Keywords
Summary

Keywords

1. Agriculture — EAGGF — Clearance of accounts — Regulations Nos 729/70 and 1258/99 — Temporal scope — Commission decision disallowing certain expenditure adopted on the basis of a regulation since repealed — Lawful notwithstanding the absence of transitional provisions — (Council Regulations Nos 729/70 and 1258/99, Arts 16(1) and 20)

2. Agriculture — Common agricultural policy — EAGGF financing — Aid intended to compensate for a loss of income from agriculture arising from afforestation — Only private persons eligible — Meaning of private-law legal person — Company wholly owned and controlled by the State — Excluded — (Council Regulation No 2080/92, Art. 2(2)(a) and (b))

3. Member States — Obligations — Obligation to cooperate in good faith with the Community institutions — Reciprocity — (Art. 10 EC)

4. Agriculture — Common agricultural policy — EAGGF financing — Principles — Commission's obligation to disallow irregular expenditure — Irregularities tolerated on grounds of fairness or remaining undetected in previous financial years — Right of the recipient of the aid to rely on that fact by virtue of the principle of the protection of legitimate expectations — None

Summary

1. As undesirable as the absence of transitional provisions making it possible to identify clearly the relationship between Regulations Nos 729/70 and 1258/1999 on the financing of the common agricultural policy and thereby to ensure that legislation is sufficiently comprehensible may be, the repeal of Regulation No 729/70 declared in Article 16(1) of Regulation No 1258/1999 did not limit the Commission's obligation to monitor the conformity with the Community rules of expenditure effected by the Member States up to 31 December 1999, the last day prior to commencement of the application of the second regulation to that expenditure. The purpose of Article 16(1) of Regulation No 1258/1999, read in conjunction with Article 20 of that regulation, is not to interrupt the application of the rules on the financing of the common agricultural policy, thereby creating a legal vacuum undermining the effectiveness of Regulations Nos 729/70 and 1258/1999, but to recast the applicable provisions with a view to ensuring clarity.

Accordingly, Commission Decision 2000/449 excluding from Community financing certain expenditure incurred by the Member States under the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF), in so far as it excludes from Community financing expenditure incurred by Ireland in respect of afforestation aid for the financial years 1997 and 1998, was properly adopted on the basis of Regulation No 729/70.

see paras 35-39

2. The expression "any other private law, natural or legal person" in Article 2(2)(b) of Regulation No 2082/92 instituting a Community aid scheme for forestry measures in agriculture and relating to aid intended to compensate for a loss of income from agriculture arising from afforestation covers only private persons, in contrast to the expression "any natural or legal person" in Article 2(2)(a), which concerns aid intended to cover afforestation costs and the costs of maintaining the afforested land, which covers both private persons and non-private persons such as legal persons owned and controlled by the State. It follows that legal persons owned and controlled by the State are eligible for aid to cover the costs of afforestation and maintenance of forests in the same way as any other natural or legal person but that they are not, however, eligible for aid to compensate for a loss of income from agriculture.

In that connection, a company such as Coillte Teoranta (the Forestry Board), wholly owned by the Irish State, is not a private-law legal person for the purposes of Article 2(2)(b) of Regulation No 2080/92. Neither the company's obligation to manage its affairs on a commercial basis nor the fact that the State does not, in practice, intervene in the company's management can prevail over the finding that the company is wholly owned and controlled by the State and that the State can therefore intervene. Accordingly, such an entity, as a public undertaking, is not eligible to receive aid to compensate for a loss of income arising from afforestation provided for by that provision.

see paras 59-61, 63

3. Under Article 10 of the Treaty, the duty to cooperate in good faith which governs relations between the Member States and the institutions entails an obligation on the Member States to take all the measures necessary to guarantee the application and effectiveness of Community law and imposes on Member States and the Community institutions mutual duties to cooperate in good faith.

see para. 71

4. The fact that the Commission did not call into question the aid granted, before a specific date, by a Member State under the European Agricultural Guidance and Guarantee Fund (EAGGF) cannot lead that State to believe that the grant of such aid will never be called into question in the future. Where the Commission has tolerated irregularities on grounds of fairness, the Member State concerned does not acquire any right to demand that the same position be taken with regard to irregularities committed in the following financial year by virtue of the principle of legal certainty or the principle of the protection of legitimate expectations. This must apply a fortiori in cases in which the Commission had not detected the type of irregularities in question during the preceding financial years.

see para. 81