Keywords
Summary

Keywords

1. Agriculture – Common agricultural policy – EAGGF financing

(Council Regulations No 729/70 and No 3508/92; Commission Regulations No 3887/92 and No 2419/2001)

2. Agriculture – EAGGF – Clearance of accounts

3. Agriculture – Common agricultural policy – EAGGF financing

(Council Regulations No 729/70 and No 1258/99)

4. Agriculture – EAGGF – Clearance of accounts

(Council Regulation No 729/70)

5. Agriculture – EAGGF – Clearance of accounts

(Art. 229 EC)

Summary

1. Even if the Community rules on the granting of aid and premiums do not expressly require Member States to introduce supervisory measures and inspection procedures, such as that mentioned by the Commission during the clearance of EAGGF accounts, to reduce the area to be taken into account in the calculation of aid where the area declared is greater than the area entered in the computerised geographical information system (GIS) nevertheless that obligation may follow, in some cases implicitly, from the fact that under the rules in question it is for the Member States to organise an effective system of inspection and supervision.

On the one hand, administrative checks and on-the-spot checks were designed by the Community legislature as two means of verification which, although separate, complement each other. On the other hand, such administrative checks preceding on-the-spot checks must be carried out in such a way as to enable the national authorities to draw all the possible conclusions, be they matters of certainty or of doubt, regarding compliance with the conditions for granting aid and premiums. Neither the areas declared nor those extracted from the GIS can be confirmed as accurate without on-the-spot checks or any other additional checks. Therefore, the contradiction between those two sources of information is likely to constitute an anomaly indicating a risk of loss for the EAGGF which requires the Member State concerned to adopt checking measures, whether on-the-spot checks or any other additional checks.

(see paras 68, 70, 72-73, 75)

2. When preparing decisions regarding the clearance of EAGGF accounts, each case must in principle be assessed individually to determine whether, as regards operations financed by the EAGGF, the Member State in question, acted in accordance with the requirements of Community law and, if it failed to do so, to what extent. A Member State may plead breach of the principle of equal treatment only if the cases it cites are at least comparable as regards all the elements which characterise them, including, in particular, the period during which the expenditure was incurred, the sectors concerned and the nature of the irregularities complained of. Prohibited discrimination can arise where comparable situations are treated differently, unless such treatment is objectively justified. The situation of a Member State which has, as a result of a system set up voluntarily, relevant information which other Member States do not have is not comparable with the situation of the latter.

(see paras 91-94)

3. In the matter of the clearance of EAGGF accounts, the fact that a procedure is open to improvement does not in itself justify a financial correction. There must be a serious failing in the application of express Community rules and such a failing must expose the EAGGF to a genuine risk of loss or irregularity. A flat-rate correction may be applied even where deficiencies are found in the application of implicit rules, provided compliance with those implicit rules is required in order to comply with an explicit rule.

(see paras 124, 126)

4. In connection with the procedure for the clearance of EAGGF accounts, although it is for the Commission to prove that Community rules have been infringed, once it has established such an infringement it is for the Member State to demonstrate, if appropriate, that the Commission made an error as to the financial consequences to be attached to that infringement. In that regard, where, instead of disallowing all the expenditure affected by the infringement, the Commission has endeavoured to establish rules for treating irregularities differently depending on the extent of the shortcomings in the checks and the degree of risk to the EAGGF, it is for the Member State to show that those criteria are arbitrary and unfair.

(see paras 135, 138)

5. There was no provision in respect of the EAGGF conferring unlimited jurisdiction on the Community courts under Article 229 EC. Recognising that those courts have unlimited jurisdiction in respect of the amounts of financial corrections imposed by the Commission in connection with the procedure for the clearance of EAGGF accounts is not supported by the contention that those corrections are in the nature of a penalty. Such corrections are designed to avoid the EAGGF being burdened with amounts that have not served to finance an objective pursued by the Community legislation in question and therefore do not constitute a penalty.