United Kingdom of Great Britain and Northern Ireland v Commission of the European Communities.
Date: 1998-10-01
35 The first point to be borne in mind here is the need to ensure legal certainty, which means that rules must enable those concerned to know precisely the extent of the obligations which they impose on them (see, to that effect, Case 348/85 Denmark v Commission [1987] ECR 5225, paragraph 19).  The Commission thus cannot choose, at the time of the clearance of EAGGF accounts, an interpretation which departs from and is not dictated by the normal meaning of the words used (see, to that effect, Case 349/85 Denmark v Commission [1988] ECR 169, paragraphs 15 and 16).
40 That evidence was such as to give rise to serious suspicions that the prohibition on tenderers submitting more than one tender per category in response to each invitation to tender had been circumvented by the use of other names in order to disguise the fact that the tenders in actual fact emanated from a single operator.  In view of the division of powers between the Community and the Member States in the field of the common agricultural policy, those were matters which called for inspection and investigation by the latter.
41 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 between national and Community authorities, does not involve any systematic supervision by the Commission, which moreover would in practice be quite unable to carry it out.  Only the intervention agencies are in a position to provide the information necessary for setting a maximum buying-in price and, where necessary, a reduction coefficient, since the Commission is not close enough to obtain the information it needs from the economic operators (see, to this effect, Case C-48/91 Netherlands v Commission [1993] ECR I-5611, paragraph 11).
42 By failing to carry out such inquiries, the United Kingdom failed to fulfil its obligations under Article 8(1) of Regulation No 729/70 (see Case C-2/93 Exportslachterijen van Oordegem v Belgische Dienst voor Bedrijfsleven en Landbouw [1994] ECR I-2283, paragraphs 16 to 18).
43 That provision, which constitutes a specific expression in the agricultural area of the obligations imposed on Member States by Article 5 of the EC Treaty, defines 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 (see Joined Cases 146/81, 192/81 and 193/81 BayWa and Others v Bundesanstalt für Landwirtschaftliche Marktordnung [1982] ECR 1503, paragraph 13).  It imposes on the Member States the general obligation to take the measures necessary to satisfy themselves that the transactions financed by the EAGGF are actually carried out and are executed correctly, even if the specific Community act does not expressly provide for the adoption of particular supervisory measures (see Case C-8/88 Germany v Commission [1990] ECR I-2321, paragraphs 16 and 17).
51 Here, it must be noted that, as the Court has consistently held, Articles 2 and 3 of Regulation No 729/70 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, 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 authorised to pay in the context of the common organisation of the markets (Case 11/76 Netherlands v Commission [1979] ECR 245, paragraph 8; Case 18/76 Germany v Commission [1979] ECR 343, paragraph 7; and Case C-48/91 Netherlands v Commission, cited above, paragraph 14).
52 Although it is therefore for the Commission to prove an infringement of the Community rules, the Member State concerned must demonstrate that the Commission committed an error as to the financial consequences to be attributed to it (see, to this effect, Case 49/83 Luxembourg v Commission [1984] ECR 2931, paragraph 30).
54 In addition, it indicated how it was possible for the unlawful conduct of the United Kingdom tenderers to have led to an erroneous assessment of the market by the Community authorities likely to result in the purchase of excessive quantities of beef and veal, possibly at higher prices.  In so doing, it established the probability that harm was caused to the Community budget.  The Commission cannot be required to do more than that, since it cannot carry out the systematic checks and since analysis of the current state of a given market depends on information gathered by the Member States (see Case C-48/91 Netherlands v Commission, cited above, paragraph 17).
56 Finally, in view of the essential nature of the formalities which were not complied with and of the probability of losses, or even fraud, to the detriment of the Community budget, the amount disallowed by the Commission, which was limited to 2% of the expenditure involved, cannot be regarded as excessive and disproportionate (Case C-49/94 Ireland v Commission [1995] ECR I-2683, paragraph 22).
59 It must be borne in mind here that, according to settled case-law, the extent of the obligation to state reasons depends on the nature of the measure in question and on the context in which it was adopted (see Case 327/85 Netherlands v Commission [1988] ECR 1065, paragraph 13, and Case C-54/91 Germany v Commission [1993] ECR I-3399, paragraph 10).
60 In this regard, it is sufficient to point out that decisions concerning the clearance of accounts do not require detailed reasons if they are taken on the basis either of summary reports or of any correspondence between the Member State and the Commission, which implies that 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 (Case 347/85 United Kingdom v Commission [1988] ECR 1749, paragraph 60).