Opinion of Mr advocate general Capotorti
Mr President,
Members of the Court,
1. My opinion today concerns four actions brought by the Netherlands Government (Case 11/76), by the French Government (Joined Cases 15 and 16/76) and by the Government of the Federal Republic of Germany (Case 18/76). The applicants seek the annulment of the decisions whereby the Commission, in discharging the accounts of the European Agricultural Guidance and Guarantee Fund (EAGGF), Guarantee Section, for 1970 and 1971, refused to recognize that certain expenditure incurred by the three States in the context of their activities in implementation of the common agricultural policy was chargeable to the said Fund.
2. The contested decisions are based on Article 5 (2) (b) of Regulation (EEC) No 729/70 of the Council of 21 April 1970 and on Article 8 (a) of Regulation (EEC) No 1723/72 of the Commission of 26 June 1972. The first concerns the financing of the common agricultural policy while the second relates to the discharge of accounts for the Guarantee Section of the EAGGF.
3. The interpretation of that provision forms the subject-matter of the first preliminary point of a general nature which is common to the action brought by the Netherlands Government and that lodged by the German Government. This involves establishing whether Article 8 relates essentially to irregularities or negligence on the part of private individuals and covers those of Member States only in so far as it concerns the course of conduct adopted by their administrative authorities or other bodies in relation to the conduct of such private individuals, or whether on the other hand it governs the apportionment of all expenditure resulting from irregularities or negligence, whether committed by individuals or by the national administrations.
4. To my mind the whole problem consists in determining whether the general principle of the attribution to the Community of the payments provided for in Regulation No 729/70 should be derived from Articles 2 and 3 of that regulation or from Article 8 (2). In the first eventuality the general principle would be that only regular expenditure could be charged to the Community; that would rule out the possibility, therefore, that the exception laid down in Article 8 (2) could also cover expenditure incurred irregularly by the Member States in the absence of wrongful conduct on the part of private individuals, since to attribute such breadth to the exception would amount to negating the principle itself. In the second eventuality, however, the general principle would be that all expenditure incurred by the Member State in managing refunds on exports and interventions to stabilize the agricultural markets could be charged to the Community, including payments which failed to conform with Community law either as to form or as to substance, with the sole exception of irregularities or negligence which could be defined as being attributable to the administrative authorities or other bodies of the Member States. It would still be necessary of course to determine the conditions for that exceptional attribution to the Member States.
5. In the light of those considerations Article 8 (2) of Regulation No 729/70 of the Council should, in my opinion, be interpreted as meaning that, in the absence of total recovery of amounts which private individuals have obtained improperly, by means of unlawful or negligent conduct, from a national administration, the loss will be borne by the Community, except where the national authorities themselves have tendered themselves liable for the loss by their conduct in making the payment (for example, by negligent control of the veracity of declarations, payment without reserve in cases of doubt, mistaken calculation of the amount) or at a subsequent time (for example, failure to demand reimbursement of the amount paid in error or to act within the appropriate period in order to recover sums paid).
6. In all the cases of irregular payments to which the decisions contested in the present cases refer, the action of the national administration concerned stands on its own without any concomitant irregular conduct attributable to individual recipients.
7. Another preliminary point raised by the applicants in Cases 11/76 and 18/76 (that is, the Netherlands Government and the German Government) relates to the procedure followed by the Commission in ascertaining the alleged irregularities.
Sale at reduced prices of butter for export (Application of the Netherlands Government and the German Government: case No 9)
8. With regard to the sale at reduced prices of butter for export a dispute has arisen between the Government of the Netherlands and the Government of the Federal Republic of Germany, on the one hand, and the Commission, on the other, with regard to the refusal by the Commission to charge to the EAGGF the financial burden borne by the two States relating to deliveries made beyond a certain fixed date.
9. From the foregoing examination it follows that in the absence of any clear evidence of the will of the Community legislature to the contrary it cannot be held that the reference to sale in Article 3 of Regulation No 1308/68 has any other meaning than that borne by the term in other provisions of the same regulation, which corresponds to its usual meaning.
Export refunds for lactalbumin (Application of the Netherlands Government)
10. This dispute arises from the fact that the Netherlands intervention agencies granted export refunds for lactalbumin in 1971 and 1972 and that the Commission held those payments to be unjustified and refused to charge them to the EAGGF. The Government of the Netherlands now recognizes that at the time in question those refunds were not payable; it may be said that it is obliged to recognize that fact following the judgment of the Court of Justice of 13 December 1973 in Case 150/73 (Hollandse Melksuikerfabriek v Hoofdproduktschap voor Akkerbouwprodukten [1973] 2 ECR 1633). The conduct of the Netherlands intervention agencies is therefore said to have been the consequence of a mistaken interpretation of the relevant regulation. According to the applicant Government, however, that mistake must be regarded as excusable, as the interpretation adopted by it is said to have been, at the time of the facts giving rise to the case, quite plausible. Therefore, relying on the said provision of Article 8 (2) of Regulation No 729/70 of the Council, the Netherlands Government maintains its argument that the financial burden should be borne by the Community.
Aid for skimmed-milk powder used for animal feeding-stuffs (Application of the German Government: cases Nos 4 and 5) — (Application of the French Government: Case 15/76)
11. With regard to Community aid for skimmed-milk powder for use as animal feed three disputes have arisen in this instance: two between the Commission and the German Government, designated cases Nos 4 and 5 respectively, and one between the Commission and the French Government, which forms the subjectmatter of Case 15/76. I shall first mention the relevant Community provisions.
12. Let us now turn to case No 4. A certain quantity of skimmed-milk powder was exported from the Federal Republic of Germany to Italy to be denatured there and used for animal feed. The documents relating to that transaction give, as the date on which the milk was placed under control in Italy, a date which is either illegible or which is subsequent to 30 June 1971. At least as regards the latter group of cases the above-mentioned provisions should have resulted in the exclusion of any possibility for the exporting State to pay the aid. However, in a telex message of 12 October 1971 in answer to a question from the German Federal Minister for Food the Commission, while reasserting the point of view set out in the said document of 4 October, declared that it was prepared to follow a more flexible line; it stated in fact that in cases where the time of the placing of the goods under control can no longer be established clearly and where the competent Italian authorities have finally refused to pay the aid, payment of that aid by the Federal Government gives rise to no objection as in that case any risk of double payment is excluded. Following that the aid was paid by the German Government.
13. We have just seen in examining case No 4 above that, as a rule, a Member State which exports skimmed-milk powder may grant the aid only when it has been proved that the goods have been placed under control in the importing Member State (for the purposes of the intended use). In practice, it is necessary that the forwarding State has received from the importing State form T 1/T2 No 5. In fact, however, for six consignments of milk, amounting to 140 tonnes, exported from Germany to Italy between 20 February and 12 June 1971 the Federal Republic of Germany paid the aid without having received those forms. For that reason the Commission refused to charge the corresponding amount to the EAGGF and that gave rise to the dispute referred to as case No 5.
14. The question raised by one of the applications lodged by the French Government (in Case 15/76) has features which are quite different from those characterizing the two cases discussed above.
15. The aformentioned factors suffice, in my opinion, to justify dismissing the application, since the existence of the formal irregularities is not contested and they are not of a merely subsidiary nature.
Aid for the purchase of butter by persons in receipt of social assistance (Application of the German Government: case No 8)
16. Regulation No 414/70 of the Council made provision for the possibility that in a subsequent decision of the Commission the Member States would be permitted, until 31 December 1970, to grant aids to facilitate the purchase of butter by certain categories of consumers. In Regulation No 2550/70 the Council limited that possibility solely to persons in receipt of social assistance but extended the time-limit to 31 December 1971. On the basis of the first regulation the Commission, by decision 70/228 of 24 March 1970, authorized the Member States to grant the aid. Under Article 3 of that decision consumers were able to obtain the butter at reduced prices on presentation of an individualized voucher. For reasons of economy the Federal Republic of Germany provided that the distribution of the vouchers should be entrusted to the social security organizations and the district authorities and sent the vouchers to those bodies at the beginning of each of the two years during which the provisions were in force. The vouchers remained valid for the whole of the year in which they were issued. The Commission raised no objection to that system.
Repurchase of butter sold at reduced prices and intended for processing into concentrated butter (Application of the German Government: case No 10)
17. In view of the butter surplus existing in the Community and of the limited possibilities of exporting it, the Commission, by a decision of 17 December 1968 pursuant to Article 6 (3) of Regulation No 804/68 of the Council, authorized the Federal Republic of Germany to sell at reduced prices butter held in store by the intervention agencies. In order to ensure that the consignments of butter sold at less than the normal price were not diverted from their intended use a system of supervision was of course necessary and the Federal Republic — as appears from a recital in the preamble to that decision — stated that it could guarantee the efficacy of such supervision. However, in the course of 1971 the German authorities informed the Commission that following developments in the situation on the butter market they were no longer in a position to ensure, at every stage of marketing, that the butter would not be diverted from its lawful destination.
Costs of crushing solidified sugar (Application of the German Government: case No 12)
18. A consignment of sugar stored by the intervention agencies in Germany which had solidified because of humidity in the store had to be reduced to powder before the goods could be put up for sale. The Commission refused to charge to the EAGGF the expenditure relating to that operation as it was not included in the expenditure provided for by Article 4 (1) of Regulation No 2334/69 of the Council of 25 November 1969 on the financing of intervention expenditure in respect of the domestic market in sugar. Under Article 4 (1) (f) of that regulation the EAGGF is to bear the costs incurred through storage calculated on the basis of a fixed amount, but not other expenditure caused by storage of the goods.
Aids for the distillation of wine (Application of the French Government: Case 16/76)
19. In order to facilitate the disposal of wine surpluses the Council, by Regulation No 766/72 of 17 April 1972, in application of Article 7 of the basic Regulation No 816/70, made provision for the granting of financial aids to distillers on condition that they acquired the wine from producers at a price not lower than that laid down by the regulation and that they should in fact distil the wine. In order to be eligible for that aid, the distillation had to be carried out between 24 April and 27 May 1972, which latter date was changed to 31 July 1972 by Regulation No 1098/72.
20. Examination of the individual cases concerning one or other of the three applicant Governments leads, as we have seen, to conclusions which are identical to those derived from an examination of the general problems.
In conclusion, therefore, I propose that the Court should dismiss the four applications in question as unfounded on all heads and that it should order the applicants to pay the costs.
1 Translated from the Italian.