C-56/91

GREECE v COMMISSION

OPINION OF ADVOCATE GENERAL JACOBS delivered on 15 December 1992 *

My Lords, 3. It appears from Article 1 and the annex of the decision in issue in the present case (hereafter 'the contested decision') that the expenditure which the applicant wished to charge to the Fund as falling under the clear­ ance of accounts for 1988 amounted to DR 169 057 420 413. Of this, the Commis­ 1. In these proceedings Greece seeks the sion recognized DR 167 404 485 562 as annulment under Article 173 of the EEC chargeable to the Fund, leaving Treaty of Commission Decision 90/644/EEC DR 1 652 934 851 to be borne by the appli­ (OJ 1990 L 350, p. 82) in so far as it concerns cant. According to the applicant, that sum the clearance, in respect of the expenditure comprises a number of amounts which the for 1988 of the Guarantee Section of the Commission should have recognized as European Agricultural Guidance and Guar­ chargeable to the Fund. antee Fund ('the Fund'), of the accounts pre­ sented by Greece in certain sectors.

6. The applicant claims that in breach of 8. In my view, the submission of the Com­ Article 176 of the Treaty the Commission mission should be upheld. As the Commis­ has failed to give proper effect to the judg­ sion points out, it would be under an obliga­ ment of the Court in Case C-259/87 Greece tion to credit Greece with all the expenditure v Commission [1990] I-2845. In that case the relating to the sale of the two consignments Court quashed the decision on the clearance only if that sale had taken place in accord­ of the accounts in respect of expenditure to ance with Community rules. In Case be charged to the Fund for 1983 (Decision C-259/87 the Court held that the sale of the 87/368, OJ 1987 L 195, p. 43) in so far as the two consignments did not comply with the Commission had not charged to the Fund requirements of Community law and conse­ expenditure declared by Greece relating quently the Commission was justified in dis­ to the sale of two consignments of allowing an amount equal to the theoretical 30 000 tonnes of common wheat. As a result price of the consignments calculated accord­ of that judgment, the Commission accepted ing to Article 3(2) of Council Regulation in the clearance relating to 1988 that a sum (EEC) No 3247/81 (OJ 1981 L 327, p. 1) of DR 596 040 000 in respect of 1983 should plus the costs of their removal from the be charged to the Fund. The applicant claims intervention system. The Court held, how­ that in order to comply with the judgment of ever, that the Commission's refusal to deduct the Court the Commission must recognize from that theoretical price the sums received as chargeable to the Fund all the expenditure as a result of the irregular sales resulted in incurred in respect of the sales in question, the unjust enrichment of the Fund and was which came to DR 875 015 976 plus interest. contrary to Community law. Consequently, The applicant asks the Court to annul the the Court annulled the decision of the Com­ decision in so far as it only recognizes the mission to the extent that it refused to recog­ lower amount. In the alternative, the appli­ nize as chargeable to the Fund 'the amount cant claims that the judgment of the Court representing the sums received on the sale of should be interpreted as meaning that the the two consignments' (see paragraph 1 of only amount which should not be recog­ the operative part of the judgment and para­ nized as chargeable to the Fund is the graph 27 of the judgment). It is not disputed amount of the difference between the price that the actual amount received from the sale of purchase and the price of sale of the two of the two consignments is DR 596 040 000. consignments. In that case, the amount disal­ It follows that the Commission was correct lowed would be DR 83 340 000 and not in charging only that amount to the Fund. DR 278 975 976 as calculated by the Com­ mission.

the context of financial transactions of this decision as a 'olive-pomace oil') for the type between the Community and the Mem period from 14 March to 7 August 1984. As ber States. The Commission also argues that, a result of that judgment, the Commission on balance, this practice benefits Member accepted in the clearance of accounts for States which often hold illegally and for long 1988 that a sum of DR 9 389 270 in respect periods substantial Community funds which of 1984 should be charged to the Fund.

accepted. I consider, therefore, that the claim of the applicant in relation to interest must fail. 12. The origin of this claim lies in an invita tion to tender as a result of which a consign ment of olive residue oil from the stocks of the Greek intervention agency was sold in July 1983. Under Article 13 of Regulation 10. I conclude that the applicant's claim that (EEC) No 2960/77 (OJ 1977 L 348, p. 46), the Commission failed to give proper effect the purchaser was required to withdraw the to the judgment of the Court in Case oil within 60 days of notification of the C-259/87 should be dismissed. result of the tender. In reply to queries from the Greek authorities the Commission clari fied, by telex of 8 November 1983, certain points regarding the requirements of Com B — Storage costs relating to olive residue munity law. The Commission confirmed by oil: compliance with the judgment of a further telex of 20 December 1983 that the the Court in Case C-334/87 Greece v Fund would cover the storage costs relating Commission to the consignment until the expiry of the period for withdrawal. Following the telex of 8 November 1983, the Commission took the view that there could be no further uncer tainty as to the meaning of the Community

1990). In that case the Court annulled the lated from the telex of 8 November) until Commission's decision on the clearance of actual delivery of the oil took place in Octo the accounts for 1984 (Decision 87/468, OJ ber 1984. However, in Case C-334/87 the 1987 L 262, p. 23) in so far as it disallowed Court held that the relevant Community expenditure declared by Greece relating to provisions were not clear as to whether secu the storage costs for a consignment of olive rity had to be lodged by the purchaser and, residue oil (described in the contested consequently, that the applicant was justified

14. The applicant also alleges that the answer of the Commission to the query concerning storage costs was given on 9 August and not on 7 August as stated in the judgment of the 17. The applicant seeks the annulment of the Court. It is clear, however, that by this argu­ contested decision in so far as an amount of ment, in support of which no evidence is DR 869 296 279 is not recognized as charge­ produced, the applicant disputes in substance able to the Fund in respect of export refunds not the execution of the judgment by the for animal feed. To justify the disallowance, contested decision but the judgment of the the Commission relies on the judgments of Court itself. The argument must, therefore, the Court in Case C-35/88 Commission v be rejected. Greece [1990] ECR I-3125 and Case C-32/89 Greece v Commission [1991] ECR I-1321. In Case C-35/88 the Court held on the basis of compelling evidence produced by the Commission that between 1981 and 1984 KYDEP (Central Office for the Man­ 15. Finally, the applicant claims that accord­ agement of National Produce) intervened in ing to its calculations the Commission the cereal sector as an agent of the State and

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GREECE v COMMISSION

It argues that dence has been submitted by the applicant to what the report of the Agricultural Bank of show that the relationship between the State Greece describes as KYDEP's claims against and KYDEP has changed. On the contrary, the State are not 'State aids' within the mean according to a report of the Agricultural ing of Article 92 of the Treaty. Bank of Greece on KYDEP's affairs dated 26 January 1990, KYDEP incurred a deficit during 1988 (as well as during the financial years 1985 to 1987) as a result of its interven tion in the animal feed sector.

18. The applicant submits a number of also Case C-61/90 Commission v Greece, arguments to dispute the disallowance. First, already cited. It is therefore clear that the applicant argues that each financial year KYDEP's deficits were absorbed by State has an autonomous character. Evidence relat funds for a number of years. The applicant ing to previous financial years cannot justify does not dispute that KYDEP incurred a the refusal to recognize expenses incurred in deficit as a result of its intervention in the

In support of this argu any payments to KYDEP in order to cover ment, the applicant submits a letter dated that deficit, this does not prove that KYDEP 24 January 1991 sent by KYDEP's director did not intervene in the animal feed market general to the Ministry of Agriculture. It also contrary to the requirements of Community

21. In my view, therefore, on the basis of the 20. Furthermore, as appears from the docu­ evidence available to it, the Commission was ments submitted to the Court, by a letter of not able to conclude that the expenditure 3 April 1990 the Commission expressed its submitted by the applicant in respect of willingness to review the amount of the dis­ export refunds for animal feed for the finan­ allowance, provided that the Greek authori­ cial year 1988 was incurred in accordance ties submitted precise and concrete evidence with the requirements of Community law. It and permitted the Commission to carry out follows that the Commission was correct in inspections in order to examine the animal malting the disallowance. feed market in Greece and the financial rela­ tions between KYDEP and the Greek State. The Commission also requested in its letter that the relevant evidence and permission to carry out the inspection should be provided by 30 April 1990 so as to enable the Com­ mission to proceed with the clearance of the accounts for 1988 within the specified dead­ lines. By a letter of 4 May 1990, the Greek 22. The Greek Government further argues Government refused the inspection on the that in so far as it disallows the contested ground that KYDEP was an institution gov­ amount the decision of the Commission is erned by private law. Subsequently the invalid for lack of sufficient reasoning and Court held in its judgment of 12 July 1990 in for infringing the 'rights of the defence', i. e. Case C-35/88 that by refusing to communi­ the rights of the Government adequately to cate to the Commission information on the present its case. It is clear, however, from the functioning of KYDEP, the applicant had documentation presented to the Court that failed to fulfil its obligations under Article the Commission explained the grounds for 5 of the Treaty. The applicant argues that in disallowance and that the applicant was March 1991 it invited the Commission to closely involved in the proceedings leading

to the adoption of the summary report and the co-responsibility levy on cereals. Ini­ the decision on the clearance of the accounts. tially, this claim of the applicant incorpo­ This becomes clear, inter alia, from a letter of rated three headings concerning respectively 3 April 1990 and a telex of 16 June 1990 sent delays in the collection of the levy, amend­ by the Commission to the Greek Govern­ ments to the statistical data provided by ment. In addition, given that the dispute sur­ Greece to Eurostat and the contention that rounding the financial links between the the contested decision would lead to unjust Greek State and KYDEP has been pending enrichment of the Community. During the for some years and has been the subject of proceedings, the Commission agreed to repeated decisions of the Court, the argu­ make a correction in the clearance of the ment that the rights of the defence have not accounts for 1989 to take account of the first been respected cannot be accepted. claim and the parties agreed to examine the third claim in the clearance of the accounts for 1990. The parties, therefore, are in dis­ pute only in relation to the statistical data 23. Finally, the Greek Government claims provided by Greece to Eurostat. that the Commission initially notified the disallowed sum as DR 8 200 000 but subsequently it increased it to DR 869 296 279 without explanation. It is clear, however, from the documents before the Court that the amount of DR 8 200 000 was an error which appeared only in the Greek version of the letter sent from the Commission to the Greek Govern­ ment on 3 April 1990. The correct sum was notified to Greece by telex of 16 June 1990. In addition, a copy of the corrected Greek 26. The method used by the Commission to version of the letter was sent by the Com­ check the collection of the co-responsibility mission on 3 August 1990. This argument, levy by Member States was considered by therefore, must also fail. the Court in Case C-385/89 Greece v Com- mission [1992] ECR I-3225. The method is essentially based on statistical data supplied by Member States to Eurostat. The Commis­ sion based the contested disallowance on the 24. I conclude that the applicant's claim in data published by Eurostat on 6 December relation to the disallowance of exports 1989. It refused to take into consideration refunds for animal feed should be rejected. revised data submitted by Greece on 6 Feb­ ruary 1990. The applicant argues that the first data were merely provisional whereas those subsequently communicated were D — Co-responsibility levy on cereals final. It claims that the distinction between provisional and final data is widely accepted and that it is reasonable that differences may exist between the two sets of data. The appli­ 25. The applicant also seeks the annulment cant concludes that the refusal of the Com­ of the contested decision in so far as it disal­ mission to accept the second set of data was lowed a sum of DR 215 156 000 in respect of unlawful.

E — Forfeiture of security lodged on the sale of meat In the present case, it is not disputed that the first set of data was submitted more than a year after the harvesting of the quantities of cereals to which it related. From the docu­ ments submitted to the Court it does not appear that when it provided the data the Greek Government informed the Commis­ 30. The applicant seeks the annulment of the sion that they were provisional. In my view, contested decision in so far as it disallowed therefore, the Commission was entitled to the sum of DR 245 233 in respect of an error consider them as final. The applicant has in the calculation of the security payable by submitted no evidence to prove what 'Thraki AE', a Greek company, on the sale prompted the corrections or to establish that of meat from intervention. the new set of data is more reliable. It may therefore be concluded that the Commission was entitled to refuse to take into account the new data.

31. Commission Regulation (EEC) No 28. In addition, it is difficult to see how the 2182/77 lays down detailed rules for the sale new data could assist the applicant. The of frozen beef from intervention stocks for Commission has produced figures which, on processing in the Community (OJ the basis of the new data, would lead to an 1977 L 251, p. 60). Article 4 provides that increase of 21 000 tonnes in the amount of before a contract of sale is concluded a secu­ cereals in relation to which co-responsibility rity calculated to guarantee that the products

I - 3450

GREECE v COMMISSION

32. It is not easy in my view to read the Commission's letter in the way in which the Commission now says that it should have The Greek Government claims that on the been read. The letter can more readily be basis of this letter the intervention agency understood as authorizing the Greek inter­ reduced the initial forfeiture to DR 623 676. vention agency to re-calculate the amount of The Commission, however, refused to recog­ security, provided only that the meat had in nize the difference between the initial forfei­ fact been processed. Although the require­ ture and the reduced forfeiture as chargeable ments of Community law had not been fully to the Fund. Greece seeks the annulment of observed, as the Greek Government has not the contested decision in so far as it disal­ disputed, doubts could well remain about the lowed that sum. The Commission states that application of the principle of proportional­ by the combined effect of Commission ity. I am therefore inclined to take the view Regulation (EEC) No 2182/77 and Commis­ that the Greek Government was justified in sion Regulation (EEC) No 2220/85 (OJ reducing the amount of the security payable 1985 L 205, p. 5), a security may not be on the basis of the letter.

I-3451

OPINION OF MR JACOBS — CASE C-56/91

37. In my view, this argument cannot be accepted. In the clearance of the accounts for 35. In relation to the first ground, the Greek 1987 the Commission established that burley Government argues that the sampling tech­ tobacco and certain quantities of oriental niques followed by the Commission in the tobaccos held in intervention did not meet course of its inspections preceding the clear­ the specified quality standards. As stated, ance of the accounts for 1987 were inade­ that finding was upheld by the Court in quate and in breach of internationally Case C-385/89 Greece v Commission. A nec­ accepted standards. In support of this argu­ essary consequence of that finding was that ment the applicant refers to a report of in calculating the quantity of tobacco which

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GREECE v COMMISSION

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OPINION OF MR JACOBS — CASE C-56/91

Conclusion

43. In the present case I have reached the conclusion that the application should be allowed only on one point. Since the application has, in my view, failed under the other heads, the applicant should be ordered to pay the costs.

44. Accordingly I am of the opinion that the Court should:

(1) declare void Commission Decision 90/644/EEC of 30 November 1990 on the clearance of the accounts presented by the Member States in respect of the expenditure for 1988 of the Guarantee Section of the European Agricultural Guidance and Guarantee Fund in so far as the Commission has not charged to the Fund the amount of DR 245 233 representing the difference between the amount of the security lodged by Thraki AE on the sale of meat for interven­ tion and the amount of the security forfeited;