Written Answers. - Proposed EU Disallowance.

Peadar Clohessy

Question:

72 Mr. Clohessy asked the Minister for Agriculture, Food and Forestry the steps, if any, he has taken to ensure that public funds will not be at risk in the event of the proposed £18.54 million disallowance materialising as proposed by the European Union in respect of multi-layered tendering for intervention contracts by certain companies in each of the years 1990 and 1991. [1834/96]

The proposed disallowance is based on the EU Commission's view that the beef intervention tendering system was not properly implemented in Ireland in 1991 and 1992. The Commission Services take the view that the provision in the relevant EU Regulation which prohibited the submission of several tenders by the same company for the sale of beef into intervention should have been interpreted so as to exclude tenders from companies which were linked commercially to other tenderers.

My Department is of the view that the manner in which the tendering procedure was operated was fully in accordance with the relevant EU Regulations in force at the time and that in practice there was no loss to EU funds due to its operation in that way. The Department's view of the legal position on this issue is strengthened by the fact that the Commission felt it necessary to amend these regulations in 1993 to provide for the rejection of tenders from linked companies. There should be no question of applying this amendment retrospectively. A number of member states applied this provision in a similar manner and are facing disallowances on the same basis.

My Department submitted this matter to the EU Conciliation Body which has made its recommendation to the Commission, which will make a final decision on the matter in the near future. With regard to the impact of any disallowance on public funds, the Government has established a group of senior officials from the Department of Finance, the Office of the Attorney General and my Department to examine the possible recovery of any disallowance from the meat trade. On completion of its work, the group's report will be submitted to the Government.