C-377/99

2. The financing of the common agricul- tural policy is governed by Council Regu- 3 — Council Regulation (EEC) No 729/70 of 21 April 1970 on the financing of the common agricultural policy (OJ, English Special Edition 1970(I), p. 218). 4 —Council Regulation (EEC) No 1765/92 of 30 June 1992 establishing a support system for producers of certain arable 1 — Original language: German. crops (OJ 1992 L 181, p. 12). 2 — Commission Decision 1999/596/EC of 28 July 1999 amend- 5 — Council Regulation (EEC) No 2078/92 of 30 June 1992 on ing Decision 1999/187/EC of 3 February 1999 on the agricultural production methods compatible with the clearance of the accounts presented by the Member States in requirements of the protection of the environment and the respect of the expenditure for 1995 of the Guarantee Section maintenance of the countryside (OJ 1992 L 215, p. 85) and of the European Agricultural Guidance and Guarantee Fund Council Regulation (EEC) No 2080/92 of 30 June 1992 (EAGGF) (notified under document number C(1999) 2476 instituting a Community aid scheme for forestry measures in final) (OJ 1999 L 226, p. 26). agriculture (OJ 1992 L 215, p. 96).

I - 7424

GERMANY v COMMISSION

EAGGF are actually carried out and are out administrative checks on aid appli- executed correctly, to prevent and deal cations and, according to Article 8(2), with irregularities and to recover sums lost administrative checks are to be supple- as a result of irregularities or negligence. mented by on-the-spot checks covering a sample of agricultural holdings. For all these checks, Member States are to draw up a sampling plan.

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OPINION OF MRS STIX-HACKL — CASE C-377/99

Should on-the-spot checks reveal signifi- — other factors to be defined by the cant irregularities in a region or part of a Member State. region, the competent authority shall make additional checks during the current year in that area and shall increase the percentage of applications to be checked in the follow- ing year.

(5) On-the-spot checks shall be unan- nounced and cover all the agricultural parcels... covered by one or more appli- (4) Applications subjected to on-the-spot cations....' checking shall be selected by the com- petent authority on the basis of a risk analysis and an element of representa- tiveness of the aid applications sub- mitted. The risk analysis shall take account of:

9. Should a Member State decide to use remote sensing on all or part of the sample referred to in Article 6(3), then, according — the amount of aid involved, to Article 7(1) of the regulation, inter alia, it must check on the spot all applications for which photo interpretation does not verify the accuracy of the declaration to the satisfaction of the competent authority.

— the number of parcels and the area... for which aid is requested,

12. In preparation for the clearance of the accounts for 1995, between 23 and 27 Oc- tober 1995 the Commission carried out an inspection in Mecklenburg-Vorpommern in accordance with Regulations Nos 1765/92, 2078/92 and 2080/92. 16. Following further exchanges, both oral and written, between the German auth- orities and the Commission, by letter of 12 June 1998 the latter formally notified the German authorities of the conclusions of the inspection in Mecklenburg-Vorpom- mern, in accordance with Decision 94/442/EC. In that letter, the Commission 13. The Commission forwarded its com- stated that in view of the explanations ments to the German authorities in a letter provided by the German authorities it had dated 13 February 1996. In that letter it decided not to impose the intended 5% noted, in particular, that with respect to the financial correction and now considered a arable crop regulations deficiencies in correction of 2% appropriate. checking and administration had been found. More especially, it referred to deficiencies in on-the-spot checking.

17. The Commission based its reassessment of the risk of losses to Community funds on 14. The Commission's comments on the several considerations, including the fol- findings of its inspection subsequently lowing: 'According to the Federal Ministry formed the subject of a sustained cor- of Agriculture's letter of 3 September 1997,

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OPINION OF MRS STIX-HACKL — CASE C-377/99

19. In August 1998, the Commission's services in Mecklenburg-Vorpommern car- ried out a further inspection visit (here- inafter 'the second inspection visit').

21. In its final report of 30 December 1998, based on testimony given by the 20. In its letter to the German authorities Commission and the German authorities at of 24 November 1998, a copy of which hearings held on 4 November 1998 and was sent to the conciliation body, the 3 December 1998, respectively, as well as Commission described, in particular, the on several written submissions by both results of the second inspection visit as parties, the conciliation body took note of follows: the misgivings expressed by the Commis- sion in the letter of 24 November 1998 and the German authorities' reply. The con- ciliation body referred to the weaknesses of the control system but also to the efforts made by the Land of Mecklenburg-Vor- 'May I also draw your attention to the pommern; as this was a new Land its following point, which could be important efforts deserved special recognition. It then

I - 7428

GERMANY v COMMISSION

came to the conclusion that, in any event, conciliation body in its final report. In there were good grounds for not applying particular, 15% of blocks were in multiple the flat-rate correction of 5% originally use and the parcels located in those blocks envisaged by the Commission. accounted for 29% of all agricultural parcels. Almost all the registered parcels consisted of a combination of registered plots and more than half the registered parcels were divided between two or more blocks, which often belonged to the same producer.

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OPINION OF MRS STIX-HACKL — CASE C-377/99

Federal Republic of Germany asks that the 31. The agricultural parcel is the unit of disputed decision be annulled in so far as it area to which INADCOS is linked under charges to the Federal Republic the sum of Regulation No 3508/92. According to DEM 18 236 469.20 corresponding to the Article 1(4) of that regulation, 'agricultural difference between a 5% and a 2% correc- parcel shall mean a continuous area of land tion. on which a single crop is raised by a single farmer'. Thus, an agricultural parcel is always sown with only one type of crop or set aside ('use-related' unit of area) and, according to the Commission, represents for its purposes the relevant standard of 28. The Commission requests that the reference and calculation factor. action be dismissed and the applicant ordered to pay the costs.

32. On the other hand, in addition to the agricultural parcel, the German Regulation IV — Preliminary observations concerning on compensatory payments for arable the dispute crops 8(hereinafter 'KAV') also recognises 'blocks' and 'registered parcels'. The Ger- man system for identifying agricultural areas is primarily based on blocks. Accord- 29. Before the heads of complaint can be ing to Paragraph 3(4a) of the KAV, a block examined in detail, some preliminary is 'a continuous area of agricultural land, explanation is required. belonging to a producer, sown with one or more crops or set aside, and surrounded by natural boundaries or by land not farmed by that producer'. A block may consist of one or more registered parcels or parts of registered parcels. Thus, blocks are 'pos- ition-related' units of area. 1. Background to the dispute: risk assess- ment criteria

36. It should also be noted that only in the case of the registered parcel can the actual area be determined directly from the land register. 1. the risk assessment applied not to 10% or to 15% of the blocks but to 29% of the total number of agricultural par- cels;

37. These two points are relevant to the problem of which checks should have been carried out in Mecklenburg-Vorpommern to ensure that aid was properly allocated and therefore ultimately concern the ques- 2. almost all the blocks were made up of tion of the extent of the area at risk. Thus, more than one registered parcel;

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OPINION OF MRS STIX-HACKL — CASE C-377/99

39. The German Government based its case on four heads of complaint: firstly, the 40. It is necessary to bear in mind the Commission's reservation concerning the relationship between the three area defini- use of a correction rate of 2% instead of the tions employed, in order to be able to

I - 7432

GERMANY v COMMISSION

determine the significance of findings Nos own purposes a risk-parcel ratio of 18%, 1 to 4 in the supplement to the Summary corresponding to the 10% of multi-crop Report, especially with respect to their blocks mentioned by the applicant. If, on 'value added' as compared with the basic the basis of the second inspection visit, assumptions which, before the supplement 15% of multi-crop blocks was now to be was issued, had already been the subject of assumed, the ratio of risk-prone parcels (in conciliation proceedings, and with respect multi-crop blocks) would amount to 29%. to their relationship with the results of the On the basis of the same overdeclaration second inspection visit. risk, that is, 17.3%, for 18% of risk parcels the risk of loss would be 3 % , and for 29% of risk parcels more than 5%.

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OPINION OF MRS STIX-HACKL — CASE C-377/99

should also be considered to be risk-prone to the 29%. This gives a total of about (hereinafter 'the field/registered parcel 43% risk parcels. problem'). In this connection, the Commis- sion asserts that almost all blocks consist of several registered parcels. The applicant observes that this correctly describes the situation resulting from the conditions on the spot, which were already known to the 47. In short, findings Nos 1 to 4 are Commission. The finding that more than therefore the numerical expression of the half the registered parcels lie in two or results of the Commission's investigation, more blocks, which often belong to one according to which the risk of loss was and the same farmer, is based on an higher than originally assumed, firstly, extrapolation from the aid applications because 15% rather than 10% of blocks examined by the Commission. were sown with multiple crops and, sec- ondly, because on account of the block/ registered parcel problem single-crop blocks should also have been included among the risk areas.

(b) Analysis of the applicant's complaints

natively that it would be an abuse of between the Summary Report — in par- discretion to take them into account again ticular the so-called 'reservation' in the in connection with such increase. More- statement of facts — and the supple- over, the substance of these findings did not ment — the finding according to which justify a correction of more than 2%. Thus, the second inspection visit showed that in in the third claim it is argued that, on the actual fact 15% of blocks were sown with one hand, from the procedural standpoint, more than one crop. In this connection, the the Commission abused its discretion by applicant argues that the reservation had 'recycling' findings and, on the other, that been discharged and therefore the Com- in substance the 5% correction was incor- mission — on the basis of the principle rect. that the administrative authorities are bound by a reservation they themselves formulate — had not been justified in deviating from the 2% correction proposed in the Summary Report. Legally, therefore, this is not a question of the 'discharge of the reservation' but of a complaint of violation of a principle, namely that of administrative self-engagement. 50. In the applicant's view, findings Nos 1 to 4 stem from the second inspection visit and first appeared in the supplement as justification for increasing the correction to 5%. From this the applicant derives, in its second claim, the procedural complaint of 52. In its fourth claim, the applicant essen- infringement of essential procedural tially contests the Commission's compre- requirements. Specifically, it alleges that hensive finding that the entire on-the-spot the Commission improperly widened the checking system in Mecklenburg-Vorpom- scope of the proceedings through the mern was defective and was leading to a belated introduction of an increased cor- substantial risk of loss for the EAGGF. It rection rate and findings Nos 1 to 4, on suggests that, at most, the deficiencies which that increase was based. More par- established permit the conclusion that there ticularly, in so doing the Commission also was a minor risk of adverse consequences violated the principles of the conciliation for the EAGGF. procedure and due process. Moreover, in substance these findings were not capable of justifying the higher charge.

tion or the Commission's assumptions and expenditure financed by the EAGGF, Guar- calculations on which it was based. antee Section. According to Article 5(2)(c), the Commission decides what expenditure is to be excluded from Community financ- ing where it finds that expenditure has not been effected in compliance with Commu- nity rules. Moreover, the first subpara- 54. I shall now proceed with a detailed graph of Article 8(2) of Regulation consideration of the procedural complaints, No 729/70 makes it clear that the financial namely, infringement of the principle that consequences of irregularities or negligence the administrative authorities are bound by attributable to administrative authorities or a reservation they themselves formulate, other bodies of the Member States shall not disregard for the principles of the concili- be borne by the Community. ation procedure and the procedure for clearance of accounts, and abuse of dis- cretion on the part of the Commission. After that, I shall consider whether the correction at issue was defective in respect 56. In this respect, the procedure for clear- of the underlying findings and the risk ance of accounts differs fundamentally not assessment based thereon. only from the procedure for the imposition of a penalty in the event of the unlawful granting of a financial benefit but also from the procedure applicable where a State has failed to fulfil its obligations under the Treaty.

V — Analysis

57. Thus, the procedure for clearance of accounts is not a procedure for the imposi- tion of a penalty inasmuch as the accept- A — Procedural aspects ance or non-acceptance of specified expen- diture is based on an objective consider- ation of whether the prior conditions on which the aid in question was granted were observed. 1. General observations on the procedure for clearance of accounts

59. In keeping with those objectives, the procedural guarantees provided for under the procedure for clearance of accounts differ from those available under the other procedures referred to. 61. In this connection, it is worth recalling the rule on the apportionment of the burden of proof, according to which 'al- though it is... for the Commission to prove an infringement of the Community rules, the Member State concerned must demon- strate that the Commission committed an error as to the financial consequences to be 60. It should first be observed that the attributed to it'. 16 Thus, new findings framework of a procedure for clearance of concerning the risks for the Community accounts is not defined by the Community budget made during the procedure for rules infringed. The main consideration is clearance of accounts do not, in principle, not so much the question of the infringe- constitute an extension of the subject- ment of those rules as the resulting risks for matter of the procedure. the Community budget. As distinct from the case of a State failing to fulfil its obligations under the Treaty in which, according to settled case-law, '... a letter giving formal notice is intended to delimit the subject-matter of the dispute...' 14 and 62. However, the introduction of such new '... the subject-matter of an application findings is subject to the guarantees arising brought under Article 169 is determined by 15 — Idem, paragraph 14. 16 — Case C-209/96 United Kingdom v Commission [1998] 13—Joined Cases 15/76 and 16/76 France v Commission ECR I-5655, paragraph 52, Case C-232/96 France v [1979] ECR 321, paragraph 28. Commission [19981 ECR i-5699, paragraph 54, and Case 14 — See the early judgment in Case 211/81 Commission v C-233/96 Denmark v Commission [1998] ECR I-5759, paragraph 53. Denmark [1982] ECR 4547, paragraph 8.

66. First of all, it should be made clear that 64. As is well known, the conciliation the question of the discharge of a reserva- procedure in the context of the clearance tion is in principle of no significance in of the accounts of the EAGGF, Guarantee 19 — Commission Decision 94/442/EC of 1 July 1994 (OJ 1994 L 182, p. 45). 17 — Case C-61/95 Greece v Commission [1998] ECR I-207, 20 — Article 1(1)(b) of Decision 94/442. paragraph 39, where numerous other references are given. 21 — Article 1(1)(c) in conjunction with Article 1(2) of Decision 18 — Commission Regulation (EC) No 1663/95 of 7 July 1995 94/442. See also Case C-44/97 Germany v Commission laying down detailed rules for the application of Council [1999] ECR I-7177, paragraph 18. On the importance of Regulation (EEC) No 729/70 regarding the procedure for the conciliation procedure, see also the Opinion of the clearance of the accounts of the EAGGF, Guarantee Advocate-General Geelhoed in Case C-374/99 Spain v Section (OJ 1995 L 158, p. 6). Commission [2001] ECR I-5943, point 41.

I - 7438

GERMANY v COMMISSION

67. However, this does not mean that Commission reservations can escape judi- cial scrutiny. In this connection, reference may be made to the judgment of the Court 69. At first glance, there seems to be in Case 129/84, according to which before nothing wrong with the Commission's the Commission may be allowed to rely on interpretation of its own reservation, so its own interpretation of a reservation it that at least, in accordance with the above- has inserted, 'it should have been possible mentioned case-law, it may be assumed [for the Member State concerned] to inter- that it should have been possible for the pret it in the same way'. 23 Federal Republic of Germany to interpret it in the same way. It should be borne in mind that the expenditure in question concerned area-related aids. In the context of the Commission's risk assessment, it therefore 68. In the view of the Federal Republic of seems obvious that the reservation — Germany, it follows from the linking, in the although expressed in use-related terms — was in reality, on the undisputed assump- tion that prima facie blocks do not con- 22 — Concerning the fundamental admissibility of a reservation, stitute risk areas if they are sown with a see Case 129/84 Italy v Commission [1986] ECR 309, paragraph 41. single crop and consist of whole registered 23 — Idem, paragraph 41. parcels, area-related.

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OPINION OF MRS STIX-HACKL — CASE C-377/99

74. The Federal Republic of Germany deduces the illegality of the decision in dispute from the time at which the results 72. In the present case, in the last analysis, of the second inspection visit came into the the Commission's reservation concerns the procedure. On the basis of the somewhat degree of risk for the Community budget. dubious premiss 26 that the increase in the However, it should be borne in mind that a financial correction from 2% to 5% is refusal to allow certain expenditure to be based only on findings Nos 1 to 4, the taken over by the EAGGF, Guarantee Federal Government considers the decision Section, does not constitute a discretionary in question to be unlawful because, in its decision on the part of the Commission if the expenditure has not been effected in 25 — See paragraph 58 above. 26 — See paragraphs 48 et seq. above and my observations in the 24 — See paragraph 61 above. substantive part of my Opinion, in paragraph 99.

I - 7440

GERMANY v COMMISSION

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OPINION OF MRS STIX-HACKL — CASE C-377/99

in its letter of 24 November 1998. This is cation of a higher correction rate of 5%. reflected in the conciliation body's final With regard to the significance of this report of 30 December 1998 where, inter procedural guarantee, reference should be alia, it is stated that: 'The conciliation body made to my earlier observations. 29 therefore takes the view that in any event there was justification for not applying the flat-rate correction of 5%, as initially envisaged by the Commission' (emphasis added). Against this background, the only possible question is whether the Commis- sion is bound by this opinion of the 81. From the description of the substantive conciliation body, a question to which I grounds for the Commission decision and have already given a negative reply. 28 their analysis in the light of the background to the case 30 it follows that the disputed decision is essentially based on the increased risk due, on the one hand, to the proportion of blocks sown with multiple crops and, on the other, to the taking into account of the block/registered 79. There is therefore no need to go more parcel problem in connection with single- deeply into the fundamental issue of crop blocks. whether the procedure for clearance of accounts should be regarded as being in breach of procedural requirements simply because the Commission's final decision was based on elements that were not part of the subject-matter of the conciliation procedure. 82. Initially, the proportion of blocks sown with multiple crops was — as the subject of the Commission's reservation — the focus of attention. Accordingly, the Ger- man Federal Government had the oppor- tunity to express its views on the relevance of this aspect to the risk assessment both 4. Infringement of the right to a fair before and during the conciliation pro- hearing cedure.

86. The supplement of 27 May 1999 to the Summary Report confirmed and expanded upon this suggestion. There is, however, no doubt that even during the conciliation proceedings the German Government could have taken a position on the Commission's 84. I do not share the Commission's view letter of 24 November 1998 — and hence that the supplement of 27 May 1999 gave on the abovementioned misgivings. no grounds for consulting the German authorities because it did not contain any new arguments. As far as the obligation to grant a fair hearing is concerned, the only consideration should be whether the Com- mission based its eventual final decision on new findings. 31 It is, however, indisputable that in that decision it based itself largely 87. Thus, the question of the right to a fair on the findings from the second inspection hearing comes down to whether the Ger- visit. man authorities had sufficient opportunity to express their views on the further arguments in the supplement of 27 May 1999 to the Summary Report and the Commission's substantially similar final conclusions of 18 June 1999 before the final decision was issued on 28 June 1999.

85. With regard to the risk posed by blocks sown with a single crop, the situation is rather different. Thus, the first evidence of the risk posed by blocks of this kind was provided during the conciliation procedure itself in the Commission's letter of 24 No- 88. In the present case, the period of about vember 1998. Regardless of the proportion five weeks between receipt of the supple- of blocks sown with multiple crops, the ment and the issuing of the final decision Commission pointed out that on the basis appears to have been very tight, especially if the need for the Federal and State authorities to consult is taken into account. 31 — In this connection, sec also Case C-61/95 (cited in At the same time, during the proceedings footnote 17), paragraph 40. the German authorities regularly responded

92. This argument is based on a misunder- standing of the nature of the procedure for 89. Thus, all in all, it cannot be assumed clearance of accounts. that the German authorities had no oppor- tunity to express their views on the findings of the second inspection visit, especially as it was clear from the earlier proceedings that these findings would play a decisive 93. Corrections are the legal consequence part in the final decision to be taken by the of the failure by a Member State to ensure Commission, which is now in dispute. the effective and orderly implementation of measures financed by the EAGGF by means of the controls described. In this connec- tion, the Commission applies flat-rate cor- rections in accordance with internal guide- lines (hereinafter 'the Belle Report'), 33 which are supposed to reflect the risk of 90. The corresponding complaint of the losses to Community funds as a result of Federal Republic of Germany should there- deficiencies in the control system. fore be dismissed as unfounded.

94. According to the Belle Report, the following, in particular, should be taken 5. On the alleged abuse of discretion due to into account: reuse of the findings used to justify a lower correction rate

' 1 . Does the deficiency relate to the effec- tiveness of the control system gen-

91. The Federal Republic of Germany also 32 — In paragraph 38. complains that the disputed decision, which 33 — Document No VI/216/93 of 3 June 1993 on calculation of is ultimately concerned with raising the financial consequences when preparing the decision regarding the clearance of the accounts of the EAGGF, correction rate from 2% to 5%, is based on Guarantee Section.

98. The corresponding complaint of the Federal Republic of Germany should there- fore also be dismissed as unfounded. 95. The Belle Report provides for flat rates of 2% and 5%. The 2% rate is used if the deficiency is limited to parts of the control system of lesser importance or to the operation of controls that are not essential to ensure the regularity of the expenditure, so that it can reasonably be concluded that the risk of loss to the EAGGF was minor. B — Aspects relating to substantive law The 5% rate is used if the deficiency relates to an important element of the control system or to the operation of controls that play an important part in ensuring the regularity of the expenditure, so that it can 99. From these considerations it follows reasonably be concluded that the risk of that, where the verification of the substance loss to the EAGGF was significant. of the correction is concerned, it is not a question of whether there were additional control deficiencies or risks that could have justified the switch to a higher correction rate. The corresponding arguments of the applicant, which it also expounded at 96. It is clear from the Belle Report guide- length during the hearing, are therefore to lines that in choosing the correction rate to that extent irrelevant in the present case. be applied the Commission's main con- What is more important is whether from an

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OPINION OF MRS STIX-HACKL — CASE C-377/99

overall point of view the Commission was 103. First of all, the Commission must give able to establish, in accordance with the reasons for its decision finding an absence applicable rules concerning the burden of of, or defects in, inspection procedures proof, 34 the existence of control defi- operated by the Member State in ques- ciencies or a corresponding risk in relation tion. 36 The Commission will have dis- to Mecklenburg-Vorpommern and whether charged this obligation to justify its on this general basis a correction rate of decision if it can adduce evidence of serious 5% should have been applied. and reasonable doubt regarding the checks carried out or the figures submitted by the Member State concerned. 37

I - 7446

GERMANY v COMMISSION

State is not able to show that the Commis- all criticism based on the level of the sion's findings are inaccurate, those find- correction. 42 ings may give rise to serious doubts as to the existence of an adequate and effective system of supervisory measures and inspec- tion procedures. 39

108. However, the Court has held that if, rather than refuse the entire expenditure, the Commission endeavours to draw up rules to differentiate according to the degree of risk posed to the EAGGF by different levels of defective supervision, the Member State may argue that these criteria 106. Read in conjunction and consistently, are arbitrary and unfair. 43 these rules on the burden of proof create a — rebuttable — presumption in favour of the Commission. The Member State must adduce evidence of the existence of a reliable and functioning control system while the Court must consider, within the context of the action for annulment, whether that evidence is well founded. 40 109. As already explained, 44 according to the Belle Report, the most important cri- terion for deciding the rate at which a financial correction should be imposed is the degree of risk of losses to Community funds. Whether the risk is minor, signifi- cant or high depends, in turn, on what parts of the control system are found to be deficient.

107. As for the amount of the financial correction, it is clear from the Court's case-law that if the Commission finds that there is no adequate system of controls, it may even disallow the entire expenditure incurred. 41 Accordingly, the Commission must in principle be considered immune to 110. In the mean time, the Court has endorsed the use of flat-rate financial cor-

111. Consequently, a Member State can prove that, in relation to the financial consequences attributable to an infringe- ment of Community rules, the Commission has made an error in respect of the level of correction only if it can show that the correction criteria of the Belle Report, 114. In particular, the applicant at least which in themselves have been approved, acknowledged that 10% of blocks were have been applied arbitrarily or unfairly. sown with multiple crops and that for these blocks there was a risk of overdeclaration. However, it also accepted the Commis- sion's figure of about 15% of blocks as the (multi-crop) risk area, attributing the dif- ference to the fact that, as distinct from the 2. Application to the specific case Commission, it had not taken subsidy-neu- tral deviations into account in its data. The applicant disputed only the level of the Commission's estimate of 17.3% for the percentage of overdeclared areas in the risk area and itself proposed a risk factor of 112. It will now be necessary to examine, 2.4%. in the light of the procedure for the apportionment of the burden of proof described above, whether the applicant has in fact demonstrated that the 5% correction in question was wrong.

113. First of all, although in its reply the 115. Secondly, the applicant did not deny applicant denied that there were significant that in the Schwerin office no comprehen- deficiencies in its system of controls, it did sive risk analyses that would have satisfied not entirely deny their existence. Thus, not the requirements of Community law were least during the oral procedure, it clearly carried out for at least six on-the-spot acknowledged that there had been defi- checks. Moreover, its argument that this had already been taken into account by the conciliation body and by the Commission 45 — See, for example, Case C-50/94 Greece v Commission [1996] ECR I-3331, paragraphs 24 to 28, and Case in the results of the Summary Report is C-242/96 (cited in footnote 41), paragraphs 65 and 66. irrelevant as far as the question of proof of I - 7448

117. Thus, the applicant expressly denied the need to carry out measurements in the context of on-the-spot checks if blocks 120. However, the Commission main- were sown with only one type of crop and tained, with reference to the second inspec- assumes that only blocks sown with tion visit, that, generally speaking, this had multiple crops are to be counted as risk not been the case. True, the applicant did areas and measured. The Commission, on insist, without giving any further details, the other hand, justified the need for that blocks sown with single crops had also measurements on the grounds that single- been measured but, on the other hand, crop blocks could be checked by visual made clear that it only regarded blocks inspection only if their boundaries sown with multiple crops as risk areas and coincided with those of registered parcels. that these had been measured 'on a priority basis'. However, the applicant did not state that, as a rule, it had also measured blocks sown with a single crop in so far as they did not coincide with registered parcels and indeed denied that, in principle, there was any need for such measurements.

118. This assumption seems to be objec- tively correct since if a block extends beyond a registered parcel or forms only a part of such a plot, and only the boundaries of the registered parcel are recorded in the 121. In the application the applicant also 46 — See paragraphs 91 et seq. above. acknowledged that the Commission's find-

I - 7449

OPINION OF MRS STIX-HACKL — CASE C-377/99

ing in the supplement that in Mecklenburg- that the Commission was able to make a Vorpommern almost all blocks consisted of prima facie case for the defectiveness of the several registered parcels was correct. It is on-the-spot checks that had to be carried also accepted that about 90% of all blocks out in accordance with INADCOS. are sown with a single crop.

GERMANY v COMMISSION

V I I— Conclusion

129. In the light of these considerations, it is proposed that the Court rule as follows:

(1) The action is dismissed.

(2) The Federal Republic of Germany is ordered to pay the costs.

I - 7451