Kingdom of the Netherlands v Commission of the European Communities.
Date: 1999-04-22
39 Article 8(1) of Regulation No 729/70, which expressly lays down in this field the obligations imposed on Member States by Article 5 of the EC Treaty, defines, according to the Court's case-law, the principles according to which the Community and the Member States must ensure the implementation of Community decisions on agricultural intervention financed by the EAGGF and combat fraud and irregularities in relation to those operations. It obliges the Member States to take the measures necessary to satisfy themselves that the transactions financed by the EAGGF are actually carried out and are executed correctly (see Case C-2/93 Exportslachterijen van Oordegem v Belgische Dienst voor Bedrijfen en Landbouw [1994] ECR I-2283, paragraphs 17 and 18, and Case C-235/97 France v Commission [1998] ECR I-7555, paragraph 45).
40 It is settled case-law, next, that where the Commission refuses to charge 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 required not to demonstrate exhaustively that the checks carried out by the Member States are inadequate but to adduce evidence of serious and reasonable doubt on its part regarding the checks carried out by the national authorities (see, to that effect, Case C-54/95 Germany v Commission [1999] ECR I-35, paragraph 35).
41 The reason for this mitigation of the burden of proof on the Commission is that it is the State which is best placed to collect and verify the data required for the clearance of EAGGF accounts, and that it is consequently for the State to adduce the most detailed and comprehensive evidence that it has made checks and, if appropriate, that the Commission's assertions are incorrect (see, to that effect, Germany v Commission, paragraph 35).
49 On this point, it must first be noted that, as stated in paragraph 38 above, the essential purpose of the decision on the clearance of the accounts is to ensure that the expenditure was incurred by the national authorities in accordance with the Community rules (see also Case 349/85 Denmark v Commission [1988] ECR 169, paragraph 19).
50 It is settled case-law, next, that the Commission may only charge to the EAGGF sums paid in accordance with the rules laid down in the various sectors of agricultural production, leaving the Member States to bear any other sum paid, and in particular any amounts which the national authorities wrongly believed themselves authorised to pay in the context of the common organisation of the markets (see, inter alia, France v Commission, paragraph 38).
51 Consequently, until the accounts have been duly cleared, the Commission is obliged under Article 3 of Regulation No 729/70 to refuse to charge to the EAGGF intervention intended to stabilise the agricultural markets which has not been carried out in accordance with the Community rules. That obligation does not disappear merely because the accounts are cleared after the expiry of the period prescribed in Article 5 of that regulation (see, to that effect, concerning export refunds, Denmark v Commission, paragraph 19, and Case C-50/94 Greece v Commission [1996] ECR I-3331, paragraph 6).
54 As to the amount of the financial correction, it is clear from the Court's case-law that if the Commission finds that there is no adequate system of controls, it may disallow the entire expenditure incurred (see, to that effect, Case C-197/90 Italy v Commission [1992] ECR I-1, paragraph 39).
56 Moreover, where instead of disallowing all the expenditure affected by the infringement the Commission has endeavoured to establish rules under which irregularities are treated 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-242/96 Italy v Commission [1998] ECR I-5863, paragraph 75). Since the Netherlands Government has not done so, its argument on this point must be rejected.
Infringement of Articles 3 and 5 of Regulation No 283/72
81 It is settled case-law that the extent of the duty to state the reasons on which a decision is based, laid down in Article 190 of the EC Treaty, depends on the nature of the act in question and on the context in which it was adopted (see Case C-54/91 Germany v Commission [1993] ECR I-3399, paragraph 10).
82 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 (see, inter alia, Case C-27/94 Netherlands v Commission [1998] ECR I-5581, paragraph 36).