CELEX: 62000CJ0178
Language: en
Date: 2003-01-09 00:00:00
Title: Judgment of the Court (Fifth Chamber) of 9 January 2003. # Italian Republic v Commission of the European Communities. # EAGGF - Clearance of accounts - Financial year 1995 - Cereals - Durum wheat - Common wheat, barley and maize. # Case C-178/00.

Case C-178/00 Italian RepublicvCommission of the European Communities
            «(EAGGF – Clearance of accounts – Financial year 1995 – Cereals – Durum wheat – Common wheat, barley and maize)»
            
               
                  Opinion of Advocate General Léger delivered on 26 September 2002 
                     
               I - 0000 
               
            
                   
               
               
            
               
                  Judgment of the Court (Fifth Chamber), 9 January 2003  
                     
               I - 0000 
               
            
                   
               
               
            
            Summary of the Judgment
         
         
                  1..
                  Procedure – Application initiating proceedings – Procedural requirements – Statement of the subject-matter of the proceedings – Summary of the pleas in law relied upon  (Rules of Procedure of the Court, Art. 38(1)(c)) 
         
                  2..
                  Agriculture – EAGGF – Clearance of accounts – Disallowance of expenditure arising from irregularities in the application of the Community rules – Not possible to establish conclusive factual data except by impartial checks – Conditions under which other evidence may be allowed  
         
                  3..
                  Agriculture – Common organisation of the markets – Cereals – Durum wheat – System of securities – Conditions governing release of the security – All the primary requirements must be fulfilled – Possibility of derogating explicitly and on special grounds from that principle  (Commission Regulations No 2220/85, Art. 21, and No 2668/94, Art. 11(2), second para., and (4)) 
         
         1.
          It is clear from Article 38(1)(c) of the Rules of Procedure of the Court of Justice, and from the case-law relating to that
         provision, that an application must state the subject-matter of the proceedings and a summary of the pleas in law on which
         the application is based, and that that statement must be sufficiently clear and precise to enable the defendant to prepare
         its defence and the Court to rule on the application. It is therefore necessary for the basic legal and factual particulars
         on which a case is based to be indicated coherently and intelligibly in the application itself. see paras 6, 40, 48
         
         2.
          In the context of the clearance of the accounts of the Member States in respect of expenditure financed by the EAGGF, conclusive
         factual data cannot normally be established except by impartial checks carried out by independent persons such as the CCIA.
         It is only where the Member State concerned succeeds in showing that those findings are incorrect that other evidence may
         be allowed.  see para. 14
         
         3.
          Since Article 21 of Regulation No 2220/85 laying down common detailed rules for the application of the system of securities
         for agricultural products provides generally that release of the security is conditional upon all the primary requirements
         being fulfilled, the specific regulation, Regulation No 2668/94, authorising the Italian intervention agency to put up for
         sale by tender 148 000 tonnes of durum wheat for export in the form of durum wheat meal to Algeria, cannot derogate from that
         principle unless it does so explicitly and on special grounds. That is not the case as regards the second subparagraph of
         Article 11(2) of Regulation No 2668/85 in its original version, pursuant to which release of the security is conditional only
         on arrival of the goods in Algeria, since Article 11(4) of that regulation provides that payment of the purchase price is
         the primary requirement and thus makes a clear reference to Regulation No 2220/85.  see para. 30
      

      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
            
            JUDGMENT OF THE COURT (Fifth Chamber)9 January 2003  (1)
         
         
            
         
               ((EAGGF – Clearance of accounts – Financial year 1995 – Cereals – Durum wheat – Common wheat, barley and maize))
               
            In Case C-178/00, 
            
            
             Italian Republic,  represented by U. Leanza, acting as Agent, assisted by D. Del Gaizo, avvocato dello Stato, with an address for service in
            Luxembourg, 
            
            
            applicant, 
            
            v
             Commission of the European Communities,  represented by E. de March and L.Visaggio, acting as Agents, assisted by A. Dal Ferro, avvocato, with an address for service
            in Luxembourg,
            
             defendant, 
            
            APPLICATION for partial annulment of Commission Decision 2000/197/EC of 1 March 2000 amending Decision 1999/187/EC on the
            clearance of the accounts presented by the Member States in respect of the expenditure for 1995 of the Guarantee Section of
            the European Agricultural Guidance and Guarantee Fund (EAGGF) (OJ 2000 L 61, p. 15), in so far as it imposed financial adjustments
            in respect of certain expenditure declared by the applicant Member State,
            
            
            THE COURT (Fifth Chamber),,
            
            composed of: M. Wathelet, President of the Chamber, D.A.O. Edward, A. La Pergola, P. Jann (Rapporteur) and S. von Bahr, Judges, 
            
            Advocate General: P. Léger, Registrar: R. Grass, 
            
            
            having regard to the report of the Judge-Rapporteur,
            
            after hearing the Opinion of the Advocate General at the sitting on 26 September 2002, 
         gives the following
         
         
         Judgment
         1
            
         By application lodged at the Court Registry on 12 May 2000, the Italian Republic brought an action, pursuant to the first
         paragraph of Article 230 EC, for partial annulment of Commission Decision 2000/197/EC of 1 March 2000 amending Decision 1999/187/EC
         on the clearance of the accounts presented by the Member States in respect of the expenditure for 1995 of the Guarantee Section
         of the European Agricultural Guidance and Guarantee Fund (EAGGF) (OJ 2000 L 61, p. 15,  
         the contested decision), in so far as it imposed financial adjustments in respect of certain expenditure declared by the applicant Member State.
         
         
         
         2
            
         The application for partial annulment concerns the following adjustments, the description of which and reasons for which are
         given in the Commission's summary report of 12 January 1999 on the results of the inspections for the clearance of the accounts
         of the Guarantee Section of the EAGGF for 1995 (Document VI/6462/98 (
         the summary report)): 
         
         
         ─
            negative adjustments of ITL 3 358 746 955 and ITL 807 967 249 and a positive adjustment of ITL 22 116 046 015 in respect of
            expenditure relating to storage costs for durum wheat (paragraph 4.5.1.2.1.11 of the summary report); 
         
         
         
         ─
            negative adjustments of ITL 7 883 033 994, ITL 1 756 934 916 and ITL 44 888 325 908 in respect of expenditure relating to
            storage costs for durum wheat (paragraph 4.5.1.2.1.14 of the summary report); 
         
         
         
         ─
            a negative adjustment of ITL 1 923 101 478 corresponding to the amount of the security which should have been forfeited in
            connection with the sale of durum wheat for export to Algeria (paragraph 4.5.1.2.1.16 of the summary report); 
         
         
         
         ─
            negative adjustments of ITL 5 263 394 861 and ITL 4 701 973 982 corresponding to the value of the discrepancies found in the
            stocks of common wheat, barley and maize between the end of the 1994 financial year and the start of the 1995 financial year
            (paragraphs 4.5.1.3, 4.5.1.3.1.1 and 4.5.1.3.1.2 of the summary report); 
         
         
         
         ─
            a negative adjustment of ITL 2 502 127 250 corresponding to the balance of the adjustments made by the Commission in an earlier
            monthly declaration concerning common wheat, barley and maize (paragraph 4.5.1.3.5 of the summary report); 
         
         
         
         ─
            in addition, the Commission's decision refusing to award the Italian Republic the sum of ITL 11 952 457 079 in the context
            of the clearance of accounts for financial year 1995 in respect of the final regularisation of invoices for the sale of cereals
            by intervention agencies is contested. 
         
         
         
            
               The negative adjustments of ITL 3 358 746 955 and ITL 807 967 249 and the positive adjustment of ITL 22 116 046 015 relating
                  to storage costs for durum wheat
               
            
         
         3
            
         It is clear from the documents before the Court, and in particular from paragraph 4.5.1.2.1.11 of the summary report that,
         following the discovery of discrepancies betwen the annual declaration for financial year 1995 and the actual situation regarding
         intervention stocks of durum wheat, the Commission made an adjustment consisting of a reduction of ITL 3 358 746 955 in the
         expenditure declared in respect of budget item 1011.003, a reduction of ITL 807 967 249 in the expenditure declared in respect
         of budget item 1012.003, and an increase of ITL 22 116 046 015 in the expenditure declared in respect of budget item 1013.003.
         
         
         
         4
            
         In its application the Italian Government seeks the annulment by the Court of  
         the proposed negative adjustment of ITL 26 282 760 219, an amount that was apparently obtained by adding together ITL 3 358 746 955, ITL 807 967 249 and ITL 22 116 046 015; and,
         submitting its own stock records but not setting out the legal grounds in support of that head of claim, maintains that the
         EAGGF derived unjustified enrichment in respect of that sum.  
         
         
         5
            
         In that regard, it is clear from the documents before the Court, and in particular from paragraph 4.5.1.2.1.11 of the summary
         report that the adjustment of ITL 22 116 046 015 in respect of budget item 1013.003 is a positive adjustment, that is to say,
         it is in the Italian Republic's favour, and only the adjustments of ITL 3 358 746 955 and ITL 807 967 249 are negative adjustments.
         
         
         
         6
            
         The claims made by the Italian Government, which is seeking the annulment of a negative adjustment of ITL 26 282 760 219 in
         total, on the ground that the EAGGF had clearly derived unjustified enrichment in respect of that amount, are therefore incomprehensible.
         As the Advocate General stated at point 6 et seq. of his Opinion, it is clear from Article 38(1)(c) of the Rules of Procedure
         of the Court of Justice, and from the case-law relating to that provision, that an application must state the subject-matter
         of the proceedings and a summary of the pleas in law on which the application is based, and that that statement must be sufficiently
         clear and precise to enable the defendant to prepare its defence and the Court to rule on the application. It is therefore
         necessary for the basic legal and factual particulars on which a case is based to be indicated coherently and intelligibly
         in the application itself. 
         
         
         7
            
         The Italian Government's claims in this case fail to meet those requirements, since it is incomprehensible how the EAGGF can
         be regarded as having derived [unjustified] enrichment in respect of ITL 26 282 760 219, when clearly ITL 22 116 046 015 of
         that amount was an adjustment in the applicant Member State's favour. 
         
         
         8
            
         The application is therefore inadmissible in so far as that head of claim is concerned and must be dismissed. 
         The negative adjustments of ITL 7 883 033 994, ITL 1 756 934 916 and ITL 44 888 325 908 relating to storage costs for durum
            wheat
         
         9
            
         The Italian Government challenges a negative adjustment totalling ITL 54 528 294 818, comprising negative adjustments of ITL
         7 883 033 994, ITL 1 756 934 916 and ITL 44 888 325 908, which the Commission imposed on the ground that an inspection conducted
         in March and April 1995 revealed that a total of 122 709.192 tonnes of durum wheat stored in the warehouses of Coop. San Giorgio
         were of very poor quality and did not meet the minimum conditions required for admission into public intervention.  
         
         
         10
            
         It is clear from paragraph 4.5.1.2.1.14 of the summary report that in respect of some of the 122 709.192 tonnes of durum wheat
         concerned, namely 84 481.128 tonnes, the buying-in price and related storage costs were charged to the Italian authorities
         because the Commission staff considered that the cereals in question did not meet the conditions required from the time they
         were submitted for public intervention. The Commission relies in this regard on Article 7(1) of Commission Regulation (EEC)
         No 3597/90 of 12 December 1990 on the accounting rules for intervention measures involving the buying-in, storage and sale
         of agricultural products by intervention agencies (OJ 1990 L 350, p. 43), which provides that  
         [q]uantities entering storage which are found not to meet the conditions laid down for storage, shall be entered in the accounts
         at the time of removal from storage as a sale at the price at which they were purchased. 
         
         
         11
            
         As regards the remainder of the 122 709.192 tonnes of durum wheat concerned, namely 38 228.064 tonnes, the Commission explains
         in the summary report that it applied Article 2(3)(c) of that regulation, which provides that  
         [i]n cases of deterioration or destruction of the product as a result of ... bad conservation conditions ... , the value of
         the product shall be accounted for in accordance with paragraph 1, that is to say,  
         by multiplying [the] quantities [in question] by the basic intervention price in force for the standard quality on the first
         day of the current financial year, increased by 5%. 
         The quantity of 84 481.128 tonnes
         
         
         12
            
         As regards the quantity of 84 481.128 tonnes of durum wheat, the Italian Government maintains that the Commission infringed
         Articles 2 and 7 of Regulation No 3597/90. It contends that at the time when it was submitted to the intervention agency that
         quantity complied with all the requirements laid down by Community legislation. As evidence of this, it produced to the Court
         37 certificates of analyses carried out by a private laboratory, which are said to confirm that the product was of good quality
         at the time when it was bought in. The Commission should therefore not have applied Article 7 of Regulation No 3597/90, which
         refers to  
         [q]uantities ... which are found not to meet the conditions laid down for storage, but Article 2(3)(c) of that regulation, which refers to  
         bad conservation conditions. 
         
         
         13
            
         The Commission rejects that criticism. In its submission, the very poor quality of the 84 481.128 tonnes of durum wheat from
         the time when they were submitted for intervention clearly emerges from the analyses conducted during the official inspections
         carried out in March and April 1995 by the Consorzio Controlli Integrati in Agricoltura (
         the CCIA). The results of the analyses carried out by a private laboratory which are now submitted to the Court by the Italian Government
         cannot be taken into account since they appear to be based on samples taken by the storer itself and not by independent persons.
         
         
         
         14
            
         In that regard, it should be observed that, as stated at points 22 to 28 of the Advocate General's Opinion, in the context
         of the clearance of the accounts of the Member States in respect of the expenditure of the EAGGF, conclusive factual data
         cannot normally be established except by impartial checks carried out by independent persons such as the CCIA.  It is only
         where the Member State concerned succeeds in showing that those findings are incorrect that other evidence may be allowed.
         In the present case, as the Advocate General states at those same points of his Opinion, the production by the Italian Government
         during course of the proceedings of 37 certificates of analyses prepared by a private laboratory which does not meet the requirements
         of impartiality cannot invalidate the findings of the CCIA 
         
         
         15
            
         The Italian Government has therefore failed to establish that the Commission infringed Articles 2 and 7 of Regulation No 3597/90.
         
         The quantity of 38 228.064 tonnes
         
         
         16
            
         As regards the quantity of 38 228.064 tonnes, the Italian Republic contends that the Commission committed an error of assessment
         in calculating the quantity of the products in question. It maintains that during its inspections the CCIA recorded that the
         quantity of wheat held by Coop. San Giorgio was only 37 042.795 tonnes, which was 1 185.269 tonnes less than the figure which
         the Commission took when it calculated the adjustment in question. 
         
         
         17
            
         According to the Commission, although the CCIA did indeed find that only 37 042.795 tonnes of durum wheat were of  
         poor quality as a result of bad conservation conditions, the CCIA did at the same time find that another quantity of 1 185.269 tonnes
         was missing. Since the value attributed to a quantity refused on grounds of poor quality is the same as that attributed to
         a quantity refused because it is missing, the arguments of the Italian Government are irrelevant. 
         
         
         18
            
         In that regard, it should be pointed out, on the one hand, that the Italian Government, which merely states that the CCIA
         found during its inspections of the warehouses of Coop. San Giorgio that there were only 121 523.923 tonnes of durum wheat
         (84 481.128 tonnes + 37 042.795 tonnes) stored, does not by any means contradict the Commission's statement that the CCIA
         also pointed out that a quantity of 1 185.269 tonnes was missing from storage. 
         
         
         19
            
         On the other hand, according to Article 2(1) and (3)(c) of Regulation No 3597/90, in the context of the financing of intervention
         measures in the form of public storage by the EAGGF, the value to be taken into account is calculated in the same way for
         missing quantities  
         exceeding the tolerance for preservation and processing, or ... due to theft or other identifiable causes as for quantities which have deteriorated or been destroyed  
         as a result of ... bad conservation conditions. 
         
         
         20
            
         It is clear therefore that the Commission did not commit any error capable of causing the Italian Republic to incur financial
         loss. Consequently, the application must be dismissed as unfounded in so far as it relates to the total negative adjustment
         of ITL 54 528 294 818. 
         The negative adjustment of ITL 1 923 101 478 relating to the security which should have been forfeited in connection with
            an export to AlgeriaLegal background
         
         
         21
            
         Article 21 of Commission Regulation (EEC) No 2220/85 of 22 July 1985 laying down common detailed rules for the application
         of the system of securities for agricultural products (OJ 1985 L 205, p. 5) provides, with regard to the release of securities:
         Once the evidence laid down by the specific Regulation has been furnished that all primary, secondary and subordinate requirements
         have been fulfilled, the security shall be released.
         
         
         22
            
         Article 20(2) of that regulation provides that  
         [a] primary requirement is a requirement, basic to the purposes of the Regulation imposing it, to perform, or to refrain from
         performing, an act.
         
         
         23
            
         Under Article 1(a) of Regulation No 2220/85 that regulation applies to a large number of common organisations of markets in
         agricultural products, including cereals. 
         
         
         24
            
         In connection with an operation to export intervention stocks of durum wheat to Algeria the Commission adopted Regulation
         (EC) No 2668/94 of 31 October 1994 authorising the Italian intervention agency to put up for sale by tender 148 000 tonnes
         of durum wheat for export in the form of durum wheat meal to Algeria (OJ 1994 L 284, p. 45). Article 11(4) of that regulation
         provides: The primary requirement within the meaning of Article 20 of Regulation (EEC) No 2220/85 of 22 July 1985 ... is payment of
         the purchase price for the wheat and export of the durum wheat meal within the specified period under the export licence referred
         to in Article 4(3).
         
         
         25
            
         Article 11(2) of that regulation provided, at the material time, as follows: To ensure performance of the requirement to export the products and import them into Algeria, a security of ECU 50 per tonne
         of durum wheat shall be lodged, ECU 25 per tonne of which shall be lodged at the time the licence  is issued for the export
         of the wheat meal in respect of the corresponding quantity of durum wheat, and the balance of ECU 25 per tonne shall be lodged
         before the cereals are removed from storage. By way of derogation from Article 15(2) of Commission Regulation (EEC) No 3002/92 ... the amount of ECU 50 per tonne of durum
         wheat corresponding to the processed wheat meal must be released within 15 working days of the date on which the successful
         tenderer provides evidence that the wheat meal has actually arrived in Algeria.
         
         
         26
            
         Amendments were subsequently made to the second subparagraph of that provision by Commission Regulation (EC) No 545/95 of
         10 March 1995 amending Regulation No 2668/94 (OJ 1995 L 55, p. 27). That subparagraph now provides that the amount of ECU
         50 must be released  
         within 15 working days of the date on which the successful tenderer provides evidence that the primary requirement referred
         to in paragraph 4 has been met. 
         The contested adjustment
         
         
         27
            
         It is clear from the documents before the Court, and in particular from paragraph 4.5.1.2.1.16 of the summary report, that
         in the context of the operation to export durum wheat to Algeria provided for in Regulation No 2668/94, the Italian company
         Italgrani SpA took part in the tendering procedure and that with regard to a contract for 32 873.951 tonnes it failed to comply
         with one of the requirements laid down in Article 11(4) of Regulation No 2668/94, namely payment of the purchase price. The
         Italian authorities none the less released the security of ECU 50/tonne which had been lodged. Considering that that security
         had been forfeited, the Commission therefore imposed a negative adjustment of ITL 1 923 101 478. 
         
         
         28
            
         The Italian Government does not dispute either the amount of the adjustment or the fact that Italgrani SpA failed to meet
         the requirement to pay the purchase price. It contends, however, that the Commission should not have considered that payment
         of the purchase price was a condition for the release of the security, since the second subparagraph of Article 11(2) of Regulation
         No 2668/94, in the version applicable at the material time, provided, as the sole condition for release of the security, that
         evidence must be provided that the wheat meal processed from the durum wheat had arrived in Algeria. It was only subsequently,
         after that provision had been amended by Regulation No 545/95, that compliance with the primary requirements referred to in
         Article 11(4) of Regulation No 2668/94 was introduced as a prior condition for release of the security. That amendment was
         not, however, applied to the facts of the case. The Commission therefore committed an error of law by applying Regulation
         No 545/95 retroactively and hence unlawfully. 
         
         
         29
            
         In that regard, it is clear from an overview of the whole scheme of the applicable legislation that the conditions for the
         release of the security were not contained exclusively in the second subparagraph of Article 11(2) of Regulation No 2668/94,
         in the original version applicable to the facts of the case, but that that provision had to be read in conjunction with Article
         11(4), and with Regulation No 2220/85, which constitutes the basic regulation in that area, to which Article 11(4) of Regulation
         No 2668/94 moreover expressly refers. 
         
         
         30
            
         Since Article 21 of Regulation No 2220/85 provides generally that release of the security is conditional upon all the primary
         requirements being fulfilled, the specific regulation, Regulation No 2668/94, cannot derogate from that principle unless it
         does so explicitly and on special grounds. This is not the case as regards the second subparagraph of Article 11(2) of Regulation
         No 2668/85 in its original version, since Article 11(4) of that regulation provides that payment of the purchase price is
         the primary requirement and thus makes a clear reference to Regulation No 2220/85. 
         
         
         31
            
         In those circumstances, release of the security was not only conditional on the goods arriving in Algeria, as required by
         Article 11(2) of Regulation No 2668/94, but also on the the purchase price being paid, as required by Article 11(4) of the
         same regulation in conjunction with Articles 20 and 21 of Regulation No 2220/85. The subsequent amendment of the second subparagraph
         of Article 11(2) of Regulation No 2668/94 by Regulation No 545/95, which makes express reference to that second condition,
         merely confirms the state of the previous law. That reading of the situation is supported by the fact that the preamble to
         Regulation No 545/95, which sets out the grounds for the other amendments to Regulation No 2668/94, does not even mention
         the amendment to the second subparagraph of Article 11(2) of that regulation. 
         
         
         32
            
         The Commission was therefore entitled to require, on the basis of Regulation No 2668/94 in its original version applicable
         to the facts of the case, that release of the security should be conditional upon payment of the purchase price, so that the
         Commission by no means applied Regulation No 545/95 retroactively and hence did not commit any error of law. 
         
         
         33
            
         The application must therefore dismissed in so far as it relates to the negative adjustment of ITL 1 923 101 478. 
         The negative adjustments of ITL 5 263 394 861 and ITL 4 701 973 982 relating to discrepancies in stocks of common wheat, barley
            and maize
         
         34
            
         It is clear from the documents before the Court, and in particular paragraphs 4.5.1.3, 4.5.1.3.1.1 and 4.5.1.3.1.2 of the
         summary report, that the Commission made the negative adjustments of ITL 5 263 394 861 and ITL 4 701 973 982, totalling ITL
         9 965 368 843, by reason of the discrepancies which appeared, from inspections made by the CCIA, in stocks of maize, common
         wheat and barley on 1 October 1994 (date on which the 1995 financial year began) as compared with the stocks appearing in
         the EAGGF tables on 30 September 1994 (end of the 1994 financial year). The discrepancies were as follows: maize:  + 35 446.263 tonnescommon wheat: + 275 000 tonnesbarley:  - 27 844.6 tonnes
         
         
         35
            
         By means of the adjustments at issue, the Commission intended, according to what it has told the Court, to charge to the Italian
         authorities the  
         carry-over value of the surplus quantities of common wheat and maize and the value of the missing quantities of barley. According to
         the Commission, the carry-over values declared on 1 October 1994 in respect of durum wheat and maize should have tallied with
         those recorded on 30 September 1994, so that it was appropriate to make the adjustments concerned. As for the missing quantities
         of barley, in the Commission's submission they should be regarded as a loss and their value should therefore be refunded to
         the EAGGF. 
         
         
         36
            
         In its application the Italian Republic maintains that those negative adjustments are unfounded and that no grounds have been
         given for them. The stock adjustments resulted from the fact that during October 1994 the Italian administration made the
         required adjustment of the stocks shown on the books to accord with the actual stocks as they were found to exist following
         the inspection carried out by the CCIA. 
         
         
         37
            
         The Commission's approach is opportunist since it takes economic advantage of the fact that the Italian administration, correctly,
         adjusted the stocks shown on the books to accord with the stocks actually in storage.  The Commission benefits, on the one
         hand, from the carry-over value due to the increase in the stocks of common wheat and maize, without giving the Italian State
         a similar advantage in return as regards barley, and, on the other hand, from the value calculated on the basis of Regulation
         No 3597/90 following the reduction in the stock of barley, a reduction not due to the actual loss of the product. 
         
         
         38
            
         According to the Italian Government, if the Commission's reasoning were to be followed it would also be necessary to credit
         the Italian administration with the following positive adjustments: 
         
         
         ─
            A refund to the Italian State of the reduction in the carry-over value charged to it for the 1994 financial year in respect
            of 27 844.6 tonnes of barley; 
         
         
         
         ─
            the technical storage costs (budget item 1011.03) due in respect of financial year 1994 on the 35 446.263 tonnes of maize
            declared in addition and discovered after the analysis of the inventory checks carried out by the CCIA, an increase which
            resulted from failure to take that quantity into account in the EAGGF tables in respect of the 1994 financial year; 
         
         
         
         ─
            the technical storage costs (budget item 1011.03) due in respect of financial years 1992, 1993 and 1994 on 275 tonnes of common
            wheat stored because none of the 5 000 tonnes of common wheat to be supplied as food aid to Albania in full in December 1992
            were delivered. 
         
         
         
         
         39
            
         Failing this, the EAGGF should be held to have derived unjustifiable enrichment at the expense of the Italian Republic. 
         
         
         40
            
         Those arguments put forward by the Italian Government do not make it possible to identify the factual and legal grounds on
         which that head of claim is based. As is clear from points 7 and 47 of the Advocate General's Opinion, it is necessary, in
         order for an action to be admissible under Article 38(1)(c) of the Rules of Procedure of the Court of Justice, which requires
         that the subject-matter of the proceedings and the pleas in law on which the application is based should be stated, that the
         basic legal and factual particulars relied on be indicated coherently and intelligibly in the application itself. This is
         not the case as regards the claims of the Italian Government relating to the subject-matter of the dispute concerning the
         adjustments in question. 
         
         
         41
            
         The application must therefore be declared inadmissible in so far as it relates to the negative adjustments of ITL 5 263 394
         861 and ITL 4 701 973 982. 
         The negative adjustment of ITL 2 502 127 250 corresponding to the balance of the adjustments made in an earlier monthly declaration
            concerning common wheat, barley and maize
         
         42
            
         It is clear from the documents before the Court, and in particular from paragraph 4.5.1.3.5 of the summary report, that the
         Commission made a negative adjustment of ITL 2 502 127 250 (+ 467 306 950 + ITL 146 883 900 - ITL 3 116 318 100) in order
         to rectify an error committed by the Italian administration when it drew up the annual EAGGF tables for financial year 1995.
         
         
         
         43
            
         That error resided in a failure to take into account, when making the annual declaration, in line 110 of Table 5, adjustments
         made in a monthly declaration under Article 9(7) of Commission Regulation (EEC) No 2776/88 of 7 September 1988 on data to
         be sent in by the Member States with a view to the booking of expenditure financed under the Guarantee Section of the Agricultural
         Guidance and Guarantee Fund (EAGGF) (OJ 1988 L 249, p. 9). That provision states that  
         corrections effected by the Commission to data referred to in Article 6 concerning the full year are to be indicated in an
         annex to a decision relating to advances and are to entail a charge or payment by the departments or agencies before the end
         of the month during which that decision was taken. 
         
         
         44
            
         In its application the Italian Republic maintains that in making that adjustment the Commission imposed a double penalty on
         it. In the twelfth monthly declaration for the financial year 1995 the Italian administration provided the following information
         in Tables 8, line 1, and 52, line 30: 
         
         
         ─
            maize stocks at 1 October 1994 equivalent to 27 371.061 tonnes; 
         
         
         
         ─
            technical costs (budget item 1011.006): ITL 472 481 200; 
         
         
         
         ─
            financial costs (budget item 1012.006): ITL 141 376 660; 
         
         
         
         ─
            other costs (budget item 1013.006): ITL 2 946 864 571. 
         
         
         
         
         45
            
         According to the Italian Republic, the Commission informed the Italian authorities of the need to make the adjustments provided
         for by Regulation No 2776/88 in respect of financial year 1995, adjustments resulting from the fact that the Commission did
         not accept the costs set out above for public intervention because of deterioration of the stocks of maize concerned following
         a natural disaster which affected Cavalli's warehouses. 
         
         
         46
            
         Subsequently, during the clearance of the accounts for financial year 1994, it was decided, under a conciliation procedure,
         with regard to the volume of maize stored in that company's warehouses, to impose in respect of the Italian administration
         two negative adjustments of ITL 448 148 256 and ITL 123 262 537 and a positive adjustment of ITL 8 132 491 172, which were
         referred to in paragraph 4.5.1.3.2 of the summary report. 
         
         
         47
            
         It follows, according to the Italian Republic, that the negative adjustment proposed under Article 9 of Regulation No 2776/88
         is unfounded in that, on the one hand, it conflicts with the decisions adopted during the conciliation procedure for the 1994
         financial year and, on the other hand, it imposes a double penalty on the Italian administration, as follows: 
         
         
         ─
            ITL 472 481 200 in respect of budget item 1011.006; 
         
         
         
         ─
            ITL 141 376 660 in respect of budget item 1012.006, and 
         
         
         
         ─
            ITL 2 946 864 571 in respect of budget item 1013.006. 
         
         
         
         
         48
            
         On that point, as point 50 of the Advocate General's Opinion makes clear, the Italian Government's arguments do not make it
         possible to identify the subject-matter of the proceedings in that regard, namely the legal and factual grounds on which the
         application is based. They do not, therefore, satisfy the requirements laid down in Article 38(1)(c) of the Rules of Procedure.
         
         
         
         49
            
         The application must therefore be declared inadmissible in so far as it relates to the negative adjustment of ITL 2 502 127
         250. 
         Refusal to grant the sum of ITL 11 952 457 079 in respect of the final regularisation of invoices for the sale of cereals
            into  public intervention
         
         50
            
         In its application, the Italian Government raises one final complaint which, it admits, doesnot concern adjustments effected
         by the Commission in the context of the contested decision but the refusal to grant an application lodged by the Italian administration,
         as part of the clearance of the accounts for financial year 1995, for payment of ITL 11 952 457 079 in respect of the final
         regularisation of invoices for the sale of cereals by public intervention.  
         
         
         51
            
         The Italian Government explains in detail that this is a problem linked to missing quantities of products which appear in
         the EAGGF tables as  
         identifiable losses and whose value, according to the Italian Government, was wrongly charged to the Italian administration. 
         
         
         52
            
         The Commission has explained in that regard that the operations to which the Italian Government refers concern sales made
         from the 1993 financial year onwards. An application for regularisation was not made by the Italian authorities until February
         1999, however. The question of the regularisation of those sales invoices cannot therefore fall within the scope of the proceedings
         relating to the contested decision, which concerns matters brought to a close in October 1998. 
         
         
         53
            
         In that regard, it need merely be observed that this head of claim does not relate to the decision contested in the present
         case. The Italian Government does not mention any other measure which it seeks to have annulled and to which the assertions
         in question relate. In those circumstances, the corresponding head of claim in the application does not satisfy the requirements
         of Article 38(1) of the Rules of Procedure since it clearly falls outside the context of the case. 
         
         
         54
            
         The application is therefore inadmissible in so far as it relates to that head of claim. 
         
         
         55
            
         Since the application by the Italian Government has proved to be inadmissible in part and unfounded in part, it must be dismissed
         in its entirety. 
         
         Costs
         56
            
         Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been
         applied for in the successful party's pleadings. Since the Commission has applied for costs and the Italian Republic has been
         unsuccessful, the latter must be ordered to pay the costs. 
         
         On those grounds, 
         
         
         
            
            THE COURT (Fifth Chamber)
         
         
         hereby:  
         
            
            1.
             Dismisses the application;
            
            
            2.
             Orders the Italian Republic to pay the costs.
            
            
                  Wathelet
               
               
                  Edward
               
               
                  La Pergola 
               
            
                  Jann
               
               
                  von Bahr 
               
               
                  
               
            
                  
               
               
                  
               
               
                  
               
            
                  
               
               
                  
               
               
                  
               
            
                  
               
               
                  
               
               
                  
               
            
            
            
            
            
            
            
            
         
         
         Delivered in open court in Luxembourg on 9 January 2003. 
         
         
         
         
                  R. Grass 
               
               
                  M. Wathelet  
               
            
         
         
         
                  Registrar
               
               
                  President of the Fifth Chamber
               
            
      
      
          1 –
            
             Language of the case: Italian.