CELEX: 62001CC0332
Language: en
Date: 2004-01-22 00:00:00
Title: Opinion of Mr Advocate General Jacobs delivered on 22 January 2004. # Hellenic Republic v Commission of the European Communities. # EAGGF - Clearance of accounts - 1996 to 1999 - Decision 2001/557/EC - Cotton, olive oil, dried grapes, sheepmeat and goatmeat. # Case C-332/01.

OPINION OF ADVOCATE GENERALJACOBSdelivered on 22 January 2004(1)
         Case C-332/01Republic of GreecevCommission of the European Communities
            ()
            
      
         
        1.        In this case, Greece seeks the partial annulment of Commission Decision 2001/557/EC of 11 July 2001 excluding from Community
      financing certain expenditure incurred by the Member States under the Guarantee Section of the European Agricultural Guidance
      and Guarantee Fund (EAGGF) (‘the decision’ or ‘the contested decision’). 
         			(2)
         		
      
        2.        Greece contests in particular the Commission’s exclusion from Community financing of expenditure in the cotton, olive oil,
      dried grape and ewe and goat sectors.
      
      
        3.        Before examining in detail Greece’s claims and arguments, it may be helpful to set out the principal features of the legislative
      framework governing the financing of the Common Agricultural Policy and the clearance of accounts under the Fund.
      
       The legal framework The principal Community legislation
        4.        The basic rules on the financing of the Common Agricultural Policy are laid down in Regulation No 729/70 
         			(3)
         		 which provides that the Fund shall finance common measures adopted in order to achieve the objectives set out in Article
      33(1)(a) EC, including intervention intended to stabilise the agricultural markets, undertaken in accordance with Community
      rules within the framework of the common organisation of agricultural markets. 
         			(4)
         		
      
        5.        Article 5 of Regulation No 729/70 provides for the clearance of the accounts submitted by the national bodies empowered to
      effect expenditure on transactions eligible to be financed by the Fund (‘paying agencies’).  The first subparagraph of Article
      5(2)(c) explicitly requires the Commission to exclude from Community financing expenditure which has not been effected in
      compliance with Community rules.
      
      
        6.        Article 5(2)(c) further provides as follows:
      ‘Before a decision to refuse financing is taken, the results of the Commission’s checks and the replies of the Member States
      concerned shall be notified in writing, after which the two parties shall endeavour to reach agreement on the action to be
      taken.
       If no agreement is reached, the Member State may ask for a procedure to be initiated with a view to mediating between the
      respective positions within a period of four months, the results of which shall be set out in a report sent to and examined
      by the Commission, before a decision to refuse financing is taken.
       The Commission shall evaluate the amounts to be excluded having regard in particular to the degree of non-compliance found.
      The Commission shall take into account the nature and gravity of the infringement and the financial loss suffered by the Community.
       A refusal to finance may not involve expenditure effected prior to 24 months preceding the Commission’s written communication
      of the results of those checks to the Member State concerned.  …’ 5  –Second, third, fourth and fifth subparagraphs of Article 5(2)(c).
      
      
        7.        Article 8(1) of Regulation No 729/70 requires Member States to take measures to ensure correct execution of transactions financed
      by the Fund, to prevent irregularities and to recover sums lost thereby.  In most agricultural sectors, specific Community
      measures set out in detail what measures the Member States must adopt in order to fulfil their general obligations under Article
      8(1). 
         			(6)
         		
      
        8.        The Commission is empowered, under Article 9 of Regulation No 729/70, to take a number of measures to verify and supplement
      the information and documents furnished by the Member State authorities.  It may, for example, carry out inspections on the
      spot and is entitled to access to all books and documents relating to expenditure financed by the Fund and to conduct or arrange
      with the Member States for the conduct of inquiries and inspections.
      
      
        9.        The first subparagraph of Article 8(1) of Regulation No 1663/95 laying down detailed rules for the application of Council
      Regulation (EEC) No 729/70 regarding the procedure for the clearance of the accounts of the EAGGF Guarantee Section 
         			(7)
         		 provides, in so far as is relevant:
      ‘When, as a result of any enquiry, the Commission considers that expenditure was not effected according to Community rules,
      it shall communicate to the Member State concerned its findings, the corrective measures to be taken to ensure future compliance,
      and an evaluation of any expenditure which it may propose to exclude pursuant to Article 5(2)(c) of Regulation No 729/70.
      The communication shall make reference to this Regulation.  …’
      
       The Court’s interpretation of the principal legislation
        10.      The Court has developed a number of principles relevant to challenges by Member States to the lawfulness of deductions effected
      by the Commission.
      
      
        11.      First, it is clear that Regulation No 729/70 allows the Commission to charge to the EAGGF only sums paid in accordance with
      the rules laid down in the different agricultural sectors 
         			(8)
         		 and in consequence obliges the Commission to refuse financing of expenditure when it finds that irregularities have occurred: 
         			(9)
         		  the purpose of the EAGGF account clearing procedure, which is to check that refunds and interventions are made in accordance
      with the Community rules, and thereby to guarantee that all traders are subject to the same conditions of competition, would
      be jeopardised if the Commission were able, when it finds a national practice to be irregular, to invoke a discretionary power
      to accept or reject it for Community financing according to the seriousness of its financial repercussions for the EAGGF. 
         			(10)
         		  Accordingly it is for the Member States to bear the burden of any other sum paid, and in particular any amounts which the
      national authorities wrongly believed themselves authorised to pay in that context. 
         			(11)
         		
      
        12.      More particularly, Article 8(1) of Regulation No 729/70 imposes on Member States the general obligation to take the measures
      necessary to satisfy themselves that transactions financed by the EAGGF are actually carried out and are executed correctly,
      to prevent and deal with irregularities and to recover sums lost as a result of irregularities or negligence, even if the
      specific Community act does not expressly provide for the adoption of particular supervisory measures.  It also follows from
      that provision, considered in the light of the duty of loyal cooperation with the Commission laid down by Article 10 EC, with
      particular regard to the correct utilisation of Community resources, that Member States are required to set up comprehensive
      administrative checks and on-the-spot inspections, thus guaranteeing the proper observance of the substantive and formal conditions
      for the grant of the premiums in question.  Those checks must be such that there is no doubt as to the regularity of the expenditure
      charged to the EAGGF. 
         			(12)
         		  Where a regulation lays down specific measures of supervision, the Member States must apply them and it is unnecessary to
      examine the merits of their view that another system of supervision is more effective. 
         			(13)
         		
      
        13.      With regard to the burden of proof, although the Commission is required to justify its decision to refuse to charge expenditure
      effected by a Member State to the EAGGF by providing evidence of serious reasonable doubt as to the existence or appropriateness
      of checks carried out in that Member State, it is nevertheless not obliged to demonstrate exhaustively that the checks were
      inadequate or that there are irregularities in the figures submitted by that State, or even to provide details of the inadequacy
      of those checks or the inaccuracy of the data provided by it:  it is the latter which is the best placed to collect and verify
      the data required for the clearance of EAGGF accounts and consequently it is for the State to adduce the most detailed and
      comprehensive evidence that it has made checks or that its figures are accurate and, if appropriate, that the Commission’s
      assertions are incorrect. 
         			(14)
         		  The Member State cannot rebut the Commission’s findings by mere assertions which are not substantiated by evidence of a
      reliable and operational supervisory system. 
         			(15)
         		
      
        14.      It is moreover for the Member State to demonstrate, if appropriate, that the Commission erred as to the action called for,
      on the financial level, as a result of the alleged breach. 
         			(16)
         		  If the Commission finds that there are no adequate control procedures, it may refuse to charge to the EAGGF the whole of
      the expenditure in question. 
         			(17)
         		  Where, instead of disallowing all the expenditure affected by the infringement, the Commission has endeavoured to establish
      rules for treating irregularities differently, depending on the extent of the shortcomings in the checks and the degree of
      risk to the EAGGF, it is for the Member State to show that those criteria are arbitrary and unfair. 
         			(18)
         		
      
        15.      With regard to the obligation to state reasons for a decision relating to the clearance of accounts, the statement of reasons
      must be regarded as sufficient if the Member State to which the decision was addressed was closely involved in the process
      by which it came about and was aware – for example from the summary report or correspondence with the Commission – of the
      reasons for which the Commission took the view that it should not charge the sum in dispute to the EAGGF. 
         			(19)
         		
      
        16.      With regard to the Commission’s obligations under Article 8(1) of Regulation No 1663/95 and Article 5(2)(c) of Regulation
      No 729/70, Article 8(1) complements Article 5(2)(c), setting out the requirements to be met by the Commission’s ‘written communication
      of the results of [its] checks to the Member State concerned’ within the meaning of the latter provision. 
         			(20)
         		  That communication is therefore to state the corrective measures to be taken to ensure future compliance, to include an
      evaluation of any expenditure which the Commission may propose to exclude and to make reference to Regulation No 1663/95;
       the Member State must be given two months to reply to it.
      
      
        17.      The purpose of the requirements imposed by the legislation is to enable the Member State concerned to ascertain precisely
      the date from which the temporal limitation is to be calculated;  the purpose of the exclusion period is to protect Member
      States against the absence of legal certainty which would exist if the Commission were able to call into question expenditure
      incurred several years before the adoption of a compliance decision. 
         			(21)
         		  A Member State may however claim the protection of that period only to the extent that it complies with its own obligations
      under Community legislation, in particular with regard to the spontaneous communication of information required for verification.
       Thus in order to determine whether the 24-month period was complied with, a Member State cannot take into consideration only
      the date of the expenditure incurred, without taking into account the date on which it informed the Commission of relevant
      and sufficient information on such expenditure, allowing the latter to carry out the clearance of accounts. 
         			(22)
         		
       The Commission’s guidelines
        18.      Commission Document VI/5330/97 of 23 December 1997 
         			(23)
         		 (‘the guidelines’) sets out the guidelines which the institution intends to follow when applying financial corrections in
      the context of the clearance of EAGGF Guarantee accounts.
      
      
        19.      The guidelines note that where the Commission finds that a given item of expenditure was not in accordance with the Community
      rules, it must as a general rule refuse to finance it.  Where a Member State does not comply with Community rules requiring
      the eligibility of aid applications to be checked, a refusal by the Commission to finance all the expenditure concerned would
      in some cases mean that the expenditure refused would probably exceed the financial loss suffered by the Community.  In such
      cases it is appropriate to estimate the loss.  In accordance with Article 5(2)(c) of Regulation No 729/70 the rate of correction
      must be clearly linked to the probable loss.  There must be a significant failing in the application of explicit Community
      rules which must expose the EAGGF to a real risk of loss or irregularity.
      
      
        20.      Annex 2 concerns the financial consequences for the clearance of such accounts of inadequacies in the controls carried out
      by the Member States.  For that purpose the guidelines distinguish between two categories of checks:
      
        
      –
         Key controls, which are the physical and administrative checks required to verify substantive elements, in particular the
            existence of the subject of the claim, the quantity, and the qualitative conditions including the observance of time-limits,
            harvesting requirements, retention periods, etc.  They are performed on the spot and by cross-checks to independent data such
            as land registers.
         
      
      
        
      –
         Ancillary controls are the administrative operations required to process claims correctly, such as verification that they
            were submitted in time, identification of duplicate claims for the same subject, risk analysis, application of sanctions and
            appropriate supervision of the procedures.
         
      
      
      
      
        21.      The guidelines indicate that when one or more key controls are not applied or are applied so poorly or so infrequently that
      they are ineffective in determining whether claims are eligible or preventing irregularities, a correction of 10% is justified
      as it can reasonably be concluded that there is a high risk of wide-spread loss to the Fund.  When all key controls are applied,
      but not in the number, frequency or depth required by the legislation, a correction of 5% is justified as it can reasonably
      be concluded both that they do not provide the expected degree of assurance that claims are regular and that the risk to the
      Fund is significant.  When a Member State has adequately performed the key controls but completely failed to carry out one
      or more ancillary controls, a correction of 2% is justified since there is less risk of loss to the Fund and the infringement
      is less serious.  Where implementation of the checking system has been non-existent or seriously inadequate and there are
      indications of very frequent irregularities and negligence in combating irregular or fraudulent practices, a correction of
      25% is justified since the fact that claims may be submitted with impunity where there is no entitlement may reasonably be
      assumed to involve extremely high losses for the Fund.
      
      
        22.      The criteria for application of flat-rate adjustments laid down in the Commission’s guidelines have been examined by the Court
      of Justice on a number of occasions.  It is clear from that case-law that the Court considers those criteria to be valid. 
         			(24)
         		
       Procedure
        23.      In the present case, the grounds on which the Commission based its refusal to reimburse expenditure were set out in the Rapport
      de synthèse (Summary Report) issued by the Commission on 19 June 2001 
         			(25)
         		 following the mediation procedure required by Article 5(2)(c) of Regulation No 729/70.
      
       Refusal of expenditure in the cotton sector Relevant legislation
        24.      At the material time, the system of aid for cotton was principally governed by, first, Regulation No 1554/95 laying down the
      general rules for the system of aid for cotton and repealing Regulation (EEC) No 2169/81 
         			(26)
         		 and, second, Regulation No 1201/89 laying down rules implementing the system of aid for cotton. 
         			(27)
         		
      
        25.      Article 8 of Regulation No 1554/95 provides:
      ‘Before 1 October, the estimated production of cotton referred to in Article 5(3) shall be drawn up …, account being taken
      of crop estimates.
       In order to draw up these estimates, a system of declarations of areas sown shall be established.’
      
      
        26.      Article 8(1) of Regulation No 1201/89 provides:
      ‘All cotton growers shall, before a date set by the Member State concerned and, except in cases of force majeure, not later than 1 July, send an annual declaration of the areas sown.
       However, for the year 1996, in the case of Greece, the date 1 July is replaced by 1 August.’
      
      
        27.      Article 12(1)(a) of Regulation No 1201/89 provides:
      ‘The agency appointed by the producer Member State shall verify … the accuracy of the declarations of areas sown, on the basis
      of modern inspections relating to not less than 5% of the declarations.’
      
      
        28.      The preamble to Regulation No 1437/96, 
         			(28)
         		 which introduced the second subparagraph of Article 8(1) of Regulation No 1201/89, states:
      ‘… Article 8(1) of Commission Regulation (EEC) No 1201/89 … provides that all cotton growers must send an annual declaration
      of areas sown before a date set by the Member State concerned and, except in cases of force majeure, not later than 1 July;  … strikes by the public services in Greece have severely disrupted the submission of those declarations
      for the year 1996;
      … as a result, a deadline after 1 July should be set for the year 1996 in the case of Greece;
      …’ 29  –First and second recitals.
      
       The Commission’s findings and Greece’s claims
        29.      The Summary Report states that there were (i) no on-the-spot inspections of the declarations of areas sown in the districts 
         			(30)
         		 of Serrai and Drama for the marketing year 1995/96 owing to lack of staff and (ii) late inspections of the declarations of
      areas sown in the districts of Voiotia and Imathia for the marketing year 1996/1997 owing to a strike of the inspectors. 
      Article 12(1)(a) of Regulation No 1201/89, which prescribes inspections relating to at least 5% of declarations, is accordingly
      breached.  The Commission therefore proposed a correction of GRD 4 163 259 550, representing 10% of all expenditure in relation
      to which errors were observed.
      
      
        30.      Greece submits that, in so far as it imposes the abovementioned deductions in the cotton sector, the Decision should be annulled
      or, in the alternative, amended so that the deduction is reduced to 2% of declared expenditure.
      
       The lack of inspections in Serrai and Drama
      
        31.      Greece, while accepting that there were no inspections in Serrai and Drama, contends that the Commission’s interpretation
      of Article 12(1)(a) of Regulation No 1201/89 is erroneous.  In the Summary Report the Commission stated that the inspections
      referred to in Article 12(1)(a) must be representative;  no district may therefore be omitted.  Greece in contrast maintains
      that that provision simply requires the inspections to relate to 5% of the declarations of areas sown.  For the marketing
      year 1995/96, 119 942 declarations were received and 8 299 inspections carried out, amounting to 6.9% of the declarations.
       Even though there were no inspections in Serrai and Drama, the inspections were therefore perfectly representative.  Moreover,
      interpreting the requirement by reference to the district would be contrary to the principle of equal treatment since other
      Member States do not have equivalent national administrative units.  Even if it were correct that Article 12(1)(a) required
      inspections to relate to 5% of a given administrative unit, that unit should be not the district, but the region or a geographical
      territory.
      
      
        32.      In addition, Greece states that the lack of inspections in Serrai and Drama was dictated by circumstance since there was a
      temporary lack of staff which was subsequently resolved so that inspections in those districts resumed.  It follows from the
      principles of good faith and proportionality that the stringent corrections imposed by the Commission cannot be justified
      by such an ephemeral circumstance.
      
       The late inspections in Voiotia and Imathia
      
        33.      Greece submits that Regulation No 1201/89 sets no deadline for on-the-spot inspections;  the only requirement flowing from
      the legislation is that the inspections must take place at an appropriate time, namely at a point when it is certain that
      the area inspected has been sown.  That period may run from August to April since even after cotton has been harvested the
      area sown may be determined on the basis of the stalks remaining in the soil.  The inspections which took place were almost
      all carried out in September, October and November.
      
      
        34.      In the alternative Greece concedes that there were delays in certain districts but submits that they were due to force majeure, namely wild-cat strikes by more than 95% of the employees of the cotton agency.
      
       Assessment
        35.      With regard to the lack of inspections in Serrai and Drama, I concur with Greece that a natural reading of Article 12(1)(a)
      is that the agency must randomly select at least 5% of all declarations received.  The requirement of randomness should ensure
      that, over time, all areas within the remit of a given agency are likely to be subject to inspections.  The alternative view
      also has the disadvantage that it would need to be decided what regional unit is the relevant one;  as Greece suggests, that
      may be inequitable.  The terms of Article 12(1)(a) may be contrasted with those of Article 6(2) of Regulation No 2911/90, 
         			(31)
         		 which explicitly provides that checks are to be made on a representative percentage of cultivation declarations in the dried
      grape sector ‘in each competent administrative unit’.
      
      
        36.      However, on the basis of the documents before the Court Greece does not appear to have applied the system in an acceptable
      manner.  In the application a table is presented which shows that the 6.9% of declarations in respect of which inspections
      were carried out quoted by Greece includes 1 101 declarations for Serrai (out of a total of 10 874) and 325 for Drama (out
      of a total of 3 222) that had been randomly selected for inspection.  Thus it appears that the declarations submitted for
      those two districts were included in the random selection process.  It appears to be accepted however that none of the areas
      covered by the declarations so selected was in fact inspected.  It is clearly contrary to the spirit of the legislation, which
      requires inspections of a specified percentage of declarations of areas sown, for a Member State which has randomly selected
      declarations for inspection to exclude from the inspection process all declarations so selected of areas sown in two entire
      districts.  It follows from the case-law of the Court that it is for the Member State concerned to adduce the most detailed
      and comprehensive evidence that it has made checks or that its figures are accurate and that the Member State cannot rebut
      the Commission’s findings by mere assertions which are not substantiated by evidence of a reliable and operational supervisory
      system. 
         			(32)
         		  It would manifestly be contrary to those principles for a Member State to be able to rely on selective inspections where
      random inspections are prescribed.
      
      
        37.      With regard to the late inspections in Voiotia and Imathia, I have some sympathy for Greece’s view that, since Article 12(1)(a)
      does not explicitly impose a time-limit for the inspections, a reasonable interpretation is that the inspections must take
      place at a time when it is certain that the area inspected was sown;  inspections need not therefore necessarily pre-date
      the harvest (as the Commission appears to suggest) since, as Greece asserts, a post-harvest inspection could have the same
      result provided that the stalks of the cotton plants remained in the soil.
      
      
        38.      It appears however that the Commission, despite repeated requests, has received no information or documents showing that inspections
      were ever carried out, even (on its interpretation) late.  Since it is settled case-law that a Member State cannot rebut the
      Commission’s findings by mere assertions which are not substantiated by evidence of a reliable and operational supervisory
      system, 
         			(33)
         		 this head of Greece’s claim must fail.
      
      
        39.      With regard to the force majeure argument, there seems to me to be some confusion over dates.  Greece annexes to its application documents issuing from the
      cotton workers’ union as evidence of an announced strike with participation exceeding 95% of employees over five days.  It
      appears that those documents are the only evidence of the strikes invoked by Greece which has been produced to the Commission,
      and then only when the application was lodged.  All the documents in that annex however date from 1995, concerning the period
      from August to October of that year, whereas the Commission’s complaint concerns late controls carried out from December 1996
      to February/March 1997.  To the extent that a 1996 strike is in issue, it may moreover be relevant that some elasticity had
      already been introduced into the timetable as a whole to take account of its effect:  see the second paragraph of Article
      8(1) of Regulation No 1201/89. 
         			(34)
         		  In any event, and whatever the merits of its force majeure argument (which at first view does not appear convincing), it is again clear that Greece has failed adequately to rebut the
      Commission’s findings;  this head of its claim must accordingly also fail.
      
       Refusal of expenditure in the olive oil sector Relevant legislation
        40.      Regulation No 154/75 provides for the establishment of a register of olive cultivation in the Member States producing olive
      oil. 
         			(35)
         		  According to Article 1 of that regulation, the register must, by 31 October 1988 in the case of Greece, cover all olive-growing
      holdings within its territory and furnish certain specified information which is to be brought up to date at regular intervals.
      
      
        41.      Article 16(1) of Regulation No 2261/84 laying down general rules on the granting of aid for the production of olive oil and
      of aid to olive oil producer organisations 
         			(36)
         		 stipulates that the Member States are to draw up and keep up to date permanent computerised files of olive and olive-oil
      production data.  The information which those files must contain is listed in Article 16(2).
      
      
        42.      The first subparagraph of Article 11(2) of Regulation No 3061/84 
         			(37)
         		 laying down detailed rules for the application of the system of production aid for olive oil provides that all the components
      of the computerised files are to be operational before 31 October 1990.
      
       The Commission’s findings and Greece’s claims
        43.      According to the Summary Report and earlier correspondence, audits carried out in Greece in May 1996 had revealed various
      shortcomings, most significantly the fact that the olive cultivation register and the computerised files required by the legislation
      had still not been established.  The Commission had as a result (in previous decisions) proposed corrections for the marketing
      years 1992/93, 1993/94 and 1994/95.  In relation to the marketing years 1995/96 and 1996/97, the Commission, after meeting
      with the Greek authorities, concluded that, although there had been improvements to the control system, that principal problem
      remained.  In the decision the Commission accordingly proposed a 5% correction, totalling GRD 17 308 535 972, on the expenditure
      declared by Greece for those years.
      
      
        44.      Greece’s first principal submission is that the contested decision should be annulled on the basis that the Commission incorrectly
      interpreted and applied the fourth paragraph of Article 5(2)(c) of Regulation No 729/70 
         			(38)
         		 and the guidelines. 
         			(39)
         		  Greece considers that the Commission erred in two ways.
      
      
        45.      First, the Commission based its correction on inspections carried out in Greece in 1996 on which corrections for earlier years
      had already been based.  The Commission thus assumed that the conclusions which it reached at that time remained valid for
      subsequent years, including periods after the inspections.  Making corrections on such a basis is unacceptable, particularly
      as the Court accepts that, if a control system cannot for objective reasons be applied in a given Member State, that lacuna
      may be stopped by the use of a reliable alternative system.  Moreover the Commission’s approach amounts to imposing a penalty
      for delay in completing the olive cultivation register, which the Commission is not empowered to do under Article 5(2)(c);
       if it wished to penalise Greece for delay in completing the register, the proper course would have been to bring infringement
      proceedings.
      
      
        46.      Second, the Commission imposed a correction for all the years for which expenditure was declared in the sector concerned on
      the sole ground that the control system was not wholly applied, without evidence of financial loss suffered by the Community
      as required by the fourth subparagraph of Article 5(2)(c).  More specifically, the guidelines state that, where the shortcoming
      is a consequence of a Member State’s failure to adopt an appropriate control system, the correction is to be applied to ‘all
      the expenditure to which that system applied’.  Greece considers that ‘all the expenditure’ must mean all the expenditure
      for the marketing year concerned and the period that was the subject of checks.  Any other interpretation would not take account
      of improvements which the Member States make to a given system.  In the present case however, while the Commission accepted
      that there had been significant improvements in Greece’s monitoring system in the years following the 1996 audit, it none
      the less applied the same rate of deduction as in previous years.
      
      
        47.      Greece’s second principal submission is that no or insufficient reasons are stated for the contested decision contrary to
      Article 253 EC.  Greece appears to seek to substantiate this submission by complaining that the Commission did not take proper
      account of various improvements to the system which the Greek authorities had communicated to it;  had it done so, it would
      have had to accept that there had been no risk to EAGGF resources and the deductions would not have been imposed.  Greece
      mentions various improvements, none of which however appear to consist in the finalisation of the olive cultivation register
      and computerised files as such.  Greece concludes that no part of its expenditure in the olive oil sector should be refused;
       in any event, the inadequacies which remain are merely isolated instances of technical problems and in accordance with the
      principle of proportionality do not justify a correction of more than 2%.  Since the Commission took a different view, it
      incorrectly assessed the facts of which it had been informed and infringed the requirement to give reasons imposed by Article
      253 EC.
      
       Assessment
        48.      I accept that, at first sight, Greece’s argument that the Commission should not have applied a correction based on checks
      which preceded the expenditure affected may have some merit.  However, I do not consider that it succeeds in the present case
      for the following reasons;  I will accordingly not consider further the general merits of the argument.
      
      
        49.      The failure by Greece to establish the olive cultivation register and the computerised files required by the legislation has
      a long history:  its obligation to establish the register dates from 1988 and its obligation to establish the files dates
      from 1990.  The approach of the Greek authorities to setting up the register and files was described by Advocate General Fennelly
      as ‘lethargic’ in the context of an unsuccessful challenge by Greece to a decision taken by the Commission in 1993 reducing
      the amount of aid paid for expenditure in 1990. 
         			(40)
         		  In another unsuccessful challenge to a subsequent decision taken in 1994 reducing the amount of aid paid for expenditure
      in 1991, the Court confirmed its previous rejection of Greece’s argument that it was impossible to establish the register
      by the required date and ruled that the delay in the establishment of the computerised files could not be justified as argued
      by Greece. 
         			(41)
         		  Most recently, in unsuccessful challenges to decisions taken in 1996 and 1997 reducing the amount of aid paid for expenditure
      in 1992 and 1993, the Court reiterated its rejection of Greece’s argument that it was impossible for it to comply with the
      requirements of the legislation relating to the establishment of the register and files. 
         			(42)
         		
      
        50.      It may be noted that Greece does not plead that it has now established the olive cultivation register and the requisite computerised
      files.  In those circumstances, it cannot complain that the Commission did not repeat the checks which originally revealed
      their absence.  It must be remembered that the Commission is not obliged to demonstrate exhaustively the irregularities on
      which it relies, provided that it can provide evidence of serious reasonable doubt thereof. 
         			(43)
         		  As for the argument that making corrections in the context described amounts to imposing a penalty beyond the Commission’s
      powers, I would refer to Case C-247/98 Greece v Commission 
         			(44)
         		 in which the Court stated that the Commission is under an obligation to carry out a financial correction if the expenditure
      in respect of which the financing has been requested has not been carried out in accordance with Community rules and that
      such a correction, being designed to avoid the EAGGF being burdened with amounts that have not served to finance an objective
      pursued by the Community legislation, does not constitute a penalty.  The first head of Greece’s first claim must accordingly
      fail.
      
      
        51.      With regard to the argument that, in the absence of evidence of financial loss suffered by the Community, the Commission was
      not entitled to impose a correction for all the years in which expenditure was declared, I would again refer to the case-law
      from which it is clear that it is for the Member State concerned to adduce detailed and comprehensive evidence that the Commission’s
      assertions are incorrect. 
         			(45)
         		  As the Commission submits, for as long as the two principal elements of monitoring aid, namely the olive cultivation register
      and computerised files, have not been fully established, the risk of loss to the Community remains high.  In any event, according
      to the Commission’s guidelines invoked by Greece a correction of 10% is justified ‘when one or more key controls are not applied’.
       It would seem to follow that 10% would be the appropriate rate of deduction for failure to establish, some considerable time
      after the relevant deadline, two key elements of the control system in the olive oil sector;  the Commission however took
      account of certain improvements and apparently reduced the 10% which it had initially proposed to 5%.  The second head of
      Greece’s first claim must accordingly also fail.
      
      
        52.      With regard to Greece’s submission that no or insufficient reasons are stated for the decision contrary to Article 253 EC,
      it is settled case-law that the statement of reasons must be regarded as sufficient if the Member State to which the decision
      was addressed was aware of the reasons for which the Commission took the view that it should not charge the sum in dispute
      to the EAGGF. 
         			(46)
         		  Since the Commission has made no secret of the reasons for which it has applied corrections more or less continuously to
      expenditure effected since 1990, it is disingenuous in the extreme of Greece to plead ignorance at this stage.  As for the
      argument that the improvements to its system mean that there was no risk to EAGGF resources, the Court has ruled that where
      a regulation lays down specific measures of supervision, the Member States must apply them and it is unnecessary to examine
      the merits of their view that another system of supervision is more – or a fortiori  equally – effective. 
         			(47)
         		  Finally under this head I consider that I have adequately dealt in the preceding paragraph with Greece’s argument that the
      inadequacies in the sector are merely isolated instances of technical problems.  Greece’s second claim must accordingly also
      fail.
      
       Refusal of expenditure in the dried grapes sector Relevant legislation
        53.      Article 1(1) of Regulation No 2392/86 establishing a Community vineyard register 
         			(48)
         		 requires Member States which produce grapes grown in the open air to establish a Community vineyard register covering their
      territory.  Article 4(4) provides that the final date for the establishment of the register is to be 31 December 2000 in Greece.
      
      
        54.      The first subparagraph of Article 3(1) of Regulation No 2911/90 laying down detailed rules of application for aid for the
      production of certain varieties of grapes for drying 
         			(49)
         		 provides:
      ‘By 30 April each year in respect of the following marketing year, cultivation declarations shall be submitted by producers
      to the competent authority designated by the Member State on whose territory the areas are located.’
      
      
        55.      Article 3(2) of Regulation No 2911/90 requires cultivation declarations to include at least a series of specified items of
      information, including:
      ‘(b)   the areas planted with vines producing the product(s) concerned (in hectares and in [ares 
         			(50)
         		]) with the land registry reference or an indication recognised as equivalent by the body checking areas;
      (c)     the grape variety used and, in the case of sultanas, a statement as to whether the vineyard is affected by phylloxera or has
      been replanted in the last five years;
      (d)     a declaration by the producer that none of the areas in question nor the products harvested therefrom are the subject of an
      application for aid under other schemes …;
      (e)     a crop estimate’.
      
      
        56.      Article 6 of Regulation No 2911/90 provides, in so far as is relevant:
      ‘1.     Member States shall verify, by surveys and on-the-spot checks, the accuracy of the information provided in support of cultivation
      declarations and aid applications, in particular as regards:
      
        
      –
         the areas declared as areas for the production of grapes for drying,
      
      
        
      –
         the accuracy of the yields given in the aid applications,
      
      
        
      –
         the actual drying of at least 90% of the fresh grapes harvested on other areas …
      
      
       With a view to controls, the Member State shall cross-check the information provided by producers with the data in the vineyard
      register …
       2.       Member States shall organise on-the-spot checks in accordance with paragraph 3 covering a representative percentage of declarations
      submitted in each competent administrative unit.  …
       3.       Where a cultivation declaration is checked all areas under vines of grapes for drying to which it relates shall be covered.
       The areas declared shall be measured and the cultivation thereon of eligible grape varieties verified.
      …
       For each check a report shall be drawn up indicating the areas and parcels visited and measured, the measuring instruments
      and the findings.’
      
      
        57.      Article 1 of Regulation No 1663/95 
         			(51)
         		 provides for the accreditation of national paying agencies empowered to effect expenditure on transactions eligible to be
      financed by the Fund.  Article 1(3) provides:
      ‘Before accrediting any paying agency, the competent authority shall be satisfied that the administrative and accounting arrangements
      of the body concerned offer the guarantees referred to in Article 4(1)(a) of Regulation (EEC) No 729/70.  The criteria shall
      be established by the Member State and applied by the competent authority for the purpose of accreditation, taking account
      of the Commission’s guidelines for those criteria as set out in the Annex.  …’
      
      
        58.      The Annex sets out numerous specific guidelines for such criteria, stating that the criteria are such that the paying agency
      provides sufficient assurance concerning the proper functioning of its administrative organisation and of the system of internal
      control.
      
      
        59.      Article 1(2) of Regulation No 1456/97 fixing for the 1997/98 marketing year the amount of the aid for the cultivation of grapes
      intended for the production of certain varieties of dried grapes 
         			(52)
         		 provides that aid is not to be paid for the cultivation of dried grapes on areas having a yield per hectare below certain
      thresholds.  Article 1(3) requires Member States to take all necessary measures for checking that minimum yield.
      
      
        60.      Regulation No 1493/1999 on the common organisation of the market in wine, 
         			(53)
         		 which became applicable on 1 August 2000, 
         			(54)
         		 encourages the compilation by Member States or at regional level of an inventory of wine-growing potential. 
         			(55)
         		  Access to the regularisation of unlawfully planted areas, the increase in planting rights and the support for restructuring
      and conversion provided for by that regulation is subject to prior presentation of that inventory.  Article 16(2) provides
      that, where a Member State has opted for inventories to be drawn up on a regional basis, all such inventories are to be drawn
      up by 31 December 2001.
      
      
        61.      Article 2(3) of Regulation No 1621/1999 laying down detailed rules for the application of Council Regulation (EC) No 2201/96
      as regards aid for the cultivation of grapes to produce certain varieties of dried grapes 
         			(56)
         		 provides that, for the purposes of administering the aid scheme, a computerised alphanumeric database containing certain
      prescribed information is to be introduced.  Article 13(1) requires the Member States to have set up the database before the
      start of the 2002/03 marketing year.  It provides for a transitional obligation to submit an application for registration
      in the database during the 1999/2000, 2000/01 and 2001/02 marketing years and provides that the references relating to the
      area and identification of plots shall be the land-registry references ‘or other indications recognised as equivalent by the
      body responsible for checks on the areas’.  The second paragraph of Article 16 provides that the Regulation is to apply as
      from the 1999/2000 marketing year.
      
       The Commission’s findings and Greece’s claims
        62.      The Summary Report states that on-the-spot inspections in 1998 in the district of Heraklion (Crete) revealed irregularities
      in, first, the controls of areas and eligible grape varieties, second, the controls of minimum yield for eligible grape varieties,
      and third, the adoption and application of control systems.
      
      
        63.      The Commission proposed a deduction of 5% of the declared expenditure in the sector for 1997 (for marketing year 1996/97),
      1998 (for marketing year 1997/98) and 1999 (for marketing year 1998/99) in the district of Heraklion on the ground of the
      first and second complaints and of 2% of the declared expenditure in the sector for 1997, 1998 and 1999 (for the marketing
      years mentioned above) for the whole of Greece on the ground of the third complaint.  The total deduction is GRD 3 144 838 970.
      
       Irregularities in the controls of areas and eligible grape varieties
      
        64.      According to the Summary Report, there were numerous infringements of Regulation No 2911/90.  In particular, the on-the-spot
      inspections revealed that information on areas in control reports, cultivation declarations, applications for aid and the
      calculation of aid did not correspond with physical reality on site.  Since there were no signs on site to facilitate identification
      of the areas mentioned in the control reports, it was impossible to identify plots of land without the assistance of the aid
      recipient.  In addition there was no documentation detailing the shape of the plots of land stated to have been measured or
      the results and method of measurement.  Specific problems with national inspectors are also mentioned:  in particular, one
      inspector used a quadratic measurement although the shape of the plots was not quadratic or rectangular when re-measured;
       some inspectors were unaware of the instructions for their work;  some control work was performed with unrealistic intensity
      (27 different plots apparently checked in a single day);  and two plots inspected were fallow.  More generally, there was
      no documentation concerning on-the-spot controls of eligible grape varieties and diseases, the control reports were dated
      after the grapes had been delivered and the control reports drawn up by the national inspectors tallied perfectly with the
      beneficiaries’ declarations whereas the controls carried out in the presence of Community agents showed discrepancies for
      each plot measured in each of the three holdings visited.  Finally, there were no effective cross-checks to avoid the same
      plot of land being declared for aid more than once.
      
      
        65.      Greece submits that the Commission incorrectly interpreted and applied the combined provisions of Articles 2 and 13(1) of
      Regulation No 1621/1999 and Article 16(2) of Regulation No 1493/1999 and stated inadequate reasons for the decision owing
      to an erroneous assessment of the facts and that on those grounds the contested decision should be annulled.
      
      
        66.      With regard to the allegedly inadequate controls of the areas and the eligible grape varieties, Article 16(2) of Regulation
      No 1493/1999 sets a deadline of 31 December 2001 for the establishment of the inventory of wine-growing potential and Article
      4(4) of Regulation No 2392/86 sets a deadline for Greece of 31 December 2000 for the establishment of a Community vineyard
      register.  Articles 2(3) and 13(1) of Regulation No 1621/1999 require Member States to set up a computerised alphanumeric
      database for the purpose of administering the aid scheme before the start of the 2002/03 marketing year.  Article 13(1) expressly
      recognises that Member States may use ‘other indications’ for control.  That is precisely what Greece has done, using data
      held for 12 years at the Rural Development Directorates and declarations submitted since 1987 to those Directorates by producers
      which contain equivalent information enabling the plots to be identified.  The system guarantees a satisfactory degree of
      protection of Community resources.  There is therefore a manifest error in the reasons on which the Commission based its decision
      to impose deductions, since at the relevant time there was no obligation on Greece to have established a register.
      
      
        67.      In any event, any administrative or procedural shortcomings such as the absence of supporting documentation concerning measurements
      or the shape of plots did not in fact put the Fund’s resources at risk and must moreover be examined in the light of the amendments
      and improvements effected in the mean time.  The discrepancies in the data referring to areas in the control reports, cultivation
      declarations and applications for aid are isolated cases of manifest error due to topography and uncertain property rights.
       Plots of land may be identified by local surveyors;  in any event the regional toponomy is known to local inhabitants.  The
      method of measuring used is that used throughout the country without regional variation, so it was not necessary to specify
      it;  the case mentioned of an inappropriate quadratic measurement is an isolated instance and the problem has in any event
      been dealt with in the mean time.  The apparent intensity of controls, also an isolated instance, is explained by the fact
      that the control reports are in general drawn up after the on-the-spot inspections, which are noted in diaries lodged with
      the local registry and now sent to the Commission.  There are numerous controls, including on-the-spot checks, of eligible
      grape varieties and of diseases, together with a system of checking aid recipients against their identity card.
      
       Irregularities in the controls of the minimum yield for eligible grape varieties
      
        68.      The Summary Report notes that on-the-spot inspections revealed infringements of Article 3(2)(e) of Regulation No 2911/90 and
      Article 1(2) and (3) of Regulation No 1456/97.  More specifically, beneficiaries failed to provide crop estimates and there
      were no controls to ensure that aid was not paid if the minimum yield set for each eligible grape variety was not reached
      and that any reduction in that yield was due to unfavourable climatic conditions.  In the absence of producers’ crop estimates,
      the authorities were unable to prove that they estimated the yield for each eligible variety so as to compensate for that
      lack of information.  Furthermore the Greek authorities have not adduced evidence that the grapes were dried and not used
      for other purposes.
      
      
        69.      Greece submits that the Commission has incorrectly assessed the facts and infringed Article 253 EC in not giving adequate
      reasons for the contested decision.  Article 3(1) of Regulation No 2911/90 requires producers to submit cultivation declarations,
      including a crop estimate, by 30 April each year.  That date is however too early for such an estimate to be possible.  Cross-controls
      were accordingly carried out in three stages.  Respect for the minimum yield for eligible varieties was accordingly ensured
      and the Commission in concluding otherwise made an erroneous assessment of relevant facts.  The contested decision should
      consequently be annulled.
      
       Shortcomings in the adoption and application of control systems
      
        70.      The Summary Report notes that the on-the-spot inspection revealed numerous specific infringements of Regulation No 2911/90
      and the Annex to Regulation No 1663/95 
         			(57)
         		 concerning the adoption and application of the control system.  The Commission considers that these shortcomings may be extrapolated
      to the whole of Greece since the same system is applied throughout the national territory.
      
      
        71.      Greece submits that there is an error of fact in the Commission’s assessment.  The shortcomings referred to have a general
      effect on the entire system of internal control carried out by the paying agency (Gedidagep) and not solely the dried grapes
      sector.  The Commission should therefore have inspected that agency rather than deduce from an inspection of the regime for
      aid in the dried grapes sector that the whole of the Annex to Regulation No 1663/95 had not been applied.  Over recent years
      however the Commission has carried out hundreds of checks of aid in all sectors and has never claimed to have observed the
      shortcomings now invoked in the dried grape sector.  In any event, there have been improvements to the system of aid in that
      sector.  The contested decision should consequently be annulled on the ground that the Commission manifestly made an erroneous
      assessment of all the necessary data on which the decision was based.
      
       Assessment Irregularities in the controls of areas and eligible grape varieties
      
        72.      Although the Summary Report mentions infringements of Regulation No 2911/90, the Commission submits in its defence, as arguments
      presumably intended in response to the arguments put forward by Greece, 
         			(58)
         		 that the corrections are linked to irregularities in identifying and measuring plots in infringement of Article 13 of Regulation
      No 1621/1999.
      
      
        73.      It is obvious however that the irregularities in question cannot in themselves constitute a breach of Regulation No 1621/1999
      since that regulation applies only as from the 1999/2000 marketing year 
         			(59)
         		 whereas the contested decision relates to expenditure for the marketing years 1996/97, 1997/98 and 1998/99.  The lawfulness
      of the correction must therefore be determined on grounds other than compliance by Greece with Regulation No 1621/1999.
      
      
        74.      That regulation, in addition to requiring Member States to set up a database containing prescribed information about individual
      producers, producer organisations and processors, repeals and replaces Regulation No 2911/90.  As is clear from the Summary
      Report, it was accordingly the latter regulation which at the material time laid down the requirements at issue concerning
      the information to be included in cultivation declarations and the Member States’ obligation to verify the accuracy of that
      information.  In particular, Article 3(2) of Regulation No 2911/90 requires the cultivation declaration to include ‘the areas
      planted with vines producing the product(s) concerned … with the land registry reference or an indication recognised as equivalent
      by the body checking areas’.
      
      
        75.      Greece’s principal argument is that the control system which it describes guarantees a satisfactory degree of protection of
      Community resources.  The results of the Commission’s on-the-spot inspections, however, as set out in the Summary Report provide
      evidence of serious doubt as to the existence or appropriateness of the checks to be carried out.  It is clear from the case-law
      of the Court that in such circumstances it is for the Member State concerned to adduce the most detailed and comprehensive
      evidence that the Commission’s assertions are incorrect;  it cannot rebut the Commission’s findings by mere assertions which
      are not substantiated by evidence of a reliable and operational supervisory system. 
         			(60)
         		  Since Greece has not adduced such evidence, this head of its claim must be rejected.
      
       Irregularities in the controls of the minimum yield for eligible grape varieties
      
        76.      I would note first that Regulation No 1456/97 
         			(61)
         		 applies only (as its title makes clear) to the 1997/98 marketing year, although it was duplicated a year later by Commission
      Regulation (EC) No 1594/98 of 23 July 1998 fixing for the 1998/99 marketing year the amount of the aid for the cultivation
      of grapes intended for the production of certain varieties of dried grapes. 
         			(62)
         		  For the period within its scope, Article 1(3) of Regulation No 1456/97 required Member States to take all necessary measures
      for checking that the prescribed minimum yield for certain varieties of dried grapes had been attained.  For the whole of
      the period in question, moreover, Article 3(2)(e) of Regulation No 2911/90 required cultivation declarations to include a
      crop estimate.  Greece does not deny that beneficiaries of the aid failed to produce such an estimate, but merely asserts
      that it was not possible to estimate the crop at the time the cultivation declarations were to be submitted and states that
      cross-controls were carried out.  I would repeat, however, that a Member State cannot rebut the Commission’s findings by mere
      assertions which are not substantiated by evidence of a reliable and operational supervisory system. 
         			(63)
         		  Since Greece has again not adduced such evidence, this head of its claim must be rejected.
      
       Shortcomings in the adoption and application of control systems
      
        77.      Greece’s principal submission appears to be based on a misapprehension that the deduction has been applied to sectors other
      than the dried grape sector.  It apparently considers that the Commission has assumed, on the basis of infringements of the
      Annex to Regulation No 1663/95 detected in the dried grape sector, that the same infringements exist in all other sectors,
      whereas the Commission states that it has assumed, on the basis of infringements of the Annex detected in the dried grape
      sector in a single district (Heraklion), that the same infringements exist in that sector throughout Greece.  The Commission’s
      rationale is that the infringements concern the adoption and application of the control system applied nationally.  It is
      accordingly reasonable to assume that the infringements found in Heraklion will be duplicated elsewhere.
      
      
        78.      To my mind that approach is entirely reasonable.  Moreover Greece does not in fact contest that the infringements were committed;
       on the contrary it pleads improvements to the system, most of which have been made since the 1998/99 marketing year, thereby
      implicitly recognising that the system was inadequate.  It is settled case-law that a Member State cannot rebut the Commission’s
      findings by mere assertions which are not substantiated by evidence of a reliable and operational supervisory system. 
         			(64)
         		  Greece’s claim under this head must accordingly be rejected.
      
       Refusal of expenditure in the meat sector – ewe and goat premium scheme Relevant legislation
        79.      Article 5(1) of Regulation No 3887/92 laying down detailed rules for applying the integrated administration and control system
      for certain Community aid schemes 
         			(65)
         		 requires ‘livestock’ aid applications to contain all necessary information and in particular certain specified items including
      ‘where applicable, an undertaking by the applicant to keep [the animals in respect of which aid is applied for] on his holding
      during the retention period and information on the location or locations where the animals will be held …’.
      
      
        80.      Article 6(1) of Regulation No 3887/92 requires administrative and on-the-spot checks to be made in such a way as to ensure
      effective verification of compliance with the terms under which aids and premiums are granted.  Article 6(3) requires on-the-spot
      checks to cover ‘at least a significant percentage of applications [which] shall represent at least … 10% of “livestock” aid
      applications …’.  Article 6(4) requires applications subjected to on-the-spot checking to be selected by the competent authority
      on the basis of a risk analysis which is to take account of a number of specified factors.
      
      
        81.      Article 10(5) of Regulation No 3887/92 provides:
      ‘In cases where owing to the impact of natural circumstances the farmer cannot meet his commitment to keep the animals notified
      for a premium throughout the compulsory retention period he shall be entitled to the premium for the number of eligible animals
      actually kept throughout the period, provided that he has informed the competent authority in writing within 10 working days
      of finding any reduction in the number of animals.’
      
      
        82.      The first paragraph of Article 12 of Regulation No 3887/92 provides that every inspection visit is to be the subject of a
      report setting out certain specified information.  The second paragraph of Article 12 provides:
      ‘It will be open to the farmer or his representative to sign the report.’
      
      
        83.      The first subparagraph of Article 1(3) of Regulation No 2700/93 on detailed rules for the application of the premium in favour
      of sheepmeat and goatmeat producers 
         			(66)
         		 provides for a retention period during which the producer undertakes to keep on his holding the number of ewes and/or she
      goats in respect of which the premium is requested.  The second subparagraph provides:
      ‘Before all or some of that number of ewes and/or she goats in respect of which the premium is requested are placed in agistment
      during the retention period, the animals concerned must be identified.  …’
      
      
        84.      Article 4(1) of Regulation No 2700/93 requires Member States to set up a system for the permanent recording of livestock movements
      with effect from the 1994 marketing year, subject to a transitional measure permitting Member States to introduce a less onerous
      recording system for the 1994 marketing year only.  Article 4(2) requires that for each marketing year Member States are to
      draw up an inventory of sheep producers marketing sheep’s milk and sheep’s milk products.
      
       The Commission’s complaints
        85.      According to the Summary Report, the Commission conducted audits, including on-the-spot inspections, in 1997 and 1998 of the
      ewe and goat premium scheme, which revealed a number of serious problems.  In April 2000 another audit revealed that the Greek
      authorities had done little to rectify the situation.  The principal problems were as follows, in summary:  non-introduction
      of livestock movement registers contrary to Article 4(1) of Regulation No 2700/93;  very few or no on-the-spot inspections
      contrary to Article 6(3) of Regulation No 3887/92;  unreliability of inspection statistics including inspectors apparently
      carrying out 25 to 30 checks in one day and inspection reports not signed by the producer contrary to Article 12 of Regulation
      No 3887/92;  low quality of inspection reports;  delays in data processing;  lack of risk analysis contrary to Article 6(4)
      of Regulation No 3887/92;  imprecise notification of place of retention contrary to Article 5(1) of Regulation No 3887/92;
       non-marking of animals contrary to Article 1(3) of Regulation No 2700/93;  acceptance of oral (rather than written) notification
      of losses contrary to Article 10(5) of Regulation No 3887/92;  lack of controls of milk production by heavy-lamb producers
      contrary to Article 4(2) of Regulation No 2700/93 and irreconcilable numbers of ewes and goats benefiting from advance and
      final payments.
      
      
        86.      More specifically, it appears from the Summary Report that the Commission staff regarded the situation in Rethymnon as totally
      irregular in that there was no control system equivalent to that required by Regulation No 3887/92:  in particular, there
      were virtually no checks in 1995, 1996 and 1997.  Immediately after the 1997 inspections by Commission officials the Greek
      authorities unilaterally suspended payments and later, following inspections of 99.6% of producers in Rethymnon in 1998, those
      authorities refused a significant proportion of premiums, the number of refusals increasing sharply compared with those in
      the previous year.
      
      
        87.      The Commission applied a deduction of 5% for national expenditure declared for 1995, 1996 and 1997, including certain expenditure
      relating to 1997 but declared in 1999.  For certain districts where statistics showed insufficient levels of inspection or
      in which the Commission’s on-the-spot observations justified different treatment, it applied a rate of 10% and for the district
      of Rethymnon a rate of 25%.  The total amount of the deductions was GRD 11 863 933 000.
      
       With regard to the 25% correction applied to expenditure effected in Rethymnon
        88.      Greece submits that the Commission infringed the principle of proportionality, exceeded the limits of its discretion and gave
      insufficient reasons.  The legal conditions imposed by the guidelines 
         			(67)
         		 for imposing a deduction of 25% are clearly not met:  the Commission based itself on a single comparator, namely the level
      of rejection in 1998, which was higher than that in 1997.  Moreover the Greek authorities took immediate steps to suspend
      all payments and checked 99.6% of the producers in Rethymnon.  Greece submits that the 25% deduction should be annulled or,
      in the alternative, reduced to 2%.
      
      
        89.      It may be noted first that, if the Commission finds that there are no adequate control procedures, it may refuse to charge
      to the EAGGF the whole of the expenditure in question. 
         			(68)
         		  Where, instead of disallowing all the expenditure affected by the infringement, the Commission has endeavoured to establish
      rules for treating irregularities differently, depending on the extent of the shortcomings in the checks and the degree of
      risk to the EAGGF, it is for the Member State to show that those criteria are arbitrary and unfair. 
         			(69)
         		
      
        90.      In my view Greece has not discharged that burden.  The Commission’s Guidelines provide for a 25% deduction where implementation
      of the checking system has been non-existent or seriously inadequate and there are indications of very frequent irregularities
      and negligence in combating irregular or fraudulent practices.  The fact that the level of rejection suddenly increased in
      1998, when the Greek authorities inspected virtually all producers, as compared to 1997, when it appears to be accepted that
      virtually no inspections took place, strongly suggests that premiums were incorrectly paid in 1997.  In any event the fact
      that there were so few checks in 1995 to 1997 in itself constitutes seriously inadequate implementation of the checking system
      and indicates negligence in combating irregular or fraudulent practices, which is after all the purpose of the requirement
      for checks.  This head of Greece’s claim must accordingly be dismissed.
      
       With regard to the 10% deduction applied to expenditure effected in certain other districts
        91.      Greece submits that the Commission incorrectly interpreted and applied Articles 5(1), 6(3) and 12 of Regulation No 3887/92,
      Article 1(3) of Regulation No 2700/93 and the fifth subparagraph of Article 5(2)(c) of Regulation No 729/70. 
         			(70)
         		  Greece concludes that the 10% deduction should be annulled or, in some cases and in the alternative, reduced to 2%.
      
      
        92.      First, Greece submits that with regard to the on-the-spot inspections there was no indication that the Commission had taken
      into account the fact that for certain districts the data, which had not been correctly input owing to teething problems with
      initial computerisation, had been re-examined and communicated to the Commission.  Those data showed that on-the-spot checks
      of more than 10% of aid applications had been carried out in 1995 and 1996.  In any event, a correction of 10% manifestly
      infringes the principle of proportionality.
      
      
        93.      It appears from the correspondence produced to the Court that in its letter of June or July 1997 
         			(71)
         		 the Commission requested the Greek authorities to forward complete and revised statistics for 1995 and 1996.  In December
      1999 the Commission agreed to accept revised inspection statistics for 1995 and 1996 provided the information was transparent,
      presented on diskette or other computerised means, supported by fully and properly completed inspection reports and already
      audited by the Greek authorities.  It is not clear whether those criteria were met by the revised statistics subsequently
      submitted by the Greek authorities, which apparently showed that the statistics originally submitted in respect of 1995 and
      1996 had been incorrect and that in several districts the on-the-spot check percentages originally given (0%, 8.6%, 7.48%,
      8.88%, 8.57% and 7.74%) should in fact have been higher (23.41%, 10.25%, 20.65%, 10.15%, 11.23% and 10.13%).  In any event
      Greece has not demonstrated that the revised statistics constituted evidence of a reliable and operational supervisory system.
      
      
        94.      With regard to the principle of proportionality, Greece’s submission consists solely in the statement that the percentage
      deduction applied by the Commission is very high and manifestly infringes that principle.  Such a bald assertion cannot be
      accepted in the absence of any developed argument in support.
      
      
        95.      Second, in relation to the 10% deduction applied in relation to expenditure effected in certain other districts, Greece submits
      that the obligation to carry out on-the-spot checks of at least 10% of aid applications in accordance with Article 6(3) of
      Regulation No 3887/92 applies at national level, not within each district or each region where goats and ewes are raised.
      
      
        96.      It will be recalled that a similar point arose in relation to cotton. 
         			(72)
         		  In the case of the ewe and goat premium scheme, however, rather than a purely random selection Article 6(4) of Regulation
      No 3887/92 requires the applications to be selected on the basis of a risk analysis to take account of a number of specified
      factors.  I accordingly have some sympathy with Greece on this point.  However, the Commission also states that Greece itself
      required spot checks of a minimum of 10% of applications for each district;  that statement is not disputed by Greece.  On
      that basis, I cannot accept that the Commission’s deduction was inappropriate.
      
      
        97.      Third, Greece submits that the case of 30 inspections apparently carried out in one day was an isolated case;  in any event
      the inspections were in fact spread over several days, with the formal dating and signing of the reports being done on the
      final day.  Cases where the producers had not signed are explained by certain producers’ fear of, or hesitation in, signing;
       Article 12 of Regulation No 3887/92 provides merely for the possibility of signature.
      
      
        98.      It is indeed correct that Article 12 does not require inspection reports to be signed by the farmer.  However, it seems to
      me that in the overall context of the inadequacies found in its inspections the Commission has provided evidence of serious
      reasonable doubt as to the existence or appropriateness of checks carried out in Greece;  in accordance with the case-law
      of the Court it is for that State to adduce the most detailed and comprehensive evidence that it has made checks. 
         			(73)
         		  That Greece does not appear to have done.
      
      
        99.      Fourth, Greece submits with regard to the obligation to introduce livestock movement registers that the period to 1 January
      1997 was a first stage in setting up the systems.  It was inevitable that there were certain problems, given that goats and
      ewes are raised in mountain regions or islands, so that their producers are dispersed and cannot easily be informed of the
      new system.  With regard to the alleged lack of risk analysis, although not computerised it is carried out in writing in all
      districts;  even where a sample is chosen without computerised risk analysis, therefore, effective controls have been carried
      out with no risk to Community resources.  With regard to alleged delays in data processing, similarly there was effective
      control even in the absence of computerisation at all levels (itself due to insufficient computers).  With regard to the acceptance
      of oral notification of losses, that may have been so in the past in isolated cases where the producers were in inaccessible
      mountain regions.
      
      
        100.    With regard to the obligation to introduce livestock movement registers, therefore, and the acceptance of oral notification
      of losses, Greece appears to accept that there were irregularities.  With regard in particular to the former, it may be noted
      that the obligation to introduce the registers dates from legislation adopted in 1993, 
         			(74)
         		 to be implemented – if necessary by a register fulfilling fewer requirements for the first year – with effect from the 1994
      marketing year.  A further two years’ delay cannot be accepted.
      
      
        101.    As for the alleged lack of risk analysis and delays in data processing, I repeat that a Member State cannot rebut the Commission’s
      findings by mere assertions which are not substantiated by evidence of a reliable and operational supervisory system. 
         			(75)
         		  There is nothing to suggest that Greece has adduced such evidence.
      
      
        102.    Fifth, with regard to the allegation that the notification of the place of retention, required in Article 5(1) of Regulation
      No 3887/92, is given in a very imprecise manner, Greece submits that the place was given as a toponym in the absence of any
      more detailed denomination (since there is no land register in Greece).  The legislation simply requires an indication of
      the place, not a detailed description.
      
      
        103.    The Commission inspectors did not, however, apparently require a detailed description, simply a clear indication of the place
      of retention, which was not given in the aid application.  Again, in the absence of evidence to the contrary Greece’s argument
      cannot be accepted.
      
      
        104.    Sixth, with regard to the non-marking of animals, Greece submits that the cases concerned joint raising of flocks belonging
      to different owners, where Article 1(3) of Regulation No 2700/93 does not require marking.
      
      
        105.    Article 1(3) requires ewes and/or she-goats in respect of which the premium is requested to be identified before they are
      placed in agistment.  It is not clear to me why flocks belonging to different owners escape this requirement;  indeed, as
      the Commission observes, it may be thought that shared flocks present precisely the problems of identification which Article
      1(3) seeks to resolve.  Greece’s argument must accordingly be rejected.
      
      
        106.    Seventh, Greece submits that the Commission’s checks took place in 1997 and 1998, and the written communication of results
      in 1998;  consequently the 24-month period referred to in the fifth subparagraph of Article 5(2)(c) of Regulation No 729/70
      started to run in 1996 whereas the deduction also concerns expenditure effected in 1995.  Furthermore the Commission erred
      in regarding expenditure effected in 1995 and declared in 1996 as falling within the 24-month period:  the decisive factor
      is the actual date of the expenditure or the moment when the entitlement to aid arose and not the declaration.
      
      
        107.    The Commission submits that the observations of its inspectors concern the financial years 1995, 1996 and 1997;  the Greek
      authorities received the written communication by letter of 22 July 1997 and hence within the 24-month period.
      
      
        108.    It is clear from that letter, which has been put before the Court, 
         			(76)
         		 that the results of at least the checks carried out in 1997 were communicated to Greece in June or July 1997. 
         			(77)
         		  The letter, headed ‘Clearance of the EAGGF Guarantee accounts for 1996 and 1997 in the meat sector’, refers to the 1997
      on-the-spot audit, summarises numerous problems revealed (in particular non-introduction of livestock movement registers,
      very few or no on-the-spot inspections, lack of risk analysis, acceptance of oral notification of losses and lack of controls
      of milk production by heavy-lamb producers), and concludes:
      ‘The findings of this enquiry are communicated with reference to Article 8 of Commission Regulation (EC) No 1663/95.  The
      Commission services consider that your authorities have not fully complied with the requirements of Regulation Nos 3887/92
      and 2700/93, for the reasons presented in points 1, 2, 3 and 4 of this letter.  They consider that corrective measures and
      procedural improvements should be implemented in the following areas …
       Given the seriousness of the findings, the Commission’s services envisage proposing the exclusion from Community funding of
      a part of the expenditure declared under article 7.1. of Commission Regulation (EC) No 296/96 78  –That provision states ‘Expenditure claimed in respect of a given month must fall with payments and receipts actually
      effected during this month.  It may include corrections to the data reported in respect of previous months of the same year.
      For a year “n”, account shall be taken of expenditure effected by the Member States from 16 October of year “n-1” to 15 October
      of year “n”.’ for a maximum of 24 months preceding the date of the formal reception of this letter (in Greek).  In the light of your reply
      to this letter, the part of the expenditure to be excluded will be determined on the basis of the relevant provisions of Article
      5.2.c) of Council Regulation (EEC) No 729/70.  As provided by Article 8 of Commission Regulation (EC) No 1663/95, your reply
      to this letter should be communicated within a period of two months following the formal reception of this letter (in Greek).
      After the expiry of this period, and after the examination of any reply received within this period, a bilateral meeting will
      be proposed before the Commission services formally notify their conclusions.’
      
      
        109.    To my mind that letter fully satisfies the requirements of the legislation as interpreted by the Court:  not only is it abundantly
      clear that it is the communication for the purpose of Article 8(1) of Regulation No 1663/95 but also the start of the 24-month
      period is explicitly mentioned.
      
      
        110.    Greece submits that the Commission’s 1997 letter concerns solely the 1996 and 1997 marketing years to the exclusion of the
      1995 marketing year.  That however is clearly incorrect:  the letter refers several times to the marketing years 1995 and
      1996;  although it is headed ‘Clearance of the EAGGF Guarantee accounts for 1996 and 1997 in the meat sector’ that presumably
      follows what appears to be the normal practice of referring both to the financial year to which the accounts relate (the EAGGF
      financial year runs from 16 October to 15 October) and the marketing year for the sector in question (in the case of sheepmeat
      and goatmeat, the marketing year begins on the first Monday in January and ends on the day preceding that day in the following
      year 
         			(79)
         		).
      
      
        111.    Since it is the date of expenditure which is relevant, there may be force in Greece’s argument that corrections to 1995 expenditure
      are out of time.  However, Greece cannot take into consideration only the date of the expenditure incurred, without taking
      into account also the date on which it provided the Commission with relevant and sufficient information on such expenditure,
      allowing the latter to carry out a clearance of accounts.  A Member State may claim the protection of the 24-month exclusion
      period only to the extent that it complies with its own obligations under Community legislation, in particular with regard
      to the spontaneous communication of information required for checks. 
         			(80)
         		  It is clear from the letter that, at the time of writing (in June or July 1997), Greece had not provided satisfactory statistics
      concerning on-the-spot inspections, the only relevant area of complaint expressed to concern the 1995 marketing year.  In
      those circumstances, Greece cannot claim the protection of the 24-month period.
      
      
        112.    For the reasons set out above, none of Greece’s submissions with regard to the 10% deduction applied to expenditure in the
      ewe and goat sector in certain districts other than Rethymnon may be accepted.
      
        Conclusion
        113.    In the light of the foregoing observations, I am of the opinion that the Court of Justice should:
      (1)     dismiss the application;
      (2)     order the applicant to pay the costs.
      
      
       1 –
         
         Original language: English.
      
      2 –
         
         OJ 2001 L 200, p. 28.
            
         
      
      3 –
         
         Regulation (EEC) No 729/70 of the Council of 21 April 1970 on the financing of the common agricultural policy, OJ English
            Special Edition 1970 (I), p. 218, as amended in particular by Council Regulation (EC) No 1287/95 of 22 May 1995, OJ 1995 L
            125, p. 1.  Regulation No 729/70 was replaced, with effect for expenditure from 1 January 2000, by Council Regulation (EC)
            No 1258/1999 of 17 May 1999 on the financing of the common agricultural policy, OJ 1999 L 160, p. 103.
            
         
      
      4 –
         
         Articles 1(3) and 3(1).
            
         
      
      5 –
         
         Second, third, fourth and fifth subparagraphs of Article 5(2)(c).
            
         
      
      6 –
         
         The legislation relevant to each of the sectors concerned by Greece’s application is set out at the head of the relevant section
            of this Opinion.
            
         
      
      7 –
         
         Commission Regulation (EC) No 1663/95 of 7 July 1995, OJ 1995 L 158, p. 6.
            
         
      
      8 –
         
         See for example Case C-118/99 France v Commission [2002] ECR I-747, paragraph 38 of the judgment.
            
         
      
      9 –
         
         See for example Case C-157/00 Greece v Commission [2003] ECR I-153, paragraph 44 of the judgment.
            
         
      
      10 –
         
         See for example Case C-332/00 Belgium  v Commission [2002] ECR I-3609, paragraph 46 of the judgment.
            
         
      
      11 –
         
         See for example Belgium v Commission, cited in note 10, paragraph 35 of the judgment.
            
         
      
      12 –
         
         See for example Greece v Commission, cited in note 9, paragraphs 11 and 12 of the judgment.
            
         
      
      13 –
         
         See for example Case C-130/99 Spain  v Commission [2002] ECR I-3005, paragraph 87 of the judgment.
            
         
      
      14 –
         
         See for example Greece  v Commission, cited in note 9, paragraphs 16 to 17 of the judgment, and Case C-331/00 Greece v Commission, paragraph 66 of the judgment of 18 September 2003.
            
         
      
      15 –
         
         See for example Greece  v Commission, cited in note 9, paragraph 18 of the judgment.
            
         
      
      16 –
         
         See for example Spain  v Commission, cited in note 13, paragraph 42 of the judgment.
            
         
      
      17 –
         
         See for example Greece  v Commission, cited in note 9, paragraph 37 of the judgment.
            
         
      
      18 –
         
         See for example Spain  v Commission, cited in note 13, paragraph 44 of the judgment.
            
         
      
      19 –
         
         See for example France  v Commission, cited in note 8, paragraph 54 of the judgment, and Case C-132/99 Netherlands  v Commission [2002] ECR I-2709, paragraph 39.
            
         
      
      20 –
         
         Case C-170/00 Finland v Commission [2002] ECR I-1007, paragraph 27 of the judgment.
            
         
      
      21 –
         
         .Spain v Commission, cited in note 13, paragraphs 133 and 134 of the judgment;  see also paragraph 41 of the Opinion of Advocate General Tizzano
            in Case C-158/00 Luxembourg v Commission [2002] ECR I-5373 and paragraphs 50 and 59 of the Opinion of Advocate General Geelhoed in Finland v Commission, cited in note 20.
            
         
      
      22 –
         
         Case C-331/01 Spain  v Commission, paragraphs 60 and 65 of the judgment of 11 September 2003.
            
         
      
      23 –
         
         Replacing Commission working Document VI/216/93 of 3 June 1993.  The 1997 guidelines apply to decisions taken after 8 December
            1997.
            
         
      
      24 –
         
         See for recent examples France v Commission, cited in note 8, paragraph 49 of the judgment, Case C-157/00 Greece  v Commission, cited in note 9, paragraph 115, and Case C-331/00 Greece v Commission, cited in note 14, paragraph 73, and for a review of the Court’s approach paragraphs 21 to 25 of the Opinion of Advocate
            General Geelhoed in Case C-375/99 Spain v Commission [2001] ECR I-5983.
            
         
      
      25 –
         
         Doc no AGRI/17537/01-Fr-Final.
            
         
      
      26 –
         
         Council Regulation (EC) No 1554/95 of 29 June 1995, OJ 1995 L 148, p. 48.
            
         
      
      27 –
         
         Commission Regulation (EEC) No 1201/89 of 3 May 1989, OJ 1989 L 123, p. 23, as amended in particular by Commission Regulation
            (EEC) No 1437/96 of 23 July 1996, OJ 1996 L 184, p. 29.
            
         
      
      28 –
         
         Cited in note 27.
            
         
      
      29 –
         
         First and second recitals.
            
         
      
      30 –
         
         ‘Nomos’:  Greece is divided into 52 nomoi, or administrative regions.
            
         
      
      31 –
         
         Commission Regulation (EEC) No 2911/90 of 9 October 1990, OJ 1990 L 278, p. 35, as amended in particular by Commission Regulation
            (EC) No 2614/95 of 9 November 1995, OJ 1995 L 268, p. 7.
            
         
      
      32 –
         
         See for example Case C-157/00 Greece  v Commission, cited in note 9, paragraphs 17 and 18 of the judgment.
            
         
      
      33 –
         
         See for example Greece  v Commission, cited in note 9, paragraph 18 of the judgment.
            
         
      
      34 –
         
         Set out in paragraph 26 above;  see also paragraph 28.
            
         
      
      35 –
         
         Regulation (EEC) No 154/75 of the Council of 21 January 1975 on the establishment of a register of olive cultivation in the
            Member States producing olive oil, OJ 1975 L 19, p. 1;  as amended in particular by Council Regulations (EEC) Nos 3453/80
            of 22 December 1980, OJ 1980 L 360, p. 15, and 3788/85 of 20 December 1985, OJ 1985 L 367, p. 1.
            
         
      
      36 –
         
         Council Regulation (EEC) No 2261/84 of 17 July 1984, OJ 1984 L 208, p. 3.
            
         
      
      37 –
         
         Commission Regulation (EEC) No 3061/84 of 31 October 1984, OJ 1984 L 288, p. 52, as amended in particular by Commission Regulation
            (EEC) No 98/89 of 17 January 1989, OJ 1989 L 14, p. 14.
            
         
      
      38 –
         
         Set out in paragraph 6 above.
            
         
      
      39 –
         
         See paragraphs 18 to 22 above.
            
         
      
      40 –
         
         Case C-50/94 Greece v Commission [1996] ECR I-3331, paragraph 49 of the Opinion.
            
         
      
      41 –
         
         C-61/95 Greece v Commission [1998] ECR I-207, paragraphs 12 and 13 of the judgment.
            
         
      
      42 –
         
         C-46/97 Greece  v Commission [2000] ECR I-5719, paragraphs 12 and 16 of the judgment, and C-243/97 Greece  v Commission [2000] ECR I-5813, paragraph 14.
            
         
      
      43 –
         
         See for example Greece  v Commission, cited in note 9, paragraph 16 of the judgment.
            
         
      
      44 –
         
         [2001] ECR I-1, paragraphs 13 and 14 of the judgment.
            
         
      
      45 –
         
         See for example Greece  v Commission, cited in note 9, paragraph 17 of the judgment.
            
         
      
      46 –
         
         See for example France  v Commission, cited in note 8, paragraph 54 of the judgment.
            
         
      
      47 –
         
         See for example Spain  v Commission, cited in note 13, paragraph 87 of the judgment.
            
         
      
      48 –
         
         Council Regulation (EEC) No 2392/86 of 24 July 1986, OJ 1986 L 208, p. 1, as amended by Council Regulation (EC) No 1631/98,
            OJ 1998 L 210, p. 14.
            
         
      
      49 –
         
         Cited in note 31, as amended also by Commission Regulation (EC) No 2475/94 of 13 October 1994, OJ 1994 L 264, p. 6.
            
         
      
      50 –
         
         The English text mistakenly reads ‘areas’.
            
         
      
      51 –
         
         Cited in note 7.
            
         
      
      52 –
         
         Commission Regulation (EC) No 1456/97 of 25 July 1997, OJ 1997 L 199, p. 4.
            
         
      
      53 –
         
         Council Regulation (EC) No 1493/1999 of 17 May 1999, OJ 1999 L 179, p. 1.
            
         
      
      54 –
         
         See Article 82.
            
         
      
      55 –
         
         See recital 31 in the preamble and Articles 2(3), 6(2), 11(4) and 16.
            
         
      
      56 –
         
         Commission Regulation (EC) No 1621/99 of 22 July 1999, OJ 1999 L 192, p. 21.
            
         
      
      57 –
         
         See paragraphs 57 and 58 above.
            
         
      
      58 –
         
         See paragraphs 65 and 66 above.
            
         
      
      59 –
         
         See Articles 13(1) and 16.
            
         
      
      60 –
         
         See for example Greece  v Commission, cited in note 9, paragraph 18 of the judgment, and Spain  v Commission, cited in note 13, paragraph 42.
            
         
      
      61 –
         
         Cited in note 52.
            
         
      
      62 –
         
         OJ 1998 L 208, p. 19.
            
         
      
      63 –
         
         See for example Greece  v Commission, cited in note 9, paragraph 18 of the judgment, and Spain  v Commission, cited in note 13, paragraph 42.
            
         
      
      64 –
         
         See for example Greece  v Commission, cited in note 9, paragraph 18 of the judgment.
            
         
      
      65 –
         
         Commission Regulation (EEC) No 3887/92 of 23 December 1992, OJ 1992 L 391, p. 36.
            
         
      
      66 –
         
         Commission Regulation (EEC) No 2700/93 of 30 September 1993, OJ 1993 L 245, p. 99, as amended in particular by Commission
            Regulation (EC) No 279/94 of 8 February 1994, OJ 1994 L 37, p. 1.
            
         
      
      67 –
         
         See paragraphs 18 to 22 above.
            
         
      
      68 –
         
         See for example Greece  v Commission, cited in note 9, paragraph 37 of the judgment.
            
         
      
      69 –
         
         See for example Spain  v Commission, cited in note 13, paragraph 44 of the judgment.
            
         
      
      70 –
         
         Set out in paragraph 6 above.
            
         
      
      71 –
         
         See paragraph 107 below.
            
         
      
      72 –
         
         See paragraph 35 above.
            
         
      
      73 –
         
         See for example Greece  v Commission, cited in note 9, paragraphs 16 to 17 of the judgment.
            
         
      
      74 –
         
         Article 4 of Regulation No 2700/93.
            
         
      
      75 –
         
         See for example Greece  v Commission, cited in note 9, paragraph 18 of the judgment.
            
         
      
      76 –
         
         Annex 11 to the defence.
            
         
      
      77 –
         
         There appear to be two dates on the document, 12 June 1997 and 3 July 1997, while the Commission refers to 22 July 1997; 
            possibly the three dates are English draft, Greek translation and receipt by the Greek authorities.
            
         
      
      78 –
         
         That provision states ‘Expenditure claimed in respect of a given month must fall with payments and receipts actually effected
            during this month.  It may include corrections to the data reported in respect of previous months of the same year.  For a
            year “n”, account shall be taken of expenditure effected by the Member States from 16 October of year “n-1” to 15 October
            of year “n”.’
            
         
      
      79 –
         
         Article 3(3) of Council Regulation (EEC) No 3013/89 of 25 September 1989 on the common organisation of the market in sheepmeat
            and goatmeat, OJ 1989 L 289, p. 1.
            
         
      
      80 –
         
         .Spain v Commission, cited in note 22, paragraphs 60 and 65.