Action brought on 12 September 2023 — Czech Republic v Commission

(Case T-567/23)

(C/2023/538)

Language of the case: Czech

Parties

Applicant: Czech Republic (represented by: M. Smolek, J. Vláčil, J. Benešová and J. Očková, Agents)

Defendant: European Commission

Form of order sought

The applicant claims that the Court should:

—	annul the contested decision (1) in so far as it excludes expenditure of a total amount of EUR 4 490 200,84 incurred by the Czech Republic, and

—	order the European Commission to pay the costs.

Pleas in law and main arguments

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

First plea in law, concerning the financial correction imposed in connection with the finding relating to errors in the update to the LPIS.

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The Commission is alleged to have infringed Article 52(1) of Regulation No 1306/2013, (2) since it imposed the correction on the basis of alleged systemic weaknesses in the update to the LPIS, despite the fact that there were no systemic weaknesses in that update. EU law, in conjunction with the Commission’s methodology, provides for a method for assessing the quality of the LPIS (‘the ETS test), and the Czech Republic met, in the period 2018 to 2020, the quality assessment factor based on the determined percentage of ineligible areas. Second, the requirement for the Commission that all parcels located in an updated zone be entirely free from error has no basis either in EU legislation or in the nature of human activity, in connection with which fortuitous human error cannot be excluded.

Second plea in law, concerning the financial correction imposed in connection with the finding relating to the late submission of the application.

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The Commission is alleged to have infringed Article 52(1) of Regulation No 1306/2013 when it imposed a correction despite the fact that the possibility to sign an application after its submission, within a period of five days, does not amount to late submission of an application for the purposes of Article 13 of Regulation No 640/2014. (3)

Third plea in law, concerning the financial correction imposed in connection with the finding relating to the recovery of irregular payments.

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The Commission is alleged to have infringed Article 52(1) of Regulation No 1306/2013 when it imposed a correction despite the fact that Article 54(3)(b) of Regulation No 1306/2013 allows the Member State not to pursue recovery where the recovery of irregular payments proves impossible owing to the insolvency, recorded and recognised under national law, of the debtor.

(1) Commission Implementing Decision (EU) 2023/1408 of 3 July 2023 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) (notified under document C(2023)3494 final).

(2) Regulation (EU) No 1306/2013 of the European Parliament and of the Council of 17 December 2013 on the financing, management and monitoring of the common agricultural policy and repealing Council Regulations (EEC) No 352/78, (EC) No 165/94, (EC) No 2799/98, (EC) No 814/2000, (EC) No 1290/2005 and (EC) No 485/2008.

(3) Commission Delegated Regulation (EU) No 640/2014 of 11 March 2014 supplementing Regulation (EU) No 1306/2013 of the European Parliament and of the Council with regard to the integrated administration and control system and conditions for refusal or withdrawal of payments and administrative penalties applicable to direct payments, rural development support and cross compliance.