The Government has failed in the European Court of Justice to have a £69 million fine against Ireland for failure to control irregularities in the beef intervention storage system overturned. The irregularities related to 1990 and 1991, and to the tendering system in 1992.
The Government was also ordered to pay costs.
The appeal was lodged against the decision of the Commission in April 1996 on the "clearance of accounts" for 1992. Because of failures to supervise the intervention system adequately and the illegal practice of "multiple tendering", the Commission proposed to withhold some of the grants.
When Ireland received notification of the proposed four fines totalling £95 million, reduced by the Commission to £68 million, officials were horrified to find the Commission had levied some of the fines at the maximum level of 10 per cent of Community spending under the relevant headings.
The Commission could also have levied them at 2 per cent or 5 per cent but argued that the irregularities were of a sufficient magnitude to warrant the maximum fine.
The bulk of the fines (£50 million) was imposed in respect of failures in 1990 and 1991 to supervise adequately yields and quality in the beef intervention storage system.
Fines totalling £18 million were also imposed for breaches of Commission regulations which forbade those tendering for intervention contracts from submitting more than one offer per contract.
In Ireland and five other countries there was evidence that multiple tenders had been made by the same bidders using the names of different front companies. Department officials are said by the Commission to have colluded in this.
The court yesterday found against the Government contention that there was ambiguity in the legislation.
On the storage fines, the Government contended that, although there were deficiencies in the system of controls, particularly in 1990 and to a lesser extent in 1991, the Commission had failed to justify the levying of fines at the highest permissible level of 10 per cent of spending.
It had failed to demonstrate that in reality large amounts were wrongly charged to the Commission and it erred in its assessment of the risk of losses, the Government argued.
The court noted it was established case law that the Commission did not have to provide detailed justification. It said the Commission had an obligation only to pay out sums in accordance with the rules laid down.
In the event the rules were not observed, the onus was then on the member-state to demonstrate that the Commission had overestimated the financial consequences, the court said.
