Judgment of the General Court (First Chamber) of 4 September 2019

Data

Court: General Court

Case date: 4 september 2019

Verdict

Judgment of the General Court (First Chamber) of 4 September 2019 –
Lithuania v Commission

(Case T‑603/17)

"(EAGF and EAFRD - Expenditure excluded from financing - Regulation (EC) No 1698/2005 - Axis 4 Leader - Regulation (EU) No 65/2011 - Administrative checks - Obligation to implement a suitable system for evaluating the reasonableness of the costs - Contribution in kind in the form of unpaid voluntary work - Contribution in kind in the form of a contribution of immovable property - On-the-spot checks - Presence of documents supporting payment claims - Implementation of operations financed in accordance with the rules on public procurement)"

AgricultureEAGF and EAFRD financingGrant of aid and premiumsObligation on the Member States to organise an effective system of administrative and on-site inspectionsScopeUnreliable controlsDisallowance

(European Parliament and Council Regulation No 1306/2013, Art. 52(2))

(see paras 38, 39)

AgricultureEAGF and EAFRD financingClearance of accountsDisallowance of expenses arising from irregularities in applying EU rulesFinding of defects in the control system established by a Member StateChallenge by the Member State concernedBurden of proofShared by the Commission and the Member State

(European Parliament and Council Regulation No 1306/2013, Art. 52(2))

(see paras 40-43, 79, 85, 109, 126, 127)

AgricultureEAGF and EAFRD financingClearance of accountsDisallowance of expenses arising from irregularities in applying EU rulesFinding of defects in the control system established by a Member StateAssessment of losses suffered by the fundsIrregular expenses not capable of determination with sufficient precisionAssessment based on flat-rate correctionsLawfulness

(European Parliament and Council Regulation No 1306/2013, Art. 52(2))

(see paras 89-91, 94, 95)

EU lawInterpretationProvision containing no express reference to the law of Member StatesIndependent and uniform interpretationConcept of provision of land or real estate

(Regulation No 1974/2006, Art. 54(1)(a))

(see paras 130-142)

AgricultureEAGF and EAFRD financingGrant of aid and premiumsObligation on the Member States to organise an effective system of administrative and on-site inspectionsDrawing up a report for every on-the-spot checkNecessary content

(Council Regulation No 65/2011, Arts 26(1)(a) and (d) and 27(1))

(see paras 149-152, 160, 161, 167, 168, 176, 177, 183-185, 190)

Re:

Application under Article 263 TFEU for annulment of Commission Implementing Decision (EU) 2017/1144 of 26 June 2017 excluding from European Union financing certain expenditure incurred by the Member States under the European Agricultural Guarantee Fund (EAGF) and under the European Agricultural Fund for Rural Development (EAFRD) (OJ 2017 L 165, p. 37), in so far as it excludes certain expenditure incurred by the Republic of Lithuania.

Operative part

The Court:

Dismisses the action;

Orders the Republic of Lithuania to bear its own costs and pay those incurred by the European Commission;

Orders the Czech Republic to bear its own costs.