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Judgment of the General Court (Ninth Chamber) of 19 November 2015

Judgment of the General Court (Ninth Chamber) of 19 November 2015

Data

Court
General Court
Case date
19 november 2015

Verdict

Judgment of the General Court (Ninth Chamber) of 19 November 2015 —

Greece v Commission

(Case T‑107/14)

"EAGGF - Guarantee Section - EAGF and EAFRD - Expenditure excluded from financing - Regulation (EC) No 1782/2003 - Single payment entitlements scheme - National reserve - Allocation criteria - Risk to the Fund - Conditionality"

AgricultureCommon agricultural policyEAGGF, EAGF and EAFRD financingClearance of accountsDisallowance of expenses arising from irregularities in applying EU rulesFlat-rate correction issued by the Commission in accordance with internal guidelinesLegal basisRegulations No 729/70, No 1258/1999 or No 1290/2005 (Council Regulation No 729/70, as amended by Regulation No 1287/95, Art. 5(2)(c), No 1258/1999, Art. 7(4), first para., and No 1290/2005, Art. 31(1)) (see paras 41, 133)

AgricultureCommon agricultural policyEAGGF, EAGF and EAFRD financingClearance of accountsDisallowance of expenses arising from irregularities in applying EU rulesAssessment of the losses incurred by the EAGGFIrregular expenses not capable of being determined with sufficient precisionAssessment based on flat-rate correctionsLawfulnessNo breach of principle of proportionality (Council Regulation No 1782/2003; Commission Regulation No 795/2004) (see paras 54-56, 58)

AgricultureCommon agricultural policyEAGF financingClearance of accountsDisallowance of expenses arising from irregularities in applying EU rulesConditionError attributable to an EU institution (Council Regulation No 1782/2003; Commission Regulation No 795/2004) (see para. 65)

AgricultureCommon agricultural policyEAGF financingClearance of accountsDisallowance of expenses arising from irregularities in applying EU rulesChallenge by the Member State concernedInvocation of the principle of fairness as the basis for an obligation to accept responsibilityNot permissible (Council Regulation No 1782/2003; Commission Regulation No 795/2004) (see para. 68)

AgricultureCommon agricultural policyIntegrated administration and control system for certain aid schemesSingle payment schemeCalculation of the reference amountRight to payment from the national reserveFarmers in a special situationDiscretion of the Member StatesScopeLimitsPriority allocation of rights from the national reserve to young farmersJustification based on conformity of the age criterion with the objectives of the single payment schemeLawfulness (Council Regulation No 1782/2003, Art. 42) (see para. 90)

AgricultureCommon agricultural policyIntegrated administration and control system for certain aid schemesSingle payment schemeCalculation of the reference amountRight to payment from the national reserveFarmers in a special situationFarmers having made investmentsDiscretion of the Member StatesScopeLimitsObligation to maintain a correlation between the value of the rights allocated and the number of hectares acquired by the farmer as an investment (Council Regulation No 1782/2003, Art. 42(4); Commission Regulation No 795/2004, Arts 6(5) and 21(1)) (see paras 93-96)

Actions for annulmentJudgment annulling a measureScopePartial annulment of an EU legal actConditionSeverability of the annullable elements from the contested actDecision of the Commission concerning the clearance of accounts in relation to expenses financed by EAGGF, EAGF and EAFRDNon-severability of elements from the contested act (Art. 263, first para., TFEU; Council Regulation No 1782/2003, Art. 42(3) and (4)) (see paras 99-101)

AgricultureCommon agricultural policyEAGF financingClearance of accountsDisallowance of expenses arising from irregularities in applying EU rulesChallenge by the Member State concernedBurden of proofShared by the Commission and the Member State (Council Regulation No 1290/2005, Art. 31) (see paras 105-108)

AgricultureCommon agricultural policyEAGF financingClearance of accountsDisallowance of expenses arising from irregularities in applying EU rulesFlat-rate correction issued by the Commission in accordance with internal guidelinesDefective or unsatisfactory character of key controls established by the Member StateWhether permissible to apply a flat rate of 10% in the event of non-compliance with the criteria governing the allocation of rights from the national reserve (Council Regulation No 1290/2005, Art. 31) (see paras 117, 118, 120, 121)

AgricultureCommon agricultural policyEAGGF financingClearance of accountsElaboration of decisionsWritten communication by the Commission to Member States of the results of its checksContentConditionsNon-complianceEffect (Council Regulation No 1258/1999, Art. 7(4), fifth para., and No 1290/2005, Art. 31; Commission Regulations No 1663/95, Art. 8(1), and No 885/2006, Art. 11) (see paras 152-155)

AgricultureEAGGFClearance of accountsPeriod capable of being the subject-matter of a financial correctionPeriod prior to the date of the written communication of the results of the checksLawfulnessConditionsOpportunity of Member State concerned to remedy the irregularities foundCommission not entitled to take account of periods concerning closed marketing years not covered by the verification mission and not capable of rectification (Commission Regulations No 1663/95, Art. 8, and No 885/2006, Art. 11) (see paras 166, 168-169)

Acts of the institutionsStatement of reasonsObligationScopeDecision on the clearance of accounts in respect of expenditure financed by EAGGF, EAGF and EAFRD (Art. 296 TFEU) (see para. 182)

Re:

APPLICATION for annulment of Commission Implementing Decision 2013/763/EU of 12 December 2013 on excluding from European Union financing certain expenditure incurred by the Member States under the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF), under the European Agricultural Guarantee Fund (EAGF) and under the European Agricultural Fund for Rural Development (EAFRD) (OJ 2013 L 338, p. 81), in so far as the Hellenic Republic is concerned.

Operative part

The Court:

Annuls Commission Implementing Decision 2013/763/EU of 12 December 2013 on excluding from European Union financing certain expenditure incurred by the Member States under the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF), under the European Agricultural Guarantee Fund (EAGF) and under the European Agricultural Fund for Rural Development (EAFRD), in so far as it imposes a flat-rate correction on the Hellenic Republic relating to the allocation of entitlements from the national reserve and in so far as the European Commission applied to the Hellenic Republic a financial correction in respect of 2008 relating to conditionality;

Dismisses the action as to the remainder;

Orders each party to bear its own costs.