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

Provisional text

JUDGMENT OF THE COURT (Fourth Chamber)

24 January 2018 (*)

(Failure of a Member State to fulfil obligations — Milk and milk products — Additional levy on milk — Tax years 1995/1996 to 2008/2009 — Regulation (EC) No 1234/2007 — Articles 79, 80 and 83 — Regulation (EC) No 595/2004 — Articles 15 and 17 — Infringement — Lack of effective payment of the levy within the time limits prescribed — Failure of recovery in the event of non-payment of the levy)

In Case C‑433/15,

ACTION for failure to fulfil obligations under Article 258 TFEU, brought on 6 August 2015,

European Commission, represented by P. Rossi, D. Nardi and J. Guillem Carrau, acting as Agents, with an address for service in Luxembourg,

applicant,

v

Italian Republic, represented by G. Palmieri, acting as Agent, and by P. Gentili and S. Fiorentino, avvocati dello Stato, with an address for service in Luxembourg,

defendant,

THE COURT (Fourth Chamber),

composed of T. von Danwitz, President of the Chamber, C. Vajda, E. Juhász (Rapporteur), K. Jürimäe and C. Lycourgos, Judges,

Advocate General: E. Sharpston,

Registrar: R. Schiano, Administrator,

having regard to the written procedure and further to the hearing on 8 September 2016,

after hearing the Opinion of the Advocate General at the sitting on 13 July 2017,

gives the following

Judgment

1        By its action, the European Commission asks the Court to declare that, by failing to ensure that the additional levy due in respect of quantities produced in Italy in excess of the national quota from the first year in which the additional levy was in fact applied in Italy (1995/1996) until the last year in which there was surplus production in Italy (2008/2009),

–        was in fact allocated to the individual producers who have contributed to each of the production overruns and

–        that the levy was paid in good time, upon their being given notification of the amount payable, by the purchasers or the producers in the case of direct sales, or

–        where the levy was not paid within the period prescribed, registered and, where possible, collected by way of enforcement from those purchasers or producers,

the Italian Republic has failed to fulfil the obligations imposed on it by the relevant provisions of EU law applicable in the years concerned, and in particular, by: (i) Articles 1 and 2 of Council Regulation (EEC) No 3950/92 of 28 December 1992 establishing an additional levy in the milk and milk products sector (OJ 1992 L 405, p. 1), (ii) Article 4 of Council Regulation (EC) No 1788/2003 of 29 September 2003 establishing a levy in the milk and milk products sector (OJ 2003 L 270, p. 123 and Corrigendum OJ 2004 L 94, p. 71), (iii) Articles 79, 80 and 83 of Council Regulation (EC) No 1234/2007 of 22 October 2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (Single CMO Regulation) (OJ 2007 L 299, p. 1), and, with regard to the Commission’s implementing provisions, (iv) Article 7 of Commission Regulation (EEC) No 536/93 of 9 March 1993 laying down detailed rules on the application of the additional levy on milk and milk products (OJ 1993 L 57, p. 12), (v) Article 11(1) and (2) of Commission Regulation (EC) No 1392/2001 of 9 July 2001 laying down detailed rules for applying Council Regulation (EEC) No 3950/92 establishing an additional levy on milk and milk products (OJ 2001 L 187, p. 19), and, finally, (vi) Articles 15 and 17 of Regulation (EC) No 595/2004 of 30 March 2004 laying down detailed rules for applying Regulation No 1788/2003 (OJ 2004 L 94, p. 22), as amended by Commission Regulation (EC) No 1568/2006 of 4 October 2006 (OJ 2006 L 274, p. 6) (‘Regulation No 595/2004’).

 Legal context

2        In accordance with the first recital of Regulation No 3950/92, the purpose of the additional levy scheme in the milk and milk products sector which ‘was to reduce the imbalance between supply and demand on the milk and milk-products market and the resulting structural surpluses ... remains necessary in the future in order to achieve a better market balance’.

3        Article 1 of Regulation No 3950/92 provides:

‘For seven new consecutive periods of 12 months commencing on 1 April 1993, an additional levy shall be payable by producers of cows’ milk on quantities of milk or milk equivalent delivered to a purchaser or sold directly for consumption during the 12-month period in question in excess of a quantity to be determined.

The levy shall be 115% of the target price for milk.’

4        Article 2(1) of that regulation provides:

‘The levy shall be payable on all quantities of milk or milk equivalent marketed during the 12-month period in question in excess of the relevant quantity referred to in Article 3. It shall be shared between the producers who contributed to the overrun.

In accordance with a decision of the Member State, the contribution of producers towards the levy payable shall be established, after the unused reference quantities have been reallocated or not, either at the level of the purchaser, in the light of the overrun remaining after unused reference quantities have been allocated in proportion to the reference quantities of each producer, or at national level, in the light of the overrun in the reference quantity of each individual producer.’

5        Regulation No 3950/79 was repealed, with effect from 1 April 2004, by Article 25 of Regulation No 1788/2003. Recital 5 to the latter regulation states:

‘The levy should be set at a dissuasive level and be payable by the Member States as soon as the national reference quantity is exceeded. The Member State should then divide the burden of payment among the producers who have contributed to the overrun. The latter must be liable vis-à-vis the Member State for payment of their contribution to the levy due for the mere fact of having overrun their available quantity.’

6        Article 1 of that directive, entitled ‘Purpose’, provides:

‘1.      For 11 consecutive periods of twelve months commencing on 1 April 2004 (hereinafter referred to as “twelve-month periods”), a levy is hereby introduced (hereinafter referred to as “the levy”) on quantities of cow’s milk and other milk products marketed during the twelve-month period concerned in excess of the national reference quantities fixed in Annex I.

2.      These quantities shall be divided between producers in accordance with Article 6, distinguishing between deliveries and direct sales as defined in Article 5. Any overrun of the national reference quantity and the resulting levy shall be determined nationally in each Member State, in accordance with Chapter 3 and making a distinction between deliveries and direct sales.

3.      The national reference quantities in Annex I shall be fixed without prejudice to possible review in the light of the general market situation and particular conditions existing in certain Member States.’

7        Article 3 of Regulation No 1788/2003, headed ‘Payment of the levy’, states:

‘1.      Member States shall be liable to the Community for the levy resulting from overruns of the national reference quantity fixed in Annex I, determined nationally and separately for deliveries and direct sales, and before 1 October following the twelve-month period concerned, shall pay it, within the limit of 99% of the amount due, into the European Agricultural Guidance and Guarantee Fund (EAGGF).

2.      If the levy provided for in paragraph 1 has not been paid before the due date and after consultation of the Committee of the European Agricultural Guidance and Guarantee Fund, the Commission shall deduct a sum equivalent to the unpaid levy from the monthly advances on the provision for expenditure effected by the Member State concerned within the meaning of Article 5(1) and Article 7(2) of Council Regulation (EC) No 1258/1999 of 17 May 1999 on the financing of the common agricultural policy (OJ 1999 L 160, p. 103) …

3.      The Commission shall determine the arrangements for implementation of this Article in accordance with the procedure laid down in Article 23(2).’

8        Under Article 4 of that regulation, entitled ‘Contribution of producers to the levy due’:

‘The levy shall be entirely allocated, in accordance with the provisions of Articles 10 and 12, among the producers who have contributed to each of the overruns of the national reference quantities referred to in Article 1(2).

Without prejudice to Article 10(3) and Article 12(1), producers shall be liable vis-à-vis the Member State for payment of their contribution to the levy due, calculated in accordance with the provisions of Chapter 3, for the mere fact of having overrun their available reference quantities.’

9        Regulation No 1788/92 was repealed by the first sentence of Article 201(1) of Regulation No 1234/2007 as from 1 April 2008. The provisions of Regulation No 1234/2007 governing the system of milk production limitation apply, under Article 204(2)(f) thereof, as from 1 July 2008. Recital 38 of the regulation states:

‘The surplus levy should be set at a dissuasive level and be payable by the Member States as soon as the national quota is exceeded. The Member State should then divide the burden of payment among the producers who have contributed to the overrun. Those producers should be liable vis-à-vis the Member State for payment of their contribution to the levy due by virtue of the fact of having overrun their available quantity. Member States should pay to the European Agricultural Guarantee Fund (EAGF) the levy corresponding to the overrun of their national quota, reduced by a flat-rate amount of 1% in order to take account of cases of bankruptcy or the definitive inability of certain producers to make their contribution to the payment of the levy due.’

10      Article 78 of Regulation 1234/2007, entitled ‘Surplus levy’, reads as follows:

‘1.      A surplus levy shall be payable on milk and other milk products marketed in excess of the national quota as established in accordance with Subsection II.

The levy shall be set, per 100 kilograms of milk, at EUR 27.83.

...

2.      Member States shall be liable to the Community for the surplus levy resulting from overruns of the national quota, determined nationally and separately for deliveries and direct sales, and between 16 October and 30 November following the twelve-month period concerned, shall pay 99% of the amount due to the EAGF.

3.      If the surplus levy provided for in paragraph 1 has not been paid before the due date and after consultation of the Committee of the Agricultural Funds, the Commission shall deduct a sum equivalent to the unpaid surplus levy from the monthly payments within the meaning of Articles 14 and 15(2) of Regulation (EC) No 1290/2005. Before taking its decision, the Commission shall warn the Member State concerned, which shall make its position known within one week. ...

...’

11      Article 79 of that regulation, entitled ‘Contribution of producers to the surplus levy due’, provides:

‘The surplus levy shall be entirely allocated, in accordance with Articles 80 and 83, among the producers who have contributed to each of the overruns of the national quotas referred to in Article 66(2).

Without prejudice to Articles 80(3) and 83(1), producers shall be liable vis-à-vis the Member State for payment of their contribution to the surplus levy due, calculated in accordance with Articles 69, 70 and 80, for the mere fact of having overrun their available quotas.

...’

12      Article 80 of that regulation, entitled ‘Surplus levy on deliveries’, in the version as amended by Council Regulation (EC) No 72/2009 of 19 January 2009 (OJ 2009 L 30, p. 1), provides:

‘1.      In order to draw up the definitive surplus levy statement, the quantities delivered by each producer shall be increased or reduced to reflect any difference between the real fat content and the reference fat content, using coefficients and on terms to be laid down by the Commission.

At national level, the surplus levy shall be calculated on the basis of the sum of the deliveries, adjusted in accordance with the first subparagraph.

...

3.      Each producer’s contribution to payment of the surplus levy shall be established by decision of the Member State, after any unused part of the national quota allocated to deliveries has or has not been re-allocated, in proportion to the individual quotas of each producer or according to objective criteria to be set by the Member States:

(a)      either at national level on the basis of the amount by which each producer’s quota has been exceeded;

(b)      or firstly at the level of the purchaser and thereafter at national level where appropriate.

The third subparagraph of Article 78(1) applies, Member States, in establishing each producer’s contribution to the amount of levy payable due to the application of the higher rate referred to in that subparagraph, shall ensure that this amount is contributed proportionately by the producers responsible according to objective criteria to be set by the Member State.’

13      Under Article 83 of Regulation No 1234/2007, entitled ‘Surplus levy on direct sales’:

‘1.      In the case of direct sales, each producer’s contribution to payment of the surplus levy shall be established by decision of the Member State, after any unused part of the national quota allocated to direct sales has or has not been re-allocated, at the appropriate territorial level or at national level.

2.      Member States shall establish the basis of calculation of the producer’s contribution to the surplus levy due on the total quantity of milk sold, transferred or used to manufacture the milk products sold or transferred by applying criteria fixed by the Commission.

3.      No correction linked to fat content shall be taken into account for the purpose of drawing up the definitive surplus levy statement.

4.      The Commission shall determine how and when the surplus levy must be paid to the Member State’s competent body.’

14      Article 7 of Regulation No 536/93 provides:

‘1.      Member States shall take all the verification measures necessary to ensure payment of the levy on quantities of milk and milk equivalent marketed in excess of any of the quantities referred to in Article 3 of Regulation (EEC) No 3950/92. ...

...

3.      Member States shall physically verify the accuracy of the accounting with regard to the quantities of milk and milk equivalent marketed and, to that end, shall check milk transport during collection at farms and shall, in particular, check:

(a)      at the premises of the purchasers …

(b)      at the premises of the producers …

...’

15      Regulation No 1392/2001 has, under Articles 16(1) and 17 thereof, replaced Regulation No 536/93 with effect from 31 March 2002. Article 11 of Regulation No 1392/2001, entitled ‘Checking by the Member States’, provides:

‘1.      Member States shall take all the measures necessary to ensure that the levy on quantities of milk and milk equivalent marketed in excess of any of the quantities referred to in Article 3 of Regulation (EEC) No 3950/92 is correctly charged and, in the case of deliveries, that it falls on the producers concerned.

2.      The Member States shall take any further measures necessary to:

(a)      verify cases of total or partial abandonment of milk production and/or reference quantities in accordance with Article 8(a) of Regulation (EEC) No 3950/92 where the relevant provisions thereof are applied;

(b)      ensure that the parties concerned are aware of the criminal and administrative penalties to which they are liable if they fail to comply with Regulation (EEC) No 3950/92 or with this Regulation.

...’

16      Regulation No 1392/2001 has been repealed, with effect from 1 April 2004, by Regulation No 595/2004, the provisions of which apply, under Article 28 thereof, from the period 2004/2005. Article 15 of Regulation No 595/2004, entitled ‘Time limit for payment’, provides:

‘1.      Before 1 September each year, purchasers and, in the case of direct sales, producers liable for the levy shall pay the competent authority the amount due in accordance with rules laid down by the Member State.

2.      Where the time limit for payment referred to in paragraph 1 is not complied with, the sums due shall bear interest annually at the three-month reference rates applicable on 1 September each year, as referred to in Annex II, plus one percentage point.

The interest shall be paid to the Member State.

3.      The Member States shall declare to the European Agricultural Guarantee Fund (EAGF) the amounts resulting from the application of Article 3 of Regulation (EC) No 1788/2003 together with the expenditure declared in respect of November each year.

...’

17      Article 17 of Regulation No 595/2004, entitled ‘Charge of the levy’, provides:

‘Member States shall take all the measures necessary to ensure that the levy is correctly charged and that it falls on the producers who contributed to the overrun.’

18      On 16 July 2003, the Council adopted Decision 2003/530/EC on the compatibility with the common market of an aid that the Italian Republic intends to grant to its milk producers (OJ 2003 L 184, p. 15), on the basis of the third subparagraph of Article 88(2) EC, which has become the third subparagraph of Article 108(2) TFEU. Recitals 2 to 5 as well as 7 and 8 of that decision state:

‘(2)      Italian milk producers have produced milk in excess of their reference quantities during the period from 1995/1996 to 2001/2002 and are due to pay to the Community an amount of EUR 1 386 475 250 by virtue of the additional levy on milk and milk products established in accordance with Regulation (EEC) No 3950/92.

(3)      This amount has to a large extent not been recovered by the Italian authorities following suspensions of payment obtained by these producers from national Administrative Courts.

(4)      The current situation in Italy is characterised by the fact that the collection of the additional levy is running into a series of difficulties, which have notably resulted in a vast number of pending court cases which may continue to retard actual payments for a considerable time in the future.

(5)      The Italian authorities envisage measures to settle this pending litigation and to remove the social tensions that currently exist by allowing these milk producers to settle their outstanding debt by means of deferred payment without interest over a number of years.

...

(7)      The Italian government undertakes to avoid similar problems in the future by imposing the rigorous application of the additional levy on the basis of a new law for the future management of milk quotas, providing a radical overhaul and modernisation of its implementation provisions. According to the Commission’s assessment, this law provides the correct legislative basis for application of the regime and, once fully and correctly implemented, the regime is expected to function well.

(8)      In order to avoid the imposition of heavy financial burdens on the individual Italian milk producers concerned, which would probably be caused by the immediate recovery in full of all the amounts due, and thus to alleviate the existing social tensions, exceptional circumstances exist which justify considering the aid which the Italian Republic intends to grant to these milk producers in the form of an advance and a deferred payment to be compatible with the common market in derogation from Article 87 of the Treaty, if the conditions laid down in this Decision are fulfilled.’

19      Article 1 of that decision provides:

‘The aid the Italian Republic intends to grant to milk producers, by itself making payment to the Community of the amount due from them to the Community by virtue of the additional levy on milk and milk products for the period 1995/1996 to 2001/2002 and by allowing these producers to repay their debt by way of deferred payment over a number of years without interest, is exceptionally considered to be compatible with the common market on condition that:

–        repayment by producers be in full by yearly instalments of equal size, and

–        the repayment period shall not exceed 14 years, starting from 1 January 2004.’

 Pre-litigation procedure and forms of order sought

20      Having received information on the insufficiency of the sums collected in Italy from the additional levy payable by the producers of cow’s milk, the Commission took the view that the Italian Republic had not fulfilled its obligations to divide fully between the producers which have contributed to each overrun of the national reference quantities, the additional levy payable individually by them, to calculate the corresponding individual debt, to control the actual payment of that debt by those producers owing it and, in case of non-payment, to recover the amounts due.

21      By a series of exchanges of letters during the period between the months of July 2008 and July 2012, most of which took place under the EU Pilot Procedure, the Commission’s services sent information requests to the Italian Government regarding the state of progress of recovering that additional level on milk. The Commission’s requests concerned, inter alia, the allocation of the additional levy between the taxable persons as well as the measures taken for recovery in the event of non-payment, the impact of the legislative amendments introduced on the effectiveness of recovery of the additional levy as well as on the administrative procedures for that recovery and the management of litigation.

22      Being dissatisfied with the information which the Italian authorities had provided it, the Commission sent the Italian Republic a letter of formal notice on 21 June 2013, inviting it to submit its observations in that regard. The Italian Republic replied by letter dated 23 September 2013, together with three additional letters of 30 September 2013, 21 January and 7 February 2014.

23      In view of the ‘continued stagnation of the recovery procedures and the large size of the amounts still due’, the Commission issued a reasoned opinion against the Italian Republic on 10 July 2014 and invited that Member State to take the necessary measures to comply with that opinion within two months of its receipt. As the Italian Government had asked for an additional deadline to reply, the Commission granted that request and allowed it to submit its reply by 11 October 2014.

24      By letter of 13 October 2014, completed on 22 October and 25 November 2014, the Italian Republic replied to the complaints raised in the reasoned opinion.

25      Since the Commission was not convinced by the arguments of the Italian Republic, it decided to bring the present action.

 The action

 Preliminary observations

26      First, it should be noted that in the forms of order sought in its application, the Commission asks the Court to state that the Italian Republic has failed to fulfil its obligations under ‘[t]he relevant provisions of EU law applicable to the years concerned, and in particular’ the provisions referred to in paragraph 1 of the present judgment. However, in the introductory part of that application and in paragraph 2 thereof, the Commission lists, without reference to the words ‘in particular’, the various provisions of EU law which are the subject of the alleged infringement. Moreover, it is not clear from that application that the Commission intended to include in its action other provisions of EU law than those explicitly referred to in paragraph 1 of the present judgment. In those circumstances, the forms of order sought must be understood in the sense that they cover only the latter provisions.

27      Second, it should be made clear that the Commission’s action for failure to fulfil obligations relates to the failure of the Italian Republic to take the measures necessary to comply with some of its obligations under EU law and which relate to the scheme for the additional levy on milk production in excess of the national quota available to that Member State. The Commission criticises that Member State for failing to have put in place a scheme ensuring that the additional levy due at the national level is actually allocated to and paid by the economic operators concerned or, failing payment, recovered by the competent authorities.

28      The forms of order sought in the application do not, however, refer to the specific amounts to which the lack of recovery would have given rise during the various tax years, or even to an overall amount covering the entirety of the tax years concerned.

29      It follows that it is not necessary to determine, in the context of the present action, whether the total amount of the additional levies not yet recovered corresponds to the sum of EUR 1 343 million, as indicated in the Commission’s pleadings, or the sum of EUR 827.39 million, according to the Italian Republic.

30      That being so, notwithstanding the differences of opinion between the parties as to the amounts already recovered and those remaining to be recovered, it should be noted that, on the date of expiry of the period laid down in the reasoned opinion, that is, on 11 October 2014, the date to which an additional period of one month was added, that is, more than 18 years after the end of the first tax year for the additional levy in Italy and more than five years after the last year, the Italian authorities had still not recovered the considerable amounts due by way of the additional levy.

31      The present action must be examined in the light of those considerations.

 Substance

 Arguments of the parties

32      The Commission claims that, on 11 October 2014, namely the date of the expiry of the period laid down in the reasoned opinion, to which an additional period of one month was added, the Italian Republic had not introduced an effective scheme to recover the amounts due by way of the additional milk levy for the tax years 1995/96 to 2008/09.

33      The Commission takes the view that the Italian Republic has failed to fulfil its obligation to allocate and recover in full with due diligence and speed the additional levy between the producers that have contributed to each overrun of the national reference quantities. In that regard, the Commission relies, in particular, on the case-law from the judgment of 21 January 1999, Germany v Commission (C‑54/95, EU:C:1999:11, paragraph 177), according to which it is incumbent on the Member States, by virtue of the obligation of general diligence laid down in Article 4(3) TEU, to recover promptly the sums due by way of the additional levy.

34      Thus, the Commission takes the view that the fact that the amounts due by way of the additional levy on milk are so high, as is clear from paragraph 29 of the present judgment, is the result of negligence on the part of the Italian Republic and the lack of effectiveness of the scheme implemented by that Member State to ensure the allocation and recovery of that levy within its territory during the period covered by the application.

35      According to the Commission, in the first place, the implementation under national law of the EU’s rules in this area has been excessively confusing, which has caused significant delays in the application of the national additional levy scheme and large-scale litigation. Consequently, the recovery of that levy has been made more difficult, in particular because of the suspension of payments awarded by certain national courts as a precautionary measure.

36      In the second place, the Italian Republic has not made effective use of the administrative mechanisms which it could have used to recover the amounts due by way of the additional levy, in particular the compensation scheme. In Italy, the possibility of offsetting the amounts due under that heading and the amounts of aid to be paid in the context of the common agricultural policy have been introduced inefficiently and belatedly. Moreover, the Commission takes the view that some legislative provisions still in force hinder compensation being implemented.

37      In the third place, the recovery procedures have been largely blocked since the entry into force of some legislative amendments introduced in the course of 2003, due to the absence of implementing provisions or conventional agreements between the authorities and the communities concerned which are necessary for the recovery procedures.

38      In the fourth place, the Commission states that, because of the errors made by the national authorities responsible for the recovery of the additional levy and the numerous amendments made to the recovery procedure, the Italian Republic itself has acknowledged that it faces ‘a significant stalemate in terms of recoveries’. In that regard the Commission states that the amounts payable have been wrongly considered to be irretrievable, which has also undermined the effectiveness of that recovery.

39      In response, the Italian Republic submits, first, that the action for failure to act brought by the Commission under Article 258 TFEU infringes, in the circumstances of the case, the principles of ne bis in idem, of proportionality and of specification. Second, it contends that the Commission does not adduce evidence that the Italian Republic has infringed its obligations in connection with the allocation and recovery of the additional levy.

 Findings of the Court

40      It should be recalled that, in accordance with Article 2(1) of Regulation No 3950/92, the additional levy established by Article 1 of that regulation is to be allocated among the producers who contributed to the overrun of the reference quantities. Such a distribution of the additional levy is also provided for in Article 4 of Regulation No 1788/2003 and in Articles 79, 80 and 83 of Regulation No 1234/2007.

41      In accordance with Article 7 of Regulation No 536/93, Article 11(1) and (2) of Regulation No 1392/2001 and Articles 15 and 17 of Regulation No 595/2004, the Member States are to take all the measures necessary to ensure that the levy, including the interest due in the event of failure to comply with the payment period, is correctly charged and that it falls on the producers who contributed to the overrun.

42      In that context, according to well-established case-law, it is incumbent on the Member States, by virtue of the obligation of general diligence laid down in Article 4(3) TEU, such as it specified by the relevant EU regulations, to recover promptly the sums due by way of the additional levy. With the passage of time, division and recovery of the additional levy is likely to become complicated or impossible for reasons such as the fact that undertakings may have ceased trading or accounting documents may have been lost (see, to that effect, judgments of 11 October 1990, Italy v Commission, C‑34/89, EU:C:1990:353, paragraph 12, and of 21 January 1999, Germany v Commission, C‑54/95, EU:C:1999:11, paragraph 177).

43      Moreover, following settled case-law of the Court relating to the burden of proof in proceedings for failure to fulfil an obligation under Article 258 TFEU, it is for the Commission to determine whether the obligation has not been fulfilled. It is therefore for the Commission to place before the Court all the information required to enable the Court to establish that the obligation has not been fulfilled (see, to that effect, judgment of 28 January 2016, Commission v Portugal, C‑398/14, EU:C:2016:61, paragraph 47 and the case-law cited).

44      Where the Commission has adduced sufficient evidence of certain matters in the territory of the defendant Member State, it is incumbent on the latter to challenge in substance and in detail the information produced and the inferences drawn (see, to that effect, judgment of 28 January 2016, Commission v Portugal, C‑398/14, EU:C:2016:61, paragraph 48 and the case-law cited).

45      In the present case, the Commission has set out in detail the factual elements which, according to it, gave rise to the negligence and failings which are the subject of the complaints about which it criticises the Italian Republic. Moreover, and without being contradicted in that respect by that Member State, the Commission has pointed out that those factual elements are largely based on the documentation provided by the Italian authorities in the course of their exchanges and are essentially confirmed by opinions of the Corte dei conti (Court of Auditors, Italy) and by governmental and parliamentary inquiry committees of that Member State.

46      Having regard to the fact that the sums due by way of the additional levy, such as those referred to in paragraph 29 of the present judgment, may have accumulated over such a long period, without the competent authorities having ever been able to reduce them in a sustainable manner, it appears that those authorities have not taken the measures necessary to comply with their obligations under EU law contained in the form of order sought in the application.

47      In those circumstances, it must be held that the Commission has provided sufficient evidence to show the reality of the facts on which it relies in its action in order to demonstrate that the Italian Republic has infringed the obligations arising from those provisions. Consequently, in accordance with the case-law referred to in paragraph 44 of the present judgment, it is appropriate to examine the grounds of defence which have been presented.

48      The Italian Republic, while accepting that there is an obligation under EU law to allocate and, where appropriate, recover the additional levy, maintains, first, that that obligation is an obligation to ‘use best endeavours’ and not to ‘achieve a specific result’ and that the Commission has not adduced evidence of non-compliance by the Italian authorities.

49      In support of that argument, the Italian Republic relies on paragraph 36 of the judgment of 13 November 2001, France v Commission (C‑277/98, EU:C:2001:603) in which the Court held that Article 19 of Commission Regulation (EEC) No 1546/88 of 3 June 1988 laying down detailed rules for the application of the additional levy referred to in Article 5c of Regulation (EC) No 804/68 (OJ 1988 L 139, p. 12), under which Member States are to adopt whatever measures are required to ensure collection of the additional levy, has created an obligation to use best endeavours and not an obligation to achieve a specific result.

50      It therefore takes the view that the mere fact that part of the amounts relating to the additional levy on milk has not been recovered cannot suffice to establish the existence of the alleged infringement.

51      In that regard, it appears that the arguments put forward by the Italian Republic are based on a misreading of the Commission’s form of order sought. By its form of order sought, the Commission asks the Court to declare that the Italian Republic has failed to fulfil its obligations by failing, as pointed out in paragraph 27 of the present judgment, to take the necessary measures to ensure that the additional levy on milk is allocated to the producers concerned and, where appropriate, recovered by the competent authorities. Thus, the object of that infringement is not the fact that that Member State did not recover the entirety of the sums due by means of that levy.

52      The Italian Republic cannot, therefore, exonerate itself from the alleged infringement by claiming that it has taken measures which enabled it to recover part of the sums due by way of the additional levy on milk.

53      Although the Italian Republic devotes a large part of its pleadings to the detailed description of the national legal framework relating to the apportionment and recovery of the additional levy and its amendments, the Italian Republic does not, however, adduce any specific elements capable of calling into question the failure to act claimed by the Commission, or to demonstrate that it has, in accordance with its duty of care, implemented in time an effective scheme allowing it to recover the amounts concerned in accordance with the regulations referred to by the Commission.

54      In those circumstances, the argument relating to an alleged ‘obligation to use best endeavours’ must be rejected as being ineffective. According to the findings in paragraphs 45 to 47 of the present judgment, the Italian Republic has not taken the necessary measures to ensure the prompt allocation of the levy to producers of milk and its effective recovery.

55      The Italian Republic then claims that the numerous changes in the EU’s legislative framework relating to the additional levy on milk have substantially contributed to the legislative and administrative difficulties encountered at the national level.

56      In that respect, it should be recalled that, even assuming that the implementation of EU rules on the milk levy has led to significant difficulties at the national level, the fact remains that, as the Court has repeatedly held, a Member State cannot plead practices or situations prevailing in its domestic legal order to justify failure to observe obligations arising under EU law (see, in particular, judgment of 2 March 2017, Commission v Greece, C‑160/16, not published, EU:C:2017:161, paragraph 13 and the case-law cited).

57      Moreover, although the Italian Republic considered that the EU rules on the additional levy on milk had, by their nature, impeded the allocation and, where appropriate, the recovery of that levy, in a prompt and effective manner, it would have been open to that Member State to bring actions before the Court for the purposes of a review of the legality of the relevant EU measures. Yet, throughout the contested period, which covers more than twelve years, no appeal to that effect was lodged by the Italian Republic. After all, the fact that the scheme for the additional levy on milk gave rise to legal and political difficulties at the EU level, and that the scheme was eventually replaced, in no way justifies the failure of Member States to take all the measures necessary to ensure its effectiveness at the national level.

58      Moreover, with regard more particularly to Decision 2003/530, from which the Italian Republic infers that the Council of the European Union could not have adopted that decision had the Italian Republic failed to fulfil its obligations, it is sufficient to point out that the Council, by that decision, merely approved the aid measures designed to facilitate the payment of the additional levy by the milk producers concerned, without any assessment of the situation as it stood at the date of its adoption in Italy. In addition, by Decision 2003/530, the Council implicitly confirmed the obligation of the Italian Republic to ensure the payment of the additional levy by the milk producers and indicated, as is apparent from recital 7 of that decision, that ‘the Italian government [undertook] ... imposing the rigorous application of the additional levy on the basis of a new law.’

59      In those circumstances, the Italian Republic’s arguments concerning compliance with its obligations as regards the allocation and possible recovery of the additional levy on milk are not such as to invalidate the Commission’s conclusions.

60      It is also necessary to examine the Italian Republic’s arguments that the present action for failure to fulfil obligations brought under Article 258 TFEU infringes the ne bis in idem, proportionality and specificity principles. It claims that, in so far as it has already paid the EAGGF the sums relating to the levy corresponding to the overrun of its national reference quantity, in accordance with Articles 3 and 4 of Regulation No 1788/2003, and, subsequently, with Articles 78 and 79 of Regulation No 1234/2007, that action would mean that it could be ‘penalised’ again for the infringement of the same obligations relating to the allocation and, where appropriate, the recovery of the additional levy.

61      In that regard, it should be recalled that, as is also apparent from recital 5 of Regulation No 1788/2003 and recital 38 of Regulation No 1234/2007, the provisions referred to in the preceding paragraph impose on the Italian Republic different obligations which relate, first, to the payment of the additional EAGGF levy to be borne by that Member State pursuant to Article 3 of Regulation No 1788/2003 and to Article 78(2) of Regulation No 1234/2007. Second, that Member State is required to divide the additional levy among the milk producers which contributed to the overrun of the national quotas and to recover it, in accordance with Article 4 of Regulation No 1788/2003 and with Article 79 of Regulation No 1234/2007. Thus, the fact that the Italian Republic eventually fulfilled the first of those obligations does not prevent it from having failed in the second of those obligations, which constitutes the sole subject matter of the present proceedings for failure to fulfil obligations.

62      Such an assessment is all the more compelling since the Italian Republic’s argument ultimately amounts to disregarding the purpose of the additional levy consisting in obliging milk producers to observe the reference quantities allocated to them (judgment of 25 March 2004, Cooperativa Lattepiù and Others, C‑231/00, C‑303/00 and C‑451/00, EU:C:2004:178, paragraph 75).

63      It follows that the Italian Republic’s argument relating to an infringement of the principles of ne bis in idem, proportionality and specificity must be rejected.

64      In the light of the foregoing considerations, it must be declared that, by failing to ensure that the additional levy payable in respect of quantities produced in Italy in excess of the national quota, from the first year in which the additional levy was in fact applied in Italy (1995/1996) until the last year in which there was surplus production in Italy (2008/2009),

–        was in fact allocated to the individual producers which had contributed to each of the production overruns and

–        was paid at the appropriate time, upon their being given notification of the amount payable, by the purchasers or the producers in the case of direct sales, or

–        where the levy was not paid within the period prescribed, was registered and, where possible, recovered by way of enforcement from those purchasers or producers,

Italy has failed to fulfil its obligations under Articles 1 and 2 of Regulation No 3950/92, Article 4 of Regulation No 1788/2003, Articles 79, 80 and 83 of Regulation No 1234/2007, and, with regard to the Commission’s implementing provisions, Article 7 of Regulation No 536/1993, Article 11(1) and (2) of Regulation No 1392/2001, and, lastly, Articles 15 and 17 of Regulation No 595/2004.

 Costs

65      Under Article 138(1) of the Rules of Procedure of the Court of Justice, the unsuccessful party must be ordered to pay the costs if they have been applied for in the other party’s pleadings. Since the Commission has applied for costs and the Italian Republic has been unsuccessful in its submissions, the latter must be ordered to pay the costs.

On those grounds, the Court (Fourth Chamber) hereby:

1.      By failing to ensure that the additional levy payable in respect of quantities produced in Italy in excess of the national quota, from the first year in which the additional levy was in fact applied in Italy (1995/1996) until the last year in which there was surplus production in Italy (2008/2009),

–        was in fact allocated to the individual producers which had contributed to each of the production overruns and

–        was paid at the appropriate time, upon their being given notification of the amount payable, by the purchasers or the producers in the case of direct sales, or

–        where the levy was not paid within the period prescribed, was registered and, where possible, recovered by way of enforcement from those purchasers or producers,

the Italian Republic has failed to fulfil the obligations imposed on it by Articles 1 and 2 of Council Regulation (EEC) No 3950/92 of 28 December 1992 establishing an additional levy in the milk and milk products sector, Article 4 of Council Regulation (EC) No 1788/2003 of 29 September 2003 establishing a levy in the milk and milk products sector, Articles 79, 80 and 83 of Council Regulation (EC) No 1234/2007 of 22 October 2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (Single CMO Regulation), and, with regard to the Commission’s implementing provisions, Article 7 of Commission Regulation (EEC) No 536/93 of 9 March 1993 laying down detailed rules on the application of the additional levy on milk and milk products, Article 11(1) and (2) of Commission Regulation (EC) No 1392/2001 of 9 July 2001 laying down detailed rules for applying Regulation No 3950/92, and, finally, Articles 15 and 17 of Regulation (EC) No 595/2004 of 30 March 2004 laying down detailed rules for applying Regulation No 1788/2003, as amended by Commission Regulation (EC) No 1468/2006 of 4 October 2006;

2.      Orders the Italian Republic to pay the costs.

[Signatures]

*      Language of the case: Italian.

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