CELEX: C1997/370/02
Language: en
Date: 1997-12-06 00:00:00
Title: Action brought on 13 October 1997 by the Kingdom of Spain against Commission of the European Communities (Case C-349/97)

6 . 12 . 97           EN                 Official Journal of the European Communities                                   C 370/ 1
                                                                 I
                                                          (Information)
                                             COURT OF JUSTICE
                                                       COURT OF JUSTICE
                JUDGMENT OF THE COURT                               transferee, in proportion to the part of the holding directly
                        (Sixth Chamber)                             or indirectly given over to dairy production at the time
                                                                    when the non-marketing undertaking was entered into
                      of 16 October 1997                            pursuant to Council Regulation (EEC) No 1078/77 of
                                                                    17 May 1977 introducing a system of premiums for the
in Case C-l 65/95 (reference for a preliminary ruling from          non-marketing of milk and milk products and for the
the High Court of Justice, Queen's Bench Division): The             conversion of dairy herds.
Queen v. Ministry of Agriculture Fisheries and Food, ex
   parte: Benjamin Lay, Donald Gage and David Gage (')
                                                                    (■) OJ C 189 , 22 . 7. 1995 .
(Additional levy on milk — Special reference quantity —
Transfer of part of a mixed holding — Apportionment of
          the quota between transferor and transferee)
                         ( 97/C 370/01 )
                                                                    Action brought on 13 October 1997 by the Kingdom of
                 (Language of the case: English)                      Spain against Commission of the European Communities
                                                                                             (Case C-349/97)
In Case C-l 65195 : reference to the Court under Article 177                                   ( 97/C 370/02 )
of the EC Treaty from the High Court of Justice, Queen's
Bench Division (United Kingdom), for a preliminary ruling
in the proceedings pending before that court between The            An action against the Commission of the European
Queen and Ministry of Agriculture Fisheries and Food, ex            Communities was brought before the Court of Justice on
parte: Benjamin Lay, Donald Gage and David Gage — on                13 October 1997 by the Kingdom of Spain, represented by
the interpretation of Articles 1 (2) and 2 of Council               Santiago Ortiz Vaamonde, Abogado del Estado, acting as
Regulation ( EEC) No 2055/93 of 19 July 1993 allocating             Agent, with an address for service in Luxembourg at the
a special reference quantity to certain producers of milk           Spanish Embassy, 4—6 Boulevard Emmanuel Servais.
and milk products ( OJ L 187, 29. 7. 1993, p. 8 ) — The
Court ( Sixth Chamber ), composed of: H. Ragnemalm,                 The applicant claims that the Court of Justice should :
President of the Chamber, G. F. Mancini and G. Hirsch
(Rapporteur), Judges; G. Tesauro, Advocate General; L.
                                                                    — annul Commission Decision 97/608/EC of 30 July
Hewlett, Administrator, for the Registrar, has given a                   1997 H amending Decision 97/333/EC on the
judgment on 16 October 1997, in which it has ruled:
                                                                         clearance of the accounts presented by the Member
                                                                         States in respect of the expenditure for 1993 of the
 On a proper construction of Articles 1 (2) and 2 of                     Guarantee Section of the European Agricultural and
 Council Regulation (EEC) No 2055/93 of 19 July 1993                     Guidance Fund ( EAGGF), as regards the financial
allocating a special reference quantity to certain producers             corrections imposed on the Kingdom of Spain and
of milk and milk products, where part of a mixed holding                 examined in the application, and
is transferred, the reference quantity must be apportioned
between the transferor and transferee, or allocated to the          — order the Commission to pay the costs.
 ---pagebreak--- C 370/2                EN                 Official Journal of the European Communities                                        6 . 12 . 97
Contentions and main arguments adduced in support:                       undertaking without conducting a tendering
                                                                         procedure . It also uses it in order to correct what it
                                                                         regards as inadequacies in the Community legislation,
The    contested     decision  is based  on   erroneous    and           as the Conciliation Body recognizes with regard to
subjective considerations . The Kingdom of Spain believes                dried feedingstuffs .
that it has put forward sufficient information and
arguments to show that the contested decision infringed at
least the following principles of Community law :                        Those corrections, which are in fact in the nature of
                                                                         penalties, are not based on any legislative provision.
— The principle of the right to a hearing : this principle is
    infringed by all the corrections at issue in the
    application .                                                        The Conciliation Body regards the correction of 10%
                                                                          in respect of production aid as fair, but in so doing
                                                                         relies on the same argument as the Commission : the
    Formally, that principle was observed in that the                     lack of computer records. It is not permissible to
    Member State was given an opportunity to state its                   withhold the refund of aid paid out in advance merely
    views on the matters raised by the Commission staff.                  because certain computer records have not been
    But in practice no notice was ever taken of the                       finalized : there must be a duly established and serious
    explanations given. That is immediately clear from the                lack   of checks        which    has  caused   harm    to   the
    documents sent to the Commission by the Spanish                       Community budget.
    authorities, setting out facts and arguments
    comprehensively, and the replies to them, which do no
    more than stress the same points, without                        — In the alternative, the applicant alleges breach of the
    contradicting or refuting the arguments put forward.                  principle of proportionality: if the submissions of the
    Such conduct is tantamount to denying the right of                    Spanish authorities had been properly considered, the
    defence and involves breach of the right to a hearing:               corrections would have been much lower than those
    the explanations put forward by Spain in its defence                  actually imposed. The applicant considers that it put
    have been repeatedly ignored .                                        forward adequate data and arguments to demonstrate
                                                                          to the Court that there is no lack of controls in Spain,
                                                                          at least not to the extent alleged by the Commission.
— Lack of any evidence of the faults imputed to the
    Member State : this basic requirement was also
    infringed in all cases, particularly in relation to              (') OJ L 245 , 9 . 9 . 1997, p . 20 .
    consumption aid . The Commission based its
    corrections either on appearances or suspicions or else
    on data refuted or corrected by the Spanish
    authorities .
— The principle of sound administration : infringed in all
    cases through failure to take account of or sufficiently         Reference for a preliminary ruling by the
    assess the explanations repeatedly given by the Spanish          Verwaltungsgerichtshof, Vienna, by order of that court of
    authorities — particularly as regards the overall                24 September 1997 in the case of Wilfried Ernst Joachim
    correction of 2 % for consumption aid . That                     Monsees against the Unabhangiger Verwaltungssenat fiir
    correction was applied on the basis of visits and                Karnten,        Additional         Party:    Bundesminister       fiir
                                                                                           Wissenschaft und Verkehr
     inspections in years prior to 1993 , and in relation to
     alleged faults on the part of an undertaking which did                                     ( Case C-3 50/97)
     not receive aid in that year.
                                                                                                  ( 97/C 370/03 )
— The principle nulla poena sine lege: this principle was
     infringed in particular in relation to aid for oil
     production and aid for the production of dried                  Reference has been made to the Court of Justice of the
     feedingstuffs .                                                 European          Communities           by     order    of        the
                                                                     Verwaltungsgerichtshof ( Administrative Court ), Vienna of
                                                                     24 September 1997, received at the Court Registry on
     A financial correction may only be imposed if it is             13 October 1997, for a preliminary ruling in the case of
     found that controls are not being carried out in                Wilfried Ernst Joachim Monsees against the Unabhangiger
     accordance with the Community provisions and only               Verwaltungssenat fiir Karnten ( Independent Administrative
     if the inadequacies detected are serious and give               Board for Carinthia ), Additional Party : Bundesminister fiir
     reasonable grounds for concluding that the                      Wissenschaft und Verkehr ( Federal Minister for Science
     Community budget has been seriously affected . The              and Transport ), on the following question:
     Commission        uses   the  instrument    of   financial
     correction in order to penalize a Member State for not
     keeping a computer record up to date or for awarding            are Articles 30 to 36 of the EC Treaty (provisions on the
     a contract regarding records of oil production to an            freedom of movement of goods ) and the other provisions