Opinion of the Advocate-General
I - Introduction
1. In these proceedings Belgium seeks the annulment of Commission Decision 98/358/EC of 6 May 1998 on the clearance of the accounts presented by the Member States in respect of the expenditure for 1994 on the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (the EAGGF), in so far as that decision disallows, in respect of Belgium, Community financing for the sum of BEF 382 208 436 by way of expenditure incurred for the advance payment of export refunds.
2. The Decision was based on checks of the Belgian control system carried out in 1993 and 1994. The Commission considered that the checks disclosed serious deficiencies; these had already led to Commission Decision No 97/333/EC of 23 April 1997 on the clearance of the accounts presented by the Member States in respect of the expenditure for 1993 on the Guarantee Section of the European Agricultural Guidance and Guarantee Fund. As in the present case, Belgium sought to have that decision annulled; the Court dismissed the application in its judgment of 18 May 2000.
3. Belgium's present application is founded on a blanket reference to its submissions in Case C-242/97, and on a number of additional submissions. The Commission, in presenting its defence, has adopted a similar approach.
4. There is, I think, no need for the submissions in the earlier case to be revisited in extenso; I shall accordingly confine myself to those issues which were not resolved by the earlier judgment.
5. This Opinion is therefore limited to:
- the question whether an application is properly made if an applicant, instead of submitting a completely new set of pleadings, merely refers to pleadings lodged in a previous case (Section A);
- the fact that corrections were applied in respect of 1994 (Section B);
- the Belgian Government's submission that the Commission should have taken account of the special control system which Belgium had introduced for common wheat (Section C);
- the submission that no correction should have been applied to the system of advance payment for warehousing in the cereals sector (Section D);
- the Belgian Government's assertion that three officials in addition to the checker had been responsible for the controls in the beef and veal sector at the Customs Office at Dendermonde (in French: Termonde) (Section E);
- the contention that detailed storage lists had been in use for beef and veal at the Sivafrost store (Section F);
- the Commission's incorrect assertion that some of the meat inspected at Dendermonde was from cows (it was in fact from male bovine animals) (Section G).
6. For other matters, such as the legal context, and the issues which have already been resolved, reference may be made to the judgment in Case C-242/97, and to my Opinion in that case.
II - Forms of order sought
7. In its application, received at the Court on 17 July 1998, the Kingdom of Belgium asks the Court
1. to annul Commission Decision 98/358/EC of 6 May 1998 on the clearance of the accounts presented by the Member States in respect of the expenditure for 1994 on the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF), in so far as that decision disallows, in respect of Belgium, Community financing for the sum of BEF 382 208 436 by way of expenditure incurred for the advance payment of export refunds, and
2. to order the Commission to pay the costs.
8. The Commission asks the Court
1. to dismiss the application and
2. to order Belgium to pay the costs.
III - Legal assessment
A - Admissibility of the application
9. The first issue to address is whether in these proceedings the Court should entertain the Belgian Government's blanket reference to its submissions in Case C-242/97.
10. Article 38(1)(c) of the Court's Rules of Procedure requires an application to contain at least a summary of the pleas in law on which it is based. Whether, and to what extent, it is permissible to refer instead to other documents, in particular pleadings in other cases, is not specified.
11. When that question arises, as the Court of First Instance correctly observed in ICI v Commission, the Court of Justice decides according to the circumstances of the individual case; on that basis, it has declined to entertain a reference to pleadings in materially unrelated actions. In ICI, however, the Court of First Instance did entertain a reference to pleadings in another action, since the parties, agents and counsel in the two actions were identical, the actions had been brought on the same day, were before the same Chamber of the Court, had been assigned to the same Judge-Rapporteur, and concerned factual questions of competition law within the same market.
12. In principle, I agree with the Court of First Instance, though it must be understood that a court's own organisational arrangements - matters such as the assignment of cases to Chambers and rapporteurs - can have no bearing at all on the effect of anything done by any party. In principle, if two actions are sufficiently closely related, a reference to other pleadings should be permitted. In the present case there is indeed such a relationship: the decisions challenged in the two cases followed what was essentially a single administrative procedure - the checks, the correspondence, the unsuccessful conciliation process. Moreover, the parties are the same in both cases. It is therefore only logical for the two actions to be founded on the same arguments; the fact that they were not brought on the same day is, by comparison, a minor issue.
13. It follows that the Belgian Government's reference to its pleadings in Case C-242/97 is admissible; the same must apply mutatis mutandis to the Commission's references to its own earlier pleadings.
B - The extension of the corrections to the year 1994
Submissions of the parties
14. Belgium argues that the Commission's checks were specifically described as relating to the 1992 and 1993 financial years, but not to 1994. At the hearing, the Belgian Government's representative contended that the checks were not capable of revealing irregularities in the 1994 financial year: it was therefore not open to the Commission to base any corrections in respect of that financial year on them.
15. The Commission points out that its checks were carried out in September and November 1994: they also covered the Belgian authorities' administrative practice in the 1994 financial year. The fact that only 1992 and 1993 were mentioned in the subject-line of the letters in question did not alter the fact that in 1994, as in the other two years, Belgian administrative practice fell short of what was required by Community law - and that it was therefore necessary to correct the clearance of the accounts.
Opinion
16. The Commission's checks were carried out in 1994; they covered inter alia the Belgian authorities' inspection practice at that time. It is, of course, unfortunate that that fact was not stated in the heading of the letters announcing the inspections. However, the Belgian authorities must surely have known, bearing in mind when the inspections were to take place, that the 1994 financial year would be included; in any case, that fact must have become apparent to them when the inspections were actually being carried out. It was therefore open to the Commission to use the results of the inspections in taking its decision on the correction of the clearance of the accounts for the 1994 financial year. Moreover, the conciliation body to which Belgium referred the matter reached the same conclusion.
17. This plea must therefore be rejected.
C - The extension of the corrections to the budget heading for common wheat
18. Belgium submits that the corrections should not have been extended to the budget heading for common wheat. The Commission had failed to carry out any inspection at U.B.M., the principal common-wheat exporter, which in 1994 had received 90% of the export refunds paid under the budget heading for common wheat; it had therefore acted without full knowledge of the facts.
19. In its reply in Case C-242/97, dated 2 February 1998, Belgium claimed that a special control system had been instituted at U.B.M. on the basis of a letter to that company from the Belgian authorities dated 15 March 1994. It is apparent from that letter that the measures in question were to be carried out from 1 April 1994.
20. It must be remembered that Commission Decision C(97) 515 final set 28 February 1997 as the deadline for the submission of new facts relating to the clearance of the accounts for the 1994 financial year.
21. Any new facts submitted in an application after that deadline are time-barred: that is apparent from Article 1(3) of Regulation (EEC) No 1723/72, which provides: Additional information may be forwarded to the Commission up to a deadline to be fixed by the Commission, taking into account in particular the amount of work necessary to supply the information concerned. In the case of failure to submit the aforementioned information within the period fixed, the Commission shall take its decision on the basis of those elements of information in its possession at the deadline, except in cases where the late submission of information is justified by exceptional circumstances.
22. Accordingly the Commission may decline to finance export refunds if Belgium, though it did submit the necessary evidence, none the less failed to do so by the deadline set by the Commission.
23. A peremptory time-limit of this kind is in any case justified where - as here - more than two years have elapsed since the Commission's checks, and where, in addition, there has already been a conciliation procedure. In such circumstances, a Member State will have had ample opportunity to challenge any inaccuracies in the Commission's findings of fact.
24. It follows that the aforementioned facts, being new facts first asserted in the course of the procedure in Case C-242/97, must similarly be excluded from consideration in the present proceedings. Accordingly the correction to the clearance of the accounts in respect of the budget heading for the common-wheat sector is justified; this plea must therefore be rejected.
25. Moreover, the Commission has stated, without being challenged, that Amylum, a company where the Commission carried out checks, exported common wheat. At the hearing, the Commission's representative stated, similarly unchallenged, that as early as 1988 a letter from the relevant authorities had ordered special inspection measures at Amylum, but that in practice these were never implemented.
26. Lastly, the Commission has stated, unchallenged, that in the 1994 financial year U.B.M. received 83.3% of its refunds before 1 April 1994. Consequently, the special inspection system could have covered only a small fraction of the Belgian refunds under the budget heading for common wheat.
D - The extension of the corrections to the financing for warehousing in the cereals sector
27. In my Opinion in Case C-242/97 I described Belgium's submissions on the correction of the clearance in respect of the advance financing for warehousing in the cereals sector in the following terms:
Thirdly, the Belgian Government claims (in the alternative) in its application that it had already, during the conciliation procedure, pointed out that a correction in the cereals sector should not be applied to expenditure that could not be attributed to the system of prefinancing export refunds. Since the Commission's inspections had only concerned such prefinancing, other areas should not have been included in the correction. In its reply it further states that the inspections related only to prefinancing processing. For this reason, Belgium had cleared the accounts for cereals not intended for processing. These sums, for prefinancing storage, had mistakenly not been indicated by Belgium in the conciliation procedure. This information had, however, been available to the Commission during the conciliation procedure, as is shown by a BBIR document dated 25 September 1996.
28. In its judgment in Case C-242/97, the Court rejected that submission under Article 42(2) of the Rules of Procedure as being out of time. In the present proceedings, however, the plea is not out of time, at least as far as procedural law is concerned.
29. However, the Commission has already demonstrated - in its rejoinder in Case C-242/97 - that two of the undertakings investigated had also participated in the system of advance payment for warehousing, and that the investigations had extended to cover that system; Belgium has not rebutted those claims. It follows that the extension of the corrections to the system of advance payment for warehousing was justified in principle.
30. However, while the time-limits set in the Court's rules for the submission of new pleas have been complied with in these proceedings, there is also, as I have already pointed out, a peremptory limit on the submission of new facts in the administrative procedure. In the event, it was only after 28 February 1997 that Belgium alleged that the Commission had failed to include the system of advance payment for warehousing in its investigations. Pace the Belgian Government, that allegation is not implicit in the application for a conciliation procedure. That application merely contains figures differing from the Commission's, without any further explanation. As there is no evidence of these assertions having been raised on any previous occasion, prior to the deadline set by the Commission, the submission is time-barred under Article 1(3) of Regulation No 1723/72, and must be disregarded.
31. Belgium refers to a document of the Belgium Office for Intervention and Reimbursement dated 25 September 1996; however, it is not apparent why that document should have been known to the Commission.
32. Consequently that plea must also be rejected.
E - The staff at the Dendermonde Customs Office in the beef and veal sector
33. It was in its application in Case C-242/97 that Belgium first alleged that there had been more than one official responsible for the checks in the beef and veal sector at the Dendermonde Customs Office, and that in fact three officials had carried out the administrative formalities, with a further official whose sole task was to verify the accuracy of the latter by physical checks; four officials in total were thus involved in carrying out the checks.
34. Moreover, at the hearing, the representative of the Belgian Government stated that Belgium had already indicated, in a communication dated 22 May 1995, that a supervisory official had been present at Dendermonde in addition to the checker.
35. On that point, it should first be observed that, the communication of 22 May 1995 not only does not support the submission made in the application - it actually contradicts it. The claim that there was an additional supervisory official working at Dendermonde in no way negates the Commission's finding that the actual checking was performed by a single checker. Indeed, it accords with the Commission's initial finding that one female official was responsible for checking the three biggest Belgian beef and veal exporters, and that her assistant weighed and counted the boxes.
36. Moreover, the claim in the application that three further officials were engaged in checking was first raised after 28 February 1997, and was therefore out of time. Accordingly it cannot be considered.
37. That plea must therefore likewise be rejected.
F - The system of checks at Sivafrost (Beef and Veal Sector) in 1994
38. The judgment in Case C-242/97 states:
Sixth, the Belgian Government denies that the only means of identifying the different boxes stored in the Sivafrost store was a sheet of paper attached to a pallet, showing the numbers of the payment declarations, and that it was therefore possible to replace on the spot the boxes stocked in that store. It asserts that the boxes stored there had labels showing the nature, weight and number of the goods. In addition, since 1994 the Sivafrost store had used storage lists showing the same details as the labels, which made it possible to check whether the boxes had left the store.
The Belgian Government has not succeeded in showing that the findings on which the Commission's decision is based are incorrect. In particular, as that Government has not claimed that it had used the system of detailed storage lists during 1993, the period to which the clearance of the accounts relates, it has not refuted the Commission's complaint that the pallets were not adequately identified.
39. In making that finding, however, the Court was not expressing a view on whether, in 1994, the system of storage lists constituted a sufficient guarantee that boxes could not be exchanged.
40. On this point, it should first be observed that Belgium has not indicated when exactly in 1994 storage lists were instituted. We only know that lists were kept in the Sivafrost store when the Commission checks were being carried out. However, the system was apparently not introduced throughout Belgium until 1995. There is therefore no reason to presume that storage lists were kept throughout Belgium during the whole of the 1994 financial year.
41. Moreover, in its rejoinder in Case C-242/97, the Commission emphasised that the storage lists which it had investigated were not linked to specific payment declarations, nor did they make it possible to identify the boxes which had been on a particular pallet. As was the practice at the time, the goods were only identified by the payment declarations attached to the pallets. What was needed, however, was for the individual boxes to be identified and sealed in a way which would make it impossible to exchange their contents. Belgium was not able to show how the storage lists could achieve a comparable result.
42. Even if use of the storage lists had significantly improved the supervision at the Sivafrost store, that concerned only one of eleven individual points in the beef and veal sector. Proving that the Commission had erred on that point would still not make it necessary to reduce the financial correction. As the Court has consistently held, the Commission may even disallow all the EAGGF expenditure in question if it finds that there are no adequate control procedures. It follows that this plea must be rejected.
G - The inaccuracy in the summary report
43. This point relates to the Commission's finding in the summary report that some of the meat checked in Dendermonde was cow meat; in fact, it was from male animals. The Commission acknowledged the error in Case C-242/97; Belgium is therefore entitled to a recognition that, in that respect, the Commission erred. However, the Court held in Case C-242/97 that the error in question was not such as to cast doubt on the Commission's correction to the clearance of accounts for the 1993 financial year. That finding must apply mutatis mutandis to the present decision.
H - Summary
44. In summary, Belgium has only succeeded with its final plea, in respect of which the Court has already held, in Case C-242/97, that it is not capable of affecting the validity of the Commission decision. By contrast, the remaining defects found by the Commission are serious.
45. Thus, as in the earlier case, there are no grounds for allowing Belgium's application either in whole or in part. More particularly, there is no need to reduce the flat-rate reductions applied by the Commission in the cereals or beef and veal sectors.
46. I might, perhaps, have reached a different conclusion if all the objections which Belgium has raised before the Court had been submitted ahead of the deadline in the administrative procedure. Both sides could then have cooperated to establish the necessary facts; in these proceedings, the time for that has passed.
47. The application must therefore be dismissed.
IV - Costs
48. Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs, if they have been applied for by the successful party. Since the Commission has applied for costs against the Kingdom of Belgium, the latter, as the unsuccessful party, must be ordered to pay the costs.
V - Conclusion
49. For the reasons given above, I propose that the Court should:
(1) Dismiss the application;
(2) Order the Kingdom of Belgium to pay the costs of the proceedings.
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