Report for the Hearing in Case C-22/89

I — Facts

1. Regulation (EEC) No 685/69 of the Commission of 14 April 1969 on detailed rules of application for intervention on the markets in butter and cream (Official Journal, English Special Edition 1969 (I), p. 194) establishes a scheme for the purchase by intervention agencies of butter intended for public storage. Article 6(1) of that regulation, as amended by Commission Regulation (EEC) No 1836/86 of 12 June 1986 (Official Journal 1986 L 158, p. 57), provides that:

2. In its Decision 88/630/EEC of 29 November 1988 on the clearance of the accounts presented by the Member States in respect of the expenditure for 1986 of the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (hereinafter referred to as the EAGGF) (Official Journal 1988 L 353, p. 30), the Commission disallowed expenditure incurred by the Netherlands amounting to HFL 3183100.46. For the dairy sector, the amount includes a total of HFL 2598185.71, of which HFL 1624796 relates to premature testing of the keeping qualities of butter intended for public storage.

3. At point 3.3.4.2 of the Summary Report of 15 July 1988 of the conclusions from the preliminary work for clearance of the EAGGF Guarantee section accounts for the year 1986, the Commission stated that, according to Article 6(1) and (2) of Regulation No 685/69, the control on the longkeeping qualities of butter delivered into intervention must be conducted not earlier than the 60th day following entry into cold store.

4. In that respect the Commission referred to the Minutes of the 726th Milk Management Committee meeting of 16 August 1985 (hereinafter referred to as the 1985 Minutes) which stated that the object of Article 6(1) of Regulation No 685/69 was to ensure that butter offered for intervention should be able to withstand storage of two months without any unacceptable deterioration in quality. The tests by the intervention agency must therefore be made at the end of the trial period. The need for good administration of the tests would legitimately lead the intervention agency not to carry them out in the same store every day of the same week but to do so periodically. Nevertheless, the intervals between tests had not to be such as to impose on the trader an appreciable prolongation of the trial period.

5. The Summary Report also refers to an interpretive note of 18 March 1986 (IV/2214/86) on Regulation No 685/69 in which it was stated in relation to Article 6(2) that if at the end of the test period it was found that the butter did not meet the requirements of quality the seller had to pay the costs of storage.

6. Since tests carried out in Member States which had correctly applied the rules show that the quantities refused after a second test constituted only a small percentage of the total quantities tendered, the Commission decided not to finance 0.25% of all entries of butter tested before the 60th day.

II — Written procedure and conclusions of the parties

1. The application by the Kingdom of the Netherlands was received at the Court Registry on 30 January 1989.

2. Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General the Court decided to open the oral procedure without any preparatory inquiry.

3. The Kingdom of the Netherknds, the applicant, claims that the Court should:

4. The Commission, the defendant, contends that the Court should:

III — Submissions and arguments of the parties

1. The Kingdom of the Netherlands maintains in the first place that the Commission infringed Regulation (EEC) No 729/70 of the Council of 21 April 1970 on the financing of the common agricultural policy (Official Journal, English Special Edition, 1970 (I), p. 218) in conjunction with Regulation No 685/69.

2. The Commission maintains that it is clear from both the wording and spirit of Article 6 of Regulation No 685/69 that the testing of the quality of the butter must be carried out after the expiry of the test period. The seller is released from the obligations which he has undertaken only if the test period has expired without any abnormal deterioration in the quality of the stored butter in store.

1 Language of the case: Dutch.