CELEX: 61995CC0054
Language: en
Date: 1998-04-02
Title: Opinion of Mr Advocate General La Pergola delivered on 2 April 1998. # Federal Republic of Germany v Commission of the European Communities. # Clearance of accounts - EAGGF - Disallowance of expenditure - 1991 financial year. # Case C-54/95.

Important legal notice

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61995C0054

Opinion of Mr Advocate General La Pergola delivered on 2 April 1998.  -  Federal Republic of Germany v Commission of the European Communities.  -  Clearance of accounts - EAGGF - Disallowance of expenditure - 1991 financial year.  -  Case C-54/95.  

European Court reports 1999 Page I-00035

Opinion of the Advocate-General

I - Subject-matter of the action 1 This action has been brought by the Federal Republic of Germany, pursuant to the first paragraph of Article 173 of the EC Treaty, against Commission Decision 94/871/EC of 21 December 1994 on the clearance of the accounts presented by the Member States in respect of the expenditure for 1991 of the European Agricultural Guidance and Guarantee Fund (EAGGF) Guarantee Section (1) (hereinafter `the Decision'), solely in so far as it fails to charge to the EAGGF the total sum of DEM 116 633 582.10. The German Government is contesting the Decision on six grounds, covered by six separate pleas in law, discussed below in the order in which they appear in the procedural documents. II - First plea: there is no legal basis for the 10% increase (equivalent to DEM 1 031 451.17) applied by the Commission to the correction relating to expenditure on production refunds for the use of starch and sugar-based products 2 On 6 October 1993, the Commission asked the German authorities to amend the national supervisory procedures concerning the allocation of production refunds for the use of starch- and sugar-based products to make them compatible with the relevant Community rules, as interpreted, in particular by the Court of Justice in its judgment of 22 June 1993 in Case C-54/91 Germany v Commission. (2) On that same occasion, the Commission asked that the EAGGF services should be promptly informed of the changes made to the German system for that purpose and of when the changes entered into force. By its subsequent decision of 21 January 1994 (Doc. VI/4480/93) and in accordance with Article 1(3) of Regulation (EEC) No 1723/72, (3) the Commission set 31 January 1994 as the deadline for providing additional information relating to the clearance of accounts for the 1991 financial year (16 October 1990 - 15 October 1991). 3 The German authorities did not transmit to the Commission the information requested concerning the measures taken to modify the supervisory procedures until July 1994. In view of the inadequacy of the supervisory measures applied during the 1991 financial year, the Commission decided not to charge to the EAGGF 5.5% of the expenditure relating to the refunds in question incurred by the competent national authorities and bodies for that year. The rate applied was the same (5%) as that already applied - for the same reason - for the 1988-1990 financial years, with a 10% increase (that is to say equivalent to 0.5% of the expenditure in question) because of the delay in informing the Commission of the corrective measures taken. 4 In its application - and basing this on the reference in the text of the Summary Report to the correction being `increased by 10% in view of the delay in amending the procedures' - the German Government described that increase as an `additional penalty' for negligence, complaining that the Commission had imposed that penalty without having the authority to do so. According to the German Government, the Commission has the authority only to require that the measures provided for and regulated by national law be substantively compatible with Community law, but does not have the power to penalise late communication of the national measures adopted. What is more, since the new control procedures had been applied as of November 1993, the delay in communicating them to the Commission by the German authorities cannot be material. 5 Lastly, no increase of the type contested in this case is provided for in the Commission guidelines on the calculation of financial consequences when preparing the decision regarding the clearance of EAGGF, Guarantee Section, accounts (hereinafter `the Guidelines'), (4) which were applicable from the time the Summary Report relating to the clearance for 1990 was drafted. Those Guidelines in fact lay down that the criterion to be applied by the Commission in determining whether it is appropriate to apply a financial correction and in setting the rate of that correction must be `the assessment of the degree of risk of losses to Community funds having occurred as a consequence of the control deficiency'. The German Government, however, takes the view that the circumstances surrounding the amendment of the national procedures (which took place in 1993) and the communication to the Commission of that modification (in 1994) could not in any way have affected retroactively the question whether the controls exercised in 1991 complied with the rules. 6 The Commission's response is that there is no element of penalty in charging to Germany the expenditure in question. The imposition of the rate of correction in question is consistent with Commission practice regarding the clearance of EAGGF accounts. Such a practice favours the Member States by taking retroactive account of the amendments they have made to their systems of supervision, which were found to be irregular, during the (in this instance three-year) period between the end of the relevant financial year and the adoption of the decision on the clearance of accounts. In any event, that reduced rate is substantially lower than the rate the Commission could legitimately have applied, which was actually equivalent to 100%. As of 22 June 1993 (the date on which the Court delivered its judgment in Case C-54/91; see point 2 above) the mitigating circumstance (the fact that proceedings were pending on the issue) that had previously justified limiting the rate of correction to 5% ceased to exist. Furthermore, on 31 January 1994, and in the absence of information to the contrary from the German authorities, the Commission was justified in assuming that they had yet to put a stop to the infringement of Community law, that had been established in relation to 1991 also, in application of the Court's judgment. 7 I consider it appropriate to begin by clearing up a terminological misconception on the part of the applicant Member State when it refers to the imposition of `an additional penalty for negligence'. The Commission has no power in this area to impose penalties on the Member States; however where it establishes an infringement of Community law in relation to the payments made by a Member State, it is required to correct the accounts that that Member State has submitted. In fact, it is hardly necessary to point out that the financing by the EAGGF of the expenditure incurred by the German authorities during the 1991 financial year is governed by the principle that only expenditure incurred in conformity with the Community rules is to be charged to the Community budget. 8 I therefore agree with the Commission that a 100% financial correction could have been applied to the expenditure on refunds disbursed on the basis of the administrative practice in force in Germany in 1991, (5) a fortiori because, in the abovementioned judgment, the Court recognised that supervision in the sector in question during the relevant financial year (and previous financial years) had been inadequate. Nor would the Commission have been precluded, on grounds of legal certainty or legitimate expectation, from charging Germany the whole (or at any rate more than 5.5% of the expenditure in issue) simply because, in similar circumstances and on the occasion of the clearance of accounts for the 1988 to 1990 financial years, it had confined itself to charging a rate of 5%. In point of fact, according to the case-law of the Court of Justice, a Member State that has been accorded favourable treatment on grounds of fairness during a particular financial year does not acquire any right to demand that the Commission should refrain from correcting the accounts that it has submitted - as the Commission is required to do where an infringement of Community rules has been established - in relation to the clearance of accounts for subsequent years also. (6) 9 If we look closely, however, Germany is not disputing that - when making a financial correction to expenditure that has been declared by a Member State but which proves incompatible with the Community rules pertaining to the agricultural sector in question - the Commission may reduce the amount of that correction as compared with the maximum sum applicable. It would not, of course, be in the interest of the applicant Member State to take that view because though it makes no claim to a reduction in the correction, it certainly derives an advantage from this. The criticism levelled by the German Government actually concerns the Commission's authority to determine, at its own discretion, the level of that reduction: according to the German Government, the Commission could have made an overall reduction in that correction to the level of 5% but was not entitled to impose the further increase of 10%. 10 I consider that assertion to be unfounded. In the first place, Germany seems to fail to appreciate that, by reducing the financial corrections at the time of clearance, the Commission generally arrives at the same outcome as is now alleged to be illegal and unacceptable: the assessment whether the national supervisory measures, as applied during the financial year covered by the decision, complied with the rules is affected retroactively - in a manner favourable to the Member State concerned - by the circumstances of the subsequent amendment of those measures to make them compatible with the Community rules. That is despite the fact that, by definition, that amendment has absolutely no impact on the risk of losses to the Community funds resulting from inadequate supervision during the financial year in issue. The Member States cannot have it both ways: they cannot be allowed to complain that the abovementioned administrative practice of the Commission may in individual cases, such as the case in point, have unfavourable financial consequences (or, to be more precise, consequences less favourable than the Member State concerned could theoretically anticipate). Therefore, setting aside the issue of the legal nature of the Guidelines and any binding effect they may have, (7) the argument which the German Government claims to base on the Guidelines is unfounded (see point 5 above). 11 Nor, moreover, can there be any question of the Commission having exceeded its discretion in this case. The Commission actually set about encouraging the German authorities to remedy the breaches of Community law that had been established. And it seems to me evident that had it been informed by 31 January 1994 of the changes that had been made to the national legislation, the correction in issue would have been not 5.5% but, in accordance with practice, 5%. Given that there were no exceptional circumstances to justify late notification by the German authorities, they have only themselves to blame for the 10% increase in the correction. Furthermore, it seems to me perfectly reasonable that the Commission should have wished to treat a Member State that fails to observe the deadline for transmitting the additional information required for the clearance of accounts more severely - albeit not excessively or disproportionately - than a Member State that does meet the deadline. If it is the case that strict observance of that deadline is very important because it allows the Commission to scrutinise the national accounts all the more rapidly, (8) the conclusion that has to be drawn is that had the Commission not applied an increase to Germany in this case, it would have given the Member States exactly the opposite signal. I consider that the solution I have proposed is consistent with the principles established by the Court's judgment in Case C-413/92 Germany v Commission. (9) That decision makes clear that where, during the procedure for the clearance of accounts, the Commission requests a Member State - after expiry of the deadline it has been accorded to submit additional information - to provide still further information, but e the sums in issue to the EAGGF on the ground that the explanations provided by the national authorities were submitted late, after the expiry of the first deadline set. That judgment seems to me unequivocally to secure the power of the Commission to refuse to charge expenditure to the EAGGF on the ground that the deadline has not been respected, provided it did not subsequently extend or remove that deadline. The first plea by the German Government has therefore to be rejected. III - Second plea: the correction of DEM 54 275 090.69 in respect of irregularities relating to the export of livestock to Poland is unlawful 12 The inquiries made by the EAGGF (pursuant to Article 9 of Regulation (EEC) No 729/70 of the Council of 21 April 1970 on the financing of the common agricultural policy - hereinafter `Regulation No 729/70'), (10) working with the competent German and Dutch authorities, during November 1991 and April 1992, revealed the existence in those two States of artificial export patterns to Poland of cattle fraudulently declared to be pure-bred breeding animals but in fact slaughtered in Poland. In the case of Germany, such exports began in 1991 and gradually ceased only because the national supervisory procedures were tightened up, with effect from October 1991. (11) Before that time, the German bodies responsible for disbursement had paid the refunds to the exporters without having the requisite proof of import (or rather use) in the third country as required by Article 5(1) of Commission Regulation (EEC) No 3665/87 of 27 November 1987 laying down common detailed rules for the application of the system of export refunds on agricultural products (hereinafter `Regulation No 3665/87'), (12) and without verifying that the animals were of sound and fair marketable quality (a requirement for payment of the refunds under Article 13 of that regulation). That verification should have considered the genetic value of the animals and their performance as required - in the Commission's view - by Article 1 of Commission Regulation (EEC) No 1544/79 of 24 July 1979 on the granting of export refunds for pure-bred breeding bovine animals (hereinafter `Regulation No 1544/79'), (13) in conjunction with Articles 1(a) and 6 of Council Directive 77/504/EEC of 25 July 1977 on pure-bred breeding animals of the bovine species (hereinafter `Directive 77/504'). (14) However, it would seem that the German authorities required only the submission of T 5 control copies and the breeding and reproduction certificates issued by the breeders' associations which contained no information on performance and assessment of the animals' genetic value or pedigree (except, in some instances, data concerning the parents only). 13 The finding that animals exported to Poland were intended for slaughter and were not going to be used for breeding purposes was then confirmed by the fact that they were infected with bovine enzootic leucosis (hereinafter `BEL'). Entitlement to refunds was therefore also precluded on the ground that the product was unsound. (i) The unlawful inclusion in the clearance of accounts for the 1991 financial year of sums relating to the 1992 financial year 14 In its reply, the German Government criticised the inclusion in the financial correction for 1991 of a sum (amounting to DEM 15 037 768.01) relating to export refunds disbursed in 1992. If the Commission wanted to apply a correction to the expenditure in question declared for the 1992 financial year, it ought to have done so in the context of the clearance of those accounts. 15 While pointing out that this limb of the second plea, which was not raised as part of the application and is thus out of time, is inadmissible, the Commission explains that the reason for including sums relating to the subsequent financial year in the clearance of accounts for 1991 is that the checks carried out by the Commission encompass both years. Moreover it is far from unusual for accounts and expenditure concerning different years to be included in a single clearance procedure, in the context of a single system of supervision. (ii) Substance and fulfilment of the obligations incumbent on the national authorities in relation to the disbursement of the refunds in question, in accordance with Article 5 of Regulation No 3665/87 16 The German Government maintains that the cattle exports met the conditions required to enable them to be classified as pure-bred breeding animals and were actually placed in free circulation and marketed in Poland. The Commission's assertion that the bulk of the animals were slaughtered on arrival in Poland, being in fact animals intended for slaughter, is not substantiated by serious and reasonable doubt, as required by the case-law of the Court of Justice in order to satisfy the rules on the burden of proof. On the allegation that the cattle exported were not of sound quality (infected with BEL: see point 13 above), the German Government claims that, in Poland, imports of pure-bred breeding animals of the bovine species were subject to extremely rigorous checks, including the submission of a certificate issued by an authorised veterinary surgeon. In the absence of evidence to the contrary from the Commission, there is no reason to doubt that those checks were properly carried out in the case of the transactions in issue. 17 Furthermore, according to the German Government, in 1991 Community law did not require formal proof of and checks on the performance and genetic value of breeding animals before export refunds could be granted (see below, point 28). The Commission cannot therefore criticise the German authorities for having considered - until the point when doubts concerning the existence of irregularities arose - the national pedigree certificates proof of the quality of the breeding animals (and thus of the fair marketable quality of the products exported), or for having disbursed the refunds applied for, as required under the legislation in force. It is also immaterial that, in individual cases, the exporters submitted pedigree certificates that did not extend as far back as the grandparents. On the other hand, since Article 1 of Directive 77/504 does not require that an animal should be registered in a herd-book before it can be covered by the term `pure-bred breeding animal of the bovine species', having only to be eligible for registration therein, the post-clearance drawing-up or submission of a pedigree certificate was also sufficient for the purposes of recognising that the animal was of such quality. 18 The Commission first of all rejects the German Government's claim that in 1991 Community legislation contained no rules concerning checks on the fair marketable quality of pure-bred breeding animals of the bovine species intended for export, based on their genetic value and performance. Instead of simply checking the information contained in the T 5 control copies, the German authorities ought also to have required the submission at the time of export of appropriate certificates stating that the cattle were intended for breeding purposes. The German authorities appear to have failed to appreciate that the procedure for checking that the exported product is of fair marketable quality takes place in two successive stages. The fact that Article 1 of Directive 77/504 merely requires that the animal be eligible for entry in the herd-book is relevant only for the purposes of establishing that the goods referred to in the export declaration and the goods actually exported are the same (first stage). However, once that has been established, ascertaining that the pure-bred breeding animals of the bovine species exported are of fair marketable quality (second stage) has to include performance monitoring and the data on their genetic value. It is only by reference to those factors that the value of the animals for breeding purposes - which determines their greater commercial value - can be established. That is also apparent from Article 3(4) of Regulation No 3665/87, according to which - for the purpose of entitlement to refund - the quantity, nature and characteristics of the product exported must be established on the day of export, that is to say `the date on which the customs authority accepts the export declaration in which it is stated that a refund will be applied for' (see Article 3(1)). Above all, the requirement that the checks in question be carried out may be inferred from an interpretation of the tariff nomenclature which determines the rate of refund for each product. The description chosen of `pure-bred breeding animals of the bovine species' - which attracts a rate of refund of ECU 98/100 kg, far higher than the rate applicable to other live cattle (ECU 55.5/100 kg) - must necessarily refer to the specific use of the animal for breeding purposes: there is thus an indissoluble link between that use and the economic objective linked to the granting of export refunds. 19 Finally, the Commission reiterates that the health checks of the kind provided for under Polish law for imports of breeding animals were not carried out in relation to the transactions in issue. The reason why the failure to carry out those checks did not prevent the transactions in issue taking place was that the animals exported from Germany were considered to be cattle for slaughter. That is demonstrated by the fact that the cost of issuing the accompanying documents (pedigree and health certificates) for the exported animals was DEM 20 per head and therefore insufficient to cover the cost (DEM 40 per head) of even the blood tests needed to identify BEL. (iii) The Commission's refusal to charge the expenditure in issue to the EAGGF, in the alternative, on the basis of the rate laid down for export refunds for cattle for slaughter is unlawful 20 In the alternative, the German Government criticises the stance taken by the Commission to the effect that, since the statistical results show that the exports in issue were made exclusively for `speculative purposes' - not therefore in order to meet real demand for the product in question on the third country market, but simply to obtain the refunds, set at a higher level than for cattle for slaughter - the exporters were not even entitled to receive the refunds at that reduced rate. In particular, it is not correct that under Article 78 of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code (hereinafter `Regulation No 2913/92'), (15) a new customs declaration had to be drawn up for that purpose. Article 78(3) of that regulation merely gives rise to a requirement that, where post-clearance examination of customs declarations indicates that the provisions governing the customs procedure concerned have been applied on the basis of incorrect or incomplete information, the customs authorities must take the measures necessary to regularise the situation. The German authorities dispute that they in fact complied with the Community legislation as interpreted by the Commission. Contrary to the Commission's contention, the German body responsible for disbursement asked the exporters to repay the sums paid out in their entirety not in relation to all of the transactions in question, but only in those cases in which the exporter failed to provide the proof requested within the period fixed (transport documents and customs documents issued for import by the Polish authorities). In the remaining cases, the refunds were paid at the reduced rate applicable to the export of cattle for slaughter. 21 The Commission's response is that the sole objective of the procedure for the clearance of accounts is to check that Community law has been properly applied. It involves no calculation of profits and losses of the kind cited by the German Government in an effort to have taken into account the refunds relating to the transactions actually carried out. In the instant case, the fact that the product listed in the customs declaration (pure-bred breeding animals of the bovine species) does not tally with the product actually exported (cattle for slaughter) means that the rate of refund applicable is zero. The export refunds for `cattle for slaughter' could have been charged to the EAGGF only if it was the export of that product that had been certified, post-clearance if need be. The reference to Article 78 of Regulation No 2913/92 indicates precisely the course that the German authorities ought to have followed with a view to amending the content of the customs declaration as specified. 22 I would first point out that the Summary Report had already indicated that the subject-matter of the decision would include sums relating to the 1992 financial year (see points 15 and 16 above); however, the German Government did not plead that their inclusion was unlawful until it submitted its reply. Therefore, setting aside the question of how the correction in issue should properly have been allocated between the two abovementioned financial years, the first subparagraph of Article 42(2) of the Rules of Procedure precludes that new plea being taken into account. 23 Having said that, the German Government's second plea seems to me to be largely directed at disputing that the Commission has met the burden of proving the infringement that has been identified. The difference in the position of the parties seems to reflect an underlying difference in their perception of the way in which the burden of proof is shared between the Commission and the Member States. It would therefore seem useful to cite the case-law of the Court of Justice in this area: this shows that the burden of proving that there has been a breach of the rules of the common organisation of the agricultural markets falls first to the Commission. (16) However, that burden of proof is to some extent mitigated, for the reasons which the Court has set out as follows: `The management of EAGGF finances is principally in the hands of the national administrative authorities responsible for ensuring that the Community rules are strictly observed. That system, based on trust, does not involve any systematic supervision by the Commission, which moreover would in practice be impossible for it to carry out. ... Only the Member State is in a position to know and determine precisely the information necessary for drawing up EAGGF accounts since the Commission is not close enough to obtain the information it needs from the economic operators. It follows that the Commission operates on the basis of figures communicated by the Member States which it can verify by means  of inquiries in order to be able to confirm or deny their accuracy, as the case may be. ... when the Commission refuses to charge certain expenditure to the EAGGF on the ground that it was incurred as a result of breaches of Community rules for which a Member State can be held responsible, it is for that State to show that the conditions for obtaining the financing refused by the Commission are fulfilled ... The Commission is required not to demonstrate exhaustively that there are irregularities in the data submitted by the Member States but to adduce evidence of serious and reasonable doubt  on its part regarding the figures submitted by the national authorities. The reason for this mitigation of the burden of proof on the Commission is that ... it is the State which is best placed to collect and verify the data required for the clearance of EAGGF accounts; consequently, it is for the State to adduce the most detailed and comprehensive evidence that its figures are accurate and, if appropriate, that the Commission's calculations are incorrect'. (17) 24 If the principles I have described here are applied to this case, I consider that it is possible to recognise a prima facie case in favour of the Commission, so that the burden of proof is reversed, in the terms set out above. (18) The doubts voiced by the Commission in regard to the information supplied by the German authorities in fact seem to be serious and reasonable. How, in particular, can the spectacular 1991 increase in German exports to Poland of cattle declared to be pure-bred breeding animals of the bovine species be explained, since the 1991 figure actually represents 345 times the figure for the previous year? (19) Then we have the unequivocal statements from the Federal Minister for Food, Agriculture and Forests, (20) according to which `the exporters insisted that the veterinary certificates required should make no mention of the fact that these were animals for slaughter. In fact, since the cattle were not free of BEL, they met the veterinary requirements for slaughter animals only and not the more stringent requirements placed on breeding stock. It cannot be ruled out that by demanding a veterinary certificate worded in "neutral" terms, the exporters were seeking to prevent doubts arising in the minds of customs officials as to whether these were really pure-bred breeding animals of the bovine species, were those officials to scrutinise the relevant veterinary documents. ... There is reason to suppose that the requirement for the purpose of export refunds that the goods be of sound and fair marketable quality was not met by the majority of the animals exported to Poland before the entry into force of the communication of 14 October 1991'. Those statements are further corroborated by the statements made by the Polish Director of Veterinary Services: (21) no breeding cattle were imported into Poland from the spring of 1991, save for a few animals that had a pedigree certificate, whereas 90% of the 91 221 live cattle imported from Germany in 1991 were cattle for slaughter and were slaughtered within 72 hours of entering Polish territory. In my view, the facts set out above, at least taken as a whole, constitute serious, specific and corroborative evidence that the animals exported possessed neither the zootechnic characteristics nor the pedigree of breeding cattle, and that the German body responsible therefore paid the differentiated refunds relating to them to the exporters without complying with the requisite formalities concerning proof and checks. 25 At neither the preliminary stage of the administrative procedure nor during these proceedings has the German Government, for its part, been able to rebut the content of the two abovementioned documents. (22) The possibility, advanced by Germany (see point 27 below), that the Polish economic operators sent pure-bred breeding animals for slaughter does not carry conviction. Furthermore, the applicant Member State has failed to provide detailed statistics to support its claim that the increase in the exports in question was the result of the break-up in 1991 of many agricultural cooperatives in the former German Democratic Republic resulting from reunification. There do not appear to be any facts to confirm that market outlets for some 57 000 pure-bred breeding animals existed in Poland, despite the serious problems Polish agriculture was facing at the time. 26 However, the objection from the German authorities concerns the actual legal premiss on which the correction in issue appears to be based: they claim that Community law did not require payment of the refunds in issue to be subject to compliance with the formal requirements of documentary evidence (verification of pedigree and assessment of genetic value) stipulated by the Commission. Contrary to the view the Commission has taken, during 1991 - the year in which the German authorities first established, in the month of October, the existence of irregularities in the sector dealing with live cattle exports to Poland - there was no provision of Community law requiring that such documents be produced as part of the national procedures for verifying the quality of the animals exported. Indeed, the German Government considers that the sole purpose of the refunds in issue was to create for the Community market in pure-bred breeding animals of the bovine species much-needed outlets given the economic climate post-reunification, and that the refunds ought therefore to have been paid whatever the actual final destination of the animals. Consequently, even if the pure-bred breeding animals were slaughtered instead of being used for breeding purposes, that circumstance was immaterial under the system of refunds which is completely unaffected by the inquiry into whether the exports were of a speculative nature. 27 More specifically, the Commission was wrong to base its finding that the infringement in question was established on the `anti-fraud' clause under Article 5(1) of Regulation No 3665/87, in conjunction with Article 13 of that regulation, Article 1 of Regulation No 1544/79 and Articles 1 and 6 of Directive 77/504 (see point 12 above). According to the German Government, Article 5(1) was not applicable to the circumstances giving rise to this aspect of the dispute since none of the situations set out in the definitive list it contains apply. (23) 28 The German Government further points out that the obligation to submit the pedigree certificate showing the results of performance tests and of the assessment of the animal's genetic value was introduced only when Regulation (EEC) No 2342/92 was adopted and thus at a point subsequent to the matters in issue. (24) That regulation, which entered into force on 17 August 1992 and repealed the earlier legislation, largely reproduced the provisions of law that had in the meantime been introduced in Germany: the Commission thus patently demonstrated that it considered that Germany had responded appropriately to the unusual increase in exports of breeding cattle. It was not, however, open to the Commission, when adopting the contested measure, to apply the requirements of the regulation to the period prior to its entry into force. 29 At first sight, the way in which Germany interprets the abovementioned `anti-fraud clause', in an attempt to deny that it is applicable in this case, seems plausible. The aim of Article 5(1) of Regulation No 3665/87 - at least as actually worded - seems in fact merely to be to prevent differentiated refunds being disbursed incorrectly where the declared territorial destination (third country for which the refund is higher) does not tally with the true destination (third country for which the refund is lower). Once that condition has been met, it could be argued - as the German Government has done - that it little matters how the product exported is used: and that applies even if, as in this case, the price of that product (like the relevant rate of refund, calculated to bring the Community price down to the level of the market price in the importing third country) is determined by reference to the quality of use to which the product is to be put. 30 Nevertheless, if we consider the spirit of the relevant provisions of Regulation No 3665/87, the premiss implicit in the applicant Member State's argument seems to me to be illogical: namely that any abuse involving the end-use of the exported product would inevitably be of lesser gravity and have therefore to be tolerated. It is my view, however, that the system set in place by Regulation No 3665/87 requires that the objective of ensuring that the refunds are paid only to those genuinely entitled to them has to be pursued, which includes the requirement that the product's declared use tallies with its actual use. I therefore consider that the Commission was right to cite Article 5(1) of Regulation No 3665/87: construing the concept of `true destination' as implying both geographical destination and function. Consequently, there can be no doubt that in this case both the conditions set down by way of alternative by Article 5(1) could be considered to be met. The `existence of serious doubt as to the true destination of the product' (Article 5(1)(a)) could not be denied if only because of the spectacular increase in the exports of (declared) pure-bred breeding animals in 1991. (25) There was the additional risk of the product being re-introduced into the Community (Article 5(1)(b)): that risk existed because of the difference between the amount of the export refund applicable to pure-bred breeding animals of the bovine species in 1991 (ECU 98/100 kg) and the level of import duties then applicable to that same product (that is to say, zero). Nor was the threat of re-introduction - which has to be seen as a potential threat - averted by the particularly strict and effective supervisory measures applicable in Germany for the purposes of exemption from import duties for transactions concerning breeding animals of the bovine species. 31 I therefore conclude from the combined provisions of Articles 3(4), 5(1) and 13 of Regulation No 3665/87 that the payment of a differentiated refund, the rate of which is determined by reference to the characteristics of the product in question and its specific use, is subject to two conditions: not only must the product be imported into the third country stated in the export declaration, it must also in fact be placed on the market in that country in accordance with the use to which its nature and characteristics would normally lend themselves. In this case, therefore, proof that the exported pure-bred breeding animals of the bovine species were of sound and fair marketable quality would necessarily consist in evidence that they had specific genetic characteristics and zootechnic value distinguishing them from the other live cattle. 32 Is that then sufficient to allow us to conclude that it is legitimate and correct that the decision should have found that the German authorities failed to implement the formal evidential and monitoring procedures which the Community rules required at the time of the facts in issue? I do not believe it is, as it is first necessary to consider the weight to be attached to a further factor cited by the German Government. That government has made the point that indicating the results of the assessment of genetic value on the pedigree certificate on exportation was made a specific requirement only by Article 3 of the subsequent Regulation No 2342/92 (see point 28 above). The Commission argues that that factor is irrelevant: in adopting that provision, it was merely seeking to clarify, for the purposes of legal certainty, the legal position that already existed pursuant to Regulation No 1544/79 and Directive No 77/504. 33 I venture, in passing, to raise at least one doubt concerning this claim by the German Government: Article 3 of Regulation No 2342/92 simply incorporated into the evidential requirements for the granting of export refunds the substance of the abovementioned Decision 86/404 of 29 July 1986 (26) - based on Articles 5 and 6(1) of Directive 77/504 - in which the Commission introduced the specimen pedigree certificate for pure-bred breeding animals of the bovine species for use in intra-Community trade and specified the information that had to be listed (including, in particular: `the results of performance tests and the results with origin of the assessment of the genetic value, on the animal itself and its parents and grandparents'; see Article 1(2)). (27) I therefore doubt that it can be seriously argued that the decision of 29 July 1986 did not afford the German authorities sufficient information on the specific formal documentary evidence they should have required to ascertain that the animals exported to Poland were really intended to be breeding stock. 34 However, that issue is of only relative importance. Germany could not in any event be permitted to rely on alleged gaps or imprecision in the Community legislation on supervision at the time of the facts in issue for the reason that the obligations incumbent on the Member States in this area exist independently of the powers of the Commission. In the light of the duty of genuine cooperation with the Commission laid down in Article 5 of the Treaty, particularly in relation to the proper use of Community resources, it is in fact for the Member States to ensure that Community law on the common agriculture policy (hereinafter the `CAP') is implemented in their territory, (28) and this includes setting in place a system of supervision to ensure that the substantive and formal requirements for the granting of export refunds are properly observed. (29) As the Court of Justice has ruled on several occasions, in acts specifically adopting measures regarding the implementation of the CAP and the use of finance from the EAGGF, `... the Community legislature does not generally include provisions regulating the procedure for supervision in detail, leaving to the Member States the power to lay down the detailed rules for supervision under their own legal system and on their own responsibility, choosing the most appropriate solution. That distribution of powers, the Court has held, is consistent with the general approach on which the common organisation of the agricultural markets in based ... That provision (Article 8(1) of Regulation No 729/70), (30) which expressly lays down in that specific area the obligations imposed on Member States by Article 5 of the Treaty defines, the Court has said, the principles according to which the Community and the Member States must ensure the implementation of Community decisions on agricultural intervention financed by the Fund and combat fraud and irregularities in relation to those operations ... That article thus imposes on the Member States the general obligation to take the measures necessary to satisfy themselves that the transactions financed by the Fund are actually carried out and are executed correctly, even if the specific Community act does not expressly provide for the adoption of particular supervisory measures ...' (31) The Commission, for its part, has only a supplementary role to play in monitoring in detail Community expenditure in relation to CAP financing (see Article 8(1) and the eighth recital in the preamble to Regulation No 729/70). (32) 35 I therefore conclude from the principles established by the Court that - even if the Commission did not specifically request this - Germany was required to adopt all the supervisory procedures necessary to ensure that the exports in question were actually carried out and were executed correctly, including those measures not specifically laid down by the Community legislation in force in 1991. (33) Moreover, the facts show that the German authorities did not need to wait for Regulation No 2342/92 to be adopted before issuing the more stringent rules on supervision contained in the communication dated 14 October 1991. In accordance with the case-law of the Court of Justice therefore, the refunds in issue - which were disbursed in breach of the obligation to set in place appropriate checks on the performance and genetic value of pure-bred breeding animals of the bovine species - failed to meet the requirements of Community law and the relevant expenditure cannot be borne by the EAGGF. (34) 36 The German authorities have further argued, in the alternative, that the financial correction decided upon by the Commission in respect of the refunds in question was far higher than the latter could lawfully impose. The expenditure declared by Germany ought to have been charged to the EAGGF at least on the basis of the lower rate of refund applicable to cattle for slaughter (see points 18 and 20 above). (35) I would point out here that, on the basis of the serious and reasonable doubts concerning irregularities raised by the Commission, and in the absence of evidence to the contrary furnished by the German authorities (see point 25 above), it seems legitimate and right to conclude that the exports in issue were of a speculative nature (as defined above; see point 19). Therefore, when clearing the accounts, the Commission's concern could not simply be to avoid the unjustified enrichment of the German economic operators, as it would have been required to do had the difference between the product stated in the customs declaration and the product actually exported resulted from factors beyond the control of the exporters. (36) That is not the case here: the exporters knowingly received sums of money by way of refunds for transactions involving cattle fraudulently declared to be pure-bred breeding animals of the bovine species but which were not in fact of the `sound and fair marketable quality' promised, as they subsequently turned out to be simply cattle for slaughter. Above all, since the customs declarations were not amended post clearance to reflect the real state of affairs - and they could, for example, have been amended had the German authorities carried out the checks on the declarations provided for by Article 78 of Regulation No 2913/92 (see point 20 above) - to have accepted Germany's claims would have resulted in the anomalous situation of charging to the EAGGF, in relation to exports (officially) of breeding cattle, sums which ought, on the basis of the rules in force, to have been paid by way of export refunds for live cattle for slaughter. I therefore consider that the refunds in question were disbursed in breach - as regards both form and substance - of the rules established by Regulations Nos 1544/79 and 3665/87. Consequently, pursuant to Article 2 of Regulation No 729/70, the cost of those refunds could not be borne by the EAGGF and had to be charged in their entirety to Germany. (37) I therefore consider that the second plea submitted by the German Government must also be rejected. IV - Third plea: the correction of DEM 56 692 508.70 in respect of irregularities (falsification of evidence of arrival at destination and manipulation of quantities) committed by IMEX during the period 1981-1987 in relation to exports of livestock to the Near and Middle East is unlawful (i) Correction of DEM 22 011 281.10 for the delay on the part of the German authorities in carrying out thorough checks on the lawfulness of the transactions carried out by IMEX after 1 January 1986: the Commission finding is unfounded in substance and fails to provide a sufficient statement of reasons 37 The German Government denies having been significantly late in adopting the measures required to safeguard the interests of the EAGGF, in breach of its own duty of genuine cooperation, and criticises the Commission for having been unable to cite in detail and give a sufficient statement of the reasons for its allegations of infringements committed by the German authorities. The customs investigation unit could not have been expected to act differently because sufficient evidence to bring charges against IMEX had to be gathered in a way that avoided arousing suspicions that could have led IMEX to mask its criminal activities involving sophisticated falsification techniques. That is why, although investigative measures were adopted as far back as December 1985, it was not possible to put a stop to the manipulation of quantities by IMEX until after the Munich police had transmitted, in October 1987, the results of their investigation into the falsification of the customs stamps used. The Commission's refusal to charge the sum in question to the EAGGF, in accordance with Article 8(2) of Regulation No 729/70, (38) on the ground of negligence on the part of the German authorities in preventing and prosecuting the irregularities, is therefore unlawful. (ii) The failure to charge to the EAGGF the refunds disbursed between 1981 and 1987 on the ground that auxiliary customs officers had manipulated the quantities: the correction of DEM 25 024 493 is unlawful to the extent that it goes beyond the findings of the criminal court 38 The German Government maintains that, when calculating the expenditure to be charged to Germany in relation to refunds disbursed unlawfully, the Commission was bound by the finding of the Munich Landgericht (125 instances in which auxiliary customs officer H falsified the quantities, at the Hamburg loading centre, resulting in loss totalling DEM 11 745 714). No financial correction could be imposed on the basis of other irregularities that were merely presumed to have taken place. 39 The Commission points out that, for the purposes of establishing whether or not expenditure incurred by the Member States in relation to CAP financing meets the requirements of Community law - the objective of the clearance of accounts procedure - there is no reason to consider the findings of a national court decisive. Since it is not necessary for the infringement to be established and penalised in the criminal courts before expenditure incurred in breach of Community rules can be charged to the Member State, the Commission was fully entitled to refer to the outcome of the inquiry conducted by the Munich customs investigation unit (284 instances in which quantities had been manipulated resulting in loss totalling DEM 25 024 493), which was not called into question or refuted. (iii) Illegality of charging to the Federal Republic of Germany the sum of DEM 9 656 734.74, equivalent to 10% of the payments made after 1 January 1986, on the ground that the national authorities had failed to meet the deadline for transmitting additional information 40 The German Government also challenges that part of the decision limiting the reduction in the sum charged to Germany to 90% of the relevant amounts. That limitation - based on the German authorities' failure to meet the deadline for forwarding to the Commission the additional information on the state of progress in and likely outcome of the procedures for recovery of the refunds disbursed after 1 January 1986 for export transactions in respect of which the true quantities had been manipulated by auxiliary customs officers - is tantamount to an additional penalty and is unlawful because there is no legal basis for it. The communication sent to the Commission by the German authorities on 27 May 1984 was not actually covered by Article 1(3) of Regulation No 1723/72 concerning the forwarding by the Member States of the additional information needed for clearance. (39) That communication actually formed part of the information system set in place by 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 (hereinafter `Regulation No 595/91') and in particular Article 5(2) thereof. (40) The significance of that distinction is that, in the context of Article 5(2) of Regulation No 595/91, it is the Member States which may, at their discretion, take the initiative of notifying the Commission, which does not therefore have the power to set a deadline (far less to penalise any `late' notification). It is actually only the Member State concerned that is able, in the final analysis, to assess the real possibilities of recovering sums wrongly paid, in the light of the state of progress and developments in the procedures for recovery that could or have already been set in motion. Furthermore, any deadline set by the Commission for forwarding additional information within the meaning of Article 1(3) of Regulation No 1723/72 can encompass only that information that Community law requires to be included in the clearance of accounts for each financial year.  It is only following notification under Article 5(2) that the information forwarded to the Commission could be included in the procedure for the clearance of accounts for a specific year. Therefore, the Commission actually reversed the order of the procedure laid down in Article 5(2), by assessing the situation itself (and concluding that it was impossible to recover the sums in question) and deciding that the refunds wrongly paid to IMEX should be included in the clearance of accounts for 1991. However, the conclusion that Germany was in breach of obligations arising out of Regulation No 595/91 - which the Commission based on the finding that the deadline of 31 January 1994 (set for the forwarding of additional information for the 1991 financial year) had not been observed - is unlawful. Had the Commission intended to plead that (alleged) failure to fulfil an obligation, it ought in any event to have applied the procedure provided for by Article 169 of the Treaty. 41 The Commission's response is that a distinction has to be made between the forwarding of the information requested on the state and likely outcome of the recovery procedure and the special notification provided for by Article 5(2) of Regulation 595/91, inappropriately cited by the German Government. In any case, though the special notification is not subject to a deadline, it is nevertheless the case that the Member States may not use it to delay unduly the procedure for the clearance of accounts, as happened in this instance. The Commission in fact used the powers accorded to it by Regulation 1723/72, by requesting Germany (and the other Member States), by decision of 21 January 1994, to forward to it within ten days all the additional information needed for the clearance of accounts procedure in respect of the abovementioned financial year (see point 2 above). In the interests of sound administration, it was perfectly legitimate to set a reasonable deadline for forwarding the information on the procedures for recovering the refunds disbursed after 1 January 1986 which the Commission was prepared to charge to the EAGGF - provided the legal requirements were met. The deadline set (by decision of 21 January 1994) for forwarding additional information was also appropriate in the light of the many requests for that information that the Commission had addressed to the German authorities before October 1993. Moreover, once that deadline had expired, the Commission was at liberty to undertake clearance on the basis of the information it possessed at that time: that would have resulted in 100% of the expenditure in issue being charged to Germany. The decision imposed no additional penalty on Germany and was consistent with the Commission's previous administrative practice of limiting to 90% of the sums in question the amount it proved necessary to charge to the EAGGF in the light of fresh information that the Member State concerned had forwarded belatedly. 42 In regard to the alleged inadequate statement of the reasons for that part of the decision that criticises Germany for being slow to carry out proper checks to ensure that the transactions carried out by IMEX after 1 January 1986 complied with the rules (see point 37 above), I do not consider that the German Government's criticism can be accepted. Setting aside the actual wording of the Summary Report, Germany must have been perfectly well aware of the exact scope of the infringement recorded in that section of the decision in issue, not least because of the correspondence exchanged with the Commission services during the procedure that led up to the decision. Moreover, it is clear from the consistent case-law of the Court of Justice that a decision on clearance of accounts in which the Commission refuses to charge to the EAGGF a proportion of the expenditure declared by the Member State concerned does not require a detailed statement of the reasons where the government concerned was closely involved in the process by which the decision was made and was therefore aware of the reason for that refusal. (41) 43 I am similarly unconvinced by the plea that the finding that the applicant was late in adopting the supervisory measures necessary to protect the Community's financial interests is in substance unfounded. I would refer to the points made above concerning the division of responsibilities between the Commission and the Member States, provided for by the Community legislature in relation to the adoption of measures designed to ensure that expenditure is in compliance with the rules (see point 34 above). In this case, did Germany adopt such measures as were required under Article 5 of the Treaty and Article 8(1) of Regulation No 729/70? The documents before the Court indicate that it did not: it is true that the competent national authorities did not actually sit back and do nothing, but nor were the measures they took conspicuous by their effectiveness. I would point out that in the IMEX affair `the buck was passed' initially and repeatedly from one customs investigation unit to another for alleged reasons of territorial responsibility. Moreover, the `initial' administrative checks carried out by the Hamburg customs office in relation to the breeders of the pure-bred breeding animals from whom IMEX obtained its stock, were organised in such a way as to be completely useless because they focused on the (merely estimated rather than established) weight of the cattle purchased by the exporter instead of the number of head - the information that mattered for export purposes. Furthermore, the German authorities did not consider it appropriate to set in place a reliable system for weighing the cattle or to carry out physical checks on a large scale. Although such checks seemed reasonable, given the very small number of exporters suspected of fraudulent practices (IMEX and Südfleisch) - as the Commission pointed out - they were attempted on two occasions only, one of which (the monitoring of a consignment exported by air) was doomed to failure from the outset (compulsory weighing of the animals before they were loaded on the aircraft making it extremely easy to establish whether the quantities had been manipulated). However, the freedom of the Member States, cited by the German Government, to choose at their own discretion the measures most appropriate to protect the Community's financial interests and the scope of those measures, which have to be commensurate with the gravity of the conduct under investigation, cannot and must not in any way be interpreted as some kind of permission to relax and reduce the frequency of the checks designed to prevent irregularities in EAGGF-financed transactions. As the Court of Justice has had occasion to point out in the case of supervisory measures adopted at the national level in order to implement Community rules regarding the common agricultural policy, the national authorities must act with the same degree of care as they exercise in implementing the corresponding national legislation, in order to prevent any erosion of the effectiveness of Community law. (42) 44 Above all, it seems to me - and this also applies to the objection that the correction made on the basis of the manipulation of quantities by auxiliary customs officers is unlawful in so far as it goes beyond the irregularities established by the criminal court (see point 38 above) - that the supervision exercised by the German authorities was haphazard and lacking in effectiveness because there was a failure clearly to distinguish between criminal prosecution of the irregularities in question and preventing, from the financial point of view, unjustified impoverishment of the Community budget. In that context, it is clear that evidence that carried some weight was not acted upon because it was considered insufficiently detailed to allow a criminal investigation to be set in motion. Furthermore, the illegal payment of Community funds came to an end, followed immediately by the winding-up of IMEX, in the wake of the investigation instituted by the German authorities on 28 October 1987, that is to say barely a week after the person who had supplied the exporters with the falsified stamps had made his statement to the Munich police. (43) The Member State's claim that, in relation to the administration of EAGGF financing, the full and uniform application of Community law, based on checks that the transactions being financed have actually taken place and have been carried out in accordance with the rules, remains subject to the conditions governing the implementation of national criminal legislation, seems to be irremediably at odds with the principles set down by the Court of Justice in its case-law concerning the primacy of Community law and the Member States duty of genuine cooperation. (44) My view, however, contrary to that of the German Government, is that the prevention of a negative financial impact on the Community budget is an objective that co-exists with but is quite separate from that of establishing and bringing a criminal prosecution in respect of an offence. In relation to the clearance of accounts it is only the former objective that matters. 45 For that same reason, the fact that the list of infringements established by the customs investigation unit and, at a criminal level, that established by the Munich Landgericht do not tally (see point 38 above) does not at all justify the claim that the correction made by the Commission was excessive. In this case, moreover, it is clear on closer examination that the accuracy and veracity of the data transmitted by the national authority is not in dispute: the figures on which the decision is based are in fact drawn from the final report of the inquiry into IMEX by the Munich customs investigation unit, dated 23 June 1989. Germany is relying, however, on a general principle of law, according to which only those irregularities established by the criminal courts may be considered proven and give rise to corrections of the relevant expenditure. Such a principle is, however completely incompatible with the rationale - never mind the letter - of the system of supervision set up by Regulation No 729/70. It is no coincidence that no trace of it is to be found in the subsequent Regulation No 595/91, mentioned above (see point 40), which clearly equates the establishment of irregularities by the administrative authorities with the finding of irregularities by the courts, and merely provides in the third subparagraph of Article 1 that: `This Regulation shall not affect the application, in the Member States, of rules relating to criminal proceedings or mutual assistance between Member States at judicial level in criminal matters'. I therefore consider that Germany has not succeeded in proving that the conditions for obtaining the financing withheld under the decision are met, in terms of the particular aspect discussed above. 46 We have, finally, to analyse the plea concerning the charging to Germany of a sum equivalent to 10% of the payments made after 1 January 1986 because of the delay in transmitting additional information on the state and likely outcome of the procedures for recovery the national authorities had set in motion. The arguments Germany puts forward on that point seem to me to be formalistic and to some extent contradictory: the applicant Government claims that the communication of 27 May 1994 was made in accordance with Article 5(2) of Regulation No 595/91 and therefore constitutes a `special notification' to be given by the Member States of their own initiative and without being subject to deadlines. There is, however, reason to doubt that that was the nature of the communication in question: the German authorities appear to forget that they had been asked to provide the information in issue on several occasions, including prior to the decision of 21 January 1994. In particular, the Commission had informed them, by letter of 10 October 1993 - six years after the financial year during which the irregularities had been committed, and four years after the adoption of the final report by the Munich customs investigation unit - that it intended closing the file on IMEX under the 1991 clearance of accounts procedure, in view of the fact that the procedures for recovery undertaken had failed to yield results. 47 Setting aside the debate on the legal basis for the Commission's action, in the final analysis the `crux' of this plea seems to me to be whether, while procedures for recovery are pending, it is for the Commission or the Member States to decide once and for all that particular payments are not recoverable (in whole or in part) and to which financial year the sums wrongly paid are to be charged, for the purposes of clearing the accounts. I consider that the solution currently advanced by Germany has no basis in the legislation. Article 5(2) of Regulation No 595/91 certainly allows the Member States to notify the Commission of those national procedures which they consider fruitless so that the Commission is able to take a decision on charging (to the EAGGF or the Member State concerned) the financial consequences thereof. However, that provision does not at all preclude - as alleged by the German Government - the power of the Commission to `provoke', so to speak, the Member State into taking a view, possibly by making use of the powers provided for under Article 1(3) of Regulation No 1723/72. How can the existence of a power of that nature be denied, particularly when, despite objective signs that the procedure has failed, the national authorities fail to take the initiative of giving special notification, in breach of the duty to exercise general diligence required by Article 5 of the Treaty and Article 8(1) of Regulation No 729/70? 48 Moreover, it is essential that the Commission - even when requesting the forwarding of information concerning the recovery procedures under way needed for the clearance of accounts for a given financial year - should abide by the principles of sound administration, such as the principle that there must be a certain and predictable financial relationship between the Commission itself and the Member States. Compliance with that principle generally implies that the Commission should make clear to the national authorities the financial consequences that it may attach, on expiry of a reasonable deadline, to their inaction or failure to fulfil precisely identified Community obligations. (45) It is my view that in this case the Commission cannot be accused of having neglected the requirements of sound administration: since the Commission had informed the German authorities a long time previously of its intention to settle the IMEX dossier under the 1991 clearance of accounts - at the time the decision of 21 January 1994 was notified - the German authorities could not have failed to realise that the additional information requested as part of the abovementioned procedure specifically included information as to the likely success of the national procedures for recovery that had been commenced. For that reason, once the ten-day deadline - which was short but, in my view, reasonable and not arbitrary - had expired, the Commission could actually have charged to Germany 100% of the sums that could not be recovered (see points 8-11 above). 49 It has also been the contention of the German Government that where a breach of the obligations arising out of Regulation No 595/91 has been ascertained, the Commission cannot use its power to set a deadline under Article 1(3) of Regulation No 1723/72 but must bring an action for failure to fulfil an obligation under the Treaty. That argument does not, however, hold good. Although meeting different needs and purposes, the procedure provided for under Article 169 of the Treaty and the procedure for the clearance of national accounts in relation to EAGGF-financed expenditure are held to be equivalent by the Court of Justice: both are of an adversary nature, entailing the right to be heard, and may culminate in proceedings before the Court. (46) I consider that the third plea submitted by Germany has therefore to be rejected. V - The fourth plea: the correction of DEM 997 814 in respect of irregularities committed by the Südfleisch company in 1991 concerning exports of beef to Lebanon is illegal 50 The fourth plea submitted by the German Government concerns the Südfleisch company. After it had exported some 628.75 tonnes of beef during March 1991, Südfleisch provided the German authorities on 1 July of that same year - on final closure of the prefinancing procedure which had been left in abeyance - with a customs clearance certificate for the goods on entry into the United Arab Emirates (hereinafter the `UAE'). That document - which Südfleisch had received from Al Fatha Goldstore, whose principal place of business is in Doha (Qatar) and with which it had previously had a commercial relationship - subsequently proved to be false. The exporter then managed to provide, by the annual deadline, evidence that 364.185 tonnes of the product had been placed on the market in Lebanon. As regards the remaining 282.565 tonnes, however, that evidence was not furnished until 1 July 1992, after the Principal Customs Office had on several occasions extended the relevant deadline. Südfleisch was therefore paid the refunds applicable at the time to exports of beef to Lebanon (equivalent to DEM 294.27 per 100 kg net weight of exported product), a rate substantially lower than the refund applicable to exports to the UAE (equivalent to DEM 423.75 per 100 kg). The Commission singled out for criticism the wrongful exercise by the German authorities of the discretion accorded to them by Article 47(4) of Regulation No 3665/87. For the purposes of payment of the refund, that article provides that further time may be granted for the production of the documents proving that the product has been cleared through customs for release for consumption in the third country concerned have been completed. The deadline may be extended in the case of an exporter who, although he has acted with all due diligence, has not produced the abovementioned documents to the authorities within 12 months of the date on which the export declaration was accepted. (i) Fulfilment of the conditions governing the granting of an extension of the deadline 51 According to the German Government, the principle of equality laid down in the German Constitution required the Principal Customs Office, when deciding on the basis of the information available whether the conditions laid down by Article 47(4) of Regulation No 3665/87 for extending the deadline, as requested by Südfleisch, were met, to proceed on the assumption that the exporter had made every possible effort to obtain proof that the goods had arrived at their destination. Indeed, the initial attempts to obtain that evidence date back to May 1991 when Südfleisch commissioned a Mr Hoffmann, an insurance agent, to inquire into the movements of the vessel that had transported the goods and to ascertain in particular whether it had unloaded the whole of its cargo in Beirut. It is, moreover, quite possible that Südfleisch was misled by Al Fatha Goldstore about the true final destination of the meat. Above all, the fact of granting an extension of the deadline would not have made it impossible to refuse subsequently to pay the refunds, were it later to emerge that some of the conditions for an extension were not met. 52 The Commission points out that the fact that Südfleisch instructed an insurance agent to inquire into whether the goods had been correctly transported barely two months after they had been dispatched and that it sent three of its employees to the UAE to investigate in June 1991 (see below), indicates that the exporter more or less immediately had doubts as to the true destination of the products exported. In the light of that circumstance, the Commission insists that the production in July 1991 of false evidence that the goods had arrived in the UAE was fraudulent or at least grossly negligent. Although it suspected that its product had been placed on the market in a country other than that for which it was intended, the exporter nevertheless decided to transmit the documentation in its possession. The request for an extension of the deadline under Article 47(4) of Regulation No 3665/87 was not in fact submitted until 24 September 1991, after the German authorities had discovered that the document was false, and the company was faced with the prospect of having to repay all of the refunds already received. Furthermore, the German Government's assertion that Südfleisch had acted with all due diligence to obtain the proof required during the 12 months following the date of acceptance of the export declaration is also belied by the unprofessional nature of the investigation which the company's three employees carried out in the port of Ajman. As far as the German authorities were able to ascertain, the three representatives were not able to be present when the goods were actually given customs clearance for placement on the market in the UAE because the day scheduled for verification was a religious festival. The representatives therefore did no more than establish that the cargo holds of the vessel used to transport the goods were more or less full of Südfleisch containers with their seals intact. (ii) Exercise by the national authorities of the discretion accorded to them by Article 47(4) of Regulation No 3665/87 53 According to the German Government, whether the exporter acted in good or bad faith - an issue that has no relevance for the purposes of entitlement to the refunds (provided the documentary evidence is furnished within the annual deadline) - also has absolutely no bearing on the process of arriving at the decision to extend the deadline. An extension of that kind could therefore also be granted to an exporter that had, fraudulently or as a result of gross negligence, submitted to the competent national authorities falsified customs clearance certificates, except where the delay in seeking the evidence was actually a result of the exporter's initial fraudulent or negligent conduct. Inasmuch as Community law grants the national authorities discretion, the Commission cannot impose its own view of how that discretion has to be exercised without provoking serious legal uncertainty that would be damaging to the Member States and all the economic operators concerned. In any event, even if it were correct that the German authorities ought to have taken account of the subjective factor of the conduct of Südfleisch when taking their decision on the request to extend the deadline, the Principal Customs Office could not in any case have refused that extension, as it was not in a position to know whether exporter had acted deliberately or with gross negligence Neither the criminal investigations nor the investigations by the customs authorities were able to establish that representatives of Südfleisch were responsible for falsifying the documents or making fraudulent use of them. 54 The Commission denies having sought to substitute its own decisions for those adopted by the national authorities on the basis of their discretion. That discretion is, however, subject to limitations arising directly out of Community law and must be exercised taking into account the spirit and objectives of such legislation. Article 47(4) of Regulation No 3665/87 - a provision in the nature of a derogation that has as such to be interpreted restrictively - allows the Member States to extend deadlines only if it has not been possible to produce the necessary documents in due time as a result of objective factors unrelated to the exporter's conduct. By failing to comply with those criteria, the Principal Customs Office has clearly exceeded the limits of its discretion in this case. 55 The Commission also points out that an official from the German customs investigation unit took part in the mission - about which it informed the Federal Finance Ministry directly - that the Commission services carried out in Beirut in June 1991. During that mission it emerged that refunds had been illegally disbursed in relation to some 2 500 tonnes of beef intended for the UAE but diverted to Lebanon. Consequently, despite the need - as claimed by the German Government - for further investigations on completion of the mission, at the time the extension was granted the Principal Customs Office must by then have been aware that the customs clearance certificate for the goods on entry into the UAE, produced by the company almost three months earlier, had been falsified and that Südfleisch knew (or at least suspected) that the document was not authentic. Above all, the Commission finds it very surprising that the extension was authorised well ahead (six months ahead) of the expiry of the original annual deadline and unusually swiftly (on the very day on which Südfleisch made its request, namely 24 September 1991). The fact, moreover, that authorisation came just one day before the official outcome of the investigative mission to Beirut was transmitted to the German authorities is in itself a remarkable coincidence to say the least. 56 Lastly, the Commission contends that, contrary to what is maintained by the German Government, the establishment of possible criminal responsibility is an issue completely separate from verification of the requirements provided for by Article 47(4) of Regulation No 3665/87. The process of verification certainly includes the need, however, to ascertain whether an extension that allows an exporter to continue to search for the `right documents' - in circumstances such as those of the instant case and following the discovery that the quantities have been manipulated - is compatible with Article 47(4). 57 I take the view that, within the context of Article 47(4) of Regulation No 3665/87, establishing whether the exporter has exercised all due diligence and is therefore entitled to be granted extensions of the deadline, must be linked to the legal concept of force majeure. Moreover, implicit reference to the concept of force majeure is to be found in the twenty-fourth recital in the preamble to the regulation, and Article 47(4) has to be interpreted in the light of this. (47) While the fact that a case of force majeure exists does not relieve the exporter of the obligation to produce within the statutory deadline the documentation concerning payment of the refund, including the documentary evidence requested, it may enable him to continue collecting and submitting evidence and therefore to obtain payment of sums that could not otherwise be disbursed. It therefore seems to me appropriate to examine whether the failure of Südfleisch to produce the documentary evidence before the deadline was extended was in fact the result of force majeure (I shall leave aside for the moment the clear anomaly, pointed out by the Commission, that this was a deadline extended six months before it was due to expire, without awaiting the outcome of an investigation that was under way). 58 According to the consistent case-law of the Court of Justice, the concept of force majeure differs in its scope in different areas of the law and must be defined by reference to the particular legal context in which it is intended to operate. (48) The legal context I described above (see points 50 to 57) seems to me not dissimilar in substance to the situations referred to the Court of Justice in the abovementioned Cases 109/86 (49) and C-334/87 (50), in which the Court ruled that `whilst that concept (force majeure) does not presuppose absolute impossibility, it nevertheless requires the non-performance of the act in question to be due to circumstances beyond the control of the person claiming force majeure which are abnormal and unforeseeable and of which the consequences could not have been avoided despite the exercise of all due care'. It seems to me highly significant that, in attempting to justify extending the deadline granted to Südfleisch, Germany has been unable to cite any specific external event that was abnormal, unforeseeable and unavoidable notwithstanding the diligence exercised by the exporter in its efforts to obtain the documentary evidence within the period fixed. Indeed, closely considered, it is the very affirmation that the company acted in accordance with the normal criteria of due diligence and care that is, in my view, contradicted by the facts established by the Commission (see point 53 above), even setting aside the question whether Südfleisch can be held responsible for falsifying the customs clearance certificate in the UAE or for its fraudulent use. (51) How then has the German Government explained the difficulties encountered by Südfleisch in obtaining proof of export? All that can be gleaned from the documents before the Court are accusations as veiled as they are vague of breaches of the contractual obligations entered into by the carrier of the goods and Al Fatha Goldstore (whose role in relation to the contract of sale in issue is in any case unclear). It can only be one or the other of those operators (or both of them), but in any event not Südfleisch, that has to be held responsible for taking the initiative of re-exporting the meat to Lebanon. But even if we wished to accept the German Government's view that Südfleisch acted with the utmost diligence, and even if the accusations directed against the other parties to the contract with that exporter were underpinned and substantiated by specific facts, the alleged failure to fulfil contractual obligations cannot in any event be encompassed by the concept of force majeure. As the Court has ruled, again in the abovementioned Cases 109/86 and C-334/87, although such a disruption to the performance of a contract may be described as a circumstance outside the control of the exporter, it is nonetheless neither abnormal nor unforeseeable. Such an event is an ordinary commercial risk inherent in commercial transactions: whether or not the exporter acted in good faith is immaterial. It is, however, for the exporter, who is fully at liberty to select such trading partners as his interests may dictate, to take the appropriate precautions either by including the requisite clauses in the contract or by effecting appropriate insurance. Similar principles apply to any fraudulent practices involving the re-introduction into the Community of goods in respect of which the exporter has obtained a refund. (52) 59 Finally, the case-law that I have cited here has also made clear that the Member States remain subject to Commission supervision regarding the manner in which they make use of the power of recognising specific circumstances as cases of force majeure, thereby making it possible to extend the period of validity of an export licence or an export deadline. According to the Court, of Justice, that power of supervision by the Commission is needed to ensure that Community law is properly applied; (53) I see no reason why, the necessary changes being made, that power cannot come into play where, at their discretion, the national authorities are granting an extension to the deadline for submitting documentary proof pursuant to Article 47(4) of Regulation No 3665/87. The further argument raised by the German Government, according to which the Commission may not impose upon the Member States its own concept of the way in which the discretion in issue has to be exercised, appears therefore also to be without merit. The Commission in fact properly decided that the Principal Customs Office ought at least to have awaited the imminent communication of the outcome of the investigative mission before taking its own decision, and that it was only on expiry of the original annual deadline (in March 1992) that the German authorities would have been in a position fully to assess whether Südfleisch had exercised due diligence, by reference to all the circumstances that had occurred after the date on which the export declaration was accepted. Similarly - and leaving aside the non-existence of a case of force majeure - the Commission was right to take into consideration also the economic consequences of the decision to grant the extension: the aim of such an extension ought simply to be to make it possible for exporters to overcome the difficulties that they may encounter in obtaining the documentary proof requested, and may not in any event permit the parties concerned to limit the damaging economic effects attributable to their own misconduct, or even avoid them all together, as seems to have happened in this case. I therefore conclude that the fourth plea must be rejected: the fact that the extension of the annual deadline accorded to Südfleisch was unlawful both on the ground that the requirement of force majeure was not met and on the ground that the national authorities misused their own discretionary powers, means that the company was late in submitting its proof. In those circumstances, the expenditure on the refund in issue could not be charged to the EAGGF. (54) VI - Fifth plea: the correction of DEM 518 181 for irregularities in relation to exports of beef to Zimbabwe by the Barfuß company in 1986 and 1987 is unlawful 60 During a mission to Zimbabwe in February and March 1990, the German customs investigation unit uncovered German certificates of fitness for consumption relating (inter alia) to consignments of beef that Barfuß had declared it had exported to the Republic of South Africa and in respect of which it had obtained the relevant export refunds. At the time, there was no refund provided for the export of the product in question to Zimbabwe. The German authorities had been very indecisive in setting about recovering the refunds paid to Barfuß: in particular, the relevant procedure was not set in motion by the Principal Customs Office until July 1991, one year after it had been notified of the outcome of the abovementioned mission. After agreeing to the request to defer the matter to the clearance of accounts for the next financial year, submitted by the German authorities in order to allow them to attempt, in the meantime, to secure repayment of the sums wrongly paid, the Commission decided in 1994, on the basis of Article 8(2) of Regulation No 729/70, (55) to make the correction in issue in respect of the irregularities established (export of the product to the Republic of South Africa and its subsequent re-export to Zimbabwe, followed by re-import into the Community under the arrangements for exemption from customs duties pursuant to the Third Lomé Convention). 61 The German Government considers the Commission's finding that the payments in issue were unlawful to be arbitrary and unfounded. The German certificates of fitness for consumption uncovered in Zimbabwe merely demonstrate that the goods exported by Barfuß were sound but do not indicate the route they took. Those documents are not in any event such as to deprive of all probative value the customs clearance documents for the Republic of South Africa or the documents accompanying the meat. It cannot, in particular, be ruled out that the products exported by Barfuß were placed on the market in South Africa and that the certificates in issue - issued in Germany and stamped in Zimbabwe - were fraudulently attached to other consignments of meat, in the course of subsequent commercial transactions, specifically after the product was imported into Africa. The delay in initiating the procedure for recovery, therefore, was actually the result of doubts as to its legality and likelihood of success, given that the documents submitted by the customs investigation unit - on which the procedure had to be based - were considered to be without probative value. Similarly, the procedure was closed because the Principal Customs Office was persuaded that the measures taken to recover the sums illegally disbursed could have been successfully challenged in the courts. 62 That argument was considered unacceptable by the Commission, since it would imply - contrary to what emerges from the case-law of the Court of  Justice - that procedures for recovery are possible only where it is proven with absolute certainty that the goods exported were placed on a market other than that of the country of destination. In this case, in the Commission' view it was for Barfuß to furnish incontrovertible proof that the goods had been placed on the market of the declared country of destination (South Africa), by producing documents other than the customs clearance certificates, the probative value of which had been called into question by the discovery in Zimbabwe of certificates of fitness for consumption concerning the selfsame consignments of beef. In the absence of such proof, the refunds already disbursed had of necessity to be recovered. 63 In the light of the interpretation guidance that emerges clearly from the earlier case-law of the Court of Justice (and more particularly the decision in Dimex), (56) there was then no point in further suspending the procedure for recovery - as decided by the Principal Customs Office in August 1991, when Barfuß raised an objection - in order to await the decision of the Court of Justice on the request for a preliminary ruling in the Möllmann-Fleisch case submitted to it by the Finanzgericht Hamburg. (57) Finally, for no good reason, according to the Commission, the German authorities declined to implement the decision to recover adopted on 1 July 1991 and closed that procedure by decision of 7 June 1994. The Commission contends that, even if the Principal Customs Office were genuinely persuaded that the order against Barfuß for repayment of sums illegally disbursed was itself unlawful, that view was unfounded in the light of the Court's abovementioned decisions. The real reason why the procedure was closed without yielding any result was in fact because the originals of the certificates of fitness for consumption had been lost by the Principal Customs Office, to which the documents had been transmitted as attachments to the customs investigation unit's mission report dated 5 June 1990. Contrary to the German Government's assertions, the original certificates could not have been validly replaced with the unauthenticated photocopies which the Principal Customs Office had obtained from the EU Commission, because the photocopies had no probative value under the German rules of evidence. 64 Under Article 8(2) of Regulation No 729/70, refunds that have been paid to an exporter and have not been recovered may legitimately be charged to a Member State if it is clear that, having first disbursed the sums in question negligently or incorrectly, the national authorities also failed to act swiftly to rectify the irregularities. To justify the lack of decisiveness and the `hiccups' that occurred in the procedure for recovery, the German Government has cited the doubts of the German authorities as to whether the payments to Barfuß were in fact irregular, as alleged by the Commission. Those doubts were said to be founded on the provisions of national law (and the case-law of the Bundesgerichtshof) on the burden of proof (see point 61 above) to which Article 8(1) of Regulation No 729/70 refers. (58) However, it seems to me indisputable that national legislation may be relied on only to the extent necessary to implement Community law and always provided that the application of national legislation does not jeopardise the scope and effectiveness of the relevant Community rules and make possible the kind of speculation the latter are meant to eliminate. (59) 65 In accordance with the principles established by the Court of Justice in the Dimex and Möllmann-Fleisch cases (see footnotes 56 and 57), the discovery in Zimbabwe of certificates of fitness for consumption relating to consignments of meat which, according to Barfuß, had been exported to South Africa was such as to arouse reasonable and justifiable doubts as to whether the objective of the differentiated export refunds had actually been achieved. (60) Therefore the German authorities could and ought to have asked Barfuß to prove, by furnishing one or more of the documents listed in Article 20(4) of Commission Regulation No 2730/79 of 29 November 1979 laying down common detailed rules for the application of the system of export refunds on agricultural products, (61) applicable at the time of these events, that the meat had in fact been placed on the market in the territory of the country indicated in the customs clearance certificate and the accompanying documents. In the absence of such proof, it has to be concluded that Barfuß obtained the refunds in issue wrongly and that the German authorities should have acted promptly to recover those monies. 66 As the Court of Justice has long made clear, in contrast to the relationship between the national intervention agencies and the economic operators - which is governed by national law, within the limits imposed by compliance with Community law, in accordance with Article 8(1) of Regulation No 729/70, (62) - the relationship between the Member States and the Commission, and therefore responsibility for any negligence, is governed by Community law in accordance with Article 8(2) of the regulation. (63) It follows from the general obligation to exercise diligence laid down  in Article 5 of the Treaty - which finds expression, in the specific sector of CAP financing, in Article 8 of Regulation No 729/70  (64) - both that the national authorities cannot justify a failure to fulfil their obligation to rectify irregularities quickly by relying on `the length of administrative or judicial proceedings commenced by an economic agent'; (65) and that the Member States must take steps to rectify irregularities promptly because `with the passage of time, recovery of sums wrongly paid is likely to become complicated or impossible for reasons such as the fact that undertakings may have ceased trading or accounting documents may have been lost'. (66) The German Government claims to have acted with the requisite diligence, but, in my view, the facts belie this: the procedure for recovering the sums wrongly disbursed was not set in motion by the Principal Customs Office until one year after the irregularity had been established and was immediately suspended; more particularly, it remained suspended for a further year awaiting the Court's ruling in Möllmann-Fleisch. Finally, the loss of the originals of the certificates of fitness for consumption made it permanently impossible to enforce the order for recovery (see points 60 and 63 above). 67 Furthermore, I do not consider that the Commission can be criticised for having failed to respect, in this case, the need for its financial relationship with the Member States to be certain and predictable, which I have already mentioned. (67) Apart from the fact that the German authorities could not reasonably have been unaware that their inertia was likely to have damaging financial repercussions, it is clear from the documents in the case that, even before the Summary Report was drawn up, the Commission had made known its intention not to charge the sum in question to the EAGGF on the ground that the German authorities had failed to fulfil their obligation to act diligently and to recover the sums wrongly paid promptly (see point 60 above). The fifth plea must therefore be rejected also. VII - Sixth plea: the correction of DEM 3 118 563.54 in respect of irregularities linked to the granting of the special premium for beef producers is unlawful 68 I propose that the Court should disregard the last plea concerning the financial correction, at the flat rate of 4%, applied by the Commission - because of the extremely limited opportunities for inspection, the poor quality of the checks carried out on the identification of the animals and the non-existence of reliable administrative controls - to the expenditure relating to the special premium for beef producers declared in 1991 (on the basis of applications submitted in September 1990) by Bavaria, Baden-Württemberg and Lower Saxony. Indeed, the German Government stated at the hearing that it was withdrawing that plea. That the arguments adduced by the German Government should be disregarded is absolutely clear from the Court's judgment of 3 October 1996 in Case C-41/94 Commission v Germany (68) - delivered after the written procedure in this case had been completed - in relation to a similar plea submitted by Germany in connection with the Commission Decision on the clearance of the accounts presented by the Member States in respect of the expenditure for 1990 of the European Agricultural Guidance and Guarantee Fund, Guarantee Section. In that judgment, the Court rejected all of the arguments reproduced by the German Government in its sixth plea in these proceedings. VIII - Conclusions In the light of the foregoing I propose that the Court: -  dismiss the application; and -  order the Federal Republic of Germany to pay the costs. (1) - OJ 1994, L 352, p. 82. The findings on which the Commission based its decision not to charge to the EAGGF the sums in issue (see below) are set out in its Summary Report concerning the clearance of the EAGGF Guarantee Section Accounts for 1991 (Doc. VI/320/94 of 21 December 1994; hereinafter `the Summary Report'). (2) - Case C-54/91 Germany v Commission [1993] ECR I-3399. In its judgment in that case, the Court dismissed Germany's application to have the Decision on the clearance of the EAGGF accounts for 1988 annulled, in relation - among other things - to the corrections made by the Commission to the expenditure in respect of production refunds for starch and sugar. Those corrections were imposed because the German authorities had unduly advantaged certain companies, by authorising them to submit applications for refund certificates not before processing commenced, as required by the relevant Community legislation, but after processing. The Court pointed out that the administrative practice described made it impossible to carry out consistently the physical checks Germany was required to make on goods, and that it could not claim, in order to circumvent that requirement, that a different system of supervision was allegedly more effective: ibidem, paragraphs 36 to 40. (3) - See Article 1 of Commission Regulation (EEC) No 422/86 of 25 February 1986 amending Commission Regulation (EEC) No 1723/72 of 26 July 1972 on making up accounts for the European Agricultural Guidance and Guarantee Fund, Guarantee Section (OJ 1986 L 48, p. 31; Regulation No 1723/72 is published in OJ, English Special Edition Second Series III, p. 109). In accordance with the practice introduced pursuant to Regulation No 1723/72, the Member States are allowed - even after 31 March of the year following the year in which the relevant expenditure has been incurred (that is to say after the expiry of the deadline for submission of the relevant documentary evidence) - to forward additional information that is needed to clear the accounts of the national authorities and bodies authorised to disburse the export refunds and intervention aimed at stabilising agricultural markets. That allows the Member States to take into account, in particular, the results of the checks already carried out by the Commission. However, to enable the Commission to scrutinise the national accounts rapidly, the abovementioned Article 1(3) of Regulation No 1723/70 provides that, in the case of failure to submit the information within the period fixed, the Commission is to take its decision on the basis of those elements of information in its possession at the deadline, except in cases where the late submission of information is justified by exceptional circumstances. (4) - See the Commission communication to the Fund Committee of 3 June 1993, Doc. VI/216/93, and more particularly annex 2 thereof, concerning forfeitary corrections. (5) - See Case C-197/90 Italy v Commission [1992] ECR I-1, paragraphs 37 to 40, and Case C-56/91 Greece v Commission [1993] ECR I-3433, paragraphs 20 to 22. (6) - See Case C-55/91 Italy v Commission [1993] ECR I-4813, paragraph 67. (7) - The Commission argues that the Guidelines cannot form the basis for any direct entitlement on the part of the Member States. According to the Commission, the legal relevance of the Guidelines is at most that they represent a decision of the Commission to impose certain limits on its own action, though it may depart from this in individual cases (particularly, as in the instant case, in a manner favourable to the Member States). (8) - The requirement that the Member States should transmit the information required to enable the Commission to take its decision on the clearance of accounts in good time may in fact have its foundation in Article 5 of the Treaty even more than in the provisions of secondary legislation (see Case 14/88 Italy v Commission [1989] ECR 3677, paragraphs 16 to 20). (9) - See Case C-413/92 Germany v Commission [1994] ECR I-3781, paragraphs 29 to 31. (10) - OJ, English Special Edition 1970 (I), p. 218. (11) - The financial correction applied by the Commission to the refunds disbursed for the exports in question, all of which were deemed unlawful, was therefore fixed according to a differentiated rate for each period in question (100% for the period November 1990 to mid-October 1991; and 17% - reflecting the percentage of transactions that the Commission found to be incompatible with Community rules by checking a sample of the practices applied - for the period mid-October 1991 to March 1992). (12) - OJ 1987 L 351, p. 1. Article 5(1) provides as follows: `Payment of the differentiated or non-differentiated refund shall be conditional not only on the product having left the customs territory of the Community but also - save where it has perished in transit as a result of force majeure - on its having been imported into a non-member country and, where appropriate, into a specific non-member country within 12 months following the date of acceptance of the export declaration: (a) where there is serious doubt as to the true destination of the product, or (b) where, by reason of the difference between the amount of the refund on the exported product and the amount of the import duties applicable to an identical product on the date of acceptance of the export declaration, it is possible that the product may be re-introduced into the Community ... ' (13) - OJ 1979 L 187, p. 8. Article 1 provides: `For the purposes of granting export refunds, bovine animals are considered as pure-bred breeding animals falling within subheading 01.02 A I of the Common Customs Tariff where they comply with the definition given in Article 1 of Directive 77/504/EEC'. (14) - OJ 1977 L 206, p. 8. Article 1(a) defines a pure-bred breeding animal of the bovine species as: `any bovine animal the parents and grandparents of which are entered or registered in a herd-book of the same breed [maintained by a breeders' organisation or association that is officially recognised], and which is itself either entered or registered and eligible for entry in such a herd-book.' Furthermore, Article 6(2) of the directive provides that until the entry into force of Community rules on the presentation of pedigree certificates drawn up in accordance with a uniform procedure, the assessment of the zootechnic value and genetic qualities of cattle carried out officially in another Member State and the herd-books currently in existence are to be recognised by the other Member States. On the basis of Article 6(1), the Commission adopted Decision 86/130/EEC of 11 March 1986 laying down performance monitoring methods and methods for assessing cattle's genetic value for pure-bred breeding animals of the bovine species (OJ 1986 L 101, p. 37) and Decision 86/404/EEC of 29 July 1986 laying down the specimen and the particulars to be shown on the pedigree certificates of pure-bred animals of the bovine species (OJ 1986 L 233, p. 19). (15) - OJ 1992 L 302, p.1. (16) - See, among many, Case C-55/91 Italy v Commission, cited in footnote 6 above, paragraph 13. (17) - See Case C-48/91 Netherlands v Commission [1993] ECR I-5611, paragraphs 11, 12, 16 and 17. See also Case 820/79 Belgium v Commission [1980] ECR 3537, paragraph 15; Case 214/86 Greece v Commission [1989] ECR 367, paragraph 19, and Case C-281/89 Italy v Commission [1991] ECR I-347, paragraph 20. In his Opinion of 22 November 1990 in the latter case, Advocate General Mischo made the point that to apply the rule on the burden of proof rigidly `would not only be contrary to the principle actori incumbit probatio but would also require the Commission to furnish negative evidence which would be very difficult to obtain, whereas it may reasonably be expected that a defendant (sic) Member State, being ex hypothesi familiar with the conditions under which it arranged for the operations in question to be carried out, would be in a position to produce positive evidence in that regard' (see [1991] ECR I-354, point 18). (18) - Opinion delivered on 22 November 1990 (cited in footnote 17 above), point 19. (19) - More than 57 000 head of cattle were imported into Poland from Germany in 1991, compared with 166 in 1990 and 374 in 1989. (20) - See the letter to the Federal Minister for Finance of 12 November 1991, containing a request that an inquiry be set in motion by the Public Prosecutor's office or the appropriate customs unit (annex 3 to the Commission's rejoinder). (21) - See the note dated 24 March 1992 from Dr Jentsch (submitted by the Commission at annex 4 to the rejoinder), concerning the statements by Mr Malezewski. (22) - See footnotes 20 and 21 above, and the relevant sections of the Opinion. (23) - See footnote 12 above and the relevant section of this Opinion. (24) - See Commission Regulation (EEC) No 2342/92 of 7 August 1992 on imports of pure-bred breeding animals of the bovine species from third countries and the granting of export refunds thereon and repealing Regulation (EEC) No 1544/79 (OJ 1992 L 227, p. 12; hereinafter `Regulation No 2342/92'). (25) - See footnote 19 above and the relevant section of this Opinion. (26) - See footnote 14 above and the relevant section of this Opinion. (27) - Use of a breeding certificate that complies with the specimen certificate is not compulsory `provided that the particulars mentioned in this Decision are already present in the reference documentation referring to the pure-bred animal of the bovine species that enters into intra-Community trade' (see the third recital in the preamble to Decision 86/404, cited in footnote 14 above). (28) - See joined Cases 205-215/82 Deutsche Milchkontor v Germany [1983] ECR 2633. (29) - See Case C-8/88 Germany v Commission [1990] ECR I-2321, paragraphs 16 to 20), concerning the granting of premiums for the maintenance of the suckler cow herd and of premiums for sheepmeat producers. (30) - Article 8(1) of Regulation No 729/70, which is the basic regulation in relation to the obligations of the Community and the Member States in connection with the financing of the common agricultural policy, provides: `The Member States in accordance with national provisions laid down by law, regulation or administrative action shall take the measures necessary to: - satisfy themselves that the transactions financed by the Fund are actually carried out and are executed correctly; - prevent and deal with irregularities; - recover sums lost as a result of irregularities or negligence ...'. (31) - See Case C-2/93 Exportslachterijen van Oordegem v Belgische Dienst voor Bedrijfsleven en Landbouw and Generale Bank  [1994] ECR I-2283, paragraphs 14 and 17 to 18; my emphasis; references to earlier judgments omitted). (32) - See footnote 30 above and the relevant section of this Opinion. (33) - Similarly, and specifically in accordance with the principle that the Member States have prime responsibility for the strict observance of the rules governing the administration of EAGGF financing, a further argument raised by the German Government with reference to the application of Article 5 of Regulation No 3665/87 (see footnote 12 and points 30 and 31 above) has, in my view, to be rejected. According to the Federal Republic of Germany, the Commission failed to fulfil its own duty of genuine cooperation under Article 5 of the Treaty: although harbouring `serious doubt as to the true destination of the product', the Commission omitted `to ask the Member States to apply the provisions of paragraph 1 (of Article 5)' - as required under the second subparagraph of Article 5(2) - and at any event failed to perform its own supplementary role in relation to the system of supervision set up by Regulation No 729/70. I take the view, however that although the Commission has the power to do this, it was not required to address to Germany the request provided for in the second subparagraph of Article 5(2). The obligation to implement Article 5(1) is incumbent on the Member States and is an independent requirement that does not have to be triggered by a prior request from the Commission (and in this case there is some doubt as to whether there would have been any point in making such a request). (34) - See Case C-8/88 Germany v Commission (cited in footnote 29 above), paragraphs 16 to 21, according to which, if the Commission ascertains that there is, in a Member State, no comprehensive system of checks necessary to guarantee the proper observance of the substantive and formal conditions for the grant of premiums or the system introduced is defective to the point of giving rise to doubts as to compliance with those conditions, it is entitled to disallow certain expenditure incurred by the Member State in question. It is entitled to disallow expenditure even where it is established that no substantive irregularity has been committed (see Case 327/85 Netherlands v Commission [1988] ECR 1065, paragraph 25. See also Case C-197/90 Italy v Commission (cited in footnote 5 above) paragraph 38. (35) - The German Government did not, however, argue that the expenditure on the refunds in issue incurred during 1991 ought to have been charged to the EAGGF at least to the level of the number of animals lawfully exported during the subsequent financial year (1992: 9 300 head) or the previous financial year (1990: 166 head). (36) - See Case 288/85 Hauptzollamt Hamburg-Jonas v Plange Kraftfutterwerke [1987] ECR 611, paragraphs 16 to 19, which concerns limiting the obligation to repay amounts unduly paid, where export refunds have been paid in advance, to the difference (to which a standard 20% supplement is applied) between the refund already paid for the goods declared to have been exported and the refund that the exporter ought in fact to have been paid for the goods actually exported (in that case mixed cereal feed for sheep with a cereal content below the 65% by weight declared). According to the Court of Justice a similar limit has a fortiori to apply where the product actually exported - although having different characteristics (in the relevant case, flour with a considerably higher ash content) from those mentioned in the payment declaration - is basically the same product, as demonstrated by the fact that it occupies the same position in the Common Customs Tariff: see joined Cases C-5/90 and C-206/90 Bremer Rolandmühle Erling v Hauptzollamt Hamburg-Jonas [1992] ECR I-1157, paragraphs 33-37. (37) - See, among many, Case 18/76 Germany v Commission [1979] ECR 343 and Case 56/83 Italy v Commission [1985] ECR 703. (38) - Article 8(2) provides: `In the absence of total recovery (of the sums lost), the financial consequences of irregularities or negligence shall be borne by the Community, with the exception of the consequences of irregularities or negligence attributable to administrative authorities or other bodies of the Member States'. (39) - See footnote 3 above and the relevant section of the Opinion. (40) - OJ 1991 L 67, p. 11. According to Article 5(2): `Where a Member State considers that an amount (wrongly paid) cannot be totally recovered, or cannot be expected to be totally recovered, it shall inform the Commission, in a special notification, of the amount not recovered and the reasons why the amount should, in its view, be borne by the Community or by the Member State. This information must be sufficiently detailed to enable the Commission to decide who shall bear the financial consequences, in accordance with Article 8(2) of Regulation (EEC) No 729/70. ...' (41) - See, among many, Case 819/79 Germany v Commission [1981] ECR 21, paragraphs 19 to 21. (42) - See Case C-2/93 (cited in footnote 31 above), paragraph 19. (43) - Incidentally, the swift action taken by the relevant German authorities, once they were aware that there was sufficient evidence to incriminate the representatives of IMEX, would seem to confirm the legitimacy of the Commission's decision to charge to Germany the expenditure incurred for the irregular transactions carried out from 1 January 1986, even though the EAGGF had first drawn the attention of the relevant German authorities to the exporters' activities only 40 days earlier, by letter of 20 November 1985. (44) - See, among many, Case 106/77  Amministrazione delle Finanze dello Stato v Simmenthal [1978] ECR 629, paragraph 17 and Case C-213/89 The Queen v Secretary of State for Transport, ex parte Factortame and Others [1990] ECR I-2433, paragraphs 18 and 19. (45) - See Case C-34/89 Italy v Commission [1990] ECR I-3603, paragraph 14. (46) - See Case C-334/87 Greece v Commission [1990] ECR I-2849, paragraph 31. (47) - The 24th recital in the preamble to Regulation No 3665/87 states: `whereas no refund is granted if the time-limits ... for submitting the proof required for obtaining payment of the refund are not complied with; ... the rules at present in force should, however, be relaxed; ...  measures should accordingly be adopted pursuant to Commission Regulation (EEC) No 2220/85 (laying down common detailed rules for the application of the system of securities for agricultural products) (OJ 1985 L 205, p. 5), as amended by Regulation (EEC) No 1181/87 (OJ 1987 L 113. p. 31)' (my italics). Article 19 of Regulation (EEC) No 2220/85, as amended by Article 1 of Regulation (EEC) No 1181/87, provides - for the purpose of release of a security - that if the deadline for showing final entitlement to the sum granted has passed without production of evidence of entitlement, it may be postponed in a case of force majeure. (48) - See, among many, Case 109/86 Theodorakis v Greek State [1987] ECR 4319, paragraph 6. (49) - Cited in footnote 48 above and the relevant section of this Opinion (concerning the claim by the Theodorakis company, which had obtained an export licence for olive oil in return for the required security, to have the obligation to export annulled and the security released on grounds of force majeure, after the contract of sale had been cancelled due to non-performance by the purchaser; see paragraphs 7 and 8). (50) - Cited in footnote 46 above and the relevant section of this Opinion (concerning, in the part of relevance to the instant case, the financial correction applied by the Commission in respect of the extension of the original period of validity of an export certificate on grounds of force majeure, granted by the Greek authorities when the contract of sale was terminated because of non-performance (failure of the Sudanese Government to open a credit line to fund the transaction). That extension resulted in the continuing application of a rate of refund higher than that in force on the date the customs formalities were completed; see paragraphs 21, 34 and 35). (51) - Furthermore, in the light of the points I have made above concerning the need to distinguish between preventing unduly detrimental financial effects having to be borne by the Community budget and criminal prosecution of the irregularities in question (see point 44), I consider it superfluous to discuss the argument raised by the German authorities, according to which, since neither the criminal investigation nor that carried out by the customs investigation unit uncovered evidence of responsibility on the part of company representatives, it has to be accepted that Südfleisch acted with all due diligence for the purposes of Article 47(4) of Regulation No 3665/87 (see point 53 above). (52) - Such practices therefore result in the right to refunds being lost even if the exporter did not take part in the fraud or acted in good faith: see Case C-347/93 Belgian State v Boterlux [1994] ECR I-3933. (53) - See Case 334/87 Greece v Commission (cited in footnote 46 above), paragraph 30. (54) - See Case 56/83 Italy v Commission (cited in footnote 37 above). (55) - See footnote 38 above. (56) - See Case 89/83 Dimex [1984] ECR 2815, paragraph 11. (57) - See Case C-27/92 Möllmann-Fleisch [1993] ECR I-1701, paragraph 11. (58) - See Joined Cases 205 to 215/82 (cited in footnote 28 above), paragraph 36. (59) - See Case C-28/89 Germany v Commission [1991] ECR I-581, paragraph 33, and Joined Cases 146/81, 192/81 and 193/81 BayWa and Others v BALM [1982] ECR 1503, paragraph 29. (60) - See Case 125/75 Milch-, Fett- und Eier-Kontor v Hauptzollamt Hamburg-Jonas [1976] ECR 771, paragraph 6, in which the Court stated that the raison d'être of the system of varying the refund would be disregarded if, in order to qualify for payment of the refund at a higher rate, it was sufficient for the goods simply to be unloaded at a port of the country of destination without actually reaching the import market. (61) - OJ 1979 L 317, p. 1, as subsequently amended. Regulation No 2730/79 was repealed, with effect from 1 January 1988, by Article 50 of Regulation No 3665/87, which I have cited on several occasions. (62) - See footnote 58 above and the relevant section of this Opinion. (63) - See Case 34/89 Italy v Commission (cited in footnote 45 above), paragraphs 9 to 11. The Court pointed out that the reply to the question whether the Member State concerned or the Community had to bear the financial burden of sums wrongly paid had direct consequences for the Community budget and could not be determined by national law, which differed from one Member State to another. It would be contrary to the uniform nature of the CAP if the Member States were able to alter its financial consequences by means of their national rules. (64) - See footnote 34 above and the relevant section of this Opinion. (65) - See Case C-28/89 Germany v Commission (cited in footnote 59 above), paragraph 32. (66) - See Case C-34/89 Italy v Commission (cited in footnote 45 above), paragraph 12. (67) - See footnote 45 above and the relevant section of this Opinion. (68) - [1996] ECR I-4733, paragraphs 6 to 73.