Opinion of the Advocate-General
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Mr President,
Members of the Court,
1 . In the present proceedings the companies L' Etoile commerciale and Comptoir national technique agricole ( CNTA ) seek :
2 . ( a ) The partial annulment of Commission Decision 84/456 of 28 August 1985 ( 1 ) on the clearance of accounts presented by the French Republic in respect of the European Agricultural Guidance and Guarantee Fund for 1981, in so far as it did not recognize as chargeable to the Fund aid which the French intervention agency had paid to CNTA for the processing of sunflower seeds;
3 . ( b ) Compensation for the damage suffered, since by virtue of that decision the intervention agency, Société interprofessionnelle des oléagineux ( SIDO ), required the aid to be refunded to it;
4 . ( c ) In the alternative, the annulment of the Commission Regulation No 1204/72 of 7 June 1972 ( 2 ) laying down detailed rules for the application of the subsidy system for oil seeds .
I - Summary of the facts
5 . Article 27 ( 1 ) of Regulation No 136/66/EEC of the Council of 22 September 1966 ( 3 ) on the establishment of a common organization of the market in oils and fats provided for a Community subsidy for seeds harvested and processed in the Community, where the target price in force for a species of seed is higher than the world market price .
6 . In implementation of that provision, Regulation ( EEC ) No 2114/71 of the Council of 28 September 1971 ( 4 ) laid down the principles governing the grant of subsidies from the EAGGF for the processing of oil seeds, providing in particular that seeds intended for oil mills were to be placed under control and creating a Community certificate for that purpose .
7 . The detailed rules for applying the system of subsidies for oil seeds were subsequently laid down in Regulation No 1204/72 . Pursuant to that regulation ( Article 3 ( 1 )*), the control is to be exercised "from the time the seeds enter the oil mill until they are processed for oil production ". For control purposes, Article 5 of the same regulation provides that the Community certificate referred to in Article 4 of Regulation No 2114/71 is to contain, in particular, "one part, designated ID, certifying that the quantity of seeds harvested in the Community ... is subject to ... control"; by virtue of Article 10 of Regulation No 1204/72, "the ID part of the certificate makes it obligatory to process the identified quantity within a period of 270 days after its date of issue ".
8 . In France, the subsidy system is operated by the SIDO .
9 . Both the French authorities and the SIDO had already taken the view, in certain earlier cases, that the fact that a Community certificate was applied for after the seeds were processed did not preclude the grant of the subsidies, since such a measure would constitute an excessive penalty for a mere administrative error . However, the SIDO was aware that the Commission did not share that view, in so far as it had stated that the grant of the subsidy in such cases was incompatible with the Community rules .
10 . Nevertheless, when in 1980 CNTA proceeded to process two batches of seeds and did not apply for the subsidy certificates until after it had done so ( apparently because of disruption of its operations as a result of a fire ), the SIDO agreed in April 1981 to pay the subsidies in question, but made its payment conditional on the provision of a security guaranteeing repayment of such amount as might be due from CNTA "when the EAGGF gave its decision as to the eligibility of the advances paid in respect of subsidies ". That security, in an amount of FF*8*586*278, was furnished on 24 April 1981 by the company L' Etoile commerciale .
11 . The financing of those subsidies by the EAGGF gave rise to various exchanges of correspondence between the Commission and the French Ministry of Agriculture, and the Commission maintained its view that the subsidies did not qualify for reimbursement by the EAGGF since, under the Community rules, the ID certificates could not be issued after the seeds were processed or indeed after their entry into the mill . That position is also expressly stated in the Commission' s summary report on the clearance of the EAGGF accounts ( Guarantee Section ) for the financial years 1980 and 1981 . It was on the basis of that report that, on 28 August 1985, the Commission adopted Decision 85/456, which was notified to the French Government on 5 September 1985 and was published in the Official Journal on 9 October of the same year .
12 . That decision does not refer to specific cases or to individually identified traders; however, it is apparent from the aforementioned summary report that the total amount of expenditure not recognized as chargeable to the EAGGF, shown in Annex I to the decision, includes a sum of FF*9*707*410.88 corresponding to the aid for the batches of seed processed by CNTA .
13 . That decision was the subject of an action for annulment brought by the French Government and pending before this Court ( Case 336/85 ), but relating only to the part of the decision on clearance of the accounts concerning fishery products . In other words, the government to which it was addressed did not raise any question concerning clearance of the accounts in respect of the subsidies with which the present proceedings are concerned .
14 . By a letter dated 27 January 1986 the SIDO required L' Etoile commerciale to pay the amount of the security which it had provided for CNTA, referring to the Commission Decision of 28 August 1985 and to the summary report . The amount was forwarded to it with a letter dated 21 February 1986 .
15 . On 26 and 27 March, L' Etoile commerciale and CNTA brought the present actions .
16 . By a separate document, lodged in accordance with Article 91 ( 1 ) of the Rules of Procedure, the Commission objected that the actions were inadmissible .
II - The claim for a declaration that Decision 85/456 is void .
17 . A . Let us first examine the objection that the part of the application seeking the partial annulment of Decision 85/456 is inadmissible .
18 . In that connection the Commission contends not only that the application is out of time, having been lodged beyond the time-limit provided for in the third paragraph of Article 173 of the EEC Treaty, but also that the decision is not of direct and individual concern to the applicants, as required by the second paragraph of that article .
19 . B . Whether or not it is necessary to consider the question of compliance with time-limits is of course dependent upon the answer to be given to the question whether or not the decision is of direct and individual concern to the applicants, for the purposes of the second paragraph of Article 173 of the Treaty - it will only be necessary to do so if that question is answered in the affirmative .
20 . As we shall see, I do not consider that to be the case .
21 . But, if for some reason a different view were to prevail, I could not reach any conclusion other than that the application was lodged in time .
22 . Since the contested decision was not addressed to the applicants - they were not, formally, its addressees - it was not, and did not have to be, notified to them .
23 . Moreover, the day of publication of the decision cannot be regarded as the dies a quo for the period laid down in the third paragraph of Article 173 . The applicants would never have been able to determine, merely by virtue of its publication, whether or not the decision on clearance of accounts recognized the sums in questions as eligible .
24 . It is immediately apparent from the decision on the clearance of accounts that it was not possible for the applicants to ascertain the precise content of that measure .
25 . The fact that that decision had repercussions affecting the applicants can, however, be deduced from the summary reports relating to the decision on the clearance of accounts .
26 . But those reports were notified only to the Member State to which they were addressed and not to the applicants . Accordingly, in this case too the date of notification cannot be regarded as setting time running for the purposes of the time-limit laid down in the third paragraph of Article 173 .
27 . Thus, that leaves as the dies a quo the day on which the applicants had notice of the measure, or rather of the fact that the decision affected them . There is nothing in the evidence before the Court to show that they had such notice before the day on which the SIDO sent a letter to L' Etoile commerciale requesting payment under the guarantee; in its turn, CNTA had notice of that fact on the same day by means of a letter sent to it by its bank . In both cases, the relevant date is, therefore, 4 February 1986 .
28 . Since the applications were lodged within a period of two months as from that date, they must be regarded as having been lodged within the prescribed period .
29 . C .* However, the second paragraph of Article 173 of the Treaty allows proceedings to be instituted by individuals only against decisions addressed to them or against decisions which, although in the form of a regulation or decision addressed to another person, are of direct and individual concern to them .
30 . I analysed those requirements, in the light of the decisions of the Court, in the Opinion which I delivered recently in Case 333/85 Mannesmann-Roehrenwerke v Commission .
31 . In the present case, the decision purports expressly to be addressed to the French Republic .
32 . Can it nevertheless be regarded as a decision which is "of direct and individual concern" to the applicants?
33 . ( a ) The Commission contends that its decisions on the clearance of accounts are concerned exclusively with relations between it and the Member States ( in this case, France ) and that, therefore, it is not the contested decision, but rather that adopted by the national intervention agency, which directly affects the interests of the undertakings concerned .
34 . And the latter decision can be challenged by the persons to whom it is addressed only before a national court .
35 . The applicants, on the other hand, maintain that the Commission' s decision is of direct and individual concern to them, since it and the summary report upon which it was based, besides referring unequivocally to the aid paid to CNTA by the SIDO, constitute the legal basis for the recovery of that aid, and the SIDO has no discretion as to whether or not it should proceed with such recovery .
36 . According to the applicants, if the contested decision had not been adopted they would not have been obliged to repay the sum in question .
37 . ( b)*However, it is only superficially possible to attribute to the decision on the clearance of accounts the obligation to repay to the SIDO the subsidies advanced by it .
38 . All things considered, no other conclusion can be drawn than that the reason for the repayment was, ultimately, to be found in the intervention agency' s failure to comply with the Community rules . It was that agency which, by granting the subsidies ( subject to the provision of a security, as a precautionary measure ) to the applicant in violation of the Community rules, created the circumstances in which, subsequently, the Commission took the view that they were not eligible for EAGGF financing and the SIDO found itself constrained to call for the sums advanced to be repaid to it .
39 . As expressly required by Article 4 of Regulation No 729/70 of the Council of 21 April 1970, ( 5 ) the decision on the payments to be made in accordance "with Community rules and national legislation" is the responsibility of the national intervention agencies appointed by the Member States .
40 . The Court has already clearly stated that "according to the general principles on which the institutional system of the Community is based and which govern the relations between the Community and the Member States, it is for the Member States, by virtue of Article 5 of the Treaty, to ensure that Community regulations, particularly those concerning the common agricultural policy, are implemented within their territory ". ( 6 )
41 . The whole system of common organization of the markets, like that of the market in oils and fats, is designed to make the national authority responsible for measures intended to regularize the agricultural markets, and this applies to the grant of subsidies .
42 . The grant of those subsidies by the national authorities is subject to Community law, in particular Article 3 ( 1 ) of Regulation No 729/70, which limits financing by the EAGGF to intervention "undertaken according to the Community rules ".
43 . If, in the present case, the SIDO considered that the payments in question were in conformity with the Community rules, then it was under a duty to grant the subsidies in question unconditionally . In the event of their not being recognized as eligible in the decision on the clearance of accounts, the French State would then have been legally entitled, on the basis of Article 173 of the Treaty, to call for the decision to be declared void . Nevertheless, it did not do so even though it contended that to impose the penalty of non-payment of subsidies merely because of administrative errors was contrary to the principle of proportionality; having taken the precautionary measure of requiring a security, it confined itself, by separate proceedings, to attacking the contested decision only as regards the part concerned with fishery products .
44 . It was certainly because it had doubts, in view of the guidelines previously laid down by the Commission, that the SIDO required a security to be furnished; on the other hand, it is not clear that, in making the Commission' s decision on the clearance of accounts a resolutory condition for the aid granted, the national agency acted in accordance with the logic of the decentralized system of management of the common agricultural policy laid down in Regulation No 729/70, thus passing back to the Commission responsibility for decisions which it ought to have adopted itself .
45 . Could it not, however, be said that the Commission' s decision refusing to recognize the aids in question placed the national authority under an obligation to arrange for recovery of the subsidies, without having any margin of discretion in that respect, ( 7 ) regardless of whether the subsidies were granted against the provision of a security or unconditionally?
46 . In those circumstances, could it not be said that the refund of the subsidies was in fact a direct and necessary consequence of the Commission' s decision?
47 . The reply to that question is, in my opinion, negative .
48 . It is not from the Commission' s decision but rather from Article 8 of Regulation No 729/70 that, in the interests of uniform application of Community law, there flows the obligation, incumbent upon the national authorities, to recover sums which have been unduly or irregularly paid .
49 . As the Court has held, 7 that obligation is designed to override any provision making recovery of the sums in question practically impossible or allowing the national authorities any discretion to decide whether or not it would be expedient to demand repayment thereof, without prejudice to proper compliance with the principle of non-discrimination as regards procedures for deciding similar but purely national disputes . ( 8 )
50 . In short, as laid down in Article 8 ( 1 ), the functions of control which are incumbent upon the competent national authorities, namely preventing and penalizing irregularities and recovering any sums lost, are to be exercised "in accordance with national provisions laid down by law, regulation or administrative action" since, as Community law stands at the present time, it does not contain specific provisions to take their place .
51 . That means that - subject to the limits imposed by Community law, to which I referred earlier - "in the absence of provisions of Community law disputes concerning the recovery of amounts unduly paid under Community law must be decided by national courts pursuant to their own national law ". ( 9 )
52 . "It follows that Article 8 ( 1 ) of Regulation No 729/70 does not govern the relations between the intervention agencies and the traders concerned and in particular it does not constitute a legal basis authorizing the national authorities to bring actions to recover unduly paid aids from their recipients; such actions are governed by national law" ( 10 ) both as regards rules of procedure and of form and as regards the substantive conditions for their recovery . ( 11 )
53 . If there is any doubt as to the validity or interpretation of Community provisions, the national courts have at their disposal the procedure under Article 177 of the Treaty .
54 . The fact is that, as the Court held in its judgments of 7 February 1979, ( 12 ) in many cases it is not possible to recover sums unduly paid to the recipients in circumstances where, viewed objectively, Community law has been incorrectly applied on the basis of an interpretation adopted in good faith by the national authorities . In those circumstances, the sums which the national authorities considered themselves entitled to pay have to be paid by the Member States, since the Commission cannot charge to the EAGGF expenditure incurred in breach of the Community rules .
55 . This confirms that it is the national intervention authorities which are responsible for decisions as to whether to grant or to withhold aid .
56 . The present proceedings are distinguished by the simple fact that the subsidies were granted on the condition that a bank guarantee should be provided, so that the national intervention authority would not have to take any proceedings before the national courts in order to recover them . That security gave it an automatic and easily enforceable guarantee of satisfaction of the obligation to recover the subsidies in accordance with national legislation . But at the same time it had the effect of causing the applicants erroneously to believe that entitlement to the subsidy depended upon a Commission decision and could not be determined by the SIDO before such a decision was adopted .
57 . Strictly according to the logic of the applicants' reasoning, in a case where the national intervention agency refused at the outset to pay the subsidies, rather than subsequently requiring them to be refunded, the position would likewise be that the decision would be attributable not to the national agency but to the Commission . Such a refusal would then be merely conditional or provisional and would not become final until the adoption of the decision confirming the clearance of the EAGGF accounts .
58 . Apart from leading to unacceptable legal uncertainty, such a view entirely disregards the general principles underlying the institutional system of the Community, to which I have just referred .
59 . The purpose of a Commission decision on the clearance of the accounts for expenditure to be financed by the EAGGF is thus, simply, as the Court has already held, ( 13 ) "to establish whether the expenditure was incurred by the national authorities in accordance with the Community provisions ". In the sphere of relations with traders, such decisions thus have a declaratory rather than a constitutive function, since the direct effects to which those traders are subject derive from the decisions adopted by the national intervention authorities in the exercise of their own powers .
60 . In general, the Commission has no power to interfere directly regarding the granting or withholding of aid and consequently it cannot require the national authorities to adopt specific individual measures .
61 . This was recognized by the Court in similar cases relating to export subsidies, in the Sucrimex ( 14 ) and Interagra ( 15 ) judgments .
62 . In Krohn, ( 16 ) the problem was different : in that case, Community law gave the Commission not merely a power to express a view but rather authority to impose a particular decision on the national authorities . Since the Commission used that power to indicate to the national intervention authority what decision was to be taken, the Court considered that an action against the Commission decision was admissible, the alleged illegality on which the applicant' s claim was based being attributable to the latter decision .
63 . In the case under review here, by granting the subsidies on terms contrary to Community law and, moreover, making them subject to a condition - the provision of a security - which was not provided for by Community law, the
SIDO misused its power of appraisal and it was that fact which made it necessary to exercise the "non-discretionary power" to require recovery of the subsidies ( or enforcement of the guarantee furnished for that purpose ).
64 . The applicants could also have contested the legality of the SIDO' s requirement that a guarantee should be provided as a precondition for the grant of the subsidy .
65 . They did not do so, preferring to accept that condition rather than run the risk of refusal of the subsidy to which they claimed to be entitled .
66 . In view of the foregoing considerations, the conditions laid down in the second paragraph of Article 173 of the Treaty cannot be regarded as fulfilled, and it is therefore appropriate to consider the applications inadmissible in that respect .
III - The claims for compensation for loss
67 . "According to an established body of decisions of the Court, the application for compensation provided for by Article 178 and the second paragraph of Article 215 of the Treaty was introduced as an autonomous form of an action with a particular purpose to fulfil within the system of actions and subject to conditions on its use dictated by its specific nature ". ( 17 )
68 . Accordingly, its purpose is not "to enable the Court to examine the validity of decisions taken by national agencies responsible for the implementation of certain measures within the framework of the common agricultural policy or to assess the financial consequences resulting from invalidity of such decisions ". ( 18 )
69 . It has also been consistently held by the Court that "the combined provisions of Articles 178 and 215 of the Treaty only give jurisdiction to the Court to award compensation for damage caused by the Community institutions or by their servants in the performance of their duties or, in other words, for damage capable of giving rise to non-contractual liability on the part of the Community . Damage caused by national institutions, on the other hand, can only give rise to liability on the part of those institutions, and the national courts retain sole jurisdiction to order compensation for such damage ". ( 19 )
70 . The recovery of the subsidies granted to CNTA is imputable not to the Commission but rather to the SIDO which was not acting under any instructions from the Commission but merely by virtue of its obligation to ensure the implementation of the Community rules .
71 . In the event of any unlawful act having given rise to the alleged loss, it is therefore the French intervention agency that would be responsible and not the Commission .
72 . The claims for compensation for loss made under Articles 178 and the second paragraph of Article 215 of the Treaty must therefore be considered inadmissible since this Court lacks jurisdiction . It is the French courts, therefore, which have jurisdiction to deal with such claims .
73 . Furthermore, it seems that recourse to the national courts in this case would provide an effective means of protecting the parties involved, and might enable compensation to be paid for the alleged loss . This satisfies the additional condition laid down by the Court concerning the obligation to exhaust the remedies available in the national courts, so that the action for compensation may be brought within "the whole system of legal protection for the individual established by the Treaty ". ( 20 )
IV - The claim for annulment of Regulation No 1204/72
74 . The applicants also seek, in the alternative, a declaration that Regulation No 1204/72 is void, since they consider that the penalty of forfeiture of the subsidies for mere failure to comply with a time-limit provided for in that regulation is contrary to the principle of proportionality .
75 . It is clear that if that claim were made by way of a direct action under Article 173 it would be inadmissible .
76 . However, it was made clear by the applicants, in their reply to the objection of inadmissibility, that that claim for annulment was made not by way of a direct action under Article 173 but as an objection of illegality under Article 184 of the Treaty . However, it has already been held by the Court ( 21 ) that "the possibility provided by Article 184 of the Treaty of invoking the inapplicability of a regulation does not constitute an independent right of action and may only be sought incidentally . In the absence of such an independent right of action the applicants cannot invoke Article 184 ".
77 . Having concluded that a direct action for the annulment of the decision on the clearance of the accounts is inadmissible, I must also conclude that the objection that Regulation No 1204/72 is illegal is also inadmissible . Otherwise, Article 184 would not achieve its desired effect of providing those persons who are precluded by the second paragraph of Article 173 from instituting proceedings directly with the benefit of a judicial review of legislative measures when they are affected by individual implementing decisions, ( 22 ) but would have the perverse effect of facilitating the review of the legality of measures adopted by the institutions, without the conditions concerning locus standi and time-limits laid down in Article 173 being fulfilled .
78 . The Commission also stated at the hearing, although with some hesitation, that the claim for annulment of Regulation No 1204/72 might be inadmissible by virtue of Article 42 ( 2 ) of the Rules of Procedure, since in the application that claim was made under Article 173 and the objection of inadmissibility was made under Article 184 only in the reply . That does not however seem to me to be the case . The applicants relied upon Article 173 only for the claim that Decision 85/456 should be declared void . As regards the claim that Regulation No 1204/72 should be declared void, the applicants made no reference to its legal basis in their application . But even if that had not been the case, it does not seem to me that a new issue has been raised . The issue was, from the outset, the illegality of the regulation . What the applicants did in their reply was merely to say that their submission in that connection was not a principal claim but merely an objection .
V - Conclusion
79 . In view of the foregoing considerations I conclude that the Court should declare the applications inadmissible and that, in accordance with Article 69*(2 ) of the Rules of Procedure, the applicants should be ordered to pay the costs .
(*) Translated from the Portuguese .
( 1 ) Official Journal 1985, L 267, p . 24 .
( 2 ) Official Journal, English Special Edition 1972 ( II ), p . 493 .
( 3 ) Official Journal, English Special Edition 1965-66, p . 221 .
( 4 ) Official Journal, English Special Edition 1971 ( III ), p . 826 .
( 5 ) Official Journal, English Special Edition 1970 ( I ), p . 218 .
( 6 ) Judgment of 21 September 1983 in Joined Cases 205 to 215/82 Deutsche Milchkontor v Germany (( 1983 )) ECR 2633, paragraph 17 of the decision .
( 7 ) See Deutsche Milchkontor, cited above, paragraph 22 .
( 8 ) Deutsche Milchkontor, pararaph 23 .
( 9 ) Deutsche Milchkontor, paragraph 19, and the cases referred to therein .
( 10 ) Deutsche Milchkontor, paragraph 20 .
( 11 ) Deutsche Milchkontor, paragraph 36 .
( 12 ) Case 11/76 Netherlands v Commission (( 1979 )) ECR 245, at pp . 278 and 279; Case 18/76 Germany v Commission (( 1979 )) ECR 343, at p . 384 .
( 13 ) Judgment of 14 January 1981 in Case 819/79 Germany v Commission (( 1981 )) ECR 21, paragraph 8 .
( 14 ) Judgment of 27 March 1980 in Case 133/79 (( 1980 )) ECR 1229, at p . 1309 .
( 15 ) Judgment of 10 June 1982, in Case 217/81 (( 1982 )) ECR 2233, at pp . 2247 and 2248 .
( 16 ) Judgment of 26 February 1986, Case 175/84 (( 1986 )) ECR 753, paragraphs 21 to 33 .
( 17 ) Krohn, supra, paragraph 26 .
( 18 ) Judgment of 12 December 1979 in Case 12/79 Wagner v Commission (( 1979 )) ECR 3657; see Interagra, supra, p . 2248 .
( 19 ) Krohn, supra, paragraph 18 .
( 20 ) Krohn, supra, paragraph 27 . The applicants' reference at the hearing to the judgment of 17 December 1981 in Case 197/80 Walzmuehle v Commission (( 1981 )) ECR 3211, is irrelevant, since in that case, in view of the particular circumstances of the parties, there was no possibility of a remedy in the national courts .
( 21 ) Judgment of 16 July 1981 in Case 33/80 Albini v Council and Commission (( 1981 )) ECR 2141, at p.*2157 .
( 22 ) See judgment of 6 March 1979 in Case 92/78 Simmenthal v Commission (( 1979 )) ECR 777, at p . 800 .
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