Court of Justice of the European Communities (including Court of First Instance Decisions)

- LIT 7 104 000 000 in respect of public storage costs on the ground that the tender procedure for beef was unlawful;

- LIT 54 927 174 194 in respect of costs of public storage of beef on the ground that checks were inadequate and ineligible goods were bought in;

- LIT 34 175 522 595 in respect of the ewe premium on the ground that management and control were inadequate;

- LIT 10 082 336 246 in respect of public storage of cereals on the ground that the system was deficient and checks inadequate;

- LIT 2 169 762 753 on the ground that the setting aside of land given over to the growing of crops in Sicily was unlawful;

- LIT 391 281 020 in respect of the reimbursement of costs of public storage of sugar on the ground that checks were inadequate.

The correction with regard to the unlawful tender procedure

'1. Tenderers may take part in the invitation to tender only if they undertake in writing to comply with all the provisions relating to the tender concerned.

2. Interested parties may participate in the invitation to tender issued by intervention agencies of the Member States in which this is opened either by lodging a written tender against a receipt or by any other written means of communication accepted by the intervention agency, with advice of receipt; they may submit one tender only per category in response to each invitation to tender.

3. Tenders shall specify:

(a) the name and address of the tenderer;

(b) the quantity tendered for, expressed in tonnes, of the products and categories specified in the notice of invitation to tender;

(c) the price tendered per 100 kilograms of products of quality R3 ...;

(d) the intervention centre or centres to which the tenderer intends to deliver the product.

...'

'1. Only the following may submit tenders:

(a) slaughterhouses for bovine animals approved in accordance with Directive 64/433/EEC, and not enjoying a derogation under Article 2 of Directive 91/498/EEC, whatever their legal status, and

(b) livestock or meat traders who have slaughtering undertaken therein on their own account and who are entered in a public register under an individual number.

2. In response to invitations to tender, interested parties shall forward tenders to the intervention agencies of the Member States in which they are opened, either by lodging a written bid against a receipt or by any other written means of communication accepted by the intervention agency, with advice of receipt.

Separate tenders shall be submitted for each type of invitation to tender.

3. Interested parties may submit only one tender per category in response to each invitation to tender.

The Member States shall ensure that tenderers are independent of each other in the terms of their management, staffing and operations.

Where there are serious indications to the contrary or that tenders are not in line with economic facts, tenders shall be deemed admissible only where the tenderer presents suitable evidence of compliance with the second subparagraph.

Where it is established that a tenderer has submitted more than one tender, all the tenders from that tenderer shall be deemed inadmissible.

4. ...'

purchases rose from 540 000 tonnes in 1987 to 1 030 000 tonnes in 1991, an increase of 90.7% in the space of four years.

'Italy

The EAGGF encountered an adjudication procedure not observed in any other Member State. Trade operators in the Italian beef market are grouped into three associations (consorzio) through which offers to sell into intervention are lodged, i.e. the association receives offers from its members and submits them all at the same time to AIMA, the paying agency.

The Italian authorities, when criticised by the EAGGF on this point, volunteered the information that an association may even submit in its own name an overlapping global offer on behalf of those of its members which had not submitted individual offers.

Such practices are contrary to Article 9(6) of Regulation No 859/89 requiring Member States to guarantee the confidentiality of offers and negates the expected advantages of a genuine adjudication because it clearly reunites the interests of the supposed competitors.

The EAGGF also established in several instances links between tenderers by comparing the standard information (e.g. names, addresses, bank accounts, signatures, etc.).

Financial corrections are proposed at a flat rate of 2% applicable to expenditure declared for 1992.'

According to the Commission, where the quantity actually delivered was lower than that which should have been delivered, the splitting of one tender into several made it possible in fact to honour at least some of the tenders and therefore to recover the relevant securities.

The corrections with regard to the public storage of beef

accordance with the Community scale provided for in Regulation (EEC) No 1208/81 and markings.

'A. 2% of expenditure - where the deficiency is limited to parts of the control system of lesser importance, or to the operation of controls which are not essential to the assurance of the regularity of the expenditure, such that it can reasonably be concluded that the risk of loss to the EAGGF was minor.

B. 5% of expenditure - where the deficiency relates to important elements of the control system or to the operation of controls which play an important part in the assurance of the regularity of the expenditure, such that it can reasonably be concluded that the risk of loss to the EAGGF was significant.

C. 10% of expenditure - where the deficiency relates to the whole of or fundamental elements of the control system or to the operation of controls essential to assuring the regularity of the expenditure, such that it can reasonably be concluded that there was a high risk of widespread loss to the EAGGF.'

'- whether the national authorities took effective steps to remedy the deficiencies as soon as they were brought to light;

- whether the deficiencies arose from difficulties in the interpretation of Community texts'.

The existence of the conduct complained of

required to follow clear rules and are directly answerable to the AIA and the Comitato Bovini.

Infringement of the guidelines laid down in the Belle Group Report

The corrections with regard to the ewe premium

to the extent necessary to offset an income loss in the Community during a marketing year.

largely ineffective, the EAGGF remained, in all events, exposed to a serious financial risk.

The correction with regard to public storage of cereals

out intervention operations. It entered into a specific contract with them laying down the conditions for the provision of storage services.

The correction with regard to set-aside of arable land

one marketing year between 1 July 1985 and 30 June 1988. For Italy, that period was the 1987/1988 marketing year.

Economic Community (OJ, English Special Edition, 1965-1966, p. 70)) show that that was still the practice in 1986 and 1987. Moreover, according to a letter from the EAGGF dated 2 August 1994, during farm inspections the farmers directly concerned had contradicted, at least in so far as concerns Sicily, the Italian authorities' claim that traditional fallowing was no longer farming practice.

The correction with regard to the reimbursement of costs of public storage of sugar

reimbursement. Article 6(2) provides that, when, for any sugar marketing year, the total of levies collected is not equal to the total of the reimbursement made, the difference is to be carried forward to a subsequent sugar marketing year. Finally, Article 6(3) specifies the method for calculating the amount of the levy: the total estimated reimbursement for the sugar marketing year in question is to be increased or decreased as the case may be by the amounts carried forward under Article 6(2); the result is to be divided by the estimated quantity of sugar which will be marketed during that marketing year and produced within the maximum quotas.

Costs