Action brought on 6 October 2006 - United Kingdom v Commission
(Case T-278/06)
Language of the case: English
Parties
Applicant: United Kingdom of Great Britain and Northern Ireland (represented by: E. O'Neill, acting as agent, and H. Mercer, Barrister)
Defendant: Commission of the European Communities
Form of order sought
Article 1 of Commission Decision 2006/554/EC on the clearance of accounts presented by Member States in respect of expenditure of the Guarantee Section of the European Agricultural Guidance and Guarantee Fund be annulled in so far as it excludes from Community financing United Kingdom expenditure for the years 2001-2004 in the sum of £1,351,441.25 in the audit field 'Butterfats in food processing' on the grounds of 'Insufficient quantity controls on manufactured quantities';
the Commission be ordered to pay the costs incurred by the United Kingdom.
Pleas in law and main arguments
The applicant seeks the partial annulment of the Commission's Decision 2006/554/EC of 27 July 2006 excluding from Community financing certain expenditure incurred by the Member States under the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF)
1 and in particular the part concerning the use of butterfats in food processing in the United Kingdom.
The dispute concerns the control measures taken by the applicant under Article 23 of Commission Regulation No 2571/97
2 ('the Commission regulation') which prescribes measures to be taken by Member States
inter alia in respect of the manufacture and use of concentrated butter for which subsidy is available when the concentrated butter is used for the manufacture of specified pastries and cakes.
Article 23(2) of the Commission regulation provides for an 'on-the-spot' check on manufacturers of concentrated butter 'during the manufacture of concentrated butter' so that 'each tender award is checked [...] at least once'.
The Commission finds that the applicant has failed to carry out key controls in that, as a matter of interpretation of the Commission regulation, the applicant is under an obligation to verify physically the quantities in one batch of concentrated butter per tender after manufacturing has taken place. The applicant alleges that this in effect amounts to ensure that each tender award is checked at least twice. The applicant claims that the Commission relies on a concept which is not in the Commission regulation of a 'physical' check on quantity.
The applicant invokes two pleas in law:
a) The Commission committed an error of law in that the contested decision was unlawful under the first subparagraph of Article 7(4) of Council Regulation No 1258/1999
3 (the 'Council regulation') on the financing of the common agricultural policy as there was no basis for concluding that the relevant expenditure was not effected in compliance with the Community rules contained in Article 23(2) of the Commission regulation; and
b) the Commission committed an error of law in that the determination of the amount excluded was in breach of the fourth subparagraph of Article 7(4) of the Council regulation.
____________1 - OJ 2006 L 218, p. 12.2 - Commission Regulation (EC) No 2571/97 of 15 December 1997 on the sale of butter at reduced prices and the granting of aid for cream, butter and concentrated butter for use in the manufacture of pastry products, ice-cream and other foodstuffs (OJ 1997 L 350, p. 3).3 - Council Regulation (EC) No 1258/1999 of 17 May 1999 on the financing of the common agricultural policy (OJ 1999 L 160, p. 103).