C-413/92

GERMANY v COMMISSION

OPINION OF ADVOCATE GENERAL DARMON delivered on 3 May 1994 *

Mr President, 3. The relevant provision, namely Regula­ Members of the Court, tion (EEC) No 756/70 of the Commission of 24 April 1970 on granting aid for skimmed milk processed into casein and 2 caseinates, provides in Article 3 that:

1. In this action, the Federal Republic of Germany seeks pursuant to Article 173 of the EEC Treaty a declaration that Commis­ sion Decision C(92) 1783 Final of 23 Sep­ '(1) Producers of casein or caseinates shall tember 1992, since published under num­ not benefit from the aid unless they: ber 92/491/EEC, on the clearance of the accounts presented by the Member States in respect of the expenditure for 1989 of the European Agricultural Guidance and Guar­ antee Fund (EAGGF), Guarantee Section, 1 is void on the ground that the Commission excluded from Community financing a sum (a)... of DM 432 000 representing aid for the pro­ cessing of skimmed milk into casein and caseinates.

(b) submit to supervision by the competent intervention agency.

2. In the disputed decision, the Commission refused to charge that amount to the EAGGF, considering that the conditions laid down by the Community legislation for granting the aid were not satisfied. (2) ...

7. As for the official check, agents of the competent body visited the manufacturing sites once a week to ensure that the internal analyses were carried out. Twice a month, they took samples of each sort of casein or caseinate, which were then analysed by an 4. Let me state at the outset that that con­ official laboratory. Lastly, every four to six cept of 'regular supervision' has not been months a final check was made at each man­ defined by the Community legislation, ufacturing concern, at the end of which it although it is apparent from the Special was decided whether to grant aid. Report of the Court of Auditors dated 3 11 November 1983 that the majority of the Member States, considering that a permanent inspector was not justified, were of the view that having inspections on a regular basis sat­ isfied the requirements of Article 3. That view is not criticized by the Commission. 8. According to the applicant, that system ensured regular supervision within the mean­ ing of Article 3 of the regulation cited above, in so far as it '... guaranteed that samples 4 from all the batches were examined'.

5. The system applying in Germany at the relevant time was as follows: there were two stages to the supervision, one internal, the 9. The Commission does not criticize the other official. system of checking so much as its conse-

3 — Special Report on aid to skimmed milk processed into casein and caseinates (OJ 1984 C 41, p. 1). 4 — Paragraph 15 of the application.

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quences for the grant of aid where the result supervision is insufficient. Finally it states of the official analyses was unsatisfactory, that a sum of DM 24 365 is in any event due. and thus conflicted with the internal analy­ ses.

5 — Paragraph 13 of the defence. 6 — Paragraph 7 of the application.

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15. Self-checking can give rise to no more 18. I therefore consider that the first plea than a simple presumption of regularity must be rejected. which can obviously be challenged by the authorities. If the official analysis disclosed a negative result, the manufacturer would either have to ask for the batch in question to be double-checked by reference to the 7 reserve sample or have to accept the extrap­ olation of that result to the entire output. If 19. I will now consider the second plea in the manufacturer or the competent body which the German Government raises were to resist the principle of extrapolation, infringement of the principle of the protec­ an official analysis would have to be made of tion of legitimate expectations on the ground all the batches manufactured. that the Commission had previously accepted that the system was compatible with Community law.

16. It is true that, as I have said, the Com­ 20. The applicant relies on the Summary munity legislation does not define what is to Report for 1974-1975, production of which be understood by 'regular supervision'. was requested by the Court. The relevant However, the very concept of supervision information, so far as concerns the Federal necessarily presupposes action external to Republic of Germany, is set out on page 43 the manufacturer, hence by a public author­ as follows: ity or a body designated by it.

24. Where the official analyses confirm the results of the internal analyses relating to the 21. In connection with the principle of the same batches, the other batches are consid­ ered to satisfy the criteria set out in the reg­ protection of legitimate expectations, I note ulation. the settled case-law of the Court, and in par­ 8 ticular a judgment Italy v Commission in which the Court stated that

25. Where on the other hand there is a con­ flict, the Summary Report indicates that 'specific analyses are made', which, accord­ ing to the Commission, unquestionably '... the practice followed by the Italian entails the obligation to carry out further authorities arises from an incorrect interpre­ investigations. The applicant does not really tation of Community law. In such a case the state how it considers those words should be Commission is not obliged to charge expen­ interpreted, simply submitting '... that, where diture incurred on that basis to the Fund the results were negative, reserve samples, unless the incorrect interpretation may be 9 taken when the samples from each batch attributed to a Community institution.' were taken, were tested in another labora­ tory, if the undertakings so requested'. 10

8 — Case 1251/79 [1981] ECR 205; sec also Case 820/79 Belgium v Commission [1980] ECR 3537. 9 — Paragraph 17. 10 — Paragraph 12 of the reply; my emphasis.

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OPINION OF MR DARMON — CASE C-413/92

26. The Commission's is the only interpreta­ accuracy of the internal analyses so that it tion compatible with the coherence of the cannot be assumed that the batches not system. It is only after specific and general­ examined by the official body comply with ized administrative checks that it is no longer the requirements. It is therefore the analysis necessary to extrapolate the results: such a of the entire output which is called in ques­ procedure checks not samples but the entire tion. output during the relevant period.

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sums of DM 6 668 and DM 17 697 — should 36. However, at the stage of the rejoinder, in any event be charged to the EAGGF. after stating that, in so far as concerns the sum of DM 6 668, it had received details before that deadline, it accepted that as to 15 that point the request was valid.

33. It is stated in the applicant's observations that the sum of DM 6 668 relates to a quan­ 37. The decision in question must therefore tity of casein which was initially considered immediately be annulled to the extent of that not to satisfy the quality criteria laid down amount. in the regulation, although that finding was 13 subsequently shown to be wrong.

38. To justify its refusal to pay the sum of DM 17 697, the Commission relies on Arti­ 16 cle 1 of Regulation (EEC) No 422/86, 34. As for the sum of DM 17 697, it alleg­ which provides: edly relates to errors concerning the number of negative samples since not only the main samples but also those taken for cross­ checking were wrongly considered to be 14 negative.

'Additional information may be forwarded to the Commission up to a deadline to be fixed by the Commission, taking into account in particular the amount of work necessary to supply the information con­ cerned. In the case of failure to submit the aforementioned information within the 35. The Commission had refused to charge period fixed, the Commission shall take its the total of those sums to the EAGGF on decision on the basis of those elements of the ground that the explanations, even information in its possession at the deadline, though they may have been relevant, were except in cases where the late submission of provided after the deadline of 15 July 1991 information is justified by exceptional cir­ imposed on the applicant in Decision cumstances.' C(91) 1270 Final of 28 June 1991 for submis­ sion of its observations.

43. Although it is not disputed that the Commission made clear its intention to close the procedure within a certain period, it sub­ 'So that the EAGGF can more accurately sequently sent a letter which, although set assess the financial effects of that irregular out as the summary of a meeting, nonethe­ procedure, the German authorities were less included an invitation to produce certain requested to supplement the information documents. in Annexes I and II to the letter of 20 March 1991 as follows ...'

44. Moreover, the documents annexed to the pleadings, which come from both the appli­ 41. Nowhere is there any mention of the cant and the Commission, do not show con­ time-limit initially imposed, which must clusively that, before the decision setting the have been known when that letter was sent, deadline, the method of calculation used by still less of its expiry. The Federal Republic the Commission was known. Furthermore, of Germany was therefore entitled to con­ sider that the Commission was prepared to take into consideration information provided 17 — Case 129/84 Italy v Commission [1986] ECR 309, at para­ to it thereafter. graph 41 of the judgment.

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the Commission does not claim that it was, entire output in the same proportions as the simply considering that the point is irrele­ samples taken. That demonstrates the impor­ vant. tance of ascertaining the method of calcula­ tion, since the consequences for the sum in dispute vary according to the method.

45. I note that although the Commission ini­ 46. I accordingly consider that the decision tially stated that 'Where the results are not should also be annulled on that point, the satisfactory, the aid should be refused not Commission having furthermore stated at just for the batch in question but for the the hearing that, had the request that that entire output between two satisfactory sum be charged to the Fund been submitted results', 19it subsequently considered that it in due time, it would in fact have been was sufficient to apply the results to the granted.