# C_2022138EN.01002601.xml

| 28.3.2022 | EN | Official Journal of the European Union | C 138/26 |
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28.3.2022

EN

Official Journal of the European Union

C 138/26

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Action brought on 27 January 2022 — Romania v Commission

(Case T-49/22)

(2022/C 138/31)

Language of the case: Romanian

Parties

Applicant: Romania (represented by: E. Gane and L. Baţagoi, acting as Agents)

Defendant: European Commission

Form of order sought

The applicant claims that the Court should:

| — | annul Decision 2021/2020 (1) in part, in so far as it relates to the exclusion from European Union financing of expenditure amounting to a total of EUR 178 320 110,85 incurred by the accredited paying agency of Romania and declared under the EAGF and the EAFRD, representing flat-rate financial corrections of 5 % and 2 % applied on the ground of infringement of EU law in connection with area-related payments for the claim years 2017 and 2018 (financial years 2018 and 2019); |
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annul Decision 2021/2020 (1) in part, in so far as it relates to the exclusion from European Union financing of expenditure amounting to a total of EUR 178 320 110,85 incurred by the accredited paying agency of Romania and declared under the EAGF and the EAFRD, representing flat-rate financial corrections of 5 % and 2 % applied on the ground of infringement of EU law in connection with area-related payments for the claim years 2017 and 2018 (financial years 2018 and 2019);

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

Pleas in law and main arguments

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

| 1. | First plea in law, alleging the inappropriate exercise by the Commission of its power to exclude sums from EU financing on the basis of Article 52 of Regulation No 1306/2013. (2)

  The Commission conducted the conformity clearance procedure relating to the claim years 2017 and 2018 in a manner that was inappropriate:
  The Commission erred in considering that there was an irregularity concerning administrative checks regarding greening payments having an impact on the Funds. Even assuming that there was such an irregularity, the conduct of that EU institution — in particular the extremely vague wording of the findings and the coincidence in time between the 2017 and 2018 enquiries — made it impossible to submit certain relevant impact calculations while observing the deadline laid down in the third subparagraph of Article 34(3) of Regulation No 908/2014. (3) In that context, the Commission unduly refused, in breach of Article 34(6) of that regulation, to analyse the data and calculations provided by the Romanian authorities through the request for conciliation (of 5 February 2020) relating to the 2018 enquiry. Under no circumstances should the Commission have applied flat-rate corrections of 5 %.
  The conduct of that EU institution, in the context of the 2018 enquiry, with regard to the irregularities concerning the updating of the LPIS (4) – quality and correct identification of reference land parcels in the LPIS-GIS (5) — in particular the fact that the essential aspects were clarified by its final position (on 20 December 2019) relating to the 2017 enquiry — made it impossible to establish the extent of those irregularities and to submit certain relevant impact calculations while observing the deadline laid down in the third subparagraph of Article 34(3) of Regulation No 908/2014. In that context, the Commission unduly refused, in breach of Article 34(6) of that regulation, to analyse the data and calculations provided by the Romanian authorities through the request for conciliation (of 5 February 2020) relating to the 2018 enquiry.
  The conduct of that EU institution, in the context of the 2018 enquiry, with regard to the irregularity concerning the maximum area eligible for the area-related support measures financed by the EAFRD, consisting of imposing its own calculation method, cannot serve as a substitute for analysis of the data and calculations provided by the Romanian authorities on 10 June 2019. What is more, that conduct made it impossible for the Romanian authorities to identify, by the deadline laid down in the third subparagraph of Article 34(3) of Regulation No 908/2014, the necessary adjustments to be made to the data and calculations provided. In that context, the Commission unduly refused, in breach of Article 34(6) of that regulation, to analyse the data and calculations provided by the Romanian authorities through the request for conciliation (of 5 February 2020) relating to the 2018 enquiry.
  That institution wrongly considered that there was an irregularity as regards the performance of a sufficient number of on-the-spot checks in connection with the greening payment scheme, incorrectly referring to the control data and statistics communicated under Article 9(1) of Regulation No 809/2014. (6) Even assuming that there was such an irregularity, the Commission should not have applied flat-rate corrections of 5 %. |
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1.

First plea in law, alleging the inappropriate exercise by the Commission of its power to exclude sums from EU financing on the basis of Article 52 of Regulation No 1306/2013. (2)

The Commission conducted the conformity clearance procedure relating to the claim years 2017 and 2018 in a manner that was inappropriate:

The Commission erred in considering that there was an irregularity concerning administrative checks regarding greening payments having an impact on the Funds. Even assuming that there was such an irregularity, the conduct of that EU institution — in particular the extremely vague wording of the findings and the coincidence in time between the 2017 and 2018 enquiries — made it impossible to submit certain relevant impact calculations while observing the deadline laid down in the third subparagraph of Article 34(3) of Regulation No 908/2014. (3) In that context, the Commission unduly refused, in breach of Article 34(6) of that regulation, to analyse the data and calculations provided by the Romanian authorities through the request for conciliation (of 5 February 2020) relating to the 2018 enquiry. Under no circumstances should the Commission have applied flat-rate corrections of 5 %.

The conduct of that EU institution, in the context of the 2018 enquiry, with regard to the irregularities concerning the updating of the LPIS (4) – quality and correct identification of reference land parcels in the LPIS-GIS (5) — in particular the fact that the essential aspects were clarified by its final position (on 20 December 2019) relating to the 2017 enquiry — made it impossible to establish the extent of those irregularities and to submit certain relevant impact calculations while observing the deadline laid down in the third subparagraph of Article 34(3) of Regulation No 908/2014. In that context, the Commission unduly refused, in breach of Article 34(6) of that regulation, to analyse the data and calculations provided by the Romanian authorities through the request for conciliation (of 5 February 2020) relating to the 2018 enquiry.

The conduct of that EU institution, in the context of the 2018 enquiry, with regard to the irregularity concerning the maximum area eligible for the area-related support measures financed by the EAFRD, consisting of imposing its own calculation method, cannot serve as a substitute for analysis of the data and calculations provided by the Romanian authorities on 10 June 2019. What is more, that conduct made it impossible for the Romanian authorities to identify, by the deadline laid down in the third subparagraph of Article 34(3) of Regulation No 908/2014, the necessary adjustments to be made to the data and calculations provided. In that context, the Commission unduly refused, in breach of Article 34(6) of that regulation, to analyse the data and calculations provided by the Romanian authorities through the request for conciliation (of 5 February 2020) relating to the 2018 enquiry.

That institution wrongly considered that there was an irregularity as regards the performance of a sufficient number of on-the-spot checks in connection with the greening payment scheme, incorrectly referring to the control data and statistics communicated under Article 9(1) of Regulation No 809/2014. (6) Even assuming that there was such an irregularity, the Commission should not have applied flat-rate corrections of 5 %.

| 2. | Second plea in law, alleging a failure to observe the principle of proportionality.
  Romania submits that the contested decision is in breach of the principle of proportionality, in view of the fact that, through the application of certain flat-rate corrections of 5 % with regard to the payments from the EAGF and of 2 % with regard to the payments from the EAFRD for the claim years 2017 and 2018 (financial years 2018 and 2019), an overestimation of the EU funding losses resulting from the irregularities found was created, the amounts of 5 % and 2 % disregarding the nature and the gravity of the infringement as well as the financial implications of that infringement for the budget of the Union. |
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2.

Second plea in law, alleging a failure to observe the principle of proportionality.

Romania submits that the contested decision is in breach of the principle of proportionality, in view of the fact that, through the application of certain flat-rate corrections of 5 % with regard to the payments from the EAGF and of 2 % with regard to the payments from the EAFRD for the claim years 2017 and 2018 (financial years 2018 and 2019), an overestimation of the EU funding losses resulting from the irregularities found was created, the amounts of 5 % and 2 % disregarding the nature and the gravity of the infringement as well as the financial implications of that infringement for the budget of the Union.

| 3. | Third plea in law, alleging a failure to fulfil the obligation to state reasons laid down by the second paragraph of Article 296 of the Treaty on the Functioning of the European Union.
  The Commission failed to fulfil the obligation to state reasons laid down by the second paragraph of Article 296 of the Treaty on the Functioning of the European Union, because it failed to provide a suitable and sufficient statement of reasons for its finding that there were irregularities and its rejection of the arguments and calculations put forward by the Romanian authorities, on the one hand, and its finding that Article 34(6) of Regulation No 908/2014 was not applicable in relation to the particular characteristics of the conformity clearance procedure which covered the claim years 2017 and 2018, on the other. |
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3.

Third plea in law, alleging a failure to fulfil the obligation to state reasons laid down by the second paragraph of Article 296 of the Treaty on the Functioning of the European Union.

The Commission failed to fulfil the obligation to state reasons laid down by the second paragraph of Article 296 of the Treaty on the Functioning of the European Union, because it failed to provide a suitable and sufficient statement of reasons for its finding that there were irregularities and its rejection of the arguments and calculations put forward by the Romanian authorities, on the one hand, and its finding that Article 34(6) of Regulation No 908/2014 was not applicable in relation to the particular characteristics of the conformity clearance procedure which covered the claim years 2017 and 2018, on the other.

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(1)  Published in Volume L 413 of the Official Journal of the European Union of 19 November 2021.

(2)  Published in Volume L 347 of the Official Journal of the European Union of 20 December 2013.

(3)  Published in Volume L 255 of the Official Journal of the European Union of 28 August 2014.

(4)  Land Parcel Identification System.

(5)  Land Parcel Identification System — Geographic Information System.

(6)  Published in Volume L 227 of the Official Journal of the European Union of 31 July 2014.

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