# C_2010100EN.01005901.xml

| 17.4.2010 | EN | Official Journal of the European Union | C 100/59 |
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17.4.2010

EN

Official Journal of the European Union

C 100/59

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Action brought on 11 February 2010 — Spain v Commission

(Case T-65/10)

2010/C 100/87

Language of the case: Spanish

Parties

Parties

Applicant: Kingdom of Spain (represented by: J. Rodríguez Cárcamo)

Applicant:

Defendant: European Commission

Defendant:

Form of order sought

Form of order sought

| — | Annul Commission Decision C(2009) 9270 final of 30 November 2009 reducing the aid from the European Regional Development Fund (ERDF) to the Operational Programme for Andalusia ‘Objective 1’ (1994-1999) in Spain granted under Decision C(94) 3456 of 9 December 1994, ERDF NO 94.11.09.001, and |
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Annul Commission Decision C(2009) 9270 final of 30 November 2009 reducing the aid from the European Regional Development Fund (ERDF) to the Operational Programme for Andalusia ‘Objective 1’ (1994-1999) in Spain granted under Decision C(94) 3456 of 9 December 1994, ERDF NO 94.11.09.001, and

| — | order the Commission to pay the costs. |
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order the Commission to pay the costs.

Pleas in law and main arguments

Pleas in law and main arguments

By the present action the Kingdom of Spain challenges the above mentioned decision. In support of its action, the Kingdom of Spain raises the following pleas in law:

| — | Infringement of Article 24 of Council Regulation (EEC) No 4253/88 of 19 December 1988, (1) by using the extrapolation method in the contested decision since that article does not provide for the possibility to extrapolate from the irregularities found in specific actions the irregularity of all the actions included in the Operational Programmes financed by the ERDF from. The correction applied by the Commission in the contested decision lacks a legal basis because, pursuant to the judgment in Case C-443/97 Kingdom of Spain v Commission [2000] ECR I-2415, the Commission’s internal guidelines of 15 October 1997 concerning net financial corrections in the context of the application of Article 24 of Council Regulation (EEC) No 4253/88 cannot produce legal effects vis-à-vis the Member States, and because Article 24 of Council Regulation (EEC) No 4253/88 of 19 December 1988 only provides for the reduction of aid in respect of which an irregularity has been determined in the course of an examination. The application of corrections by extrapolation contradicts that principle. |
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Infringement of Article 24 of Council Regulation (EEC) No 4253/88 of 19 December 1988, (1) by using the extrapolation method in the contested decision since that article does not provide for the possibility to extrapolate from the irregularities found in specific actions the irregularity of all the actions included in the Operational Programmes financed by the ERDF from. The correction applied by the Commission in the contested decision lacks a legal basis because, pursuant to the judgment in Case C-443/97 Kingdom of Spain v Commission [2000] ECR I-2415, the Commission’s internal guidelines of 15 October 1997 concerning net financial corrections in the context of the application of Article 24 of Council Regulation (EEC) No 4253/88 cannot produce legal effects vis-à-vis the Member States, and because Article 24 of Council Regulation (EEC) No 4253/88 of 19 December 1988 only provides for the reduction of aid in respect of which an irregularity has been determined in the course of an examination. The application of corrections by extrapolation contradicts that principle.

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Kingdom of Spain

Commission

| — | In the alternative, infringement of Article 24 of Council Regulation (EEC) No 4253/88 of 19 December 1988, in conjunction with Article 4(3) TEU (principle of cooperation in good faith), by applying the correction by extrapolation in spite of the fact that it was not shown that the management, control and auditing system in relation to the amended contracts was insufficient, given that the managing bodies applied Spanish law which has not been declared contrary to European Union law by the Court of Justice. The Kingdom of Spain claims that the fact that the managing authorities adhere to national law, even if that may result in the Commission finding irregularities or specific infringements of European Union law, cannot serve as a basis to extrapolate the ineffectiveness of the management system where the law applied by those bodies has not been declared contrary to European Union law by the Court of Justice and the Commission has not brought an action for failure to act against the Member State pursuant to Article 258 TFEU. |
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In the alternative, infringement of Article 24 of Council Regulation (EEC) No 4253/88 of 19 December 1988, in conjunction with Article 4(3) TEU (principle of cooperation in good faith), by applying the correction by extrapolation in spite of the fact that it was not shown that the management, control and auditing system in relation to the amended contracts was insufficient, given that the managing bodies applied Spanish law which has not been declared contrary to European Union law by the Court of Justice. The Kingdom of Spain claims that the fact that the managing authorities adhere to national law, even if that may result in the Commission finding irregularities or specific infringements of European Union law, cannot serve as a basis to extrapolate the ineffectiveness of the management system where the law applied by those bodies has not been declared contrary to European Union law by the Court of Justice and the Commission has not brought an action for failure to act against the Member State pursuant to Article 258 TFEU.

| — | In the further alternative, infringement of Article 24 of Council Regulation (EEC) No 4253/88 of 19 December 1988 since the sample used for the application of the financial correction by extrapolation was not representative. The Commission composed the sample by extrapolating from a very reduced number of projects (37 out of 5 319), without taking account of all the axes of the Operational Programme, including expenses withdrawn beforehand by the Spanish authorities, by working on the basis of the declared expenses and not the aid granted and by using an IT programme which was less than 85 % reliable. For that reason, the Kingdom of Spain claims that the sample does not satisfy the requirements of representation necessary for it to be able to be used as a basis for extrapolation. |
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In the further alternative, infringement of Article 24 of Council Regulation (EEC) No 4253/88 of 19 December 1988 since the sample used for the application of the financial correction by extrapolation was not representative. The Commission composed the sample by extrapolating from a very reduced number of projects (37 out of 5 319), without taking account of all the axes of the Operational Programme, including expenses withdrawn beforehand by the Spanish authorities, by working on the basis of the declared expenses and not the aid granted and by using an IT programme which was less than 85 % reliable. For that reason, the Kingdom of Spain claims that the sample does not satisfy the requirements of representation necessary for it to be able to be used as a basis for extrapolation.

| — | The limitation period for proceedings under Article 3 of Council Regulation 2988/95 has expired. (2) Finally, the Kingdom of Spain submits that the day on which the Spanish authorities were informed of the existence of irregularities (which took place in October 2004 and for the most part concerned irregularities committed in 1997, 1998 and 1999) should constitute the starting point of the limitation period for those irregularities, in accordance with the four-year limitation period laid down in Article 3 of Regulation 2988/95. |
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The limitation period for proceedings under Article 3 of Council Regulation 2988/95 has expired. (2) Finally, the Kingdom of Spain submits that the day on which the Spanish authorities were informed of the existence of irregularities (which took place in October 2004 and for the most part concerned irregularities committed in 1997, 1998 and 1999) should constitute the starting point of the limitation period for those irregularities, in accordance with the four-year limitation period laid down in Article 3 of Regulation 2988/95.

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(1)  Council Regulation (EEC) No 4253/88 of 19 December 1988, laying down provisions for implementing Regulation (EEC) No 2052/88 as regards coordination of the activities of the different Structural Funds between themselves and with the operations of the European Investment Bank and the other existing financial instruments (OJ 1988 L 374, p. 1).

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(2)  Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European Communities financial interests (OJ 1995 L 312, p. 1).

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