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

The correction in respect of intervention measures for public storage of cereals

- the cereals be sound, fair and of marketable quality, free from abnormal smell and live pests and that they meet minimum quality requirements (Article 2);

- all offers for intervention contain the name of the offerer, the cereal offered, the place of storage, the intervention centre to which the offer relates and the quantity, main characteristics and harvesting year (Article 3(1));

- takeover by the intervention agency take place when the quantity and standards have been established for the entire lot in respect of the goods delivered to the intervention store (Article 3(4));

- the quality characteristic be established on the basis of a representative sample (Article 3(5));

- the quantity may be established on the basis of the stock records in respect of goods taken over in the store (Article 3(6));

- a takeover note be issued by the intervention agency in respect of each offer (Article 3(8));

- the intervention agency check the quality of the stored product at least once a year (Article 5).

- quality checks on products on entry into storage;

- the identification of stocks in storage, in particular their differentiation from stocks stored under different arrangements;

- the late entry into the accounts of stock movements;

- the unavailability of accurate records of stocks held in each store on a particular date when checks were carried out;

- the unavailability at the head office of the physical inventories laid down in Community rules and of accounting records when checks were carried out;

- the unsatisfactory nature of stock records held by the storage bodies;

- the unsuitability of certain warehouses for intervention storage (impossibility of taking measurements, non-existent or dangerous gangways, open to the elements ...);

- the difficulty of reconciling plans with the actual measurements of warehouses.

'... according to persistent trade rumours, it would appear that stocked goods and market cereals are switched in particular upon the sale of stocks into intervention'.

The Commission went on: 'If it should transpire that those rumours are founded, very severe financial corrections will be imposed and you will be requested to impose penalties on traders and/or on storage bodies.'

- the delay in entering stocks into the accounts;

- certain inadequacies in checks;

- poor storage conditions and problems with the placing of signs;

- inadequate stock records.

them too lenient, and now took the view that the improvements made by the French Republic after the 1993 visit justified reducing the financial correction applicable to 1992, but not abandoning a penalty altogether.

'It is certainly to be regretted that the Commission should give the impression of having retrospectively gone back on its original conclusions, which, here again, can only serve to corroborate the relevant Member State's observations as to the uncertainty of the clearance procedure. Moreover, the Commission's observations and conclusions would indeed be more solidly founded if they were based on a thorough examination of the system in France.

Nevertheless, the French authorities do not, essentially, deny that they should have modified significantly their previous procedure in order to meet the Commission's requirements and that the Community inspections have identified various irregularities, which the French authorities have admitted and penalised.'

'On notification of these findings the French authorities took action to improve their procedures. The fact remains, however, that the inadequacies of the system put EAGGF funds at significant risk during the 1992/93 and 1993/94 marketing years'.

- delays in booking stocks

- some inadequacy in surveillance

- inadequacy of storage conditions and inadequate signs identifying intervention stocks

- absence of plans

- inadequate stock records.

Conformity of the national management and control system with Community legislation

its own, the ONIC relies on service providers with which it enters into storage contracts.

'Variances are properly followed up. The reconciliations of the quantities of cereals on the annual clearance statements for 1993 and 1994 with those on the computer print-outs from the ONIC's management system are accurate' (paragraph 7.3.5 of Annex 7 to the audit report).

'The quantity control inspections carried out by the ONIC are clearly of a good standard: they are frequent, supported by a defined procedure, systematic, and intermediate inspections are unannounced. They enable the ONIC to form a reliable view of the information provided by the storage bodies. In addition, as a result of the fact that information is compiled manually, which is undoubtedly a lengthy and tedious process, the ONIC's management system enables detailed information to be available on the amount of cereals in storage with each storage body at any given time' (paragraph 7.4 of Annex 7 of the audit report).

The principle of legal certainty

The principle of proportionality

and thus that there was a risk of additional losses which could not be made good in accordance with Regulation No 3597/90.

The correction in respect of an export refund for processed cheese

'1. The day of export means the date on which the customs authority accepts the export declaration in which it is stated that a refund will be applied for.

...

4. The day of export shall be used to establish the quantity, nature and characteristics of the product exported.'

'Payment of the differentiated or non-differentiated refund shall be conditional not only on the product having left the customs territory of the Community but also - save where it has perished in transit as a result of force majeure - on its having been imported into a non-member country and, where appropriate, into a specific non-member country within 12 months following the date of acceptance of the export declaration:

(a) where there is serious doubt as to the true destination of the product, or

(b) where ... it is possible that the product may be re-introduced into the Community.'

'In addition, the competent authorities of the Member States may require that additional evidence be provided such as to satisfy them that the product has

actually been placed on the market in the non-member country of import in the unaltered state.'

'No refund shall be granted on products which are not of sound and fair marketable quality, or on products intended for human consumption whose characteristics or condition exclude or substantially impair their use for that purpose.'

'A product shall be considered to have been imported when it has been cleared through customs for release for consumption in the non-member country concerned.'

'The products from the group's Belgian factory were examined by the company's quality control staff. They formed the view that the manufacturing procedure had been inadequately monitored during some ten days of manufacture, which led to the withdrawal from sale of all the products affected'.

'... it is unable to find a basis for conciliation in this case. It wishes to emphasise the importance of rapid clarification of the applicable Community provisions, in particular Articles 5 and 13 of Regulation No 3665/87'.

- the product was not of marketable quality (see Article 13 of Regulation No 3665/87);

- the defect in quality was caused during manufacture, and consequently before export (see Article 3 of Regulation No 3665/87);

- the product was not put on the market in the country of destination (see Article 5 of Regulation No 3665/87).

Costs