Action brought on 22 September 2014 — Italy v Commission

(Case T-686/14)

(2014/C 395/73)

Language of the case: Italian

Parties

Applicant: Italian Republic (represented by: G. Galluzzo, avvocato dello Stato, and G. Palmieri, Agent)

Defendant: European Commission

Form of order sought

The applicant claims that the Court should:

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annul, in so far as it is contested in the present action and in so far as it was imposed against Italy, Implementing Decision C (2014) 4479 of the European Commission of 9 July 2014, notified on 10 July 2014, excluding from Community 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);

—	revoke the flat-rate financial correction relating to tomato processing aid for the 2008 financial year, totalling EUR 1 399 293,78;

—	revoke the one-off financial correction for the irregularity ‘Lack of information on the undertaken recovery actions’, totalling EUR 2 362 005,73;

—	revoke the one-off financial correction for the irregularity ‘Non-reporting in Annex III’, totalling EUR 1 460 976,88.

Pleas in law and main arguments

In support of the action, the applicant relies on four pleas in law.

First plea in law: (i) failure to comply with essential procedural requirements (Article 253 EC) owing to a failure to state adequate reasons and (ii) breach of the principle of proportionality.

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It is submitted that the flat-rate financial correction relating to tomato processing aid for the 2008 financial year is contrary to: (i) Article 31 of Council Regulation (EC) No 1290/2005 of 21 June 2005 on the financing of the common agricultural policy (OJ 2005 L 209, p. 1) and (ii) Articles 28 and 31 of Commission Regulation (EC) No 1535/2003 of 29 August 2003 laying down detailed rules for applying Council Regulation (EC) No 2201/96 as regards the aid scheme for products processed from fruit and vegetables (OJ 2003 L 218, p. 14). By that plea, the applicant challenges the application of the financial corrections imposed by the contested decision, corresponding to 5 % of the expenditure incurred, maintaining that those corrections were imposed despite evidence that there had been no appreciable financial damage.

—	The applicant also disputes the quantification of that correction, since the actual amount set is disproportionate and clearly illogical, being significantly higher than any damage potentially resulting from the conduct imputed to the Italian authorities.

Second plea in law: (i) misrepresentation of the facts and (ii) failure to comply with essential procedural requirements (Article 253 EC) owing to a failure to state adequate reasons.

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This plea concerns the financial correction, amounting in total to EUR 1 460 976,88, imposed because the Italian State supposedly failed to indicate an alleged irregularity in the table set out in Annex III to Commission Regulation (EC) No 885/2006 of 21 June 2006 laying down detailed rules for the application of Council Regulation (EC) No 1290/2005 as regards the accreditation of paying agencies and other bodies and the clearance of the accounts of the EAGF and of the EAFRD. The Italian Government submits in that regard that it had been documented that the aid granted was not irregular, and there was therefore no need to add any notes to the table set out in Annex III.

Third plea in law: breach of the principle of proportionality.

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In that regard, the applicant submits that the financial correction for the irregularity ‘Non-reporting in Annex III’, relating to the entirety of the aid, based on a failure to send documents, is significantly higher than any damage potentially resulting from the conduct imputed to the Italian authorities.

Fourth plea in law: (i) infringement of Article 6(3) of the Treaty on European Union; (ii) breach of the principle of res judicata; (iii) infringement of Article 32(8)(b) of Regulation (EC) No 1290/2005 and (iv) breach of the principle of proportionality.

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This plea concerns the financial correction, amounting in total to EUR 2 362 005,73, imposed because the Italian State had not provided information on the recovery actions undertaken. The applicant claims in that regard that the Commission decided without reason that it was able to overrule a final judicial decision establishing that the aid had been legitimately allocated. Moreover, the Italian Government noted the delivery of a criminal court judgment absolving the aid recipient. Those facts showed that there was no reason for taking steps to recover that aid and, accordingly, that all the necessary information had been provided. In addition, that correction, which relates to the entirety of the aid, is significantly higher than any damage potentially resulting from the conduct imputed to the Italian authorities.