Kingdom of Spain v Commission of the European Communities.
Date: 2005-06-09
24. The Commission submits that, in accordance with the Court’s established case-law relating to Commission decisions reducing the monthly advances paid to Member States as part of the expenditure financed by the EAGGF, there is a general rule according to which the Commission is not entitled, when managing the common agricultural policy, to commit funds which fail to comply with the rules governing the common organisation of the market in question (Case C-342/89 Germany  v Commission  [1991] ECR I-5031, paragraph 14, and Case C‑346/89 Italy  v Commission  [1991] ECR I-5057, paragraph 14).  Consequently, before accepting the accounts of the paying agencies, it has the power to adjust them by making the corrections required on finding that certain expenditure effected did not comply with those rules.
37. It is apparent from the Court’s case-law that respect for the rights of the defence is, in all proceedings initiated against a person which are liable to culminate in a measure adversely affecting that person, a fundamental principle of Community law which must be guaranteed even in the absence of any rules governing the proceedings in question.  That principle requires that the addressees of decisions which significantly affect their interests should be placed in a position in which they may effectively make known their views (see, inter alia, Case C-32/95 P Commission  v Lisrestal and Others  [1996] ECR I-5373, paragraph 21, and Case C-462/98 P Mediocurso  v Commission  [2000] ECR I-7183, paragraph 36).
52. Furthermore it is settled case-law that the basic regulation allows the Commission to charge to the EAGGF only sums paid in accordance with the rules laid down in the various agricultural sectors (see, inter alia, Case 327/85 Netherlands  v Commission  [1988] ECR 1065, paragraph 24; Case C-197/90 Italy  v Commission  [1992] ECR I-1, paragraph 38; and Case C-118/99 France  v Commission  [2002] ECR I‑747, paragraph 38) and requires it to refuse financing of expenditure when it finds that irregularities have occurred (Case C-157/00 Greece  v Commission  [2003] ECR I-153, paragraph 44).
53. It is also established case-law that the Commission, in order to prove an infringement of the rules on the common organisation of the agricultural markets, is required not to demonstrate exhaustively that the checks carried out by the national authorities are inadequate or that the data submitted by them are incorrect, but to adduce evidence of serious and reasonable doubt on its part regarding the checks or data.  The reason for this mitigation of the burden of proof on the Commission is that it is the Member State which is best placed to collect and verify the data required for the clearance of EAGGF accounts and consequently it is for that State to adduce the most detailed and comprehensive evidence that its checks or data are accurate and, if appropriate, that the  Commission’s statements are incorrect (see Case C-278/98 Netherlands  v Commission  [2001] ECR I‑1501, paragraphs 39 to 41; Greece  v Commission , cited above, paragraphs 15 to 17; and Case C-344/01 Germany  v Commission  [2004] ECR I‑2081, paragraph 58).
54. Furthermore, the Court has repeatedly held that the Member State concerned, for its part, cannot refute the Commission’s findings without making its own allegations, in the form of evidence of the existence of a reliable and operational system of checks ( Greece  v Commission , paragraph 18).
64. With regard to the burden of proof, the principles established by the Court’s case-law have been set out in paragraphs 53 and 54 of this judgment.  More particularly, where the Commission had assessed the amount of EAGGF permitted expenditure on the basis o f the results of the checks carried out, the Court upheld the validity of such an assessment where the Member State provided no evidence that the Commission relied on incorrect facts, nor 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 (Case C-130/99 Spain  v Commission  [2002] ECR I‑3005, paragraphs 90 and 91).