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2. The Italian Republic has now brought an B — Facts action for the annulment in part of Commis- sion Decision 96/701/EC of 20 November 1996 (hereinafter 'the Decision') amending Decision 96/311/EC ' on the clearance of the accounts presented by the member States in respect of the expenditure for 1992 of the Guarantee Section of the E A G G F and in respect of certain expenditure for 1993. 2 The Italian Republic challenges that decision in so 4. Following an exchange of highly detailed correspondence between the EAGGF and the Italian authorities concerning the documenta- tion and evidence relating to the legality of * Original language: German. the aid advanced for the consumption of olive 1 — Commission Decision of 10 April 1996 on the clearance of oil for the financial year 1992, the Commis- the accounts presented by the Member States in respect of the expenditure for 1992 of the Guarantee Section of the Euro- sion at first envisaged applying an adjustment pean Agricultural Guidance and Guarantee Fund (EAGGF) and in respect of certain expenditure for 1993 (OJ 1996 of ITL 17 149 929 372. In September 1994, L 117, p. 19). The Italian Republic lias also brought an action the Italian authorities produced additional against the Commission for the annulment in part of that decision. Sec in this respect the Opinion delivered on 24 information. By its decision of 13 January March 1998 by Advocate General Albcr in Case C-242/96 Italy v Commission [1998] ECR 1-5863. 1995, the Commission informed the Member 2 — OJ 1996 L 323, p. 26. States that only such documents as had been

7. After extending the time-limit in this case too, the Commission finally applied a defini- tive adjustment for the 1992 financial year of approximately ITL 743 million, taking into account also four of the cases at issue here. 11. Group A comprises seven undertakings. In their case, according to the Italian Govern- ment, the aid has already been claimed back and recovered. These are the undertakings Valdolio, P. I. O., Certo C , OL. F. Ili de 8. O n 20 November 1996, the Commission Sensi, Perilu, Vizzari and OL. Albenese. adopted the contested decision on the clear- ance of accounts in respect of the 1992, and in part the 1993, financial years on the basis 3 — Summary Report on the findings of the clearance of the of the documents which it had received prior accounts of tne Guarantee Section of the EAGGF in respect of the 1992 and in part the 1993 financial years (Commission to 28 February 1995, confirming thereby the document VI/6355/95 Final of 27 March 1996).

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12. Group B includes the Luccisano under- 16. The Italian Government claims that the taking. In its case the aid to be recovered is Court should: said to have been set off against other claims.

— annul the decision of the Commission of 20 November 1996 N o C(96)3274 final in 13. Group C concerns the Valle Piacentino so far as it refuses to charge to the EAGGF undertaking which, according to the Italian ITL 11934 331913 in the clearance of Government, has meanwhile lodged security, accounts submitted by the Italian Republic in the form of a voluntary mortgage on real in respect of expenditure in the 1992 finan- property owned by it and a bank guarantee, cial year; and to cover the aid paid. At the time when the guarantee was released, there were still no grounds for suspecting any unlawful conduct on the part of that undertaking. — order the defendant to pay the costs.

19. As regards, now, the individual undertak- ings mentioned by the Italian Government, the Commission's submissions are as follows: 23. Finally, as regards the Caruso Rosa under- taking, the guarantees should not have been released and the Italian authorities should instead have demanded that the period of validity of the guarantees be extended. With the exception of the expenditure con- cerning the undertakings P. I. O., Certo C. and Perilli, the expenditure in respect of the Group A undertakings had been taken into account in the context of the clearance of the accounts for the 1995 financial year. The infor- C — The applicable legislation mation provided on those three undertakings was, however, contradictory and did not jus- tify the conclusion that the aid advanced had indeed been recovered.

24. The basic rules governing the olive oil sector are set out in Regulation N o 136/66/EEC. 4 Article 11(1), inserted by Reg- 20. Similarly, the documents concerning the ulation (EEC) N o 2210/88, 5 provides the Luccisano undertaking do not justify the con- following in respect of aid for the consump- clusion that the amount declared had actually tion of olive oil: been paid back to the EAGGF.

21. With regard to the Valle Picentino under- taking, the security initially lodged was not 'Where the production target price minus the forfeited and the amount declared was neither production aid is higher than the representa- claimed back nor credited to the account of tive market price for olive oil, consumption the EAGGF.

4 — Council Regulation of 22 September 1966 on the establish- ment of a common organisation of the market in oils and fats (OJ, English Special Edition, 1965-66, p. 221). 22. With regard to the undertakings com- 5 — Council Regulation of 19 July 1988 amending Regulation No 136/66/EEC on the establishment of a common organisation prising Group D , the Italian Government of the market in oils and fats (OJ 1988 L 197, p. 1).

27. The implementing provisions in respect 2. The security shall be lodged by an estab- of the grant of consumption aid for olive oil lishment meeting the criteria laid down by are, in so far as they relate to the 1992 finan- cial year in point here, laid down in Regula- 7 — Commission Regulation of 24 September 1998 laying down implementing rules in respect of the system of consumption aid for olive oil (OJ 1998 L 254, p. 5). 8 — Commission Regulation of 8 March 1991 amending Commis- 6 — Council Regulation of 19 December 1978 laying down gen- sion Regulation (EEC) No 2677/85 of 24 September 1985 eral rules in respect of aid for the consumption of olive oil laying down implementing rules in respect of the system of (OJ 1978 L 369, p. 12). consumption aid for olive oil (OJ 1991 I. 63, p. 19).

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the Member State to which application for 31. Furthermore, Article 12 provides inter aid is made. The security shall be valid for at alia: least six months.

3. The security shall be released as soon as ' 1 . ... the competent authority of the Member State has recognised entitlement to the aid in respect of the quantities shown in the application.

2. If any doubt arises as to the accuracy of the information given in the application for If entitlement to the aid is not recognised in aid, the Member State shall suspend payment respect of all or part of the quantities shown of aid in respect of the quantity of olive oil in the application, the security shall be forfeit which is the subject of the inspection and in proportion to the quantities in respect of take any steps necessary to ensure recovery which the conditions giving entitlement to of aid which may turn out to have been the aid were not complied with. wrongly granted and the payment of any fines.

'Once the competent authority is aware of circumstances giving rise to forfeiture of the security, in whole or in part, it shall without delay demand that the party required to meet 35. Article 1(3) of Regulation (EEC) N o the obligation to pay the sum forfeited, 1723/72, » inserted by Regulation (EEC) N o allowing up to 30 days ... for payment.' 422/86, u provides that the Commission may fix a deadline for Member States to commu- nicate additional information. In the case of failure to submit the information concerned within the period fixed, 'the Commission Where payment has not been made at the end shall take its decision on the basis of those of this period, the guarantor, amongst others, elements of information in its possession at can also be required to pay without delay. the deadline, except in cases where the late submission of information is justified by exceptional circumstances'.

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because those same amounts had been taken on the applicant is, according to settled case- into consideration for the 1995 financial law, particularly onerous. 1 4 year. I 3 Consequently, only the cases of the remaining undertakings cited by the Italian Government need now be considered.

40. Moreover, the Commission is not required to demonstrate exhaustively that the data sub- mitted by the Member States are incorrect 37. The Italian Government's argument, sum- but merely to make out a plausible case that marised, is that the applicable rules were there are justified doubts regarding the fig- observed so far as the documents submitted ures submitted by the national authorities. 15 were concerned and thus the Commission The reason for this rule concerning the burden was required to allow the expenditure. of proof is that ultimately it is the State which is best placed to collect and verify the data required for the clearance of E A G G F accounts. Consequently, it is for the State to prove in full the correctness of its figures and, as the case may be, to demonstrate that the Commission's calculations are incorrect. 16

38. The Commission relies first on the time- limit of 28 February 1995 it had set for sub- mitting the documents and rejects the addi- tional information produced after that deadline as out of time. Moreover, the Commission points to certain unclear and contradictory 41. With regard to the remaining undertak- elements in the information submitted and ings in Group A, namely P. I. O., Certo C. claims, furthermore, that the applicable pro- and Perilli, the Commission claims that the visions concerning the grant of aid were not documents produced justify the inference that complied with. they had in part been transmitted after the deadline which the Commission had fixed at 28 February 1995. Moreover, the documents submitted contain differing figures concerning the sums to be claimed back; those amounts

were claimed back in part but not yet recov- produced, it was unable to show with suffi- ered; furthermore, the same amounts appeared cient certainty that the Commission's deci- under various headings with the result that it sion was erroneous. was not clear to which heading they arc now to be ascribed or even whether they come under several headings and are thus accounted for twice. All things considered, however, it cannot be inferred from the documents what specific sums are concerned and to what extent they were repaid. 44. With regard to the Luccisano undertaking in Group B, it should first be reiterated that the Commission was only required to take into account the documents produced before 28 February 1995. However, it was only with its letter of 18 September 1995 that the com- petent Italian authority informed the Com- 42. It must first be stated that in this case it mission of the fact that, in August 1994, the is common ground that the deadline men- Luccisano undertaking had requested that the tioned in Article 1(3) of Regulation N o aid to be repaid be offset against outstanding 1723/72 was set by the Commission at 28 claims. However, that set-off was effected February 1995. Since the Italian Government only by a decree of 15 December 1995. has not claimed the existence of exceptional circumstances, the additional information pro- duced after that date must be regarded as out of t i m e . , 7 That alone is sufficient ground for dismissing the plea on this point of the con- tested decision. Moreover, the Italian Gov- ernment has not submitted any concrete or 45. On that point the Commission itself states decisive evidence such as to call in question that it had taken into account the documents the accuracy of the Commission's findings or concerning the 1995 financial year that had the inferences it drew from them. A mere been produced before that deadline in so far as they had been submitted before 15 October assertion to the contrary effect cannot, in view 1995 (final date for submitting documents of the abovementioned rules concerning the concerning the 1995 financial year). It follows burden of proof, suffice for that purpose. that the Italian Government did not produce the documents within the period prescribed by the Commission and, furthermore, that it did not plead exceptional circumstances such as would justify the delay which occurred,

48. The implementing provisions adopted by the Community legislature concerning con- sumption aid for olive oil were introduced, as it is stated in the preambles to the regulations in question, also with a view to preventing fraud.

51. In the present case, the supervisory authority issued its investigation report on 26 January 1993 but the new securities men- 49. Article 11(3) of Regulation N o 2667/85 tioned by the Italian Government were only must consequently also be read in this con- lodged in September 1993, that is to say, nine text. That article provides that security is only months later. The effective application of the to be released once the competent authority rules governing aid presupposes, however, of the Member State has recognised the exist- that the sums paid in advance are covered by ence of a right to the aid. However, it follows a security until such time as entitlement to from Article 11 that where there are justified the aid is itself recognised. It is therefore in doubts no such right can be recognised. The breach of the provisions in force that, not- Commission thus rightly points out that in withstanding the existence of serious doubts, view of the serious doubt regarding the regu- the securities were released and were not larity of the conduct of the undertaking con- replaced until nine months later, in the con- cerned, the security originally lodged should text of pending criminal proceedings. Such a not have been released, particularly since procedure is not in keeping with the spirit

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and purpose of the rules for monitoring con- further particulars in this respect, the plea in sumption aid for olive oil — which aim inter law concerning this point must be rejected. alia to forestall any fraud. The Italian Gov- ernment's initial assertion that the conduct of the Valle Piccntino undertaking was unobjec- tionable related to the year 1990 and is there- fore of no relevance for the purposes of this case.

53. The Italian Government's argument con- cerning the undertakings in Group D must likewise be rejected. The Italian Government merely claims that the procedures for recovery of the amounts are not yet completed and that the existence of the securities can be proved. However, no such proof has been adduced. 56. Here again, the conditions for entitlement to the aid were not satisfied in view of the doubts that existed, so that by virtue of the applicable provisions the security should not have been released. In the context of the abovementioned rules concerning the burden of proof it should also be noted here that the Italian Government neither makes any sub- 54. As those securities have therefore not stantiated claim nor proves that the securities been shown to exist, the Italian Government were properly released and that the Commis- is merely making a counter-assertion which is sion's conduct was unlawful. Under the appli- not sufficient to show that the Commission's cable provisions, where a right to the grant of decision is unlawful. In the absence of any aid cannot be recognised, the security

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provided for advance payment of aid cannot Costs be released.

57. To summarise, it may be concluded that the Italian Government has been unable to prove that the calculations of the Commis- 58. Under the first subparagraph of Article sion were incorrect. The action must there- 69(2) of the Rules of Procedure, the unsuc- fore be dismissed. cessful party is to be ordered to pay the costs.

E — Conclusion