Affaire C-344/01

Federal Republic of Germany

v

Commission of the European Communities

(EAGGF – Expenditure excluded from Community financing – Suckler cow premium – Checks carried out by the Commission in certain Länder – Extrapolation of findings to other Länder – Burden of proof – Duty of cooperation in good faith)

Summary of the Judgment

1. Agriculture – EAGGF – Clearance of accounts – Expenditure arising from irregularities in the application of the Community rules disallowed – Disputed by the Member State concerned – Burden of proof – Apportionment between the Commission and the Member State concerned – Member State with federal structure

(Council Regulation No 729/70, Art. 8(1))

(Art. 10 EC)

1. So far as concerns financing of the common agricultural policy by the EAGGF, in order to prove an infringement of the rules on the common organisation of the agricultural markets, the Commission is required not to demonstrate exhaustively that the checks carried out by the national authorities are inadequate, or that the data submitted by them are incorrect, but to adduce evidence of serious and reasonable doubt on its part regarding the checks or data. The reason for this mitigation of the burden of proof on the Commission is that it is the Member State which is best placed to collect and verify the data required for the clearance of EAGGF accounts and it is for that State to adduce the most detailed and comprehensive evidence that its checks or data are accurate and, if appropriate, that the Commission’s statements are incorrect.

Those rules on apportionment of the burden of proof between the Commission and the Member States apply irrespective of the internal structure of a Member State. Responsibility for an infringement of the rules on the common organisation of the agricultural markets lies with the Member States themselves, as is clear from Article 8(1) of Regulation No 729/70 on the financing of the common agricultural policy. Therefore, just as it is not for the Commission to rule on the way powers are allocated by the institutional rules proper to each Member State, or on the obligations which, in a State with a federal structure, may be imposed on the federal authorities and the authorities within the federation respectively, that allocation of powers cannot constitute a sufficient reason to restructure the Member States’ obligations towards the Community in connection with the apportionment of the burden of proof of an infringement of the rules on the common organisation of the agricultural markets.

2. The duty to cooperate in good faith which follows from Article 10 EC, entailing an obligation on the Member States to take all the measures necessary to guarantee the application and effectiveness of Community law and imposing on Member States and the Community institutions mutual duties to cooperate in good faith, applies to disputes concerning the clearance of EAGGF accounts. Through the active participation required on the part of both the Commission and the Member States, those rules induce cooperation in good faith between those bodies in determining whether or not the rules on the common organisation of the agricultural markets have been infringed. It follows that correct application of the rules on the apportionment of the burden of proof entails, in principle, compliance with Article 10 EC.

(see paras 79-81)

JUDGMENT OF THE COURT (Fifth Chamber) 4 March 2004 (1)

(EAGGF – Expenditure excluded from Community financing – Suckler cow premium – Checks carried out by the Commission in certain Länder – Extrapolation of findings to other Länder – Burden of proof – Duty of cooperation in good faith)

In Case C-344/01,

applicant,

v

defendant,

APPLICATION for the annulment of Commission Decision 2001/557/EC of 11 July 2001excluding from Community financing certain expenditure incurred by the Member States under the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF) (OJ 2001 L 200, p. 28), in so far as it makes financial corrections in respect of suckler cow premiums granted in 1995 and 1996, which correspond to the 1996 and 1997 financial years,

THE COURT (Fifth Chamber),,

composed of: C.W.A. Timmermans (Rapporteur), acting for the President of the Fifth Chamber, A. Rosas and A. La Pergola, Judges,

Advocate General: P. Léger,

after hearing oral argument from the parties at the hearing on 5 June 2003,

after hearing the Opinion of the Advocate General at the sitting of 25 September 2003,

gives the following

…’

and

‘The rate of correction should be applied to that part of the expenditure which presents a risk. When the deficiency results from a failure by the Member State to adopt an appropriate control system, then the correction should be applied to the entire expenditure for which that control system was required. When there is reason to suppose that the deficiency is limited to that of a department or region’s application of the control system adopted by the Member State, the correction should be limited to the expenditure controlled by that department or region …’.

On those grounds,

THE COURT (Fifth Chamber)

hereby:

Timmermans

Rosas

La Pergola

Delivered in open court in Luxembourg on 4 March 2004.

R. Grass

V. Skouris

Registrar

President