Judgment of the Court of First Instance (Third Chamber) of 4 September 2009 – Austria v Commission

(Case T-368/05)

EAGGF – Guarantee Section – Expenditure excluded from Community financing – Cattle premium – Suckler cow premium – Payment for extensification – Key controls – Duty to use a computerised geographical information system – Control of Alpine forage areas – Duty to cooperate – Duty to state reasons – Type of financial correction applied – Extrapolation of the findings of default

1.                     Agriculture – EAGGF – Clearance of accounts – Disallowance of expenditure arising from irregularities in the application of the Community rules (Council Regulation No 1258/1999) (see paras 71-72, 116-117)

2.                     Agriculture – Common agricultural policy – EAGGF financing – Grant of aids and premiums – Obligation of Member States to organise an effective system of administrative controls and on-the-spot checks – Scope (Art. 10 EC; Council Regulations Nos 3508/92, Art. 8, and 1258/1999, Art. 8(1); Commission Regulation No 3887/92, Arts 6(1) and 9(2)) (see paras 78-88)

3.                     Member States – Obligations – Duty of loyal cooperation with the Community institutions – Reciprocity (Art. 10 EC; Council Regulation No 1258/1999, Art. 8(1)) (see paras 128-131)

4.                     Agriculture – Common agricultural policy – EAGGF financing – Accounts clearance procedure – Conciliation procedure – Opinion of the conciliation body – No binding effect (see para. 141)

5.                     Acts of the institutions – Statement of reasons – Obligation – Scope – Decision relating to the clearance of accounts in respect of expenditure financed by the EAGGF (Art. 253 EC) (see paras 148-149)

6.                     Agriculture – EAGGF – Clearance of accounts – Disallowance of expenditure arising from irregularities in the application of the Community rules – Financial correction – Assessment of the level of failure to act and the degree of risk for the Fund (Council Regulation No 1258/1999) (see paras 181-184)

7.                     Agriculture – EAGGF – Clearance of accounts – Disallowance of expenditure arising from irregularities in the application of Community rules – Extrapolation of findings of deficiencies in the control system of a Member State from one region to other regions (Council Regulation No 1258/1999) (see paras 199-201)

Re:

Operative part:

The Court:

1.     Dismisses the action;

2.     Orders the Republic of Austria to pay the costs.