C-238/96

3 — OJ, English Special Edition 1970 (I), p. 218. * Original language: German. 4 — This problem forms at least part of the subject-matter of the proceedings in Gases C-209/96 United Kingdom v Commis- 1 — European Agricultural Guidance and Guarantee Fund. lion [1998] ECR I-5655, C-232/96 France v Commission 2 — 1992 Summary Report P o c . VI/6355/95-EN), pp. 130 and [1998] ECR I-5699, C-233/96 Denmark v Commission [1998] 131 in conjunction, inter alia, with Article 22 of Regulation ECR I-5759 and C-242/96 Italy v Commission [1998] ECR N o 859/89. I.-5863.

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7. Ireland does not dispute that there were deficiencies in the control procedures. These were less significant in 1991 than in 1990. (The Commission took account of that fact in making the reductions: 10% for 1990 and 5% for 1991. This had become possible, the Com- 9. In this connection Ireland seeks the annul- mission stated, since it had been possible to ment of the Commission decision disallowing organise the control procedures more effec- from Ireland's expenditure for 1991 and 1992, tively after the Commission had drawn the which was incurred in the buying-in of beef, existing defects to Ireland's attention.) the amount of IRL 9 613 206 for 1991 and the amount of IRL 8 862 144 for 1992. 6 The dis- allowance of that expenditure is contained in Annex I to the decision. The amount disal- 5 — Commission Decision (96/311/EC) of 10 April 1996 on the clearance of the accounts presented by the Member States in respect of the expenditure for 1992 on the guarantee section of the European Agriculture Guidance and Guarantee Fund and in respect of certain expenditure for 1993 (OJ 1996 L 117, p. 19). 6 — See footnote 5.

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lowed corresponds to a flat-rate correction of part the security deposited in respect of the 2 % of 1991 and 1992 expenditure. total amount. 8

11. The Commission further contended that so-called multiple tenders may be of a specu- lative nature. If, for example, very large quan- tities of beef are offered for sale into interven- tion, it becomes necessary to reduce these 13. A clear consequence of this, in the Com- quantities by application of a coefficient. 7 mission's view, is that the lodging of multiple Since the tenderers endeavour to continue to tenders favours speculation because the effect sell the whole of their meat into intervention of the security deposit is lessened. inflated tenders are lodged for speculative purposes. If a tenderer speculates that a spe- cific reduction coefficient will be laid down, he offers a correspondingly higher quantity for sale into intervention. If it then turns out 14. Speculative tendering for larger quantities that the coefficient laid down is not as high as is said to run counter to the purpose of inter- the tenderer assumed, the tenderer must vention, which is, for example by interven- deliver into intervention more meat than he tion buying-in, to stabilise the market and actually has available. If he is unable to per- prevent or lessen any substantial price reduc- form his contract with the intervention agency tion, 9 where market prices fall below a as to 85 or 9 5 % , he loses in whole or in

8 — Article 13(4) of Regulation N o 859/89. 7 — The relevant provision is to be found in Article 11(3) of 9 — Fourth recital in the preamble to and Article 5 of Regulation Commission Regulation (EEC) N o 859/89 of 29 March 1989 (EEC) N o 805/68 of the Council of 27 June 1968 on the laying down detailed rules for the application of intervention common organisation of the market in beef and veal (OJ, measures in the beef and veal sector (OJ 1989 L 91, p. 5). English Special Edition 1968 (I), p. 187).

15. Speculative tenders which, as has been demonstrated, are favoured by the lodging of multiple tenders make it difficult to operate intervention successfully. Since more meat is offered than is actually on the market, buying-in prices and quantities determined on the basis of tenders received can no longer 17. In the applicant's view, however, all the be established in accordance with the actual rules concerning intervention were observed. market situation. Speculative tenders thus pre- It did not accept more than one bid per ten- vent the Commission from obtaining a pre- derer. cise overview of the market situation. For that reason it may almost certainly be pre- sumed that, as a result of the speculative ten- ders and the multiple tenders favouring them, more meat is bought in by the intervention agencies at higher prices. In that connection it must also be borne in mind that the lodging of several tenders allows speculation as to the price. The buying-in of excessive quantities causes the E A G G F to incur higher costs than 18. The provision which underlies this dis- pute is contained in Article 9 of Regulation is necessary in order to support the market. N o 859/89, paragraph 1 of which provides: 'Tenderers may take part in the invitation to tender only if they undertake in writing to 10 — Cited in footnote 7. comply with all the provisions relating to the 11 — Third recital and Article 7 et seq. of Regulation N o 859/89. tender concerned.' 13 12 — Second recital in the preamble to Council Regulation (EEC) N o 571/89 of 2 March 1989 amending Regulation (EEC) N o 805/68 on the common organisation of the market in beef and v e a l ,repealing Regulation (EEC) N o 1302/73 and renewing Regulation (EEC) N o 4132/88 (OJ 1989 L 61, p. 43). 13 — Emphasis added.

20. The distinction between the concepts of 'tenderer' and 'interested party' is, in the Commission's view, of significance in this connection. According to the Commission, it 'Interested parties may submit only one tender follows from the difference in wording that per category in response to each invitation to interested parties are not to be equated with tender. tenderers. 'Interested parties' are not only those persons who lodged tenders in the course of their economic activities. That con- cept embraces a much wider circle of persons. It is not therefore only the individual ten- derer, that is to say the person who actually lodges the tender, who is prohibited from lodging more than one tender. The prohibi- The Member States shall ensure that tenderers tion covers all persons tendering in respect of are independent of each other in the terms of the same quantity of meat. their management, staffing and operations.

21. O n the other hand, the applicant is of the opinion that persons participating in a ten- dering procedure are 'tenderers' and 'inter- ested parties'. It is not possible to make a dis- Where there are serious indications to the tinction between those two concepts. contrary or that tenders are not in line with Accordingly, the prohibition in the last phrase economic facts, tenders shall be deemed admis- of Article 9(2) merely provides that the person sible only where the tenderer presents suit- finally appearing as tenderer may submit only able evidence of compliance with the second one tender. subparagraph.

14 — Emphasis added. 15 — OJ 1993 L 225, p. 4.

2. a declaration that, pursuant to Article 173 of the Treaty establishing the European Eco- 24. The Commission points out in that con- nomic Community, the Commission decision nection that, in contrast to the national author- of 10 April 1996 on the clearance of accounts ities, it did not at first have this information presented by Member States in respect of available to it. Since the tenders were for- expenditure for 1992 of the guarantee section warded to it anonymously, it became aware of the European Agricultural Guidance and of the irregularities only after checks carried Guarantee Fund and in respect of certain out by it. expenditure for 1993 is void in so far as it purports to disallow a sum of IRL 24 020 455.26 (being 5% of the expenditure 16 — Established by Commission Decision 94/442/EC of 1 July declared by Ireland for public storage of beef 1994 setting up a conciliation procedure in the context of the for 1991) from the expenditure declared by clearance of the accounts of the EAGGF, Guarantee Section (OJ 1994 L 182, p. 45). Ireland for public storage of beef for 1992;

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3. a declaration that, pursuant to Article 173 6. an order that the Commission of the Euro- of the Treaty establishing the European Eco- pean Communities pay the costs of these nomic Community, the Commission decision proceedings.' of 10 April 1996 on the clearance of accounts presented by Member States in respect of expenditure for 1992 of the guarantee section of the European Agricultural Guidance and Guarantee Fund and in respect of certain expenditure for 1993 is void in so far as it The Commission contends that the Court purports to disallow a sum of IRL 9 613 206.00 should: from expenditure declared by Ireland for public storage of beef for 1991 being 2% of such expenditure;

O P I N I O N OF MR ALBER — CASE C-238/96

on clearance of accounts, primarily in regard regulation or administrative action shall take to the establishment of damage and the burden the measures necessary to: of proof.

— satisfy themselves that transactions financed by the Fund are actually carried 28. According to the Court's case-law, 'as the out and are executed correctly; Court has already observed, only refunds granted and intervention undertaken in accor- dance with the Community rules within the framework of the common organisation of agricultural markets are to be financed by the — prevent and deal with irregularities; E A G G F ...'. 17 In that connection it is for the Commission to prove an infringement of the rules governing the common organisation of the agricultural markets. 18

— recover sums lost as a result of irregulari- ties or negligence.

29. Such proof was not even necessary in the present case, since, as already stated, the appli- cant does not dispute that there were weak- nesses in the system of controls in Ireland. N o r does it contest the infringement of Article 8 of Regulation N o 729/70 alleged by the Commission. Article 8 of the regulation, which reflects these recitals, provides in paragraph 1 thereof: 30. If there is such an infringement, the Court has held that the Member State concerned must show that the Commission misdirected itself in regard to the financial consequences of such infringement. 19

'The Member States in accordance with national provisions laid down by law,

not representative. For that reason, the Com- the correction applied would have been justi- mission could not be said to have correctly fied on the grounds of other deficiencies. The assessed the risk to the Fund. In that connec- decisive factor in that connection is that no tion it should be said that, under the guide- checks at all were made and there was no lines adopted by the Commission upon a ascertainment of the remaining quantity of proposal by an inter-service group (Belle meat. O n that ground it cannot be ruled out Group Report), the checks carried out cannot that the E A G G F incurred a loss. That alone and need not be used in each case as the (sole) is decisive since, as stated, it is a matter of basis for assessing financial loss. In cases, such establishing the financial risk incurred by the as the present one, where it is not possible to Fund. give a precise assessment of the loss, provi- sion is made for a flat-rate correction proce- dure on the basis of the risk incurred by the Fund.

34. In order to show that, in its view, the E A G G F incurred no loss, the applicant finally focuses on sales into intervention. It submits that the yields achieved in respect of sales of meat in storage were scarcely less than those 32. Thus, it cannot be concluded, as Ireland achieved in other Member States. Since there indeed so concludes, that the corrections were scarcely any complaints, no inference applied were to that extent disproportionate. could be drawn that the quality of the meat was lower. However, this argument concerns only certain of the possible causes for losses in the context of the EAGGF.

— 10%, where the deficiency relates to the whole of or fundamental elements of the control system or to the operation of con- trols essential to assuring the regularity of the expenditure, such that it can reason- ably be concluded that there was a high risk of widespread loss to the EAGGF. 39. Moreover, reference should be made to the Court's case-law in regard to cases in which the Commission does not disallow the total expenditure affected by the infringement but endeavours to establish the financial con- sequences of the unlawful action by means of calculations. These calculations are based on 36. As demonstrated, the applicant has been an assessment of the situation which would unable to show that the deficiencies in con- have prevailed on the market in question had trol procedures did not entail a risk for the it not been for the infringement. In such cases, Fund. As regards the individual percentages, the Court has held, it is for the Member State these are related to the seriousness of the to show that the conditions for obtaining the deficiencies. financing disallowed by the Commission are fulfilled. 21 Thus, in this case too, it is for the applicant to show that the Commission's

20 — Judgments in Case C-50/94 Greece v Commission [1996] ECR I-3331, paragraph 26, Joined Cases 15/76 and 16/76 France v Commission [1979] ECR 321, paragraph 32 et seq., 37. Further, it should be recalled that, under and Case 347/85 United Kingdom v Commission (cited in footnote 18, paragraph 13). the Court's case-law, financing of expenditure 21 — Judgment in United Kingdom v Commission (cited in foot- can be disallowed even as to 100%, if the pre- note 18, paragraphs 14 and 15).

42. The applicant further points out that expenditure for 1991 was already reduced by 2% on account of the multiple tenders to be 45. In that connection it should be said that dealt with in the second part. If, however, the decisive factor is whether there is a link that expenditure were to be further reduced between deficiencies found to exist and any by 5% on the grounds of deficient control loss or financial risk to the Fund. That is procedures, that would represent a reduction independent of the question as to the time of 7%, which is not permitted. In the case of when the resulting reduction in expenditure is made. Clearance at a subsequent date is possible where, as in the present case, an ear- lier decision is stated to be without prejudice 22 — Cf. para. 36. to subsequent financial consequences. This 23 — Judgment in United Kingdom v Commission (cited in foot- note 18, paragraph 60). may be justified by the fact that the relevant

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investigations had not yet been concluded. 24 registered in the register of companies had to Under the Court's case-law it is sufficient in be accepted. This was checked in each case by that connection for the recitals of the decision the national authority. Whether the individual to contain reservations of a general nature. 25 undertakings which submitted a tender may have belonged to the same group of compa- nies was not examined in Ireland because there was no provision in Regulation N o 859/89 for this to be done.

46. There is thus no ground apparent for annulment of the Commission decision as regards this part of the claim.

24 — Seventh and seventeenth recitals in the preamble to Com- mission Decision 94/871/EC of 21 December 1994 on the clearance of the accounts presented by the Member States in respect of the expenditure for 1991 of the European Agri- cultural Guidance and Guarantee Fund (EAGGF), Guar- antee Section (OJ 1994 L 352, p. 82). Nineteenth recital in 50. Moreover, in regard to the requirements the preamble to Commission Decision 93/659/EC of 25 which the formulation of provisions must November 1993 on the clearance of the accounts presented by the Member States in respect of the expenditure for 1990 satisfy, the Court has held: 'Since a rule whose of the European Agricultural Guidance and Guarantee Fund (EAGGF) Guarantee Section (OJ 1993 L 301, p. 13). See in breach inevitably entails financial conse- this connection judgments in Case C-61/95 Greece v Com- mission [1998] ECR I-207, paragraph 30 and Greece v Commission, cited above in footnote 20, paragraph 6. 25 — Judgment in Case C-335/87 Greece v Commission [1990] ECR I-2875, 1st introductory sentence. 26 — See footnote 18.

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quences must be sufficiently clear and precise, 52. The Commission points out that, the Commission was not entitled to rely on according to the Court's case-law, a provision the terms of subheading ... as a basis for is not merely to be construed literally but imposing, at the time of the clearance of also in accordance with its meaning and pur- E A G G F accounts, an interpretation which pose. 28 Accordingly, the Commission con- was not dictated by the normal meaning of tends that the provision at issue in these pro- the words used.' 27 ceedings would be deprived of its purpose if it were possible to submit several tenders via nominees, thus circumventing the prohibitive provision.

28 — Judgment in Case C-283/91 Contarini [1992] ECR I-6359, paragraph 14 and judgment in Joined Cases C-296/93 and 27 — Judgment in Case 349/85 Denmark v Commission [1988] C-307/93 France and Ireland v Commission [1996] ECR ECR 169, paragraph 16. I-795, paragraph 21.

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29 — Commission Regulation (EEC) N o 2271/90 of 1 August 1990 amending Regulation (EEC) N o 859/89 laying down detailed rules for the application of intervention measures in 31 — Commission Regulation (EEC) N o 1282/90 of 15 May 1990 the beef and veal sector (OJ 1990 L 204, p. 45). amending Regulation (EEC) N o 859/89 and laying down 30 — This distinction is also reflected in the English version which detailed rules for the application of intervention measures speaks of 'interested parties' and 'tenderer'. for beef (OJ 1990 L 126, p. 31).

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meaning and purpose of the provision here at common agricultural policy must ensure equal issue in the last phrase of Article 9(2) is thus treatment as between citizens of the Member that several tenders may not be submitted in States, national authorities of a Member State respect of a specific quantity of meat. That are not permitted, by means of a broad inter- provision would become meaningless if it pretation of a given provision, to favour citi- could readily be circumvented by recourse to zens of that State as against those of other nominees. Member States in which a stricter interpreta- tion is applied. 33

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result that the tenders may be assumed to 67. However, the Commission is unable to have been submitted by nominees. adduce such proof because in this connection the applicant carried out no checks. The only check made was whether the tenders were from independent (legal) persons. Thus, the Commission has no information before it as to the further details of specific circumstances. Admittedly, the Commission may also carry 64. In that way, contrary to the applicant's out its own checks. However, under the submission, a basis is provided for such ten- Court's case-law on the implementation on ders to be rejected, namely the last phrase of E A G G F financing it is primarily for the Article 9(2) aforesaid. national authorities to ensure precise compli- ance with Community provisions. As the Court went on to point out, 'that system, based on trust, does not involve any system- atic supervision by the Commission, which moreover would in practice be impossible for it to carry out ... Only the Member State is in a position to know and determine precisely Monitoring obligation on the Member State the information necessary for drawing up E A G G F accounts since the Commission is not close enough to obtain the information it needs from the economic operators.' 34

65. In the Commission's view, the disallow- ance made in the context of the clearance of accounts is justified on the ground that the applicant did not ensure compliance with that provision.

69. In connection with the question whether judgment it was held in regard to Article 8(1) there is thus shown to be an infringement by of Regulation N o 729/70: the applicant, a matter also to be considered is whether the applicant was required to carry out any additional examination. In that con- nection reference should be made to Regula- tion (EEC) N o 729/70. In the recitals in the preamble to that regulation it is stated, inter 'That provision, which expressly lays down alia: 'Measures must be taken to prevent ... in that specific area the obligations imposed irregularities.' 35 The eighth recital states: on Member States by Article 5 of the Treaty 'Community expenditure must be made sub- defines, the Court has said, the principles ject to close supervision. In addition to super- according to which the Community and the vision carried out by the Member States on Member States must ensure the implementa- their own initiative, which remains essential, tion of Community decisions on agricultural provision should be made for verification by intervention financed by the Fund and combat officials of the Commission and for it to have fraud and irregularities in relation to those the right to enlist the help of Member States.' operations (BayWa, cited above, paragraph Article 8 of the regulation is in accordance 13). with those considerations.

72. Thus, the question arises whether in the 75. In the present case, however, there was a specific case before the Court the applicant further provision to be considered which was required to carry out further checks, that could not be circumvented. An interested is to say whether the Member State ought to party desirous of selling his meat into inter- have or could have done more and, if so, vention could not submit more than one what? tender. That followed from the underlying rationale of intervention. It is true that that idea was only subsequently given concrete shape in Regulation N o 2456/93. 40 However, that does not alter the fact that already prior thereto there must have been awareness of that idea. Accordingly, the Commission cannot be said, contrary to the applicant's submis- sion, to be seeking to apply Regulation N o 73. In line with the Commission's submis- 2456/93 retroactively to the facts of the present sion, the disadvantage for the Fund arises out case. of the fact that the submission of several ten- ders by an interested party by means of nomi- nees encourages the submission of speculative tenders. Yet if one has regard to the Commis- sion's procedure against speculative tenders, it might be queried whether the applicant was required to take any further steps. 76. Thus, one arrives at the conclusion that the applicant ought to have carried out fur- ther checks in order to establish whether the tenders submitted were in fact from the same tenderer. That is particularly the case in light of the clear indications already alluded to of interconnections between individual tenderers. Even if it could not with certainty be con- 74. In order to prevent speculative tenders cluded from those interconnections that there whereby, in anticipation of a specific reduc- was an infringement of the last phrase of tion coefficient, tenders are made in respect of Article 9(2), the indications were however of a greater quantity of meat than is available, 38 such a nature as to necessitate more specific a security payment was introduced under checks, and that was the sole decisive factor. Article 10(1), in order to ensure that 'tenders are bona fide and that the conditions laid down are complied with.' 39 That means that in that connection the Member States are merely obliged to ensure that the appropriate amount of security is deposited. They do not have to check •whether the individual tenderer has offered more beef than is in his posses- 77. It must therefore be held that the appli- sion. cant ought to have carried out further checks which it failed to do.

Proof of loss occasioned to the E A G G F — be established to what extent a national mea- burden of proof sure incompatible with Community law has led to an increase in expenditure under a bud- getary heading of the EAGGF, the Commis- sion has 'no choice' but to disallow the ques- tionable expenditure altogether, and not merely a certain percentage of it. 42 78. It now falls to examine whether a reduc- tion in the context of the clearance of accounts, as applied by the Commission, was justified. As the applicant claims in the alternative, that is not the case since the reduction made is disproportionate in the absence of any loss to the Fund. 81. There may be a case of that kind here since, precisely because the necessary checks were not made, the Commission was unable to establish to what extent the applicant's conduct has occasioned loss to the EAGGF. Hypothetically, it may only be speculated 79. In order to answer that question, regard what costs would not have been incurred if must again be had to the Court's case-law on the applicant had carried out the proper proof of loss and the burden of proof in the checks. context of the clearance of E A G G F accounts. Thus, the Court has stated that it is for the Member State to show that the conditions for obtaining the financing refused by the Com- mission are fulfilled, where the Commission refuses to charge certain expenditure to the E A G G F on the ground that such expenditure was incurred as a result of breaches of Com- 82. Conversely, in a case in which the Com- munity rules attributable to that Member mission called in question the correctness of State. 41 figures notified by a Member State, the Court held: 'The Commission is required not to demonstrate exhaustively that there are irregu- larities in the data submitted by the Member States but to adduce evidence of serious and reasonable doubt on its part regarding the 80. In that connection, a further question is figures submitted by the national authorities. as to the requirements 'which the Commis- The reason for this mitigation of the burden sion's submission with regard to the occa- of proof on the Commission is that... it is the sioning of financial loss must satisfy. Under State which is best placed to collect and verify the Court's case-law, in cases where it cannot

85. It is therefore for the applicant — as is apparent from the judgment cited in para- graph 30 — to show that the conduct alleged 83. That case is not directly comparable with against it did not lead to an increase in expen- the present case since the Commission is not diture in the context of the EAGGF. The alleging that the figures communicated to it applicant submits that tendering procedures by the applicant are incorrect. It is rather the in Ireland did not lead to more meat being case that the figures could have been different bought in at higher prices. The allegation in if the applicant had carried out adequate that regard in the 1991 Summary Report was checks. But, also in that connection, the Com- finally withdrawn. From that it may be mission did not merely submit that the inferred that the Irish at any rate did not ben- EAGGF suffered no loss. Rather it showed efit from the practice of multiple tenders. that the applicant had infringed Community law and the manner in which it had done so. It explained, furthermore, how that may have favoured speculative bids by tenderers. It explained, finally, that that may have led to an erroneous appraisal of the market and thus to excessive buying-in of beef, in some cases, at increased prices. Thus, in any event, it adduced 86. The Commission, on the other hand, fur- credible evidence that it was possible for loss ther claims that it cannot be ruled out that as to have been incurred by the EAGGF. a result of the acceptance of multiple tenders and the resulting speculation more beef was bought in at higher prices.

only in Ireland not have given rise to exces- was a practice in Ireland of multiple tenders, sive buying-in of beef. that is to say tenders made by undertakings belonging, for example, to the same group of companies. The Commission further points out that the applicant stated in a letter that, also in relation to intervention sales, it was not uncommon for large contracts to be 88. Ireland also claims that speculation by divided amongst subsidiary companies to means of inflated tenders in order to reduce diminish the risk of security loss. In a further the risk of forfeiture of security payments is letter the applicant stated that the practice of only of limited interest to Ireland. Thus, in using subsidiary companies as a means of many cases in Ireland the safety net proce- minimising the risk of security loss was widely dure was applied. 44 Under that procedure all known at the time. Such a business policy bids were accepted which was why there was had to be considered both a legitimate and no need to submit speculative tenders. None prudent practice. However, in the Commis- the less, even during that procedure the mul- sion's view, that practice led to an increase in tiple tenders criticised by the Commission the financial risks to the Fund. That view of continued to be made. It may be inferred from the matter must be upheld. that fact that the purpose of multiple tenders was not to diminish the effect of the security deposit.

89. The Commission contends, however, that 91. Since the Commission has thus at least almost one-half of the beef was bought in not adduced credible evidence that the applicant's under the safety net procedure but under the conduct may have occasioned loss to the normal procedure in the context of which EAGGF, it is for the applicant to show that inflated tenders may be advantageous. Thus, this was not the case. also in Ireland the practice of multiple ten- ders may have had negative consequences. As the Commission submits, this is all the more so since expenditure during the relevant period was unusually high.

93. Likewise in connection with the obser- vance of formalities, the Court has held: 'In view of the essential nature of the formalities which were not complied with and of the fact 96. As the Commission rightly argues, the that it was not possible to check that the practice of so-called multiple tenders enables time-limit within which the products were to the tenderer to speculate with several tenders be exported was observed, and in view, there- whereby, in the event of an unsuccessful fore, of the possibility of losses, or even fraud, speculation, the loss is reduced because the to the detriment of the Community budget, security is smaller for the smaller quantity. the amount disallowed by the Commission, which was limited to 2 % of the expenditure involved, cannot be regarded as excessive and disproportionate'. 46 Thus, even the mere like- lihood of losses may be used as a criterion for the purposes of the assessment. Such likeli- hood subsists in the present case in light of the abovementioned factors and the absence of checks. 97. O n the other hand, the practice of so-called multiple tenders need not neces- sarily lead to a reduction in cases in which the security is forfeited.

94. The sole matter to be determined is there- fore whether the applicant can successfully plead that no loss was incurred by the EAGGF.

98. It does not follow absolutely from the fact that security payments were forfeited only in a few cases that more beef than neces- 95. The applicant submits that during the rel- sary was not sold into intervention. Those evant period security payments were retained tenderers who had submitted an excessive bid only in a few cases. Only small amounts of and speculated on a higher reduction co-efficient are also able to avoid losing the security payment by purchasing the missing 45 — Judgment in Case 327/85 Netherlands v Commission [1988] quantity on the free market. This is of course ECR 1065, paragraph 25. not in keeping with the intervention scheme 46 — Judgment in Case C-49/94 Ireland v Commission [1995] ECR I-2683, paragraph 22. but is apparently practised. Thus, under Article

102. In that connection it should be said that 99. Moreover, the applicant gives examples the applicant is incorrectly assuming that no where alleged multiple tenders were of no connection with a loss can be established. As advantage to tenderers. If in cases which demonstrated above, 47 a loss to the E A G G F according to the Commission are open to cannot be precluded. Moreover, it is sufficient challenge multiple tenderers had submitted to refer to the Court's case-law. 48 only one overall tender, smaller amounts in respect of security payments would have been forfeited; in some cases the security payment would not have been forfeited at all. The applicant is assuming in that connection that tenders were submitted in respect of different quantities of beef which, if appropriate, could be added to an overall quantity. In the Com- 103. The applicant finally claims an infringe- mission's example, however, tenders were ment of the principle of the protection of made in respect of the same quantity of meat. legitimate expectations. In its view, the Com- mission must have been aware of the practice under tendering procedures in Ireland. It must also have been aware that there are 29 approved slaughterhouses in Ireland, a listof which was forwarded to the Commission. Moreover, it 100. Thus, it is clear that the applicant has was clear from the list of unnamed tenders been unable to refute the Commission's argu- forwarded to the Commission that far more ment concerning financial loss incurred by than 29 tenders had been submitted. The the EAGGF. Commission must also have been aware of the fact that certain slaughterhouses belonged to the same group of companies. If, however, the Commission was aware of the practice, it was under an obligation to inform the Member Possibility of a flat-rate calculation of the State that in its opinion that practice was not financial loss consistent with Community law. If it did not do so it cannot subsequently be heard to say that it is disallowing the relevant expenditure.

105. Accordingly, the objections made against the Commission decision cannot avail the 104. The Commission counters those argu- applicant. The reduction proposed by the ments by pointing out that under the ten- Commission is thus well founded and also dering procedure it receives only an anony- entirely proportionate. mous list which does not show who submitted the tenders. For that reason it could not have been aware of the practice of multiple ten- ders. Furthermore, it should be pointed out that it is not only slaughterhouses which are Costs entitled to submit tenders for purposes of intervention. As the Commission has sub- mitted, there is in fact no restriction as to the characteristics of the tenderer. For that reason the number of authorised slaughterhouses in 106. Under Article 69(2) of the Rules of Pro- Ireland can be of no relevance to the ques- cedure of the Court the unsuccessful party is tion whether under a tendering procedure to be ordered to pay the costs if they have multiple tenders were submitted or not. It been asked for in the successful party's plead- cannot therefore be assumed that the Com- ings.

D — Conclusion

107. I therefore p r o p o s e t h a t the C o u r t s h o u l d :

(1) dismiss t h e action;

(2) o r d e r Ireland t o p a y t h e costs.

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