# C_2016279EN.01001802.xml

| 1.8.2016 | EN | Official Journal of the European Union | C 279/18 |
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1.8.2016

EN

Official Journal of the European Union

C 279/18

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Appeal brought on 19 May 2016 by the Kingdom of Spain against the judgment of the General Court (Sixth Chamber) delivered on 3 March 2016 in Case T-675/14 Spain v Commission

(Case C-279/16 P)

(2016/C 279/25)

Language of the case: Spanish

Parties

Parties

Appellant: Kingdom of Spain (represented by: M.J. García-Valdecasas Dorrego, Agent)

Appellant:

Other parties to the proceedings: European Commission and Republic of Latvia

Other parties to the proceedings:

Form of order sought

Form of order sought

The appellant claims that the Court should:

| — | allow the present appeal and set aside the judgment of the General Court; |
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allow the present appeal and set aside the judgment of the General Court;

| — | in the new judgment handed down annul Commission Implementing Decision 2014/458/EU of 9 July 2014, (1) on excluding from European Union financing certain expenditure incurred by the Member States under the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF), under the European Agricultural Guarantee Fund (EAGF) and under the European Agricultural Fund for Rural Development (EAFRD), as regards the expenditure incurred by the Kingdom of Spain in the amount of EUR 2 713 208,07. |
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in the new judgment handed down annul Commission Implementing Decision 2014/458/EU of 9 July 2014, (1) on excluding from European Union financing certain expenditure incurred by the Member States under the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF), under the European Agricultural Guarantee Fund (EAGF) and under the European Agricultural Fund for Rural Development (EAFRD), as regards the expenditure incurred by the Kingdom of Spain in the amount of EUR 2 713 208,07.

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Pleas in law and main arguments

Pleas in law and main arguments

| 1. | An error of law based on a lack of statement of reasons in the judgment under appeal, in so far as the General Court was obliged to rule on the lack of statement of reasons in the Commission decision because the plea in question was formulated in a sufficiently clear and precise manner to enable the General Court to adopt a position. |
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1.

An error of law based on a lack of statement of reasons in the judgment under appeal, in so far as the General Court was obliged to rule on the lack of statement of reasons in the Commission decision because the plea in question was formulated in a sufficiently clear and precise manner to enable the General Court to adopt a position.

An error of law based on a lack of statement of reasons in the judgment under appeal

| 2. | An error of law as regards the scope of the obligation to state reasons because the reasoning relied on by the General Court is not compatible with the necessary clarity and lack of ambiguity which must characterise the reasoning in the Commission decision in order to satisfy the requirements of Article 296 TFEU. The reasoning of the measure was neither clear nor unambiguous, thereby infringing the Kingdom of Spain’s rights of defence. |
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2.

An error of law as regards the scope of the obligation to state reasons because the reasoning relied on by the General Court is not compatible with the necessary clarity and lack of ambiguity which must characterise the reasoning in the Commission decision in order to satisfy the requirements of Article 296 TFEU. The reasoning of the measure was neither clear nor unambiguous, thereby infringing the Kingdom of Spain’s rights of defence.

An error of law as regards the scope of the obligation to state reasons

| 3. | A manifest distortion of the facts in so far as the General Court manifestly distorted the facts in finding in paragraph 55 of the judgment under appeal that ‘The Kingdom of Spain has not demonstrated that certain farms were not subject to any of the obligations in respect of which deficiencies were detected’. First, that statement is contrary to the nature of the cross-compliance system given that in that area only certain farms may pose a risk, and they are the ones to which the specific requirements in respect of which deficiencies have been detected are applied. Secondly, there was a manifest distortion of the facts because the Kingdom of Spain provided the Commission with specific data which shows how certain farms were not subject to the specific obligations. |
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3.

A manifest distortion of the facts in so far as the General Court manifestly distorted the facts in finding in paragraph 55 of the judgment under appeal that ‘The Kingdom of Spain has not demonstrated that certain farms were not subject to any of the obligations in respect of which deficiencies were detected’. First, that statement is contrary to the nature of the cross-compliance system given that in that area only certain farms may pose a risk, and they are the ones to which the specific requirements in respect of which deficiencies have been detected are applied. Secondly, there was a manifest distortion of the facts because the Kingdom of Spain provided the Commission with specific data which shows how certain farms were not subject to the specific obligations.

A manifest distortion of the facts

The Kingdom of Spain has not demonstrated that certain farms were not subject to any of the obligations in respect of which deficiencies were detected

| 4. | An error of law in the interpretation of Article 31(2) of Regulation No 1290/2005 and with regard to the principle of proportionality in relation to the application of a flat-rate correction and the rejection of the correction proposed by the Kingdom of Spain.






  4.1 | An error of law in the interpretation of Article 31(2) because that provision requires that the financial damage caused is taken into account as an essential factor. Since that damage had been evaluated precisely by the Kingdom of Spain, flat-rate correction, which is a means available only where it was impossible to have recourse to a more appropriate method, should not have been used. |
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4.

An error of law in the interpretation of Article 31(2) of Regulation No 1290/2005 and with regard to the principle of proportionality in relation to the application of a flat-rate correction and the rejection of the correction proposed by the Kingdom of Spain.

An error of law in the interpretation of Article 31(2) of Regulation No 1290/2005 and with regard to the principle of proportionality

4.1

An error of law in the interpretation of Article 31(2) because that provision requires that the financial damage caused is taken into account as an essential factor. Since that damage had been evaluated precisely by the Kingdom of Spain, flat-rate correction, which is a means available only where it was impossible to have recourse to a more appropriate method, should not have been used.

| 4.2 | And an error of law in respect of the review of the principle of proportionality because the method used by the Commission produced a flat-rate correction some 530 % higher than the calculation put forward by the Kingdom of Spain. The Kingdom of Spain’s calculation took into account actual data of the penalties imposed in subsequent years in which the cross-compliance deficiencies had been corrected. The amount resulting from the flat-rate correction is absolutely disproportionate and the paying agencies must not meet the costs of corrections which are overvalued. |
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4.2

And an error of law in respect of the review of the principle of proportionality because the method used by the Commission produced a flat-rate correction some 530 % higher than the calculation put forward by the Kingdom of Spain. The Kingdom of Spain’s calculation took into account actual data of the penalties imposed in subsequent years in which the cross-compliance deficiencies had been corrected. The amount resulting from the flat-rate correction is absolutely disproportionate and the paying agencies must not meet the costs of corrections which are overvalued.

| 5. | An error of law in the interpretation of Article 31(2) of Regulation No 1290/2005 and with regard to the principle of proportionality in so far as it was held that a flat-rate financial correction could be applied concurrently with a one-off financial correction in respect of the same budget line for 2008. First, in accordance with the document AGRI-2005-64043 no corrections are applied to amounts already corrected for the same grounds; secondly, under the case-law of the Court of Justice the concurrent application of corrections is only allowed when the risk incurred by the Fund cannot be covered by analytical corrections alone; lastly, a disproportionate and unjustified result has been produced since, if the flat-rate correction alone had been applied, the amount to be taken away would have been less than that resulting from applying both financial corrections concurrently. |
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5.

An error of law in the interpretation of Article 31(2) of Regulation No 1290/2005 and with regard to the principle of proportionality in so far as it was held that a flat-rate financial correction could be applied concurrently with a one-off financial correction in respect of the same budget line for 2008. First, in accordance with the document AGRI-2005-64043 no corrections are applied to amounts already corrected for the same grounds; secondly, under the case-law of the Court of Justice the concurrent application of corrections is only allowed when the risk incurred by the Fund cannot be covered by analytical corrections alone; lastly, a disproportionate and unjustified result has been produced since, if the flat-rate correction alone had been applied, the amount to be taken away would have been less than that resulting from applying both financial corrections concurrently.

An error of law in the interpretation of Article 31(2) of Regulation No 1290/2005 and with regard to the principle of proportionality in so far as it was held that a flat-rate financial correction could be applied concurrently with a one-off financial correction in respect of the same budget line for 2008.

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(1)  OJ 2014 L 205, p. 62.

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