Action brought on 13 July 2007 — Lithuania v Commission

(Case T-262/07)

(2007/C 211/100)

Language of the case: Lithuanian

Parties

Applicant: Republic of Lithuania (represented by: D. Kriaučiūnas and E. Matulionytė)

Defendant: Commission of the European Communities

Form of order sought

Pleas in law and main arguments

The contested decision sets out the quantities of agricultural products in free circulation in the new Member States at the date of accession exceeding the quantities which were to be regarded as constituting a normal carryover of stock at 1 May 2004, and the amounts to be charged to the new Member States in consequence of the expense of elimination of those excess quantities.

The applicant considers the contested decision to be unlawful. It relies on four pleas in law in support of its action.

1.   Lack of power

The applicant states that paragraph 4 of Chapter IV of Annex IV to the Act of Accession does not confer upon the Commission power to impose on the Member States payments to the Community budget that are in the nature of penalties, in particular where it has not proved expenditure incurred by the Community in eliminating surplus stocks; also, the Commission exceeded the prescribed three-year period for adoption of the decision under Article 41 of the Act of Accession, which alone could be an appropriate legal basis for the decision.

2.   Infringement of European Community law

Infringement of the principle of legal certainty: the contested decision infringes the principle of legal certainty because the methodology and criteria for calculating surplus stocks were not known when determining built up stocks at the time of accession, which would have allowed Member States to prevent surplus stocks from arising or to eliminate them at the expense of the economic operators who had built up the stocks. Moreover, the contested decision laid down different criteria — and extended the list of products assessed — compared with Article 4 of Regulation No 1972/2003, under which the States scrutinise the building up of surplus stocks.

Infringement of the principle of non-discrimination: unlike Commission Regulation (EC) No 144/97 on surplus stocks of agricultural products in Austria, Sweden and Finland, the contested decision assessed not only products which were granted export refunds or to which intervention measures were applied, but also stocks of other products. This principle has also been infringed by treating the different situations of new Member States in the same way and by failing, without justification, to have regard to the specific circumstances in which their stocks arose.

Infringement of the principle of good administration and the principle of transparency: the contested decision does not disclose comprehensively the criteria for calculating the payments and, moreover, the criteria continually change. Also, although the Member States themselves assessed stocks in accordance with measures of Community law, the Commission, without giving reasons as to why that assessment is inappropriate and without disputing it, conducted another assessment of the same stocks on the basis of its own criteria.

Infringement of provisions of the Act of Accession: first, the decision is not an appropriate means of achieving the objectives of the elimination of surplus stocks which is required by paragraph 2 of Chapter IV of Annex IV to the Act of Accession, in particular because it was not even attempted in the decision to link the penalties imposed with expenditure on the elimination of stocks actually incurred by the Community. Second, the decision was adopted after expiry of the period, laid down in Article 41 of the Act of Accession, of three years from the date of accession during which the Commission could adopt transitional measures.

3.   Inadequate statement of reasons

In the applicant's submission, the contested decision has an inadequate statement of reasons or entirely lacks reasons; in particular, it is not shown in the decision that (and in what amount) the European Community actually incurred, by reason of elimination of the alleged surplus stocks, expenditure which Member States should meet.

4.   Manifest errors of assessment

The applicant asserts that the Commission made manifest errors of assessment in that, first, it selected a method at macroeconomic level and did not assess the stocks that had actually arisen in the Member States and, second, when assessing specific arguments of the parties it did not have regard to the specific and objective circumstances obtaining in the Republic of Lithuania in which national stocks arose in the milk sector.

(1)  Commission Decision 2007/361/EC of 4 May 2007 on the determination of surplus stocks of agricultural products other than sugar and the financial consequences of their elimination in relation to the accession of the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia (OJ 2007 L 138, p. 14).