Hellenic Republic v Commission of the European Communities.
Date: 2000-07-13
4 According to the summary report, the checks carried out in Greece revealed no significant improvement on the situation reported in the 1990 and 1991 clearances. Thus, there was still no olive cultivation register and the computer files continued to be unusable.
5 Furthermore, the summary report described serious structural shortcomings in the system for the management and checking of applications for aid, which it summarises in 18 points. In that regard, particular mention is made of the lack of coordination between the competent local and national offices and the inadequacy of controls. According to the summary report, the alternative control procedures put in place by the Greek authorities instead of those specified in the Community regulations do very little to reduce the risk to which EAGGF expenditure is exposed.
6 The Greek Government contends that the complaints formulated in the summary report are unfounded.
7 As regards the absence of the olive cultivation register, it points out that in Case C-50/94 Greece v Commission [1996] ECR I-3331 the Court has already stated that the Hellenic Republic had informed the Commission of the difficulties experienced in establishing the register of olive cultivation after 31 October 1988, the deadline laid down in Council Regulation (EEC) No 3453/80 of 22 December 1980 amending Council Regulation (EEC) No 154/75 on the establishment of a register of olive cultivation in the Member States producing olive oil (OJ 1980 L 360, p. 15) for the completion of that work. On that ground the Court validated the financial correction of 10% imposed for the 1990 financial year. A penalty was therefore imposed.
8 The Greek Government asserts that since 1991 the Commission has been kept fully informed and has been fundamentally disposed to assist the Hellenic Republic in its efforts to overcome the objective difficulties in question. Consequently, the first of the conditions mentioned above, namely informing the competent Community institution in good time, is satisfied. Since the Greek authorities collaborated in good faith with the Commission throughout the period in question, namely the 1992 year, no correction should be applied in respect of the absence of a register of olive cultivation.
9 It should be pointed out, first, that pursuant to Regulation No 3453/80, the Greek Government was required to establish the register of olive cultivation by no later than 31 October 1988.
10 Second, it should be observed that Greece did not comply with that deadline and during the 1992 financial year there was still no register of olive cultivation.
11 Third, in Greece v Commission, cited above, and in Case C-61/95 Greece v Commission [1998] ECR I-207, paragraph 12, the Court has already rejected the Greek Government's argument that it was absolutely impossible to establish a register of olive cultivation. In fact the Government did not raise those arguments until after the date laid down in Regulation No 3453/80 and did not make any approach to the Community authorities to vary that date (see, in that regard, Case C-353/92 Greece v Council [1994] ECR I-3411, paragraph 39).
12 In those circumstances, it cannot be accepted that it was absolutely impossible to comply with the requirements arising under Regulation No 3453/80.
13 As regards the computerised files, the Greek Government claims that they have been in existence since 1985 and that they work satisfactorily. In any event, any shortcomings which may exist are linked to the absence of the register of olive cultivation, since it is on that register that a large number of the data necessary for the file should appear. The Government maintains that the considerations referred to above in relation to the absence of the register of olive cultivation therefore apply mutatis mutandis to the computerised files. Moreover, where the control procedure proves inadequate additional checks and further inspections are carried out.
14 Pursuant to Article 16(1) of Council Regulation (EEC) No 2261/84 of 17 July 1984 laying down general rules on the granting of aid for the production of olive oil and of aid to olive oil producer organisations (OJ 1984 L 208, p. 3), each producer Member State is to draw up and keep up to date permanent computerised files of olive and olive-oil production data. Article 14(5) of that regulation invites Member States to use those files for the checks and verifications referred to in that regulation. Those files are to contain all the information likely to facilitate the control operations and the rapid identification of irregularities (Article 16(2)). Furthermore, Member States are to enter in the file the basic data contained in the register of olive cultivation, as soon as such data become available (second subparagraph of Article 11(1) of Commission Regulation (EEC) No 3061/84 of 31 October 1984 laying down detailed rules for the application of the system of production aid for olive oil (OJ 1984 L 288, p. 52), as amended by Commission Regulation (EEC) No 98/89 of 17 January 1989 (OJ 1989 L 14, p. 14)).
15 The first sentence of Article 11(2) of Regulation No 3061/84, as amended by Regulation No 98/89, provides that all the components of the computerised files are to be operational before 31 October 1990. Furthermore, Member States are to use the data for the checks as and when the specific files are established (second sentence of Article 11(2) of Regulation No 3061/84, as amended by Regulation No 98/89).
16 In that regard, it is sufficient to point out that the Greek Government has provided no detailed rebuttal of the Commission's assertion that the computerised files were not operational. On the contrary, by letter No 292675 of 21 July 1995 the Ministry of Agriculture informed the Commission that it was faced with the problem of having insufficient staff to input the data needed to carry out the checks. That statement also means that it cannot be accepted that it was absolutely impossible to comply with the requirements arising under Regulation No 3061/84, as amended, on the establishment of the files.
17 As regards, last, the effectiveness of the system of checks put in place, the Greek Government maintains that the list of 18 failings is quite inaccurate, that it is not supported by firm evidence and that it does not justify any financial correction.
18 As regards, more particularly, the complaint that the checks carried out in 1992 were inadequate, the Greek Government observes that those checks were indisputably more numerous and more thorough than those carried out in 1991 and 1990, in respect of which a financial correction of 10% had also been imposed.
19 According to Article 14(1) of Regulation No 2261/84, each producer Member State is to apply a system of checks to ensure that the product in respect of which aid is granted is eligible for such aid.
20 Article 14(2) of Regulation No 2261/84, as amended by Council Regulation (EEC) No 3500/90 of 27 November 1990 (OJ 1990 L 338, p. 3) provides that producer Member States are to verify the activities of each producer organisation and association and, in particular, that the checking operations have been carried out by those bodies within the meaning of Article 8(1) and Article 10, first indent, of that regulation.
21 Article 14(3a) of Regulation No 2261/84, as inserted by Regulation No 3500/90, provides that, for the purposes of paying aid to olive growers whose average production is at least 500 kilograms of olive oil per marketing year, the producer Member States are to check:
- the accuracy of the crop declarations on the basis of criteria to be determined,
- the correspondence between the quantity of oil entered in the aid application and that stated in the stock records of approved mills,
- the compatibility between the olive production declared by each olive grower as having been pressed in an approved mill and the particulars given in his crop declaration on the basis of criteria to be determined.
22 Article 14(4) of Regulation No 2261/84, as amended by Regulation No 3500/90, provides that, with regard to the olive oil referred produced by olive growers whose average production is less than 500 kilograms of olive oil per marketing year, the checks should verify:
- the accuracy of the crop declarations on the basis of criteria to be determined,
- the existence of evidence of the olives having been pressed in an approved mill.
23 Article 10(2) of Regulation No 3061/84, as amended by Commission Regulation (EEC) No 928/91 of 15 April 1991 (OJ 1991 L 94, p. 5), stipulates that Member States are to check on the spot a representative percentage of olive growers to be determined. Where an agency responsible for checks is entrusted with the task of carrying out such checks, that percentage is to be indicated in the agency's work schedule. The percentage is to vary according to whether or not the basic data from the olive cultivation register are available in the areas concerned. Priority is to be given to checks on growers whose production potential has changed substantially.
24 Finally, Article 10(3) of Regulation No 3061/84, as amended by Regulation No 928/91, provides that, in checking the accuracy of crop declarations as indicated in Article 14(3a) and (4) of Regulation No 2261/84, as amended by Regulation No 3500/90, Member States are to make use, in particular, of data in the register of olive cultivation and the computerised files, the figures from on-the-spot checks made on the grower and the yields of olives and oil set for the zone in which the holding or holdings are located.
25 In the present case, it is sufficient, first of all, to observe that the Greek Government does not dispute the figures presented by the Commission, according to which, at national level, the percentage of on-the-spot checks concerning producers' cooperatives were 0.1%, 0.21% and 0.13% respectively for the 1990/1991, 1991/1992 and 1992/1993 marketing years. The percentages concerning independent producers were 0.8% and 0.87% respectively for the 1991/1992 and 1992/1993 marketing years. It is also apparent from the documents provided by the Greek authorities that, for the 1991-1992 control periods, the proportion of olive growers checked was 0.22%.
26 Those checks are manifestly insufficient to make up for the absence of the register of olive producers and operational computerised files. Since, moreover, the Greek Government does not contradict in detail the other failures found in the summary report, including the lack of general rigour in the checking procedure, the absence of methodology and system allowing information to be cross-checked and the fact that the competent body found it impossible to carry out an effective scrutiny of the financing of producers' organisations owing to the mixing of activities and interests, it must be concluded that the financial correction of 10% in respect of the serious shortcomings in the arrangements for checking the system of aid for the production of olive oil is fully justified.
Expenditure by way of aid for permanent abandonment of areas under vines
38 Those findings, which are not contradicted by the Greek Government, show that the system of inspections put in place relies exclusively on the competence and action of specific agents, who alone are in a position to verify the accuracy of applications for premiums. Verification by external services, both national and Community, is thus precluded. The system of controls therefore lacks the objectivity required by Community legislation.
58 The Court has consistently held that a Member State against which the Commission has justified its decision finding the absence of or shortcomings in the checks carried out in the framework of the application of the EAGGF Guarantee section operating rules cannot rebut the Commission's findings by mere assertions which are not substantiated by evidence of a reliable and operational supervisory system. If it is not able to show that they are inaccurate, the Commission's findings can give rise to serious doubts as to the existence of an adequate and effective series of supervisory measures and inspection procedures (Case C-253/97 Italy v Commission [1999] ECR I-7529, paragraph 7).