CELEX: C1997/271/08
Language: en
Date: 1997-09-06 00:00:00
Title: Action brought on 3 July 1997 by the Kingdom of Belgium against the Commission of the European Communities (Case C-242/97)

C 271 /6                  EN                  Official Journal of the European Communities                                     6 . 9 . 97
the same regulation provides that the results of the                      The applicant claims that the Court should:
 verification, by either of the procedures allowed, are to be
 used for the purposes of applying the provisions governing
 the customs procedure under which the goods are placed .
                                                                          1 . annul Commission Decision 97/333/EC of 23 April
                                                                               1997 on the clearance of the accounts presented by the
                                                                               Member States in respect of the expenditure for 1993
 In a first instance it was noted that part of the goods did                   on the Guarantee Section of the European Agricultural
 not correspond to those indicated in the declaration. The                     Guidance and Guarantee Fund ( EAGGF) in so far as it
 Commission considered that ' the facts known indicate that
                                                                               disallows, in respect of the applicant, Community
 the consignment exported was of uniform composition',                         financing for the sum of Bfrs 413 309 611 by way of
 and therefore made a financial adjustment for the whole                       expenditure incurred for the advance payment of
consignment. However, the Spanish authorities were only                        export refunds;
 able to make an overall adjustment in respect of the
 declaration made by the person concerned on the basis of
 facts proved incontestably, not mere suspicions or fears.
                                                                          2. order the Commission to pay the costs .
 In a second instance, the Commission accepted the
 Spanish investigation as evidence that part of the                       Pleas in law and main arguments adduced in support:
declaration was incorrect but did not accept it as regards
the part which could not be proved false.
                                                                          — Infringement of Article 5 of Regulation ( EEC) No 729/
Export refunds in relation to processing                                       70 and Article 190 of the EC Treaty and infringement
contracts for fruit and vegetables ( citrus )                                 of the principle that due care should be taken : in
                                                                              preparing and adopting the contested decision, the
                                                                              Commission did not cooperate fairly with the Belgian
                                                                              authorities; furthermore, in inquiring into the data
The Commission perceived a fraud in the fact that a
                                                                              provided to it, the Commission did not set to work
processor of citrus fruits, as a result of a change of dates
                                                                              with the requisite care . The factual data produced by
negotiated ex post facto, obtained a lower minimum price                      the Belgian authorities and the mistakes and
but at the same time maintained the higher rate of aid
                                                                              inaccuracies identified by the applicant in the
which would have been appropriate had the contract date
                                                                              Commission's final conclusions have been disregarded
not been changed. But that was not the true position. The
                                                                              by the Commission without stating any grounds for so
processor obtained, in relation to the contracts of which
                                                                              doing. As a result, the Commission is in breach of the
the dates were changed, the lower rate of aid available for
                                                                              obligation of bona fide cooperation ( Article 5 of the
operations on or after 12 February 1993 , not the earlier
rate .
                                                                              EC Treaty, as given practical effect by the so-called
                                                                              ' Belle reform' and the conciliation procedure )* and of
                                                                              the principle that due care should be taken.
(') OJ L 139 , 30 . 5 . 1997, p . 30 .
( 2 ) OJ L 302 , 19 . 10 . 1992 , p . 1 .
                                                                              If the Commission had seriously and objectively
                                                                              inquired into the data and observations submitted by
                                                                              the Belgian authorities, its assessment of the risk
                                                                              connected with the deficiencies found would have been
                                                                              different and it would have had either to refrain in
                                                                              whole or in part from making a flat-rate correction or
Action brought on 3 July 1997 by the Kingdom of                               to apply a lower correction factor.
Belgium against the Commission of the European
                               Communities
                            ( Case C-242/97)                             — Infringement of Regulations ( EEC ) Nos 729/70 and
                              ( 97/C 271 /08 )                                1732/72 and of Article 190 of the EC Treaty: what is
                                                                              involved in this case is not expenditure which was
                                                                              wrongly incurred but a flat-rate sanction in the form
                                                                              of a refusal of a percentage of the expenditure
An action against the Commission of the European                              incurred imposed on the ground that the supervisory
Communities was brought before the Court of Justice of                        system set up in the Member State concerned is
the European Communities on 3 July 1997 by the                                allegedly inadequate. In the applicant's view, the
Kingdom of Belgium, represented by Jan Devadder,                              Commission is only entitled to impose flat-rate
General Adviser in the Ministry of Foreign Affairs,                           sanctions on the ground of perceived shortcomings in
Foreign Trade and Development Cooperation, and Hans                           the supervisory systems set up by Member States
Gilliams, of the Brussels Bar, acting as Agents, with an                      where three ( cumulative ) conditions are satisfied, that
address for service in Luxembourg at the Belgian Embassy,                     is to say, where the Commission can produce sufficient
4 Rue des Girondins .                                                         evidence that:
 ---pagebreak--- 6 . 9 . 97                EN                 Official Journal of the European Communities                                    C 271 /7
     — the supervisory system as a whole exhibits                       Action brought on 7 July 1997 by the Portuguese
             deficiencies ( in contrast, isolated shortcomings          Republic against the Commission of the European
             which do not say anything about the operation of                                     Communities
             the system as a whole have to be treated                                           Case C-246/97 )
             differently, namely by refusing Community
             financing for a number of identified transactions in                                ( 97/C 271 /09
             respect of which the conditions for the grant of
             financing are not met),
                                                                        An action against the Commission of the European
     — the deficiencies must be sufficiently serious ( the              Communities was brought before the Court of Justice of
             seriousness of the deficiencies should be assessed         the European Communities on 7 July 1997 by the
             partly in the light of the complexity of the               Portuguese Republic, represented by Dr Joao Mota de
             Community provisions which the Member States               Campos, Dr Luis Ines Fernandes and Dr Maria Lufsa
             are having to implement and of the risk that               Duarte, acting as Agents, with an address for service in
             certain sums were wrongly incurred ), and                  Luxembourg at the Portuguese Embassy, 33 Allee Scheffer.
     — it may reasonably be considered that the
             deficiencies have resulted in wrongful expenditure         The applicant claims that the Court should :
             or even fraud ( and hence in a loss for the
             EAGGF); in addition, the flat-rate corrections
             should be commensurate with the risk so found .            — declare null and void the Commission's Decision
                                                                            requiring the Portuguese Government to suspend aid
                                                                            in the shape of a State guarantee granted to the
     In the applicant's view, the Commission was not                        undertaking       EPAC       —      Empresa    para     a
     entitled, on the basis of the verifications carried out by             Agroalimenta^ao e Cereais, SA,
     EAGGF officials, ( i ) to consider that the Belgian
     supervisory system as a whole exhibited deficiencies,
      ( ii ) to impose linear corrections and apply to the              — order the Commission to pay the costs .
     applicant the most severe correction factor of 10%
     and ( iii ) to apply the linear correction to all
     expenditure relating to the sectors concerned. In any              Pleas in law and main arguments adduced in support:
     event, the summary report does not contain sufficient
     reasons to justify such a correction .
                                                                        — lack of legal basis,
— Infringement of the principle of legal certainty, the
     principle patere legem quam ipsi fecisti and Article 190           — unlawful adoption of the interim measure by the
     of the EC Treaty:                                                      Commission .
     Assuming that there is justification for applying a flat­              — lack of legal basis : despite the fact that neither the
     rate correction in this case ( which is denied ), it might                 Treaty nor secondary legislation provides for the
     at least be expected that the Commission would                             adoption of interim measures in the context of
     comply with its own guidelines, in particular the rules                    proceedings under Article 93 of the EC Treaty, the
     set out in its document No IV/216/93 , when carrying                       power to adopt them was afforded to the
     out that correction .                                                      Commission by the case-law of the Court of First
                                                                                Instance . However, the Commission must not
                                                                                impose upon a Member State an inappropriate and
— Infringement of the principle of equal treatment and of                       fundamental measure whose nature and effect is
     the duty to state reasons:                                                 that of a definitive measure. When exercising its
                                                                                quasi-judicial power to take interim measures, the
                                                                                Commission cannot dispense — as it has done —
     Neither the contested decision nor the summary report                      with verifying whether there is a prima facie case,
     set out reasons justifying a flat-rate correction of 10%                   since to do so makes its decision manifestly
     in      the   beef and    veal  sector when    the  flat-rate              arbitrary. Moreover, the Commission took no
     correction applied in respect of that sector as regards                    account whatsoever of the damage which the
     the Netherlands, Germany and France is only 5% .                           interim measure imposed could entail for the
     Not only are no reasons given for that difference in                       Portuguese State, EPAC and its creditor banks.
     treatment, but also it is not based on objective criteria .                Finally, the Commission cannot extend the exercise
     The evidence submitted by the applicant in that                            of the extraordinary powers conferred by the
     respect to the Commission in the application for                           Court of First Instance to situations not provided
     conciliation was simply ignored by the Commission.                         for in that case-law by requiring that the grant of
                                                                                a State guarantee ( without transfer of State
                                                                                resources ), rather than non-existent payments, be
                                                                                suspended,