Opinion of Advocate General
Mr President,
Members of the Court,
1. The Corte d'Appello di Roma (Court of Appeal, Rome) has referred to the Court for a preliminary ruling a question on the interpretation of the fourth subparagraph of Article 3(2) of Council Regulation (EEC) No 3247/81 of 9 November 1981, as amended by Council Regulation (EEC) No 2632/85 of 16 September 1985, and of Section VIII Olive Oil of Annex II to that regulation, to which the former provision refers. Section VIII of Annex II reads as follows:
Relevant legislation
2. I shall start with the provisions on fixing the buying-in price of olive oil offered for intervention.
3. In accordance with Article 12(4) of Regulation No 136/66, the Commission laid down, by Regulation (EEC) No 3472/85 of 10 December 1985, implementing rules governing the buying-in and storage of olive oil by intervention agencies. According to Article 3(1) and (2) of Regulation No 3472/85, the buying-in price is to be that valid on the day of delivery, adjusted in accordance with Article 5 in the case of goods delivered in to the warehouse but not unloaded, allowance being made for the price increases and reductions provided for in this Regulation, and is to be adjusted by applying to the intervention price such increases and reductions as are specified in the Annex.
4. I would now turn to the provisions on the establishment of annual accounts with a view to the financing of the intervention of the EAGGF.
5. The fourth subparagraph of Article 3(2) of the initial version of Regulation No 3274/81 provides that discrepancies in quantities due to theft or loss attributable to identifiable causes are not to be taken into account for the purposes of calculating the tolerance. According to that provision, the value of those quantities is be entered on the credit side of the accounts on the date when the theft or loss took place or when the theft or loss was noticed. The value is to be determined in accordance with the provisions laid down for quantities exceeding the tolerance. Consequently, for olive oil for which no specific provisions are laid down in Annex II, that value should be determined on the basis of the intervention price for that standard quality. According to the last sentence of Article 3(2), the intervention price to be used is that for the current marketing year, increased if necessary by all the monthly increases.
The main proceedings and the Court's jurisdiction
6. By a contract of 1 February 1986, AIMA entrusted the successful tenderer, Federconsorzi, with the practical implementation of intervention measures (including buying-in and sales) in the olive oil market during the 1985/1986 marketing year, as it had in the preceding years. In its observations submitted to the Court, the Italian Government stated that Federconsorzi's mandate had to be carried out in accordance with the tendering terms set out in the Ministerial Decree of 12 April 1984 and in the atto disáplinare of 24 September 1985.
7. A dispute arose between AIMA and Federconsorzi as to the interpretation of the provisions of the Community legislation setting out the way in which the value of the stolen olive oil had to be calculated. According to the second paragraph of Article 3 of the contract, which I quoted earlier, the relevant provisions of the Community legislation were to be binding on the parties. According to AIMA, which relies on an opinion endorsing its view which was given to it by the Commission of the European Communities at its request, those provisions have to be interpreted as meaning that the intervention agency should be paid the equivalent value of the quantities misappropriated at the buying-in price applicable in the 1985/1986 marketing year, including monthly increases, for lampante virgin olive oil of 1o acidity. In contrast, Federconsorzi argues that the reimbursement in respect of the quantities misappropriated should be effected on the basis of the lower buying-in price for lampante virgin olive oil of 7o acidity applicable in the 1983/1984 marketing year or, in the alternative, in the 1985/1986 marketing year.
8. Federconsorzi brought an action against AIMA in the Corte d'Appello di Roma to have the arbitration award set aside. AIMA lodged a cross-appeal also claiming that the award should be set aside. The Corte d'Appello considered that its determination depended on the way in which the relevant provisions of Community law had to be interpreted, and referred the following question to the Court of Justice for a preliminary ruling:
9. The question relating to the interpretation of Regulation No 3247/81 has been referred by the national court in connection with a dispute which is not governed directly by that regulation, but by an agency contract which refers to that regulation. It therefore has to be considered whether the Court has jurisdiction under Article 177 of the EEC Treaty to give a preliminary ruling on the national court's question.
Answer to the question raised
10. In its question, the national court essentially seeks to establish how the expression the intervention price for the relevant quality of oil in Section VIII of Annex II to Regulation No 3247/81, as amended by Regulation No 2632/85, should be interpreted (see the second paragraph of section 5 above), since, according to the fourth subparagraph of Article 3(2) of Regulation No 3247/81, as amended, it is that price which should be used to determine the value of the quantities of oil which went missing on account of a theft noticed during the 1985/1986 marketing year.
11. As regards the relevant time, the Italian Government and the Commission agree with the arbitration board. According to the latter, the value of the stolen oil should be determined on the basis of the buying-in price for the relevant quality which was applicable at the time when the theft was noticed, that is to say, on the basis of the buying-in price applicable in the 1985/1986 marketing year, increased by the monthly increases which had taken effect at that time.
12. As regards the relevant quality, the parties agree with the arbitration board that, in view of the amendment made by Regulation No 2632/85 to Regulation No 3247/81 (see the second paragraph of section 5 above), the value of oil stolen in the 1985/1986 marketing year should be determined in accordance with the specific provisions applicable to the olive oil sector, that is to say, on the basis of the intervention price for the relevant quality and therefore no longer on the basis of the intervention price for the standard quality. Consequently, they agree that in this case the basis should be the buying-in price of lampante oil (that is to say, the type of oil which was stolen) and not that of semi-fine oil (the standard quality). What is in dispute is simply whether the reduction for the decree of acidity of the stolen oil should be taken into account. Essentially, the dispute turns on whether the expression the relevant quality in Section VIII of Annex II to Regulation No 3247/81, as amended, also covers the degree of acidity and, if so, what degree.
13. I cannot agree. It is true that the annex to Regulation No 136/66 does set out descriptions and definitions for four types of virgin olive oil. But even if each of those four types of oil should be regarded as quality categories, that does not mean that when olive oil of the quality lampante has been stolen, a reduction for a degree of acidity other than 1o should not be applied. The opposite view is the correct one. According to the last sentence of the first subparagraph of Article 12(1) of Regulation No 136/66, as amended by Regulation No 1562/78 (see section 2 above), the buying-in price is to be adjusted by means of a scale of price increases and reductions where the description or quality of the oil offered to the intervention agency does not correspond to that for which the intervention price was fixed (my emphasis).
14. The history of the legislation bears out this view. As I have already mentioned (in section 5), Council Regulation No 3247/81 provides, as a general rule, that the value of the quantities stolen has to be determined on the basis of the intervention price for the standard quality. That general rule, which also applied to the olive oil sector until the 1984/1985 marketing year, therefore entailed a flat-rate reimbursement, which allowed no account to be taken of the actual quality of the oil stolen. Consequently, the value to be reimbursed was sometimes greater than the true value (when oil of lower quality than the standard quality had been stolen) and sometimes lower (where oil of better quality than the standard quality had been taken). However, in Regulation No 2632/85, the Council discarded this flat-rate rule for the olive oil sector: as of the 1985/1986 marketing year, the intervention price for the relevant quality of olive oil had to be taken into account.
15. Thus far, I have not yet given an entirely satisfactory answer to the national court's question. The Italian Government and the Commission point out that virgin olive oil is stored by marketing year on the basis of the four types of oil mentioned in the annex to Regulation No 136/66. As far as lampante oil in particular is concerned, the storage agency could have stored all the oil of that type bought in during a particular marketing year in the same container, irrespective of its degree of acidity. In the view of the Italian Government and the Commission, this means that in the event of theft it is possible in fact to determine that lampante oil bought in during a particular marketing year has been stolen, but impossible to ascertain its degree of acidity.
16. It appears to me that the question of the degree of acidity of the stolen lampante oil is a matter for the national court to determine in the light of the available evidence, bearing in mind that, in the absence of cogent evidence, the evidential risk should not lie with the Community. The reason for this lies, to my mind, in the Community's interest in protecting its finances against fraud and, more specifically, theft. It seems to me that, in the absence of evidence, the outcome which is most favourable to the Community should be adopted, a view which is borne out by that which the Court has consistently held in relation to the financing in the agricultural sector of payments which the Member States have made unlawfully, that is to say, payments which have not been made in conformity with the Community rules on the financing of expenditure. According to that case-law, such payments must be borne by the Member States in so far as, even if it is impossible to prove with certainty the extent to which a national measure incompatible with Community law has resulted in an (unlawful) increase in expenditure, the Community authority is bound to refuse to finance all the expenditure in question. It follows that in case of doubt the burden of proof should be discharged by the person seeking funding for the expenditure, which, in any event, is consistent with the general principle of the law of evidence that the evidential risk is to be borne by the person who cannot fulfil his obligation to prove with certainty the facts (in this case the degree of acidity of the stolen oil) on which the amount of the funding depends.
17. I propose that the Court's reply to the national court's question should be as follows:
1 Original language: Dutch.
2 Council Regulation (EEC) No 3247/81 of 9 November 1981 on the financing by the European Agricultural Guidance and Guarantee Fund, Guarantee Section, of certain intervention measures, particularly those involving the buying-in, storage and sale of agricultural products by intervention agencies (OJ 1981 L 327, p. 1).
3 OJ 1985 L 251, p. 1.
4 Regulation of the Council No 136/66/EEC of 22 September 1966 on the establishment of a common organization of the market in oils and fats (OJ, English Special Edition 1965-1966, p. 221).
5 See the first and second sentences of Article 12(1) of Regulation (EEC) No 136/66, as amended by Regulation (EEC) No 1562/78 of 29 June 1978 (OJ 1978 L 185, p. 1).
6 OJ 1985 L 333, p. 5.
7 Sec also Article 2 of Council Regulation (EEC) No 1502/85 of 23 May 1985 fixing the production target price, the production aid and the intervention price for olive oil for the 1985/86 marketing year (OJ 1985 L 151, p. 27), according to which the intervention price referred to in Article 1 (ECU 227.62 per 100 kg) relates to semi-fine virgin olive oil with a free fatty acid content, expressed as oleic acid, of 3.3 grams for 100 grams.
8 OJ 1978 L 216, p. 1.
9 OJ 1990 L 337, p. 3.
10 OJ 1990 L 350, p. 43.
11 Gazzetta Ufficiale della Repubblica Italian (GURI) No 114 of 26 April 1984.
12 GURI No 235 of 5 October 1985.
13 Joined Cases C-297/88 and C-197/89 Dzodzi v Belgian State [1990] ECR I-3763. See also Case C-231/89 Gmurzynska [1990] ECR I-4003 and Case C-384/89 Tomatis [1991] ECR I-127 (summary publication only).
14 The national court simply sutes that the theft was discovered on 25 August 1986.
15 Article 9(2) of Regulation No 3472/85 provides that in cases where the intervention agency entrusts intervention to storage agencies it must check on a random basis that the oil stored corresponds to the samples specified in Article 8(3).
16 See, most recently, Case C-197/90 Italy v Commission [1992] ECR I-1, paragraph 38.
17 See in particular Case 347/85 United Kingdom v Commis-sión [1988] ECR 1749, paragraph 13.