here. 
      
      45.   As the Commission submits, both allegations are therefore inadmissible. 
        
       Alleged incorrect amendments to the accounts of Castilla-La Mancha 
      46.   Spain contests the justification for the financial correction to the accounts of Castilla-La Mancha which is proposed in the
         Summary Report on the clearance of accounts of the Guarantee Section for the 2001 financial year. (17)  That report proposes a correction of EUR 1 831 526 on account of errors in the arable sector. 
      
      47.   The accounts clearance decision is to determine the amount of expenditure effected in each Member State during the financial
         year in question to be recognised as being chargeable to the EAGGF;  this will inevitably result in the quantification (albeit
         provisional pending any subsequent non-compliance decision) of amounts not so recognised. (18)
      
      48.   Further it is settled case-law that the Basic Regulation allows the Commission to charge to the EAGGF only sums paid in accordance
         with the rules laid down in the different agricultural sectors (19) and in consequence obliges the Commission to refuse financing of expenditure when it finds that irregularities have occurred. (20)
      
        
       Arguments of the parties as to whether the correction was justified 
      49.   As a preliminary observation, it should be noted that the Commission in the rejoinder has accepted Spain’s assertion that
         the correction should not have been applied to compensatory allowances, and has stated that it intends to take account of
         that claim in assessing the amount of the final correction.  Otherwise the parties disagree as to whether the correction was
         justified. 
      
      50.   In its submissions, the Commission sets out its reasons for proposing the correction.  In that regard, it relies on the report
         of Castilla-La Mancha’s certifying body, dated 23 January 2002, which was based on inspections of the relevant accounts for
         the 2001 financial year (‘the certification report’).  According to the certification report as cited by the Commission, two
         types of error occurred in the accounts for the 2000 financial year and in the accounts for the 2001 financial year 
      
      51.   In the accounts for the 2000 financial year, a computer error resulted in the payment of incorrect amounts of aid for certain
         land down to hard wheat.  A second, unexplained error in the accounts for the 2000 financial year related to the computer
         programme for detecting deficiencies in data necessary to ensure compliance with minimum surface area requirements for declarations
         of land subject to set-aside; that error resulted in payments which were higher than those that ought to have been made. 
      
      52.   According to the certification report as cited by the Commission, similar deficiencies in the accounts for the 2001 financial
         year indicate that errors affecting the accounts for the 2000 financial year were not addressed before drawing up the later
         accounts.  On the basis of the errors cited in the certification report, the Commission alleges that their occurrence is random. 
         It refers to the identification of mistakes in the 2001 accounts relating to wheat and to difficulties in recalculating the
         variables to be taken into account for calculating set-aside payments which was necessary following repetition of the second
         type of error. 
      
      53.   The Commission makes specific reference to erroneous payments in 2001 due to an incorrect application of the reduction of
         surface area subject to set-aside in the context of irrigated maize.  It also submits, on the basis of the certification report,
         that the results of inspections were not appropriately registered and that their absence was not detected by the relevant
         computer programme. 
      
      54.   Spain, however, does not consider that the errors identified in the certification report justify the correction proposed by
         the Commission. It interprets the position adopted by the certifying body concerning the deficiencies in the accounts for
         the 2001 financial year in a different manner from the Commission.  It relies on the written communication from the certifying
         body of 23 April 2002 which states that its observations concerning the errors in the certification reports for the two financial
         years in question are not the same.  According to that communication, the observation regarding the 2001 financial year relates
         only to the incorrect application of the coefficient for penalisation for set-aside in the context of irrigated maize.  The
         error thus affects only that budget heading, rather than all payments in the arable sector.  Spain, apparently relying on
         an assessment given in the communication of 23 April 2002, submits that the corresponding monetary value of the error is EUR
         17 855, which is the value of the error under irrigated maize. 
      
      55.   Referring to Commission guidelines No 8, (21) Spain additionally submits that the error is systematic and that the assessment of the total number of errors in all sectors
         in the accounts for the 2001 financial year, which it cites as EUR 7 725 641, falls below the materiality level of 1% of total
         expenditure, which is EUR 8 759 994.  In conclusion, it argues that there is no reason to impose a financial correction, at
         least not in the accounts clearance procedure. 
      
        
       Assessment 
      56.   It is common ground that in assessing the amount of the error, the Commission was incorrect to include compensatory allowances.
         
      
      57.   That in itself requires that the contested decision should at least be annulled as regards the correction of expenditure on
         that item of aid. 
      
      58.   Spain does not otherwise raise any relevant issue for determining whether the correction was justified.  In particular, in
         alleging that the total number of errors falls below the materiality level set by Commission guidelines No 8, the recommendations
         of which relate to assessment of error by national certifying bodies, Spain does not found its arguments on relevant grounds. 
         Clearly those guidelines do not regulate the Commission’s competence to propose amendments in the clearance decision. 
      
      59.   The accounts clearance procedure explicitly requires the Commission to determine the amount of expenditure effected in Member
         States which is to be recognised as chargeable to the EAGGF. (22)  The Court has consistently held that, in order to establish an infringement of the rules on the common organisation of the
         agricultural markets, although the Commission must adduce evidence of serious and reasonable doubt on its part regarding the
         checks or figures communicated by the Member State, it is not required to demonstrate exhaustively that the checks were inadequate
         or that there are irregularities in the figures;  it is the Member State which is best placed to collect and verify the data
         required for the clearance of the EAGGF’s accounts and consequently, it is for the State to adduce the most detailed and comprehensive
         evidence that it has made checks or that its figures are accurate and, if appropriate, that the Commission’s assertions are
         incorrect. (23)  The Member State cannot rebut the Commission’s findings by mere assertions which are not substantiated by evidence of a
         reliable and operational supervisory system. (24)
      
      60.   In its submissions, the Commission has adduced significant evidence of doubt on its part as to the reliability of the checks
         concerned as carried out in 2001.  Not only has it asserted that errors occurring in 2000 had not been addressed in the following
         year, including two computer errors resulting in incorrect payments for hard wheat and for agricultural parcels subject to
         set-aside, it has also, on the basis of the observations in the certification report relating to 2001, specifically highlighted
         erroneous payments due to an incorrect application of the reduction of surface area subject to set-aside in the context of
         irrigated maize, and the absence of checks to ensure registration of the results of inspections.  According to the extracts
         of the certification report annexed to the Commission’s defence, the absence of those checks, as observed by the certifying
         body, relates to the arable sector in general. 
      
      61.   Spain does not adduce evidence either of the results of such checks, or that the assertions made by the Commission are incorrect. 
         Moreover, it has not demonstrated that the deficiencies identified in the supervisory system in 2000 were remedied so as to
         permit the reliable operation of the system in 2001.  None of those three requirements (25) is addressed by the mere assertion that the error affects only the budgetary heading relating to irrigated maize. 
      
      62.   I am therefore of the view that the Commission has provided evidence of serious and reasonable doubt regarding the checks
         communicated by the MemberState, and that consequently it was justified in finding an infringement of Community expenditure
         rules and in proposing a financial correction accordingly. 
      
      63.   With regard to the amount of the correction, aside from the inclusion of compensatory allowances, the assessment appears to
         me to be in line with the Court’s application of the principles found in the case-law regarding the burden of proof (26) to the situation in which an assessment has been carried out by the Commission on the basis of the results of checks.  In
         such circumstances, the Court has confirmed the assessment where the Member State has not provided any evidence that the Commission
         relied on incorrect facts, or demonstrated that the irregularities identified did not affect the Community budget or that
         they did so to an appreciably lesser extent than was estimated by the Commission. (27)
      
      64.   As I have already stated, Spain has not demonstrated that the Commission’s assertions were incorrect in alleging irregularities
         in the accounts.  It follows that no evidence has been produced either disproving the facts on which the assertions were based
         or proving that the irregularities did not affect the Community budget. 
      
      65.   Further nothing in Spain’s submissions indicates that the irregularities affected the Community budget to an appreciably lesser
         extent than the Commission’s assessment reflects.  Under the principles in the case-law concerning the burden of proof, (28) the mere assertion that the error affects only irrigated maize, which is substantiated by no evidence of a reliable and operational
         supervisory system, in no way undermines the assessment made. 
      
      66.   For those reasons, aside from the component relating to compensatory allowances, the amount of the correction proposed by
         the Commission is not in my view incorrect. 
      
      67.   Since Spain has partly succeeded in its submissions, each party must be ordered to bear its own costs. 
        
       Conclusion 
      68.   On the basis of the foregoing observations, I am of the opinion that the Court of Justice should: 
      (1)      annul Commission Decision 2002/461/EC of 12 June 2002 on the clearance of the accounts of Member States’ expenditure financed
         by the European Agricultural Guidance and Guarantee Fund (EAGGF), Guarantee Section, for the 2001 financial year as regards
         the correction made to the expenditure relating to compensatory allowances; 
      
      (2)      dismiss the remainder of the application; 
      (3)      order each party to bear its own costs. 
      1 –	 Original language: English.
      
      2  –	OJ 2002 L 160, p. 28.
      
      3  –	Council Regulation (EC) No 1258/1999 of 17 May 1999 on the financing of the common agricultural policy (OJ 1999 L 160,
         p. 103).  With effect for expenditure from 1 January 2000, Regulation No 1258/1999 repealed and replaced Regulation (EEC)
         No 729/70 of the Council of 21 April 1970 on the financing of the common agricultural policy (OJ, English Special Edition,
         1970 (I), p. 218), as amended in particular by Council Regulation (EC) No 1287/1995 of 22 May 1995 (OJ 1995 L 125, p. 1); 
         by virtue of Article 16(2) of and the Annex to Regulation No 1258/1999, references in earlier legislation to provisions of
         Regulation No 729/70 are to be construed as references to the equivalent provisions of Regulation No 1258/1999.
      
      4  –	Articles 1(2)(b) and 2(2).
      
      5  –	Recital 9.
      
      6  –	Regulation (EC) No 1663/95 of 7 July 1995 laying down detailed rules for the application of Council Regulation (EEC) No
         729/70 regarding the procedure for the clearance of the accounts of the EAGGF Guarantee Section (OJ 1995 L 158, p. 6), as
         amended by Regulation (EC) No 2245/1999 of 22 October 1999 (OJ 1999 L 273, p. 5).
      
      7  –	Listed above at point 6.
      
      8  –	Article 4(2).
      
      9  –	Article 7(1) of the Implementing Regulation.
      
      10  –	Recital 9.
      
      11  –	Case C-342/89 Germany v Commission [1991] ECR I-5031, and Case C-346/89 Italy v Commission [1991] ECR I-5057, at paragraph 16.
          
      
      12  –	Cases C-342/89 and C-346/89, cited in footnote 11, paragraph 14.
      
      13  –	Ibid.,at paragraph 15.
      
      14  –	See, for example, the judgments in Case 327/85 Netherlands  v Commission [1988] ECR 1065, at paragraphs 24 and 25, Case C-197/90 Italy v Commission [1992] ECR I-1, at paragraph 38, and Case C-118/99 France  v Commission [2002] ECR I-747, at paragraph 38.
      
      15  –	See Case C-177/00 Italy  v Commission [2003] ECR I-233, paragraph 23.
      
      16  –	See, for example, Case C-395/00 Cipriani [2002] ECR 11877, at paragraph 51;  Case C-462/98 P Mediocurso v Commission [2000] ECR I-7183, at paragraph 36;  Case C-7/98 Krombach [2000] ECR I-1935, at paragraph 42;  and Case C-32/95 P Commission v Lisrestal [1996] ECR I-5373, at paragraph 21.
      
      17  –	Document reference AGRI/60939/2002-FR final.  See section 6.5.
      
      18  –	Article 7(1) of the Implementing Regulation.
      
      19  –	See the cases cited in footnote 14.
      
      20  –	See, for example, Case C-157/00 Greece  v Commission [2003] ECR I-153, paragraph 44.
      
      21 –	Document No VI/5331/98, entitled ‘Guidelines for the Certification of accounts of EAGGF Paying Agencies’.
      
      22  –	Article 7(1) of the Implementing Regulation.
      
      23  –	See Cases C-278/98 Netherlands v Commission [2001] ECR I-1501, paragraphs 39 to 41, C-157/00, cited in footnote Error! Bookmark not defined., at paragraphs 15 to 17, and most recently C-344/01 Germany v Commission,  judgment of 4 March 2004, at paragraph 58.
      
      24  –	See, for example, Case C-157/00, cited in footnote Error! Bookmark not defined., at paragraph 18.
      
      25  –	Which the Member State must satisfy, according to the case-law cited in footnotes Error! Bookmark not defined.Error! Bookmark not defined..
      
      26  –	See point 59 above.
      
      27  –	See Case C-130/99 Spain v Commission [2002] ECR I-3005, at paragraphs 90 and 91.
      
      28  –	See point 59 above.