C-34/89

ITALY v COMMISSION

OPINION OF MR ADVOCATE GENERAL JACOBS delivered on 12 July 1990 *

My Lords, year (Official Journal 1978 L 331, p. 10), producer Member States were 'authorized to advance up to 70 % of the aid requested to producer organizations as soon as they submit their aid applications'. Similar 1. In this case, Italy seeks the partial provisions were laid down for the marketing annulment of Commission Decision years 1979/80, 1980/81, 1981/82, 1982/83 88/630/EEC on the clearance of the and 1983/84. accounts presented by the Member States in respect of the expenditure for 1986 of the Guarantee Section of the European Agri­ cultural Guidance and Guarantee Fund ('the Fund') (Official Journal 1988 L 353, p. 30). 4. Pursuant to those provisions, AIMA In that decision, the Commission refused to made advance payments of production aid accept as chargeable to the Fund for olive oil between 1978 and 1984. The LIT 10 410 055 894 which had been paid by sums advanced turned out to be in excess of AIMA, the Italian intervention agency, to a the aid actually payable. As a result, AIMA number of producers of olive oil by way of was obliged by Article 8 of Regulation advances on aid for production between (EEC) No 729/70 on the financing of the 1978 and 1984. common agricultural policy (Official Journal, English Special Edition 1970 (I), p. 218) to recover the difference. The first two paragraphs of that provision are in the following terms: 2. Italy originally put forward a separate complaint, but that was withdrawn after the close of the written procedure.

2. In the absence of total recovery, the financial consequences of irregularities or 6. The Italian Government points out that negligence shall be borne by the the sum in question represents an extremely Community, with the exception of the high number of individual requests for consequences of irregularities or negligence advances (namely 94 094), many of which attributable to administrative authorities or were for very small amounts. Some other bodies of the Member States. LIT 2 000 000 000 has apparently been recovered, but a large number of disputes has arisen. The Italian Government denies it has been negligent and claims to have The sums recovered shall be paid to the encountered a number of practical diffi­ paying authorities or bodies and deducted culties in connection with recovery. It by them from the expenditure financed by argues that no provision of Community law the Fund.' requires national authorities to seek to recover advance payments in circumstances such as these within a period shorter than that laid down by national law, which in The Italian Government does not contest this case is 10 years. According to the the Commission's view that advance Italian Government, that period had not payments of aid which turn out to be in expired in respect of any of the recipients excess of the amount due constitute 'irregu­ when its letters relating to recovery were larities' within the meaning of Article 8(1). I dispatched at the end of June 1988. consider that that view is correct. Accordingly, the Italian authorities were required to recover the excess production aid which had been paid. 7. Article 8(1) of Regulation No 729/70 makes it clear that disputes between the Member States and recipients of sums paid 5. When the Commission carried out its out under Community legislation are to be investigations relating to the clearance of resolved in accordance with national law. Member States' accounts for the financial Proceedings between the Commission and year 1983 at the end of 1985, it informed the Member State responsible for the the Italian authorities that they had not payments, however, must in my view be taken sufficient steps to secure repayment. resolved by applying Community law. Letters concerning repayment in respect of According to Article 8(2) of Regulation the marketing years 1978/79 to 1983/84 No 729/70, the financial consequences of were subsequently sent by the Italian auth­ irregularities or negligence are only to be orities to the recipients of the aid at the end borne by the Community where the default of June 1988. The Commission takes the in question is not attributable to the

8. I am unable to accept the view of the Italian Government that a Member State cannot be said to have been negligent within the meaning of Article 8(2) of Regulation No 729/70 if it acted within the applicable limitation period laid down by national law. 10. It is not necessary here for the Court to In circumstances such as those of the specify how quickly the applicant should present case, a Member State must be able have sought to recover the excess payments to show that it has acted within any such once it became aware of them. In my view, period, for otherwise it will be unable to it is reasonable, as the Commission suggests, recover the excess payments at all. But the to expect a Member State, in circumstances mere fact that a Member State has met that such as these, to set the process of recovery minimum requirement does not in my view in motion as soon as it becomes apparent suffice to establish that it has not been that the amount of aid actually payable is negligent for these purposes. The view of less than any advance which has been made. the Italian Government, if adopted, would Indeed, a Member State which does not do mean that the effect of Article 8 would vary so may be said not to have complied with from State to State and could be altered by the obligation imposed on it by Article 8(1) Member States at will. Such an outcome of Regulation No 729/70 to 'take the would be inconsistent with the purpose of measures necessary' to recover sums lost as the common agricultural policy, which is to a result of irregularities. It is sufficient for lay down common rules concerning agri­ the purposes of these proceedings, however, cultural products applicable throughout the for me to say that a delay exceeding three Community, and would mean that the cost years is clearly too long.

13. I therefore consider that the Court should dismiss the action and order the applicant to pay the costs, with the exception of those relating to the complaint which was withdrawn , in respect of which the parties have agreed that each should bear its own costs.

I-3612