Kingdom of Spain v Commission of the European Communities.
Date: 2002-03-21
34 It should be pointed out, in that regard, that, although it is for the Commission to prove an infringement of the rules of the common organisation of agricultural markets, it is not obliged to demonstrate exhaustively the insufficiency of the checks carried out by national administrations or the irregularity of the figures transmitted by them, but must present evidence of a serious and reasonable doubt with regard to those checks or those figures (see, in particular, Case C-374/99 Spain v Commission [2001] ECR I-5943, paragraph 15).
36 Moreover, when the Commission criticises a Member State for not having established an effective monitoring and checking system, the discovery of individual cases in which it finds that the applicable agricultural legislation has been disregarded is only one element among others to justify its criticism in relation to the efficacy of the monitoring and checking system established by the Member State (see, in particular, Spain v Commission, cited above, paragraph 16).
39 In this respect, it must be pointed out that under Article 1(2)(a) of Decision 94/442, the position of the Body shall be without prejudice to the Commission's final decision on the clearance of the accounts. It follows that when the Commission makes its decision it is not bound by the findings of the Conciliation Body (see, in particular, Spain v Commission, cited above, paragraph 9).
42 In that respect, it is settled case-law that, whilst it is for the Commission to prove that there has been a breach of the rules governing the common organisation of agricultural markets (see, for example, Case C-278/98 Netherlands v Commission [2001] ECR I-1501, paragraph 39, and the case-law cited), it is 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 that breach (see Case C-235/97 France v Commission [1998] ECR I-7555, paragraph 39).
44 Moreover, 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 (see, to that effect, Case C-28/94 Netherlands v Commission [1999] ECR I-1973, paragraph 56).
87 Furthermore, it is not disputed that the competent authorities did not carry out cross-checks. As to the assertion by the Spanish Government that an animal identification system was put in place, it is sufficient to observe that, quite apart from the fact that such a system does not remedy the absence of cross-checks, the Court has consistently held 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 effective (see, among others, Case C-54/91 Germany v Commission [1993] ECR I-3399, paragraph 38).
90 So far as concerns, first, the complaint that the Commission calculated the losses suffered by the EAGGF on an extrapolation from the results of the checks carried out, it has already been held at paragraph 42 of this judgment that, whilst it is for the Commission to prove that there has been a breach of the rules governing the common organisation of agricultural markets, it is 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 that breach.
91 However, the Spanish Government has not provided any evidence that the Commission relied on incorrect facts, nor has it demonstrated that the irregularities identified did not affect the Community budget or that they did so to an appreciably lesser extent than was estimated by the Commission.
101 So far as concerns, secondly, the deduction of ESP 1 355 544 657 by way of default interest, it must be stated, first, that Article 3(4) of Regulation No 536/93 makes purchasers liable to pay interest, as from 1 September of each year, to the competent body in case of late payment of the additional levy. On the other hand, Article 5(2) of that regulation makes Member States responsible for deducting interest paid from the applications for reimbursement of expenditure on milk and milk products submitted to the EAGGF. It follows that the fact that certain sums due remain unpaid, or have been paid belatedly, does not of itself constitute failure to fulfil obligations laid upon the Member States by Community law.
102 It is true that, according to the first subparagraph of Article 8(2) of Regulation No 729/70, the Commission may apply an adjustment only where it is able to show that the EAGGF suffered a loss as a result of a negligent failure, attributable to the national authorities, to recover the disputed sums. In that regard, the Commission, in order to show such failure, need merely give the reasons for which it entertains serious and reasonable doubt (see, to that effect, Case C-277/98 France v Commission [2001] ECR I-8453, paragraphs 41 and 42).
123 In that regard, it is sufficient to note that that argument, as put forward, is irrelevant. The Spanish Government has not alleged the existence of circumstances comparable to those in other Member States nor has it explained in what way its control system was superior to that of certain other Member States (see Case C-242/97 Belgium v Commission [2000] ECR I-3421, paragraphs 130 and 131).
126 In the particular context of the preparation of decisions relating to the clearance of accounts, the statement of reasons for a decision 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 of the reasons for which the Commission took the view that it should not charge the sum in dispute to the EAGGF (Case C-28/94 Netherlands v Commission, cited above, paragraph 82, and Belgium v Commission, cited above, paragraph 95).
133 In that regard, it must be stated that, as the sixth recital in the preamble to Regulation No 1287/95 makes clear, the intention of the Community legislature in establishing the period referred to in Article 5(2)(c) of Regulation No 729/70, as amended by Regulation No 1287/95, was to determine the maximum period to which the consequences to be drawn from the [Commission's] checks on conformity may be applied. The purpose of that limitation 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.
137 Secondly, the Spanish Government contends, without denying that there was delay in establishing the register of olive cultivation and implementing the computerised files of production data, that the controls carried out in Spain were none the less effective and that the EAGGF did not suffer any loss.
138 In that regard, suffice it to note, as the Court has already done in paragraph 87 of this judgment, 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 effective.
139 In those circumstances, the remainder of the Spanish Government's claim relating to the refusal to charge to the EAGGF certain expenditure relating to production aid for olive oil must be dismissed.
Aid in the wine sector
146 Article 5 of Regulation No 619/71 provides:
Member States shall verify the accuracy of the declarations of areas sown and harvested and applications for aid submitted by the producers by means of spot checks.
147 Article 4(a) of Commission Regulation (EEC) No 1164/89 of 28 April 1989 laying down detailed rules concerning the aid for fibre flax and hemp (OJ 1989 L 121, p. 4) states that aid is to be granted only in respect of areas which have been completely sown and harvested and on which normal cultivation work has been carried out.
164 Where the conciliation procedure is not yet completed or where it has not been possible to implement the conclusions to be drawn from that procedure, the Commission is entitled to draw up the accounts on the basis of the information obtained during the clearance procedure, reserving to itself the possibility of correcting that decision in a subsequent clearance (Case C-61/95 Greece v Commission [1998] ECR I-207, paragraph 30).