C-69/94
ECLI:EU:C:1996:349
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FRANCE v COMMISSION
OPINION OF ADVOCATE GENERAL TESAURO delivered on 26 September 1996 *
1. By an action brought under Article 173 of The legislation the Treaty the French Republic is seeking the annulment of Commission Decision 93/673/EC of 10 December 1993 fixing the flat-rate reduction to advances on the entry of agricultural expenditure in the accounts in the event of non-compliance with the provi sions relating to the forwarding of the annual 2. The additional levy for milk and milk products was introduced in 1984 for the pur questionnaire on the application of the pose of reducing the gap between supply and arrangements for additional levies in the milk demand in those products on the Commu sector introduced by Council Regulation nity market. (EEC) No 3950/92 1 ('the decision').
The scheme was subsequently extended for seven years from 1 April 1993 by Council Regulation (EEC) No 3950/92 of 28 Decem 2 ber 1992, which, in the light of the experi ence gained over the first few years of the scheme's operation, introduced a number of modifications designed to improve and sim plify it ('the basic regulation'). The French Government's main contentions are, first, that the decision was adopted in breach of the provisions constituting its legal basis and of several essential procedural requirements, and of the provisions of the regulation on the financing of the common 3. Pursuant to Article 11 of the basic regu agricultural policy; and, second, that the pen 3 lation, the Commission adopted Regulation alties laid down by the decision for failure to 4 (EEC) No 536/93 of 9 March 1993 laying comply with the relevant provisions are incompatible with the principle of propor tionality. 2 — OJ 1992 L 405, p. 1. 3 — Which provides that the detailed rules for the application of the regulation arc to be adopted by the Commission in accordance with a procedure involving the scheme's manage- * Original language: Italian. ment committee. 1 — OJ 1993 L 310, p. 44. 4 — OJ 1993 L 57, p. 12.
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down detailed rules on the application of the The purpose of the questionnaire is to gather additional levy ('the implementing regu information and statistics concerning the lation'). application and functioning of the scheme each year and for each Member State.
The fifth recital in the preamble to the 4. The contested decision, which was implementing regulation reads as follows: adopted on the basis of the fourth indent of Article 8 of the implementing regulation, determines the amount of the reduction to be applied to advances.
'... experience gained has shown [that] major delays in both the transmission of figures on collections or direct sales and payment of the In particular, it provides that there is to be a levy have prevented the arrangements from reduction of 1% of the overall amount paid being fully effective; ... therefore, lessons to the Member State concerned under the should be learned from the past and the nec previous budget year for failure to commu essary conclusions drawn by laying down nicate the questionnaire by 1 September of strict requirements as regards notification the current year (Article 1); a reduction of and payment deadlines and providing for 0.5% for information on the questionnaire penalties where deadlines are not met.' which is incorrect by more than 10% (Article 2); and a reduction of 0 . 04 % for each item of missing data, where the ques tionnaire is incomplete.
Under the fourth indent of Article 8 of the regulation the Member States are required to 5. The provision in the fourth indent of notify to the Commission 'before 1 Septem Article 8 of the implementing regulation was ber each year, the duly completed question recently amended by Commission Regu naire as set out in the Annex. Where that 5 lation (EC) No 82/96 of 22 January 1996. time-limit is not observed, the Commission shall make a flat-rate reduction to advances on the entry of agricultural expenditure in the accounts.' 5 — OJ 1996 L 17, p. 1.
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By point 1 of Article 1 of that regulation the validly adopted on the basis of the fourth following sentence was added to that provi indent of Article 8 of the implementing regu sion: 'Where the information changes, in part lation. The latter provides expressly for as a result of the text provided for in Article reductions to the advances in question only 7, an update shall be communicated to the in the event of laie communication of the Commission before 1 December, 1 March questionnaire, there being no mention of 6 and 1 July of each year.' penalties for incorrect or incomplete ques tionnaires (mentioned in Articles 2 and 3 of the decision).
Pleas in law
The French Government argues that Article 11 of the basic regulation which, as I said, confers on the Commission the power to 6. As I said, the French Government's adopt detailed implementing rules for the action is based on three different pleas: additional levy, likewise cannot constitute an breach of the fourth indent of Article 8 of adequate legal basis for Articles 2 and 3 of the implementing regulation and of Article the decision. That provision provides 11 of the basic regulation, together with vari expressly for the participation of the man ous essential procedural requirements; agement committee in the procedure for breach of Council Regulation (EEC) No adopting detailed implementing rules, 8
729/70 of 21 April 1970 on the financing of whereas the committee does not appear to 7 the common agricultural scheme; breach of have been consulted when the contested the principle of proportionality. decision was adopted.
First plea
8. In order to determine whether the argu ments of the French Government in connec tion with the first plea are well founded, I consider that it would be useful to consider first, albeit briefly, the aims of the additional 7. As regards the first plea, the French Gov levy scheme for milk, and then the ratio of ernment maintains that the decision, in par the relevant provisions in Article 8 of the ticular Articles 2 and 3 thereof, could not be basic regulation and thus of the provisions of the contested decision.
6 — Article 7 of the basic regulation lays down the checks which the competent national authority must carry out with regard to producers and purchasers in order to ensure that the 8 — The procedure is that governed by Article 30 of Regulation scheme functions efficiently. (EEC) No 804/68 of 27 June 1968 on the common organiza- 7 — OJ, English Special Edition 1970 (I), p. 218. tion of the market in milk and milk products.
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I should first recall that the scheme in ques The proceeds of the levy, currently fixed at tion was introduced, as I said, in order to the rate of 115% of the target price for milk, u reduce the gap on the milk market between is paid to the Community and used to ever-increasing production and stable levels finance the costs connected with the stabili of internal consumption and exports. By zation and regularization of the market in Council Regulation (EEC) No 856/84 of 31 milk products. 9 March 1984, the Council first introduced the additional levying scheme, that is to say, a mechanism of financial co-responsibility which would come into operation whenever the quantity of milk (marketed, not pro duced) in a particular Member State exceeds a predetermined annual quantity (known as the 'reference quantity' or 'milk quota'). The intention was to create a disincentive in 10. Under Article 11 of the basic regulation order to reduce structural surpluses in the the Commission adopted the implementing sector, if not on production at least on the regulation for the declared three purposes of: marketing of milk and milk products. supplying the additional factors necessary for the final calculation of the levy; establish ing measures to ensure payment of the levy in good time; and establishing the rules on checks permitting verification of proper col lection of the levy (second recital in the pre amble).
9. The scheme, which was extended and modified on several occasions and finally codified in the basic regulation, functions Responsibility for the proper collection of broadly as follows: the reference quantities the levy lies primarily with the competent assigned to each Member State are divided, national authority, which must carry out the within that Member State, into individual 12 necessary checks and verifications in loco. quantities for each producer. It is on the lat The Commission, however, must be ter, subject to the control of the competent informed annually of the situation regarding national authority, that the obligation falls to collection of the levy in each Member State pay the amount due by way of additional by means of notification by the national levy where the relevant quantity is authorities of the questionnaire referred to in 10 exceeded. the fourth indent of Article 8 of the imple menting regulation.
9 — OJ 1984 L 90, p. 10. 10 — For practical reasons the amount of the levy is actually paid to the competent body by the purchaser, who deducts the 11 — More precisely, the EAGGF (European Agricultural equivalent from the price paid to producers, who are the Guidance and Guarantee Fund). real debtors (see Article 2(2) of the basic regulation). 12 — See Article 7, cited above.
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11. On the basis of the information received demand on the market in question; that is, as from each Member State the Commission we have seen, the ultimate aim of the addi must determine whether it is necessary to tional levy scheme. adopt corrective measures; if the reference quantities are exceeded in one or more Mem ber States it may, for example, depending on the amount by which the quantity has been exceeded, regulate prices directly, or increase export refunds, or require the excess to be 12. In view of that, it is evident that the put into storage. In addition, if it is found obligation of Member States to supply the that a Member State has failed, in breach of Commission with all the information neces Community law, to collect sums payable to sary to enable it to fulfil adequately the man the Community, the Commission may apply agement duties attributed to it by the Treaty reductions to the monthly advances on agri in this area can only properly be met if the cultural expenditure on the basis of the pow questionnaire submitted is complete and ers conferred upon it by the provisions in accurate; however, to interpret the fourth force and confirmed by the judgment of the indent of Article 8 of the implementing regu Court of Justice in Cases C-342/89 Germany lation as imposing an obligation merely as to v Commission and C-346/89 Italy v Com- time, that is to say the obligation to commu 13 mission. nicate a questionnaire (even, paradoxically, incomplete or inexact) within a particular time, would deprive such a provision of all meaning.
There is, in addition to that, the actual word ing of the provision, which, as I said, requires the Member States to communicate It is apparent, therefore, that the question each year by 1 September 'the duly com- naire is an instrument essential to the proper pleted questionnaire as set out in the 14 management of the scheme at Community Annex'. level, inasmuch as it enables the Commission to acquire all the information it needs in order to be able to take appropriate action. The data afforded by means of the question naire, it must be emphasized, is indispensable not only for the purposes of checking and In the circumstances I do not consider that coordinating collection of the levy but ulti there can be any reasonable doubt that the mately in order to eliminate or correct as far contested decision falls entirely within the as possible any distortions which may occur scope of the requirements listed in the fourth owing to the gap between supply and indent of Article 8 of the implementing
13 — [1991] ECR 1-5031 and I-5057. 14 — The emphasis is mine.
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regulation, including where it provides for Consequently, the first plea is unfounded. financial consequences for Member States who have communicated a questionnaire which, although it was submitted in due time, is incomplete or inaccurate.
Second plea
13. As regards, lastly, the argument put for ward by the French Government to the 15. In the second plea the French Govern effect that the decision was adopted in ment alleges breach of Council Regulation breach of the essential procedural require 15 (EEC) No 729/70, cited above, on the ments laid down in Article 11 of the basic financing of the common agricultural policy, regulation, it is, in my view, likewise as interpreted by the consistent case-law of unfounded. the Court of Justice.
As the Commission rightly pointed out, in It relies in particular on the judgments of 17 fact the decision itself is not one of 'the October 1991 in which the Court of Justice detailed rules for the application' of the acknowledged that the Commission had the regulation within the meaning of Article 11 power to reduce the sums owed by way of which, as such, requires the opinion of the monthly advances, based on the accounting management committee; it is merely a meas situation of each Member State vis-à-vis the ure fixing, at an equal percentage for each EAGGF, in the case of sums not collected, in Member State, the rate of reduction to be breach of Community law, but stated that applied to advances in connection with vari such reductions were not definitive but tem ous forms of breach of the fourth indent of porary and provisional, and could not preju Article 8 of the implementing regulation. dice the final and definitive decision on the 16 annual clearance of accounts.
14. The Commission could quite well, in The French Government argues that the fact, have proceeded to impose those reduc consequences imposed by the contested tions by means of individual decisions adopted in relation to each individual Mem ber State on the basis of the powers directly 15 — As amended by Regulations (EEC) Nos 3183/87 and conferred upon it by the fourth indent of 2048/88. Article 8 of the implementing regulation. 16 — Judgments cited in footnote 13, paragraphs 16 to 19.
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decision are in fact definitive, contrary to In particular, the Commission has stated what the Court of Justice stated, particularly that, as is apparent from the provisions con in view of the fact that they apply automati cerning the financing of the common agricul cally, without there being any presumption tural policy, as interpreted by the Court of of breach of Community law on the part of Justice, reductions applied to monthly the Member State concerned and without advances which prove, at the time the defini that Member State being given an opportu tive decision on the clearance accounts is nity to present its views. made, to have been unjustly applied (for example because the delay for which the penalty was imposed was attributable to force majeure) will be adequately compen sated for in the final calculation of the sum attributable to each Member State. More 16. That argument appears to me to be quite over, at this stage the Court does not have clearly unfounded, since there is no reason to any evidence that casts doubt on what suppose that the reductions in question do appears to be the current practice in such not have the same temporary and provisional matters, a practice which, moreover, is in character as any other reduction in agricul accordance with settled case-law. tural expenditure in the context of the EAGGF, in view of the re-examination which must take place when the final decision is adopted on the annual accounts defining the financial position of each Mem Third plea ber State vis-à-vis the EAGGF itself.
18. In the third plea the French Government Moreover, the sole circumstance cited by the alleges that the Commission breached the French Government to justify its assertion is principle of proportionality in its determina that neither the implementing regulation nor tion in the contested decision of the rates of the decision expressly provides that the reduction to be applied. reductions are to be re-examined in the con text of the final decision on the clearance of annual accounts.
In particular, it claims that the contested pro visions 'exceed what is appropriate and nec essary to attain the objective sought' as 17 stated in Buitoni, inasmuch as they intro 17. All I need say in that connection is that duce concrete penalties for Member States the Commission itself has confirmed on a who are in breach of their obligation to sub number of occasions, both in its written mit the questionnaire, and that, since the observations and at the hearing, that the penalties are applied not to breach of the measures are provisional and temporary and that they are to be reviewed when the final decisions are adopted in relation to each Member State. 17 — Case 122/78 [1979] ECR 677, paragraph 16.
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(principal) obligation to guarantee collection measures in question are proportionate to of the levy but to breach of the (secondary) the objective to be achieved. obligation to inform the Commission as to the manner in which it has been collected, it might also be in conflict with the Court's 18 judgments in Man and Kurt Drewes.
20. As I stated in my Opinion in Otto 20 Pressler, I do not believe that as a matter of principle a definition of the legal nature of 19. The Commission, for its part, denies that provisions attaching unfavourable legal con the reductions are penalties and, in particu sequences to a failure to comply with certain lar, in view of their provisional and tempo requirements is essential in order to be able rary character, defines them as 'negative to determine whether those provisions com financial consequences' for the Member ply with the principle of proportionality. In State. It also notes that the distinction other words, as far as the facts at issue here between principal and secondary obligations are concerned, whether we are concerned employed by the Court in the context of a with penalties stricto sensu, as the French well-defined set of circumstances quite dif Government maintains, or negative financial ferent to those at issue in this case, that is to consequences, as the Commission contends, say where there was an obligation to lodge a is not relevant for the purposes of determin 19 ing whether they meet the requirements of security in respect of export certificates, cannot be transposed sic et simplicitet to the the principle of proportionality. case at issue here.
What is to be ascertained in any event, then, Reiterating the fact that the information in in accordance with case-law of the Court of the questionnaire is essential to ensure the Justice which is now consistent, is whether proper management of the whole levy the provisions of the contested decision scheme, the Commission asserts that the exceed what is appropriate and necessary to achieve the aim pursued and, more particu larly, whether the means used in order to 18 — Case 181/84 [1985] ECR 2889 and Case 358/87 [1989] ECR achieve that aim correspond to the impor 891 respectively; in particular, in paragraph 17 of the second-named judgment, concerning non-marketing premi- tance of that aim and whether they are nec 21 ums for milk, the Court stated that 'failure to fulfil the obli- essary in order to achieve it. gation not to market... is capable of undermining the objec- tive of the premium scheme, namely the reduction of surpluses of milk and milk products, to such an extent that it justifies recovery, in their entirety, of the amounts already paid, whereas failure to comply with any of the checking procedures ... can have such an effect only to the extent to 20 — Opinion delivered on 13 December 1991 in Case C-319/90 which the checking in question is thereby prevented.' [1992] ECR I-203, at p. I-209, points 3 and 4. 19 — Man, cited above. 21 — See inter alia Pressler, paragraph 12.
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21. As I have already said, the decision does In other words, the fact that the reductions not seek to achieve any aim other than that to advances, applied to a Member State of defining in detail a rule already contained, which, by delay or omission, has risked in fact, in Article 8 of the implementing undermining the functioning of the whole regulation; it determines the rate of reduc scheme, are not irreversible or definitive but, tion applicable for various types of breach of on the contrary, will be reviewed, is suffi the obligation on Member States to commu cient to demonstrate that they are propor nicate to the Commission within a certain tionate to their aim. time a duly completed questionnaire.
23. For the sake of completeness, I would note, finally, that at the hearing the French Government mentioned a recent regulation of the Council, Council Regulation (EEC) In view of the importance of the information No 82/96, referred to above, amending contained in the questionnaire for the pur Article 8 of the implementing regulation by poses of ensuring the proper management of introducing the obligation for Member States the additional levy scheme, and the fact that to communicate, by means of four-monthly the Commission can only pursue its essential updates, any changes in the data covered by role of coordinating and regulating the mar the questionnaire resulting from the checks ket in milk if the information necessary to referred to in Article 7 of the regulation. The apply the appropriate intervention measures French Government maintains that that when needed is made available to it in due amendment shows that in fact the Commis time, I do not consider that the unfavourable sion is in a position to manage the scheme if consequences attached by the decision to the data it requires is communicated on a breach of the obligation in question are dis date other than that provided for, 1 Septem proportionate to the aim to be achieved. ber, and even thereafter.
However, that argument, too, is without foundation. The four-monthly updates are in 22. That conclusion is borne out by the pro fact merely corrections which the new regu visional nature of the reductions to advances lation provides for in the event of abnormal which the Commission itself is authorized to situations (such as the communication to the apply, and by the fact that they may be Commission of data which prove, after veri revised when the final decision is adopted fication, to be erroneous); they do not, there concerning the clearance of accounts for each fore, alter the substance of the obligation on Member State, which, as I stated in point 17, Member States in normal situations to com I regard as one of the essential features of the municate a fully and accurately completed scheme. questionnaire within a time-limit.
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24. In conclusion, I do not consider that the As regards the size of the penalties, next, I arguments put forward by the French Gov consider it significant that, as the Commis ernment can reasonably cast doubt on the sion pointed out, the penalty provisions have validity of the decision at issue, which, in to this date not had to be applied since the fact, has the merit of encouraging the Mem Member States have so far fulfilled their ber States to assume their responsibility of obligation correctly and in due time. contributing, within the extent of their pow ers, to the functioning of a complex scheme for regularizing the milk market.
Conclusion
25 . In the light of those observations I propose that the Court :
— dismiss the application ;
— order the applicant State to pay the costs .
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