Spain v Commission (Agriculture) [2003] EUECJ C-331/01 (11 September 2003)

Judgment By application lodged at the Court Registry on 6 September 2001, the Kingdom of Spain brought an action under the first and second paragraphs of Article 230 EC for the annulment of Commission Decision 2001/557/EC of 11 July 2001 excluding 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 concerns the Kingdom of Spain. The Kingdom of Spain contests the exclusion from Community financing of the sum of ESP 185 046 088 in the 1997 financial year in respect of livestock premiums. It is apparent from Decision 2001/557 that in issue is budget post 2133 and that the reason for exclusion is the existence of a [s]ystem not in conformity with the rules. Relevant provisions Community legislation The procedure for clearance of accounts Under Article 2(1) and Article 3(1) of Regulation (EEC) No 729/70 of the Council of 21 April 1970 on the financing of the common agricultural policy (OJ 1970 L 94, p. 13) as amended by Council Regulation (EC) No 1287/95 of 22 May 1995 (OJ 1970 L 125, p. 1; Regulation No 729/70), the Guarantee Section of the EAGGF finances refunds on exports to third countries and intervention intended to stabilise the agricultural markets, granted or undertaken according to Community rules within the framework of the common organisation of agricultural markets. Article 5 of Regulation No 729/70 governs the clearance of the annual accounts submitted by national agencies authorised to incur expenditure to that end. This provision has been heavily amended by Regulation No 1287/95. Article 5(1) and (2) of Regulation 729/70 provide: 1. Member States shall at regular intervals transmit to the Commission the following information concerning the accredited paying agencies and coordinating bodies referred to in Article 4 and relating to transactions financed by the Guarantee Section of the EAGGF: (a) statements of expenditure and estimates of financial needs; (b) annual accounts, accompanied by the information required for clearance and an attestation regarding the integrality, exactitude and veracity of the accounts transmitted. 2. The Commission, after consulting the Fund Committee: ... (b) shall, before 30 April of the year following the financial year concerned, on the basis of the information referred to in point (b) of paragraph 1, clear the accounts of the paying agencies. The accounts clearance decision shall cover the integrality, exactitude and veracity of the accounts submitted. The decision shall not prejudice the adoption of a subsequent decision pursuant to point (c); (c) shall decide on the expenditure to be excluded from the Community financing referred to in Articles 2 and 3 where it finds that expenditure has not been effected in compliance with Community rules. Before a decision to refuse financing is taken, the results of the Commission's checks and the replies of the Member State concerned shall be notified in writing, after which the two parties shall endeavour to reach agreement on the action to be taken. If no agreement is reached, the Member State may ask for a procedure to be initiated with a view to mediating between the respective positions within a period of four months, the results of which shall be set out in a report sent to and examined by the Commission, before a decision to refuse financing is taken. The Commission shall evaluate the amounts to be excluded having regard in particular to the degree of non-compliance found. The Commission shall take into account the nature and gravity of the infringement and the financial loss suffered by the Community. A refusal to finance may not involve expenditure effected prior to twenty-four months preceding the Commission's written communication of the results of those checks to the Member State concerned. ... The first subparagraph of Article 8(2) of Regulation No 729/70 refers to irregularities or negligence attributable to administrative authorities or other bodies of the Member States. The fourth, fifth and sixth recitals of Regulation No 1287/95 are relevant for the interpretation of Article 5 of Regulation No 729/70. Those recitals provide: Whereas the time limit for the clearance of accounts decision must be shortened; whereas, therefore, information technology must be used as fully as possible for producing the information to be sent to the Commission; whereas, when carrying out checks, the Commission must have full and immediate access to information on expenditure held in both documents and electronic files; Whereas a single annual decision for the clearance of accounts creates numerous difficulties in that, for a given financial year, in respect of all measures covered by the Guarantee Section of the EAGGF and in all the Member States, it fulfils simultaneously an accounting objective and a recognition that expenditure has been effected in accordance with Community rules; whereas considerable time lags accompany the taking of this single decision, which is nevertheless subject to reservations and disjunctions; whereas it is accordingly necessary to separate the procedure into two types of decision, one concerning the clearance of the accounts of the Guarantee Section of the Fund, the other determining the consequences, including financial corrections, to be drawn from the results of the checks on conformity; Whereas the checks on conformity and the ensuing clearance decisions will therefore no longer be linked to the implementation of the budget in a particular financial year; whereas the maximum period to which the consequences to be drawn from the checks on conformity may be applied must be determined. On 7 July 1995 the Commission adopted Regulation (EC) No 1663/95 laying down detailed rules for the application of Regulation No 729/70 regarding the procedure for the clearance of the accounts of the EAGGF Guarantee Section (OJ 1995 L 158, p. 6). Article 4 of Regulation No 1663/95, as amended by Commission Regulation (EC) No 2245/1999 of 22 October 1999 (OJ 1999 L 273, p. 5; Regulation No 1663/95) provides that, by 10 February of the year following the end of the financial year which it concerns, the Member State is to send to the Commission the annual accounts of the expenditure charged to the Guarantee Section of the EAGGF, the reports established by each department or body pursuant to Article 5(1) of the regulation and the certificates and reports established by the certifying body or bodies. The first subparagraph of Article 8(1) of Regulation No 1663/95 provides: If, as a result of an enquiry, the Commission considers that expenditure has not been effected according to Community rules, it shall notify the Member State concerned of the results of its checks and indicate the corrective measures to be taken to ensure future compliance. Legislation on additional payments In the course of the crisis of bovine spongiform encephalopathy (BSE), the Council adopted Regulation (EC) No 1357/96 of 8 July 1996 providing for additional payments to be made in 1996 with the premiums referred to in Regulation (EEC) No 805/68 on the common organisation of the market in beef and veal and amending that regulation (OJ 1996 L 175, p. 9). Regulation No 1357/96 provides for the payment of additional premiums to producers of bovine animals (additional payments). In order to expedite the actual payment of the amounts stipulated as much as possible, Articles 1 to 3 of the regulation provide that the additional payments will be made on the basis of the information on the premiums paid for the 1995 calendar year and that an adjustment will be made subsequently to take into account the number of animals for which entitlement to a premium is established in the 1996 calendar year. Article 1(3) of the Regulation states: The extent to which a producer is entitled to each of the additional payments referred to in paragraphs 1 and 2 and received in respect of the 1995 calendar year shall depend upon the number of animals for which he establishes entitlement to a premium in the 1996 calendar year. Article 4 of Regulation No 1357/96 allows Member States to make further payments in special circumstances. Article 4(a) relates to Community aid and Article 4(b) to national aid. Article 5 of Regulation No 1357/96 provides: By way of derogation from Articles 1, 2, 3 and 4, Member States may grant the total amount of aids resulting from the application of Article 1(1) and (2) and Article 4(a) to producers of bovine animals according to objective criteria, provided that the compensation will not be higher than the loss of income to such producers and that there is no distortion of competition. The fifth recital of the regulation, which is relevant for the interpretation of Article 5 thereof, states: Whereas Member States, in which the structure of production makes a system of payment other than by means of the said increase in premiums more appropriate and/or where the need to complete all payments by 15 October makes this necessary, should be authorised, in derogation from the above, to distribute the total of the aid which would otherwise have been payable by way of increases in premiums and the amount provided for in the Annex to producers of bovine animals on the basis of objective criteria. Under the second paragraph of Article 7 of Regulation No 1357/96: The Community shall finance the expenditure incurred by Member States in relation to the payments referred to in Article 1 and Article 4(a) and Article 5 only where such payments are made by them by 15 October 1996 at the latest. On 29 July 1996, the Commission adopted Regulation (EC) No 1504/96 laying down detailed rules for the application of Council Regulation (EC) No 1357/96 (OJ 1996 L 189, p. 77). The first recital of Regulation No 1504/96 states that for the sake of transparency between Member States, and the monitoring and proper administration of the additional payments provided for in Regulation (EC) No 1357/96, the Member States should inform the Commission of the grant model used and the national detailed rules of application for implementing the measures provided for in that Regulation and of the final balance. Article 1 of Regulation No 1504/96 provides: As regards the additional aid provided for in Regulation (EC) No 1357/96, the Member States shall communicate to the Commission: (a) where Articles 1 to 4 of that Regulation are applied: - no later than 15 November 1996 and 31 July 1997, the number of additional amounts granted pursuant to Article 1, broken down according to the arrangements ..., - without delay, the methods used to grant the amounts and aids referred to in Article 4(a) and, where applicable, Article 4(b), and in particular the type or category of animals concerned, the unit amounts provided for, their method of calculation and the final dates for payment, - no later than 15 November 1996 and 31 July 1997 respectively, the total amounts of aid paid pursuant to Article 4(a) and, where applicable, Article 4(b) and the number of beneficiaries and animals concerned; (b) where Article 5 and, where applicable, Article 4(b) of that Regulation are applied: - without delay, the methods used to grant the aid referred to therein, and in particular the type or category of animals concerned, the unit amounts provided for, their method of calculation and the final dates for payment, - no later than 15 November 1996 and 31 July 1997 respec tively, the total amou nts of aid paid pursu ant to Article 5 and Article 4(b), and the numb er of benefi ciaries and animal s concer ned. National legislation The order of the Spanish Minister for Agriculture, Fisheries and Food of 19 September 1996 (BOE No 228 of 20 September 1996; the Ministerial Order) governs the procedure on additional payments with premiums to producers of male bovine animals and suckler cows. The Ministerial Order is based on Article 5 of Regulation No 1357/96, but it uses the number of animals of each producer which conferred entitlement to a premium in 1995 as the criterion for the grant of additional payments. The preamble to the Ministerial Order states: To that effect, under Article 5 of Regulation (EC) No 1357/96, by way of derogation from Articles 1 to 4, Member States may grant the total amount of aid resulting from the application of Article 1(1) and (2) and Article 4(a) to producers of bovine animals according to objective criteria, provided that the compensation will not be higher than the loss of income to such producers and that there is no distortion of competition. It was therefore conside red necessary to use as the most objective criterion for the grant of aid the number of animals of each producer which conferred entitlement to a premium in 1995. The system for obtaining aid by the producers can thus be rendered more flexible and the formalities and administrative procedures for payment simplified as much as possible, since the entitlement to aid in 1995 has already been clearly established in each concrete case. As the Spanish Government argued before the Court, the Ministerial Order refers to urgency in order to justify the adoption of a ministerial order rather than a royal order. The correction procedure in question On 8 June 1998 the Spanish Ministry of Agriculture, Fisheries and Food sent a letter to the Commission by fax to inform it, in accordance with Article 1 of Regulation No 1504/96, of additional payments made under Regulation No 1357/96 (the letter of 8 June 1998). The document consists of four columns setting out, in the first column, the type of animal, in the second column, the number of animals having received premiums, in the third column, the unit amount of the premiums and, in the fourth column, the legislative provision under which they were granted. The provisions referred to are Article 1 and/or Article 4(a) and/or Article 4(b) of Regulation No 1357/96 as appropriate. The Ministerial Order was delivered to the Commission at the time of an inspection which took place in Spain from 21 to 25 September 1998 (the inspection) for the purpose of assessment of the accounts for the years 1997 and 1998. On 12 April 1999, the Commission sent the Kingdom of Spain a letter pursuant to the first subparagraph of Article 8(1) of Regulation No 1663/95 in which it noted that the fact that Spain had not adjusted its additional payments pursuant to Regulation No 1357/96 to take account of the premium applications made for 1996 nor recovered overpayments appeared to infringe Article 2(1) and (2) of Regulation No 1357/96. The Commission invited the Spanish Government to provide information on the amounts in question. An exchange of correspondence between the Kingdom of Spain and the Commission resulted in the application of the conciliation procedure. According to its summary report of 19 June 2001, the Commission takes the view that the Kingdom of Spain applied Article 1 of Regulation No 1357/96 and not Article 5. Spain should therefore have made the adjustment required under the regulation in order to take account of the number of animals conferring entitlement to the premium in 1996. The financial correction applied is 2% of the expenditure incurred by the Kingdom of Spain in 1996 by way of additional payments. The action In support of its action, the Kingdom of Spain relies on two pleas in law. The first alleges an error in the Commission's assessment of compliance with the Community legislation applicable to the case. The second plea alleges failure by the Commission to observe the time-limits for notification laid down in that legislation. The first plea The Kingdom of Spain alleges, in its first plea in law, that the Commission has made an error in claiming that it had not complied with Regulation No 1357/96. In support of that plea, it claims that, when the additional payments were granted, it relied on the derogation in Article 5 of Regulation No 1357/96. It takes the view that the conditions for operation of that provision were fulfilled. First of all, the criterion for allocation was objective, since it concerned additional premiums. In this regard, nothing precluded the use of the same payment criterion as that laid down in Regulation No 1357/96. Secondly, having regard to the small amount of the premium, representing 2.9% of the price of the animals concerned, given the decrease of more than 30% in prices between February and June 1996, the compensation was not higher than the loss of income to such producers. Finally, there was no distortion of competition since all the beneficiaries received identical additional payments. The Spanish Government further notes that the amount which was paid to the producers on the basis of the information for the 1996 financial year exceeded that which was actually paid on the basis of the information relating to the 1995 financial year. The Spanish Government claims that the application of Article 5 of Regulation No 1357/96 was justified by urgency and the requirement, pursuant to Article 7 of the regulation, to make the payments before 15 October 1996. It points out that the two conditions laid down in the fifth recital of the regulation are separated by the terms and/or and that, therefore, the second condition regarding the date of the payments was sufficient to justify the application of Article 5. According to the Spanish Government, urgency was evidenced by the type of provision used, namely a Ministerial Order, and by the preamble thereto. The Spanish Government disputes the fact that the letter of 8 June 1998 constitutes an acknowledgement of the application of Articles 1 and 4 of Regulation No 1357/96. If this letter cited provisions, it did so in a manner consistent with Article 5 of the Regulation, which provides that the Member States may grant the total amount of aids resulting from the application of Article 1 and Article 4(a) to producers of bovine animals according to objective criteria. The letter was intended to indicate that the amounts paid to the producers under Article 5 took account of the amounts provided for in Article 1 and Article 4(a). The fact that the expenditure was declared under budget posts 2133.001 and 2133.002, entitled respectively additional payment to the suckler cow premium and additional payment to the special premium, which are for the application of Article 1 of Regulation No 1357/96, cannot be interpreted as an application thereof. The Spanish Government claims in this connection that it should have declared the expenditure under budget post 2133.004, for the application of Article 5 of Regulation 1357/96, only if it had relied on the first of the two conditions laid down in the fifth recital of the regulation, that is to say if it had relied on a system of payment other than the increase in premiums. The Spanish Government concludes that, having applied Article 5 of Regulation No 1357/96, it was not required to make the adjustments referred to in the regulation in order to take account of entitlement to a premium for 1996. The Commission points out that the Kingdom of Spain used the criteria for the allocation of additional payments laid down in Regulation No 1357/96. It also states that, on several occasions, Spain reported the application of Article 1 and Article 4(a) and (b) of the regulation, not of Article 5. Accordingly, the letter of 8 June 1998 only refers to Article 1 and Article 4(a) and (b) of the Regulation. That document was sent to the Commission again on 2 October 1998, following a request for further information by the Commission at the time of the inspection. In addition, the expenditure incurred was declared under budget posts 2133.001 and 2133.002, provided for the application of Article 1 of the Regulation, rather than 2133.004, provided for the application of Article 5. It therefore takes the view that, contrary to its claims, the Kingdom of Spain has not applied Article 5, but rather Article 1 and Article 4(a) of Regulation No 1357/96. It follows that the Spanish Government must comply with Article 1(3) of the Regulation and make the adjustments required in terms of premiums in respect of the 1996 calendar year. In the alternative, the Commission contends that, even if the Kingdom of Spain were considered to have applied Article 5 of Regulation No 1357/96, it did not comply with the conditions laid down in that provision. First, it follows from the fifth recital of Regulation No 1357/96 that the aid in question should have been granted other than by means of the increase in premiums. Secondly, in order to comply with Article 5 of Regulation No 1357/96, the Kingdom of Spain should have set criteria linked to the loss of revenue to the producers in 1996, the year of the BSE crisis referred to in the regulation, rather than grant aid to those who had ceased or considerably restricted their activities during 1995 and 1996. Thirdly, Spain had not given the reason for which reliance on Article 5 was justified on the ground of urgency. The time-limit for payment laid down in Community legislation applied to all the Member States. Moreover, the information on the premiums for 1995 were available and enabled additional payments to be made as provided for in the regulation. Findings of the Court It must be noted at the outset that Regulation No 1357/96 was adopted in order to help producers of beef and veal by means of rapid additional payments following the BSE crisis which broke out in March 1996. It is also important to point out that, for the sake of transparency between Member States, monitoring and sound administration of additional payments, Regulation No 1504/96 provided for the communication to the Commission of specific information within certain time-limits, namely no later than 15 November 1996 and 31 July 1997 respectively. In this case, it was only in the letter of 8 June 1998, that is to say with a delay of 17 months, that the Spanish Government submitted to the Commission information making reference to Article 1 and Article 4 of Regulation No 1357/96. On the basis of that letter the Commission had every reason to believe that the Spanish Government had applied Article 1 of the regulation, above all since it is not disputed that the expenditure was declared under budget posts 2133.001 and 2133.002 for the application of Article 1 of the regulation, and not under 2133.004 for the application of Article 5. The Spanish Government relies on the fact that the Ministerial Order of 19 September 1996, which was not communicated to the Commission until the end of September 1998, states that Article 5 of Regulation No 1357/96 is applicable. In this connection it should first be noted that, although this provision was actually referred to, the Ministerial Order adopts the same criteria for the grant of additional payments as those provided in Article 1 of the regulation for provisional payments, namely entitlements to premiums for animals kept in the 1995 calendar year. Next, the Ministerial Order contains no ground consistent with the requirements of Regulation No 1357/96 for the use of Article 5 of the regulation. The urgency arising from the prescribed deadlines for payment is only referred to for reasons of national law, to justify the powers of the Minister for Agriculture, Fisheries and Food to adopt the order. In any event, as the Advocate General notes in points 46 to 48 of her Opinion, the Spanish Government has not shown the existence of any special and exceptional urgency justifying the application of Article 5 since the deadlines for payment were the same for all the Member States and, as is stated in the Ministerial Order, the information on the premiums for 1995 was available. Finally, the only ground for reliance on Article 5 of the Regulation set out in the Ministerial Order is that in relation to the need to render more flexible the system for obtaining aid by the producers and simplify the formalities and administrative procedures for payment as much as possible, since the right to aid in 1995 has already been clearly established in each concrete case. This ground leads to the conclusion that reliance on Article 5 could only have been justified by the aim of avoiding the administrative procedures associated with the adjustments intended to take into account entitlements to premiums for 1996. The Commission's alternative ground of defence regarding the incorrect application of Article 5 of Regulation No 1357/96 could be held to be justified. It is sufficient to state, without the need to establish whether the conditions set out in the fifth recital of Regulation No 1357/96 are of a cumulative or alternative nature, that the sole justification pleaded by the Spanish Government of urgency is not proven, as has been pointed out in paragraph 45 above. However, having regard to the circumstances of the present case, the Commission's main ground of defence, in relation to the non-compliance with Articles 1 to 3 of Regulation No 1357/96, must be upheld. The Commission is right to consider that in actual fact the Spanish Government applied Article 1 of Regulation No 1357/96. In that regard the Commission was able to take into consideration the procedures for granting additional payments, which reflected those laid down in that provision; the fact that the conditions for the application of Article 5 of the Regulation were not fulfilled; the absence of grounds for the use of Article 5; and information supplied to the Commission by the Kingdom of Spain, in particular in the letter of 8 June 1998 and in the detailed accounts of the expenditure of the year in question. Accordingly, the first plea in law put forward by the Kingdom of Spain must be dismissed. The second plea In its second plea in law, the Kingdom of Spain claims that the Commission failed to comply with the 24-month period laid down in Article 5(2)(c) of Regulation No 729/70. In fact the expenditure in respect of the additional payments had been incurred in 1996, whereas the first notification relating to them was in a letter of the Commission of 12 April 1999. To refute the argument of the Commission that the year to be taken into consideration is the year during which it was necessary to make the adjustments, that is 1997, the Spanish Government quotes the report of the conciliation body, which found the following in particular: - The express obligation to recover excess payments exists where Article 1 and Article 2 are applied, but does not appear in the context of Article 5; - In the context of their interpretation of Article 5, the Spanish authorities had no reason to consider that the payments they had made should in part give rise to recovery, and they were only informed of this after the 24 months; until that time the expenditure in question was in the nature of definitive expenditure from a legal and accounting point of view; - Even if the Commission's position is to reclassify the payments as having been made under Article 5, it must be stated that this reclassification did not take place until the 24 months had passed ... The Spanish Government takes the view, furthermore, that if the Commission had really wanted to make a financial correction for the 1997 financial year, it should have taken account of the expenditure of that year for which amounts in excess of entitlements had been paid and applied the 2% correction to them. It also states that there was no budgetary post 2133 in the nomenclature of expenditure for that financial year. It would have been absurd to apply a financial correction to a year for which the appropriate budgetary post did not exist. Finally it draws attention to the objective of legal certainty pursued by Article 5(2)(c) of Regulation No 729/70. The Commission contends that the assertions of the Spanish Government in relation to the different budgetary posts do not put in question the obligation laid down in Article 1(3) and Article 2 of Regulation No 1357/96 to review the entitlement to additional payments paid in 1995 in terms of the number of animals for which the producer obtained a premium in 1996. This process could only take place in 1997. On the question of the reference year for the calculation of the financial correction, the Commission submits that the Spanish Government does not take into account the fact that the expenditure which should have been recovered during the 1997 financial year corresponded to additional payments granted during the 1996 financial year to producers who were not entitled to them and declared by the Spanish authorities in budgetary post 2133. It takes the view therefore that the fact that this budgetary post was modified in respect of the 1997 financial year is of no relevance. The change in the nomenclature of a financial year in relation to that of the previous financial year does not preclude the financial correction from relating to the 1997 financial year, as in this case. Finally, the Commission notes that the reference to legal certainty is unfounded in the context of this case, since it was the Spanish authorities themselves who told the Commission that Articles 1 and 4 of Regulation No 1357/96 were the provisions under which the payments were made. Findings of the Court As was stated in paragraph 48 above, the Commission is right to consider that in actual fact the Kingdom of Spain applied Article 1 of Regulation No 1357/96. It follows that, in accordance with Articles 1 to 3 of Regulation No 1357/96, the Kingdom of Spain had to make adjustments in order to take into account entitlements to premiums for 1996. Since those adjustments could only take place during the 1997 financial year, the 24-month period laid down in Article 5(2)(c) of Regulation No 729/70 was complied with. In any event, in order to check whether the 24-month period was complied with, the Kingdom of Spain cannot take into consideration only the date of the expenditure incurred, without taking into account the date on which it informed the Commission of relevant and sufficient information on such expenditure, allowing the latter to carry out the clearance of accounts. As is clear from the fourth recital of Regulation No 1287/95, the shortening of the time-limit for the adoption of clearance of accounts decisions was connected with computerisation of the information to be submitted to the Commission and full and immediate access for the Commission, when carrying out checks, to information on expenditure held in both documents and electronic files. It should also be noted that, in accordance with Article 4(2) of Regulation No 1663/95, all the documents required for the clearance of accounts of a financial year must be sent to the Commission by 10 February of the year following the end of that financial year. It follows from this provision by implication that the Member States must communicate the necessary documents promptly so that the Commission has sufficient time in which to carry out the checks. In this case it was not until the end of September 1998 during the inspection and at the request of the Commission that the Kingdom of Spain communicated the Ministerial Order stating that it had applied Article 5 of Regulation No 1357/96. However, on the one hand, under Article 1(b) of Regulation No 1504/96 the total amounts of aid paid and the number of beneficiaries and animals concerned should have been communicated on 15 November 1996 and 31 July 1997 respectively and, on the other hand, the methods used to grant the aid referred to should have been communicated without delay, namely before 15 November 1996, if the provision was to be effective. If the argument of the Spanish Government were followed and assuming that the additional payments were made on the permitted deadline, here 15 October 1996, the Commission would only have had three weeks, from 25 September 1998, the date on which the inspection was completed, to 15 October 1998, to contest the conformity of the expenditure entered into by the Kingdom of Spain. Nor is it inconceivable, in situations where the Member State has not sent in any of the information required for the checking and clearance of accounts, that the Commission would be out of time to contest the conformity of that State's expenditure before the existence of such expenditure even comes to its knowledge. The Court has already held that the purpose of the exclusion period for the adjustment of accounts is to protect Member States against the absence of legal certainty which would exist if the Commission were able to call into question expenditure incurred several years before the adoption of a compliance decision (Case C-130/99 Spain v Commission [2002] ECR I-3005, paragraph 133). A Member State may only however claim the protection of this period to the extent that it complies with its own obligations under Community legislation, in particular with regard to the spontaneous communication of information required for checks. It follows from the foregoing considerations that the second plea in law of the Kingdom of Spain is unfounded and that, accordingly, its application must be dismissed. Costs 67. 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 in the successful party's pleadings. Since the Kingdom of Spain has been unsuccessful and the Commission has applied for costs, the Kingdom of Spain must be ordered to pay the costs. On those grounds, THE COURT (First Chamber), hereby: 1. Dismisses the application; 2. Orders the Kingdom of Spain to pay the costs. Wathelet Jann Rosas Delivered in open court in Luxembourg on 11 September 2003. R. Grass M. Wathelet Registrar President of the First Chamber 1: Language of the case: Spanish. BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII