United Kingdom of Great Britain and Northern Ireland v Commission of the European Communities.
Date: 1988-03-24
11 ON THIS POINT IT MUST BE BORNE IN MIND FIRST OF ALL THAT, ACCORDING TO THE PRINCIPLES GOVERNING THE PROCEDURE FOR CLEARING EAGGF ACCOUNTS AS AFFIRMED BY THE COURT ( SEE IN PARTICULAR THE JUDGMENTS OF 7 FEBRUARY 1979 IN CASE 11/76 NETHERLANDS V COMMISSION (( 1979 )) ECR 245 AND IN JOINED CASES 15 AND 16/76 FRANCE V COMMISSION (( 1979 )) ECR 321 ), ONLY REFUNDS GRANTED AND INTERVENTION UNDERTAKEN "IN ACCORDANCE WITH THE COMMUNITY RULES" WITHIN THE FRAMEWORK OF THE COMMON ORGANIZATION OF AGRICULTURAL MARKETS ARE FINANCED BY THE EAGGF .
12 IT IS ALSO ESTABLISHED ( SEE IN PARTICULAR THE JUDGMENTS CITED ABOVE ) THAT ADDITIONAL EXPENDITURE RESULTING FROM NATIONAL MEASURES WHICH ARE SUCH AS TO COMPROMISE THE EQUALITY OF TREATMENT OF TRADERS IN THE COMMUNITY AND THUS TO DISTORT COMPETITIVE CONDITIONS BETWEEN THE MEMBER STATES CANNOT BE FINANCED BY THE EAGGF BUT MUST IN ALL EVENTS BE BORNE BY THE MEMBER STATE CONCERNED .
13 MOREOVER, AS APPEARS FROM THE JUDGMENT OF THE COURT OF 7 FEBRUARY 1979 IN JOINED CASES 15 AND 16/76, CITED ABOVE, WHERE IT PROVES IMPOSSIBLE TO ESTABLISH WITH CERTAINTY THE EXTENT TO WHICH A NATIONAL MEASURE THAT IS INCOMPATIBLE WITH COMMUNITY LAW HAS CAUSED AN INCREASE IN THE EXPENDITURE ENTERED UNDER A BUDGETARY ITEM OF THE EAGGF, THE COMMISSION HAS NO CHOICE BUT TO DISALLOW ALL THE EXPENDITURE IN QUESTION .
14 FINALLY, IT MUST BE POINTED OUT ( SEE IN PARTICULAR THE JUDGMENT OF THE COURT OF 12 JULY 1984 IN CASE 49/83 LUXEMBOURG V COMMISSION (( 1984 )) ECR 2931 ) THAT WHEN THE COMMISSION REFUSES TO CHARGE CERTAIN EXPENDITURE TO THE EAGGF ON THE GROUND THAT IT WAS INCURRED AS A RESULT OF BREACHES OF COMMUNITY RULES IMPUTABLE TO A MEMBER STATE, IT IS FOR THAT STATE TO SHOW THAT THE CONDITIONS FOR OBTAINING THE FINANCING REFUSED BY THE COMMISSION ARE FULFILLED .
15 THE SAME CONSIDERATIONS APPLY WHERE, AS IN THIS CASE, THE COMMISSION, INSTEAD OF REJECTING ALL THE EXPENDITURE AFFECTED BY THE INFRINGEMENT, HAS ENDEAVOURED TO ESTABLISH THE FINANCIAL IMPACT OF THE UNLAWFUL ACTION BY MEANS OF CALCULATIONS BASED ON AN ASSESSMENT OF WHAT THE SITUATION ON THE RELEVANT MARKET WOULD HAVE BEEN IF THE INFRINGEMENT HAD NOT OCCURRED . IN SUCH A CASE, THE BURDEN OF PROVING THAT THOSE CALCULATIONS ARE NOT CORRECT RESTS ON THE STATE SEEKING TO HAVE THE DISALLOWANCE ANNULLED .
16 IT MUST THEREFORE BE CONCLUDED THAT THE COMMISSION HAS SATISFIED ITS OBLIGATIONS IN THE MATTER OF PROOF ONCE IT ESTABLISHES THAT A MEMBER STATE HAS INFRINGED THE RULES OF THE COMMON ORGANIZATION OF AGRICULTURAL MARKETS . WHERE THE COMMISSION HAS CHOSEN TO CALCULATE THE AMOUNT OF THE EXPENDITURE CONCERNED BY THE INFRINGEMENT BY EXAMINING THE MANNER IN WHICH THE IRREGULARITY AFFECTED EAGGF EXPENDITURE, AS IS THE SITUATION IN THIS CASE, IT IS FOR THE MEMBER STATE CONCERNED TO PROVE THAT THE EXPENDITURE IN QUESTION WAS NOT INCREASED AS A RESULT OF THAT IRREGULARITY OR THAT IT WAS INCREASED BY AN AMOUNT LESS THAN THAT CALCULATED BY THE COMMISSION .
THE QUESTION WHETHER THE DIFFERENTIAL PRICING PRACTICES IN QUESTION ARE COMPATIBLE WITH COMMUNITY LAW AND WHETHER THEY ARE LIABLE TO ENTAIL AN INCREASE IN EAGGF EXPENDITURE
52 IT MUST BE EMPHASIZED IN THIS REGARD THAT, ACCORDING TO ARTICLES 2 AND 3 OF REGULATION ( EEC ) NO 729/70 OF THE COUNCIL OF 21 APRIL 1970 ON THE FINANCING OF THE COMMON AGRICULTURAL POLICY ( OFFICIAL JOURNAL, ENGLISH SPECIAL EDITION 1970 ( I ), P . 218 ), REFUNDS GRANTED AND INTERVENTION UNDERTAKEN "IN ACCORDANCE WITH THE COMMUNITY RULES" WITHIN THE FRAMEWORK OF THE COMMON ORGANIZATION OF AGRICULTURAL MARKETS ARE TO BE FINANCED BY THE EAGGF . AS THE COURT HELD IN ITS JUDGMENT OF 7 FEBRUARY 1979 IN CASE 11/76 NETHERLANDS V COMMISSION, CITED ABOVE, THOSE PROVISIONS PERMIT THE COMMISSION TO CHARGE TO THE EAGGF ONLY SUMS PAID IN ACCORDANCE WITH THE RULES LAID DOWN IN THE VARIOUS SECTORS OF AGRICULTURAL PRODUCTION WHILE LEAVING THE MEMBER STATES TO BEAR THE BURDEN OF ANY OTHER SUM PAID, AND IN PARTICULAR ANY AMOUNTS WHICH THE NATIONAL AUTHORITIES WRONGLY BELIEVED THEMSELVES AUTHORIZED TO PAY IN THE CONTEXT OF THE COMMON ORGANIZATION OF THE MARKETS .
53 SUCH A CONCLUSION IS NOT AFFECTED BY THE FACT THAT NATIONAL PRACTICES INCOMPATIBLE WITH COMMUNITY LAW MIGHT HAVE HAD BENEFICIAL EFFECTS AS REGARDS SUMS ENTERED UNDER OTHER ITEMS OF EAGGF EXPENDITURE . IF THE MEMBER STATES COULD SET OFF THE NEGATIVE EFFECTS OF SUCH UNLAWFUL PRACTICES AGAINST THEIR POSITIVE EFFECTS WHEN ACCOUNTS WERE CLEARED, IT WOULD FOLLOW THAT, PROVIDED THAT THERE WAS NO NET INCREASE IN OVERALL EAGGF EXPENDITURE, THEY COULD CHARGE TO THE COMMUNITY ANY KIND OF EXPENDITURE, EVEN EXPENDITURE WHICH HAD BEEN INCURRED IN BREACH OF THE RULES GOVERNING THE ADMINISTRATION OF THE COMMON AGRICULTURAL POLICY AND WHICH HAD GIVEN RISE TO DISTORTIONS OF COMPETITION BETWEEN THE TRADERS CONCERNED . IF THE PROCEDURE FOR THE CLEARANCE OF ACCOUNTS WERE APPLIED IN THIS WAY, IT WOULD BE DEFLECTED FROM ITS ESSENTIAL PURPOSE, WHICH IS TO VERIFY WHETHER THE REFUNDS GRANTED AND THE INTERVENTION UNDERTAKEN WERE IN ACCORDANCE WITH THE COMMUNITY RULES WITHIN THE FRAMEWORK OF THE COMMON ORGANIZATION OF AGRICULTURAL MARKETS .
60 IN THIS REGARD, IT IS SUFFICIENT TO POINT OUT THAT THE COURT HAS ALREADY STATED ( SEE THE JUDGMENT OF 27 JANUARY 1981 IN CASE 1251/79 ITALIAN REPUBLIC V COMMISSION (( 1981 )) ECR 205 ) THAT DECISIONS CONCERNING THE CLEARANCE OF ACCOUNTS DO NOT REQUIRE DETAILED REASONS IF THE GOVERNMENT CONCERNED WAS CLOSELY INVOLVED IN THE PROCESS BY WHICH THE DECISION CAME ABOUT AND IS THEREFORE AWARE OF THE REASON FOR WHICH THE COMMISSION CONSIDERS THAT IT MUST NOT CHARGE THE SUMS IN DISPUTE TO THE EAGGF .