April 16, 2009

The EU's anti-fraud body Olaf has welcomed an Italian court ruling on a milk quota scam that will help recover millions of euros.

Olaf said Italian dairies have been avoiding paying fines imposed by the EU for exceeding annual milk quotas.

The Italian Supreme Court ruled in January that the seizure of milk producers' assets worth EUR21 million (US$28 million) was justified. But a statement from the European Commissioner last September said Italian milk producers owed the EU about EUR1 billion (US$1.3 billion) in accumulated fines.

Some dairies had simulated transactions by using fake companies, Olaf said.

An Olaf spokesman said the ruling gives a basis for following up a larger number of cases. He added that no such scheme is being investigated in other EU member states.

The European Commission sets national milk quotas each year, and Italy has repeatedly complained that its quota level is too low. The quota system was introduced in 1984 to support milk prices and to prevent overproduction.

The EU plans to phase out milk quotas by 2015, but before then the Commission intends to allow a one-percent increase in annual quota.

The Commission has acted against Italy five times for infringing the milk quota system.