C-158/00

LUXEMBOURG v COMMISSION-

OPINION OF ADVOCATE GENERAL TIZZANO delivered on 21 February 2002 1

I — Introduction II — Legal background

A — General provisions concerning the clearance of accounts

2. 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); here- 1. By the action it brought on 27 April inafter 'Regulation No 729/70') states in 2000, the Grand Duchy of Luxembourg, Article 1 (2)(b) that the European Agricul- pursuant to Article 230 EC, seeks the tural Guidance and Guarantee Fund (here- partial annulment of Commission Decision inafter the 'EAGGF'), Guarantee Section, is 2000/216/EC of 1 March 2000, which required to finance in particular interven- excludes from Community financing cer- tion intended to stabilise the agricultural tain expenses incurred by the Member markets. States under the European Agricultural Guidance and Guarantee Fund (EAGGF), Guarantee Section [notified by number C(2000) 488] (OJ 2000 L 67, p. 37, here- inafter 'Decision 2000/216' or the 'con- tested decision'). The applicant Govern- ment seeks in particular the annulment of 3. Article 3(1) of that regulation provides the part of the decision which, with refer- that: ence to the financial years 1996, 1997 and 1998 and in relation to arable crops, provides that the sum of LUF 56 106 800, equal to 5% of the costs sustained by Luxembourg, is not chargeable to the EAGGF. 'Intervention intended to stabilise the agri- cultural markets, undertaken according to Community rules within the framework of 1 — Original language: Italian. the common organisation of agricultural

Before a decision to refuse financing is taken, the results of the Commission's checks and the replies of the Member •—• concerning national aids, or State concerned shall be notified in infringements, for which the pro- writing, after which the two parties cedures referred to in Articles 93 shall endeavour to reach agreement on and 169 of the Treaty have been the action to be taken. initiated'.

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5. Article 8(1) of Regulation No 729/70 cation of Council Regulation (EEC) then provides that: No 729/70 regarding the procedure for the clearance of the accounts of the EAGGF Guarantee Section (OJ 1995 L 158, p. 6; hereinafter 'Regulation No 1663/95'). Those provisions state that: '1. The Member States in accordance with national provisions laid down by law, regulation or administrative action shall take the measures necessary to:

'1. When, as a result of any enquiry, the Commission considers that expenditure was not effected according to Community — satisfy themselves that transactions rules, it shall communicate to the Member financed by the Fund are actually State concerned its findings, the corrective carried out and are executed correctly; measures to be taken to ensure future compliance, and an evaluation of any expenditure which it may propose to exclude pursuant to Article 5(2)(c) of Regulation (EEC) No 729/70. The com- munication shall make reference to this — prevent and deal with irregularities; Regulation. The Member State shall reply within two months, and the Commission may modify its position in consequence. In justified cases the Commission may agree to extend this period for reply. — recover sums lost as a result of irregu- larities or negligence.

7. Article 1(1) of Commission Decision 94/442/EC of 1 July 1994 setting up a conciliation procedure in the context of the (c) at the end of its investigations, to draw clearance of the accounts of the European Agricultural Guidance and Guarantee Fund up a report on the outcome of its (EAGGF) Guarantee Section (OJ 1994 efforts at reconciliation, making any L 182, p. 45, hereinafter 'Decision 94/442') remarks it deems useful should all or provides that: some of the points of dispute remain unresolved.'

8. Pursuant to Article 1(2)(a) of Decision '1. For the purposes of the clearance of 94/442, EAGGF Guarantee Section accounts, a Conciliation Body, hereinafter referred to as the "Body", is hereby set up in the Commission. Its tasks shall be: 'the position of the [Conciliation] Body shall be without prejudice to the Commis- sion's final decision on the clearance of the accounts ...'.

(a) to examine any matter referred to it by a Member State which, following inspections pursuant to Article 9 of 9. Article 2 of Decision 94/442 provides Regulation (EEC) No 729/70 and that: bilateral discussion of the findings of such inspections, receives formal notifi- cation from the competent Commis- sion departments, with reference to this Decision, of the conclusion that certain items of expenditure incurred by that '1. A Member State must refer a matter to Member State are not chargeable to the the Body within 30 working days of its EAGGF Guarantee Section, receipt of notification as referred to in

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Article l(l)(a), by sending a reasoned 4. The Body shall conduct its investigations request for conciliation to the Secretariat as informally and promptly as possible, of the Conciliation Body, the address of basing itself on the evidence in the dossier which will be notified to the Member States and on a fair hearing of the Commission through the EAGGF Committee. staff and national authorities concerned. At the end of its investigations it shall send them the r e p o r t referred to in Article 1(1)(c).

OPINION OF MR TIZZANO — CASE C-158/00

and two categories: key controls and ancillary controls:

— to the Commission when the accounts clearance decision is proposed.' '— key controls are those physical and administrative checks required to verify substantive elements, in particular the existence of the subject of the claim, the quantity, and the qualitative con- ditions including the respect of time limits, harvesting requirements, reten- 10. As regards the financial consequences tion periods, etc. They are performed of investigations revealing deficiencies in on-the-spot, and by cross-checks to the control procedures of a Member State, independent data such as land registers. the Commission prepared a document establishing the guidelines to be followed in cases of this kind (Document VI/216/93 of 3 June 1993), subsequently corrected and replaced by Document No VI/5330/97 of 23 December 1997 (hereinafter 'the guidelines') in which the reform of the — ancillary controls are those adminis- procedure for the clearance of EAGGF trative operations required to correctly accounts, introduced by Regulation process claims, such as verification of No 1287/95, was taken into consideration. the respect of time limits for their According to the approach described submission, identification of duplicate therein, and following from the clearance claims for the same subject, risk analy- of accounts for the 1990 financial year, if it sis, application of sanctions and appro- is not possible to determine the actual priate supervision of the procedures.' amount of irregular payments, and there- fore to calculate the financial loss to the Community, the Commission must apply flat-rate financial adjustments or correction factors of 2, 5 or 10% of the declared expenses, depending on the degree of the risk of loss. 12. On the basis of the guidelines, the Commission is required to apply the vari- ous flat-rate correction factors as follows:

16. As regards aid applications, Article 6( 1) In exceptional cases higher correction fac- to (5) of Commission Regulation (EEC) tors may be decided, up to 100%. No 3887/92 of 23 December 1992 laying

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down detailed rules for applying the inte- bering more than 700 000 per Member grated administration and control system State in the calendar year. for certain Community aid schemes (OJ 1992 L 391, p. 36, hereinafter 'Regu- lation No 3887/92') provides that:

'1. Administrative and on-the-spot checks shall be made in such a way as to ensure effective verification of compliance with the terms under which aids and premiums are granted. 4. Applications subjected to on-the-spot checking shall be selected by the competent authority on the basis of a risk analysis and an element of representativeness of the aid applications submitted. The risk analysis shall take account of: 2. The administrative checks referred to in Article 8(1) of Regulation (EEC) No 3508/92 shall include cross-checks on parcels and animals declared in order to ensure that aid is not granted twice in respect of the same calendar year without justification. — the amount of aid involved,

3. On-the-spot checks shall cover at least a — the number of parcels and the area or significant percentage of applications. The number of animals for which aid is significant percentage shall represent at requested, least:

A — Introduction

18. The applicant Government raises three pleas in law, of which only the second and third concern the entire period of the contested decision (financial years 1996-1998), as we shall see in more detail 17. Pursuant to Article 12 of Regulation later on: No 3887/92:

'Every inspection visit must be the subject — in the applicant's view, the Commis- of a report setting out, in particular, the sion infringed the fifth subparagraph of reasons for the visit, the persons present, Article 5(2)(c) of Regulation the number of parcels visited, those meas- No 729/70, as amended, by refusing ured, the measuring methods used, the to finance the expenses incurred prior number of animals of each species found to 26 May 1996; and, where applicable, their identity numbers, and the reasons for rejection, total or partial, or acceptance of the application. — the Commission made errors of reason- ing and assessment as it did not take into account the information provided by the Luxembourg authorities in order It will be open to the farmer or his to assess correctly the financial con- representative to sign the report. He may sequences of the irregularities found;

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— the Commission infringed the guide- 1997 (financial years 1996, 1997 and lines and the principle of proportional- 1998), and was thus extended unlawfully ity. to the financing of 5% of the expenses for the 1995 crop, for a sum of LUF 17 939 235. Decision 2000/216 should therefore be annulled to that extent.

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Member State concerned to a fair hearing. that in this case there cannot be any doubts As the protection of those rights is a concerning the nature of the letter, because fundamental principle of Community law, it clearly states the type of procedure in its even within the framework of an adminis- subject line ('Clearance of EAGGF trative procedure, it follows that the con- accounts — Guarantee') and the sector ditions laid down in Article 8 must be concerned ('Arable Crops Sector') and that considered as essential procedural require- in the annex the irregularities found are ments. described analytically. In addition, the heading of the letter showed that it came from the department of the Directorate- General for Agriculture responsible for the clearance of EAGGF accounts. According to the Commission, therefore, the Lux- embourg authorities could not reasonably have mistaken the nature of the communi- cation; moreover, both in correspondence 21. Finally, Luxembourg argues that, and in subsequent contacts, they never under the principle of legitimate expec- expressed the slightest doubt about the tations, the Commission should have nature of the procedure initiated by the adhered to its letter of 26 May 1998, Commission. It was only after receiving the where it stated that it intended to exclude final report from the Conciliation Body, by from Community financing part of the letter of 24 January 2000, that they raised expenses in respect of the maximum period the question of the 24-month period laid of 24 months prior to the date of receipt of down in the fifth subparagraph of the communication, thus implying that the Article 5(2)(c) of Regulation No 729/70. term mentioned would not be exceeded. Given that the contested decision also concerns expenses declared before 26 May 1996, the applicant infers from this that the Commission did not adhere to its own statements and therefore damaged the legitimate expectations of Luxembourg.

24. The Commission then states that the period of six weeks given to the Lux- embourg authorities to answer the letter of 13 February 1996 was a simple adminis- trative error which could certainly not deprive the letter of its nature as a com- munication within the meaning of Article 8 as stated above, especially as its content was unequivocal, as has been seen. In its 26. Finally, with regard to the alleged view, the error did not in any case cause infringement of the principle of legitimate damage to Luxembourg, given that the expectations, the Commission objects that Luxembourg Government took two the expenses incurred more than 24 months months to provide its observations and before 26 May 1998, the date on which the that the Commission also took account of second communication was sent, were the these. As Article 8 provides that, in justified subject of a separate preliminary procedure cases, the Commission may extend the (see letter of 13 February 1996) and that deadline provided for, it is clear that the the phrase concerning the intention to important aspect is that the Member State exclude some expenses (see paragraph 21), concerned was able to make effective use of to which the applicant refers, is no more the time necessary to present its observa- than a standard expression which takes up tions, as happened in this case. the substance of the fifth subparagraph of Article 5(2)(c) of Regulation No 729/70, as amended, without quoting it specifically. It is therefore not possible to attribute the meaning indicated by the Luxembourg Government to that phrase, particularly as that Government is well aware of the 25. As regards the alleged damage to the practices of the Commission. This point is rights to a fair hearing, the Commission also confirmed indirectly by the fact that refers to the case-law of the Court which the question was never discussed during the states that a procedural irregularity may various contacts which took place sub- justify the annulment of a decision only if it sequently between the competent Commu- is proved that, without it, that decision nity departments concerned and the might have been different. According to the national authorities. In any event, the Commission, during the course of the Commission observes that the possibility procedure the applicant failed to provide of proceeding with financial corrections

would be compromised if excessive formal rections to the expenses of 1995 (1996 requirements were imposed, given that financial year). collecting information takes a great deal of time, especially in complex cases, and that sometimes it is the Member States which create problems, and even refuse to cooperate, despite their obligations in such matters. 2 28. Before I examine those irregularities analytically, I believe it would be appropri- ate to point out that the Rules of Procedure introduced by Regulation No 1287/95, and

27. I should point out immediately that conclusive decision on the clearance of there is no disagreement between the accounts must be taken at the conclusion parties on the fact that the letter of 26 May of a specific procedure giving effect to the 1998 meets the requirements of Article 8 of audi alteram partem rule, during which the Regulation No 1663/95 and therefore con- Member States concerned must be provided stitutes a proper communication within the with all the guarantees necessary for them meaning of the fifth subparagraph of to present their point of view'. 4It is also Article 5(2)(c) of Regulation No 729/70, for that reason that the procedure is carried as it was sent in due time in respect of the out in the various stages mentioned above expenses incurred in 1996 and 1997 (fi- (see paragraphs 4 to 9): the communication nancial years 1997 and 1998). In actual of the results of the checks carried out by fact, the disputed points concern exclus- the Commission, 5 the subsequent 'bilateral ively the irregularities of the letter of discussion' between the parties, 6 the docu- 13 February 1996 and consequently ment in which the Commission communi- whether that can be identified and cates its final conclusions, 7 and, if appli- described as a proper communication within the meaning of the aforementioned provision, that is, able to produce the 3 — See in particular Article 5(2)(c) of Regulation No 792/70, as stated consequences on the financial cor- amended. Article 8 of Regulation No 1663/95 and Articles 1 and 2 of Decision 94/442. 4 — Case C - 2 4 5 / 9 7 Germany v Commission [ 2000 ] ECR I-11261, paragraph 4 7 , which contains further

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cable, the attempt at conciliation on the (b) Irregularities in the letter of 13 Feb- initiative of the Member State concerned. 8 ruary 1996 and their consequences

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the fact that the letter was part of a to make effective use of the time required to procedure for the clearance of accounts, prepare its observations. In the case at or concerning the agricultural sector issue, the Commission points out, even involved. though Article 8 provides that in justified cases it can extend the normal period of two months, the applicant Government did not need to request an extension; in spite of that fact, the Commission took into account the reply from the Luxembourg authorities of 11 April 1996, even though it 32. I have no difficulty in acknowledging reached the Commission after the end of that, in itself, the omission in question does the six-week period. not appear to be an essential formal defect, even if I do not understand why the Commission should not comply with the provisions which it itself imposed in Regu- lation No 1663/95. 10 In any case, as I have already stated, it is also judged in relation to the other irregularities, to assess whether, in that context, the failure to 34. In the same way as for the preceding make the reference meant that the Govern- irregularity, I find it difficult to call this an ment concerned was prevented from iden- essential formal defect such as could per se tifying the letter in question with certainty justify the annulment of the contested as being a communication for the purposes decision. However, I must point out that of the fifth subparagraph of Article 5(2)(c) here again an obligation laid down by the of Regulation No 729/70. In my view, that Commission itself was not fulfilled, and appears to be the result in this case, as I that the irregularity may also contribute, shall describe below. with the others, to placing in question the description of the letter in issue as a communication for the purposes of the fifth subparagraph of Article 5(2)(c) of Regulation No 729/70.

Article 8(1) of Regulation No 1663/95 for referring to the settled case-law of the the communications provided for by the Court which states that 'a procedural fifth subparagraph of Article 5(2)(c) of irregularity will entail the annulment of a Regulation No 729/70. decision in whole or in part only if it is shown that in the absence of such irregu- larity the contested decision might have been substantively different.' 12 In the case at issue, as the Commission pointed out without being challenged, the applicant did not provide any proof of the effect that the alleged infringement of the rights to a fair

With- out that information, it could not have taken a position as regards the extent of possible financial corrections, by disputing, for example, the evaluation of the nature and gravity of the irregularities in the 38. That being so, however, I must say that checks and the financial loss for the Com- for our purposes, the important point is not munity. 11 Essentially, that Member State so much the damage to the rights to a fair could not have proposed a different level of hearing as I have just described; what is financial correction, again on the basis of important is to ascertain whether the the parameters in the guidelines, by provid- omission prevented Luxembourg from ing the relevant data and information. identifying the letter of 13 February 1996 as a valid communication within the mean- ing of the fifth subparagraph of

non-compliance found. The Commission shall take into paragraph 48; Case C-288/96 Germany v Commission account the nature and gravity of the infringement and the [2000] ECR I-8237, paragraph 101, which contain further financial loss suffered by the Community.' references.

41. It therefore seems to me that, especially if they are taken together, the irregularities described — over and above their varying degrees of gravity — have prevented the 40. The other objection raised by the letter in question from fulfilling the func­ Commission does not appear to me to be tion for which the most precise formal decisive either, namely, that an indication of the amount would be pointless as the Member State would easily be able to 13 — Sec page 4 of the document entitled 'The clearance of calculate the possible financial corrections accounts procedure', prepared by the Directorate-General for Agriculture and available on the internet (see http://eu- on the basis, firstly, of the results of the ropa.eu.int/conini/agnculture/publi/fact/clear/clear_en.pdf, containing the text completed on 11 August 2000) and the checks, and secondly, from the indications facts in the cases still pending before the Court, C-377/99 in the guidelines. First of all, I should point Germany v Commission (concerning Į99.S financial year, when Regulation No 1663/95 was not yet in force) and out that it is not always easy for the C-337/00 Germany v Commission (1996 financial year).

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43. Finally, and still within the terms of the first plea in law, I must look at the argument based on the alleged infringement 14 — Advocate General Jacobs made this point in his Opinion in Case C-130/99 Spain v Commission [2002] ECR I-3005: 'Thus to comply with Article 5(2)(c), the Commission is required only to carry out checks and notify the results thereof within a period of 24 months after the expenditure 15 — Under that paragraph, the annual decision for the clear- has been incurred by the affected Member State; it is not ance of accounts, adopted in accordance with the previous required to complete the clearance of accounts procedure clearance of accounts procedure, had to be adopted before within that period. In my view, that system does not the end of the year following the year under consideration, impose an unreasonable burden on the Commission, but but the failure to meet that deadline did not have any strikes a reasonable balance between, on the one hand, the consequences, unlike the provision currently in force. need of the Member States for legal certainty and, on the 16 — See, in particular, Case C-55/91 Italy v Commission [1993] other hand, the financial interests of the Community' ECR I-4813, paragraph 69, where there are further (paragraph 95). references.

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reasons given in paragraphs 38 to 42, and mission for the aforementioned financial that therefore the contested decision should years, but it considers that they cannot be be annulled in the part concerning the applied in general to the whole system: the expenses incurred in the arable crops sector financial correction of 5% is therefore declared by Luxembourg prior to 26 May excessive, in its view. It also points out 1996. that in the final report of 11 January 2000 (document No 99/LUX/136, annex 25 to the application; hereinafter 'the final report'), the Conciliation Body looked at whether the application of such a correc- tion was well founded for the whole period under consideration, given the improve- ments which had been made to the Lux- C — Second plea in law: erroneous rea- embourg control system over the years. soning and manifest error of assessment That body therefore suggested to the Com- due to failure to take account of various mission that it should examine in particular items of evidence the supplementary information contained in a note from the Luxembourg Govern- ment of 23 November 1999, and also check the justification for a financial cor- 1. Introduction rection of 5% identical for all of the years concerned (1996, 1997 and 1998). The contested decision, however, did not take those observations into consideration, thereby committing an error in reasoning in addition to a manifest error of assess- 47. With the pleas in law which I shall now ment. move on to discuss, not only are the financial corrections relating to the expenses incurred before 26 May 1996 disputed, but also those concerning the entire period of time covered by the con- tested decision, that is, the financial years 1996-1998.

51. The objections of the Commission appear to me to be well founded. The documentation available in the case at issue, to which the defendant refers, shows clearly the reasons for the Commission's decision to apply financial corrections at the rate of 5%. Not even the Luxembourg Government, 'closely associated with the proceedings for that [contested] decision', 50. With regard to the error of assessment, had any difficulty in being aware of and the Commission objects firstly that the understanding those reasons. In the light of applicant admits that errors were com- that documentation, the accuracy of which mitted, not only in terms of the adminis- has not been called into question by Lux- trative checks on applications, but above embourg, I consider that the Commission all in terms of the on-the-spot checks, has declared the reasons for its adoption of which the guidelines describe as essential. Decision 2000/216 in a satisfactory and Those errors, which at times even revealed correct manner. structural shortcomings in the Luxembourg system, already per se required the appli- cation of corrections of 5%, according to the Commission. Moreover, as regards the gravity of the irregularities found, the improvements made to the Luxembourg control system were not at all sufficient, as they were not even subsequent to the 52. With regard to the argument on the period under consideration and therefore manifest error of assessment, which is had no influence with respect to the closely linked to the preceding point, I financial corrections in question. The appli- must point out first of all that, according to cation of those corrections at the rate of settled case-law, Article 3 of Regulation 5% for the entire period under review must No 729/70 allows the Commission to therefore be considered to be justified. Not charge to the EAGGF only the amounts even the Conciliation Body deemed such paid in accordance with the relevant Com- financial corrections to be unlawful; in fact, munity provisions and that, therefore, if an it found that the irregularities were mani- expense has been incurred which does not fest. comply with those provisions, the Com- mission must refuse financing in full. 19 The Court has also stated that, 'in this case, the 18 —Case C-22/89 Netherlands v Commission [1990] ECR I-4799, paragraph 18; also see Case C-27/94 Netherlands v Cnmmtssioit [1998] ECR I-5581, paragraph 36, and Case C-28/94 Netherlands v Commis- 19 — See, in particular. Case C-50/94 Greece v Commission sion [1999] ECR I-1973, paragraph 82. [19961 ECR I-3331, paragraph 26.

Commission, instead of rejecting all the losses to the Community, thereby justifying expenditure affected by the infringement, a reduction in the financial correction has endeavoured to establish the financial factors applied, at least for part of the impact of the unlawful action by means of expenses. calculations based on an assessment of what the situation on the relevant market would have been if the infringement had not occurred. ... the burden of proving that those calculations are not correct rests on the State seeking to have the disallowance annulled.' 20 This case-law has been con- firmed subsequently, in particular after the guidelines were adopted. 21 54. It is true that while the Conciliation Body, in its final report, acknowledged that the high number and gravity of the defi- ciencies in the Luxembourg checks could, according to the guidelines, justify a flat- rate correction factor of 5%, it suggested that the Commission re-examine the pro- posal to apply a factor of 5% for three consecutive years in view of the fact that improvements had been made. However, 53. It therefore follows from that case-law that body also noted that the checks carried that in the case at issue, given the irregu- out by the Commission in June 1997 did larities found and, moreover, not disputed, not show improvements as regards the the Commission had the right to refuse the on-the-spot checks, described by the guide- financing of the expenses declared by Lux- lines as key controls and therefore able by embourg in full. As it only refused 5% of themselves to justify a correction factor of the total amount of expenditure in question 5%. If there were improvements, therefore, on the basis of the criteria laid down in the they were essentially limited to the adminis- guidelines, it cannot now be accused of trative checks, and were not, as the Com- acting in a disproportionate manner. On mission points out, sufficient to reduce the other hand, while it is true that the significantly the risk of financial losses to Luxembourg Government presented a the Community, not to the point of allow- series of observations on the assessments ing a reduction in the correction factor of the Commission, it is also true that it from 5 to 2%, or even the removal of some was not in a position to show either that of those corrections. the irregularities did not affect essential elements in the control system, nor that in the period under consideration (1996,1997 and 1998 financial years) the improve- ments to the system had such an effect as to reduce considerably the risks of financial

D — Third plea in law: infringement of the merely suggested that the Commission re- guidelines in document no. VI/5330/97 und examine the application of financial cor- of the principle of proportionality rections at 5% without thereby claiming that the approach of the Commission was legally incorrect. Concerning the alleged disproportion of the flat-rate correction factor, the Commission objects that this type of correction is necessary specifically 56. In this plea in law, the applicant when it is not possible to quantify the loss Government puts forward again arguments sustained by the Community because of the which have already been stated, to a large irregularities found. extent, in the previous plea. It complains that the Commission infringed the guide- lines inasmuch as, in fixing the financial correction factor, it did not take account, as an extenuating circumstance, of the fact that from 1996 the competent national authorities had made considerable efforts to improve the situation, as was, moreover, recognised by the Conciliation Body. It then adds that a factor of 5% is totally disproportionate to the risk of losses for the EAGGF, which was in actual fact non- 58. I do not think I need discuss these existent. arguments further, for the obvious reason that they repeat almost entirely the argu- ments examined under the second plea in law. I shall therefore merely refer to my previous remarks, particularly concerning the choice of the Commission to apply the same flat-rate correction factor to three consecutive financial years despite the fact 57. For its part, the Commission acknowl- that in the period under consideration some edges once again the improvements made improvements in the Luxembourg system by Luxembourg, and also admits that, of control were noted. according to the guidelines, if the national authorities have taken effective steps to remedy any identified deficiencies, the lowest correction factor or no correction factor must be applied. The Commission objects, however, stating its own final conclusions of 16 July 1999, that in this case the improvements were clearly insuf- ficient to be taken into account in the way the applicant wished and that in 1997 there were still irregularities which were con- sidered to be serious in essential elements of the controls in Luxembourg. As regards the 59. The third plea in law cannot therefore conclusions of the Conciliation Body, it be upheld.

(2) The remainder of the application is dismissed.

(3) The parties shall each bear their own costs.

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