Case T‑376/12

(publication by extracts)

Hellenic Republic

v

European Commission

‛EAGGF — Guarantee Section — EAGF and EAFRD — Expenditure excluded from financing — Dried grapes — Wine — Expenditure incurred by Greece — One-off financial correction — Method of calculation — Nature of the accounts clearance procedure — Connection with expenditure financed by the Union’

Summary — Judgment of the General Court (Fifth Chamber), 10 July 2014

1. Agriculture — Common agricultural policy — EAGGF, EAGF and EAFRD financing — Clearance of accounts — Purpose

   (Council Regulations No 1258/1999, Art. 7(4), No 1493/1999, Art. 2(3) and No 1290/2005, Art. 31)

2. Agriculture — Common agricultural policy — EAGGF, EAGF and EAFRD financing — Clearance of accounts — One-off financial correction without sufficient connection with expenses financed by the funds — Not included — No assessment of expenses incurred by the funds despite availability of information for that purpose — Not permissible

   (Council Regulations No 1258/1999, Art. 7(4), No 1493/1999, Art. 2(3), No 1290/2005, Art. 31, and No 479/2008, Art. 86(1))

1.  The procedure for clearing the accounts of the Guarantee section of the EAGGF, of the EAGF and of the EAFRD, pursuant to Article 7(4) of Regulation No 1258/1999 and Article 31 of Regulation No 1290/2005, whereby Member States present accounts in respect of expenditure incurred by the funds, serves to determine whether the expenditure was actually and properly incurred. In that procedure the Commission is under an obligation to carry out a financial correction if the expenditure in respect of which financing has been requested has not been carried out in accordance with Union rules, such a financial correction being designed to avoid the funds being burdened with amounts that have not served to finance an objective pursued by the Community legislation in question.

   (see para. 163)

2.  The accounts clearance procedure of Article 31(1) of Regulation No 1290/2005 and the financial corrections which follow from it apply only in cases where expenditure was incurred by the Member States and it was financed by the EAGGF or the EAFRD. Where a financial correction does not have a sufficient connection with any expenditure whatever financed by the funds that would have been contrary to the Union rules, it cannot be implemented in the context of an accounts clearance procedure.

   Clearance of accounts merely enables consequences to be drawn from regularisations irregularly carried out pursuant to Article 2(3) of Regulation No 1493/1999. Therefore, a financial correction applied by the Commission which does not relate to expenses financed by those funds lacks a legal basis and is directly contrary both to Article 31 of Regulation No 1290/2005 and to the second paragraph of Article 86(1) of Regulation No 479/2008.

   The same applies to the calculation method used by the Commission the latter has not sought to determine the amount of losses for the funds occasioned by vines irregularly regularised pursuant to Article 2(3)(a) of Regulation No 1493/1999, where it had information allowing it to follow that course. Similarly, no provision of Regulation No 479/2008 envisages the possibility of regularising vines irregularly planted through the Member State concerned paying the Commission a sum equivalent to a regularisation fee in the context of the clearance of accounts, since the reservation in the second subparagraph of Article 86(1) cannot have such a scope.

   (see paras 167, 172, 177, 178, 181, 188, 191, 197, 200, operative part 1)