Kingdom of the Netherlands v Commission of the European Communities.
Date: 1993-11-10
11 The management of EAGGF finances is principally in the hands of the national administrative authorities responsible for ensuring that the Community rules are strictly observed. That system, based on trust, does not involve any systematic supervision by the Commission, which moreover would in practice be impossible for it to carry out (see Case 349/85 Denmark v Commission [1988] ECR 169, paragraph 19). Only the Member State is in a position to know and determine precisely the information necessary for drawing up EAGGF accounts since the Commission is not close enough to obtain the information it needs from the economic operators.
13 The objective of decisions of the Commission concerning the clearance of accounts presented by the Member States in respect of expenditure financed by the EAGGF is to determine whether it may be accepted that the expenditure was incurred by the national authorities in accordance with Community provisions (see Joined Cases 15/76 and 16/76 France v Commission [1979] ECR 321, paragraph 9).
14 Thus, as the Court has already observed, only 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 (see, in particular, Case 11/76 Netherlands v Commission [1979] ECR 245, paragraph 8, Joined Cases 15/76 and 16/76 France v Commission, paragraph 10, and Case 347/85 United Kingdom v Commission [1988] ECR 1749, paragraph 11).
15 It is also clear that additional expenditure resulting from national measures which are liable 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 and must in any event be borne by the Member State concerned (see, in particular, Case 347/85 United Kingdom v Commission, cited above, paragraph 12).
16 Finally, 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 for which a Member State can be held responsible, it is for that State to show that the conditions for obtaining the financing refused by the Commission are fulfilled (see Case 347/85 United Kingdom v Commission, cited above, paragraph 14).
17 The Commission is required not to demonstrate exhaustively that there are irregularities in the data submitted by the Member States but to adduce evidence of serious and reasonable doubt on its part regarding the figures submitted by the national authorities. The reason for this mitigation of the burden of proof on the Commission is that, as pointed out above (paragraph 11), it is the State which is best placed to collect and verify the data required for the clearance of EAGGF accounts; consequently, it is for the State to adduce the most detailed and comprehensive evidence that its figures are accurate and, if appropriate, that the Commission' s calculations are incorrect.
18 It follows from the foregoing that in the event of a dispute it is for the Commission to prove that the rules of the common organization of the agricultural markets have been infringed and, once it establishes such an infringement, the Member State concerned must then, if appropriate, demonstrate that the Commission committed an error as to the financial consequences to be drawn from it (see Case C-281/91 Italy v Commission [1991] ECR I-347, paragraph 19).
23 Second, there is nothing either in the preamble to or in the provisions of Regulation No 729/70 to indicate that there should be any difference in the procedure for clearing the accounts depending on whether it relates to expenditure to be financed by the EAGGF or revenue to be collected by that body. On the contrary, the final subparagraph of Article 5(1) clearly shows that it applies to all transactions financed by the Guarantee Section, including intervention measures intended to stabilize the markets, of which the co-responsibility levy forms part.
32 On the contrary, as the Court stated in paragraph 42 of that judgment, the fact that the Commission has identified individual cases in which it found that the relevant agricultural rules were not complied with merely constitutes one factor among others in support of its allegation regarding the effectiveness of the Member State' s system of supervision and inspection.