Judgment — ECLI:EU:T:2004:26
Date: 2004-01-28
Language of the case: Italian
Court formation: Second Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Agriculture and Fisheries;European Agricultural Guidance and Guarantee Fund (EAGGF)
Concepts: Application ratione temporis;Structural funds
Procedure: Action for annulment - unfounded;Action for annulment - inadmissible
Origin: Italy

Summary of the Judgment 
1. Acts of the institutions — Temporal scope — Immediate application of a new 
procedural rule — Retroactive effect of a substantive rule — Conditions — Rules 
concerning Community assistance 
(Council Regulations Nos 2052/88 and 42S3/88, Art. 24, and 4256/88 and 2082/93) 
II - 369 
SUMMARY — CASE T-180/01 
2. Economic and social cohesion — Structural assistance •—• Community funding — 
Commission's powers of review — Scope 
(Council Regulations Nos 2052/88 and 4253/88, Art. 23(2)) 
3. Economic and social cohesion — Structural assistance — Community funding — 
Obligation on applicants for, and beneficiaries of, EAGGF assistance to provide 
information and act in good faith — Compliance with the conditions laid down in the 
decision to grant assistance — Compliance with the information contained in the 
application for assistance 
(Council Regulation No 4253/88, Art. 24(2)) 
4. Economic and social cohesion — Structural assistance — Community funding — 
Commission's powers to carry out on-the-spot checks and inspections — Option for 
the Commission to use the results of a check carried out in the context of national 
criminal proceedings — Non-binding nature of those results 
(Council Regulation No 4253/88, Arts 23(2) and 24) 
5. Economic and social cohesion — Structural assistance — Community funding — 
Correspondence between the financing and a service essential for the implementation 
of the project — Burden of proof on the beneficiary 
(Council Regulation No 4253/88, Art. 24) 
6. Economic and social cohesion — Structural assistance — Community funding — 
Withdrawal of assistance — Need for a clear and unequivocal legal basis 
(Council Regulation No 4253/88, Art. 24(2)) 
1. The procedural rules are generally con­
sidered to apply to all proceedings 
pending at the time when they enter 
into force, although this is not the case 
with substantive rules. The latter are 
usually interpreted as applying to situ­
ations existing before their entry into 
force only in so far as it clearly follows 
from their terms, objectives or general 
scheme that such an effect must be 
given to them. The conditions for 
granting Community assistance, the 
obligations incumbent on the benefici­
ary and the conditions under which 
assistance may be withdrawn consti­
tute substantive rules. Those aspects 
are therefore, in principle, governed by 
the regulations applying at the time 
when the assistance was granted. How­
ever, the provisions concerning the 
inspections carried out by the Commis­
sion and the obligations incumbent on 
the Commission and the Member 
States in connection with the monitor­
II - 370 
EUROAGRI v COMMISSION 
ing of projects are procedural provi­
sions, applying in their new version, 
from their entry into force. 
The withdrawal of Community assist­
ance due to the irregularities alleged 
against a beneficiary is by way of being 
a penalty when it goes beyond repay­
ment of amounts that have been 
wrongly paid as a result of those 
irregularities and is imposed in order 
to serve as a deterrent. It is therefore 
only permissible if it is justified both 
under the regulations applying at the 
time when the assistance was granted 
and those in force at the time when the 
decision to withdraw that assistance 
was made. 
(see paras 36, 37) 
2. The last subparagraph of Article 23(2) 
of Regulation No 4253/88 laying down 
provisions for implementing Regu­
lation No 2052/88 as regards coor­
dination of the activities of the dif­
ferent Structural Funds between them­
selves and with the operations of the 
European Investment Bank and the 
other existing financial instruments, as 
amended, provides that the Commis­
sion is to ensure that any checks that it 
carries out are performed in a coor­
dinated manner so as to avoid repeat­
ing checks in respect of the same 
subject matter during the same period. 
That provision is indeed intended to 
avoid repeated checks on the same 
project. It thus requires the Commis­
sion to organise its checks according to 
the principles of good administration. 
It does not, however, prohibit repeated 
checks as such. 
It is in particular legitimate for the 
Commission to repeat its checks where 
fresh evidence reveals that more 
detailed checks are needed on certain 
projects. At any event, it is normal for 
an inspection instigated because of new 
evidence that has given rise to suspi­
cion of fraud in connection with cer­
tain projects to be more detailed and to 
produce results that differ from those 
of a routine inspection undertaken in 
the absence of any suspicion. 
(see paras 57-59) 
3. The system of subsidies provided for by 
the Community legislation relies in 
particular on the beneficiary complying 
with a series of obligations which 
entitle it to obtain the proposed finan­
cial assistance. If the beneficiary does 
not comply with all those obligations, 
Ar t ic le 24(2) of R e g u l a t i o n 
No 4253/88, laying down provisions 
for implement ing Regula t ion 
No 2052/88 as regards coordination 
of the activities of the different Struc­
tural Funds between themselves and 
II - 371 
SUMMARY — CASE T-180/01 
with the operations of the European 
Investment Bank and the other existing 
financial instruments, authorises the 
Commission to reconsider the extent 
of the obligations it assumes under the 
decision awarding that assistance. 
Similarly, applicants for, and benefici­
aries of, Community assistance are 
required to satisfy themselves that they 
are submitting to the Commission 
reliable information which is suffi­
ciently accurate, since otherwise the 
system of controls and evidence set up 
to determine whether the conditions 
for granting assistance are fulfilled 
cannot function properly. In the 
absence of sufficiently accurate infor­
mation projects which do not fulfil the 
conditions required could obtain assist­
ance. It follows that the obligation on 
applicants for, and beneficiaries of, 
assistance to provide information and 
act in good faith is inherent in the 
EAGGF assistance system and essential 
for its effective functioning. Infringe­
ment of those obligations must there­
fore be regarded as an irregularity 
within the meaning of Article 24 of 
Regulation No 4253/88, as amended. 
Furthermore, the grant of financial 
assistance is subject not only to com­
pliance with the conditions laid down 
by the Commission in the award 
decision but also to compliance with 
the terms of the application for assist­
ance in respect of which that decision 
was given. The applicant for the Com­
munity assistance applied for it in 
respect of a specific project, which it 
described in detail in its application. 
That description played a decisive part 
as regards the award decision. 
It is incumbent on the beneficiary to 
prove that the information contained in 
the application for assistance is correct. 
As the originator of that application, it 
is in the best position to do so and must 
establish that the receipt of resources 
from public funds is justified. 
If it proves subsequently that the infor­
mation did not correspond to the facts, 
the award decision is vitiated by an 
error of fact and must therefore be 
considered to be unlawful. Such unlaw­
fulness may, provided that the adminis­
tration does not infringe either the 
principle of legal certainty or that of 
the protection of legitimate expec­
tations justify retroactive withdrawal 
of the award decision. 
(see paras 82-85, 87, 92, 112) 
II - 372 
FUROAGRI v COMMISSION 
4. Although the Commission may legit­
imately use the results of a check 
carried out by the national authorities 
as its basis for determining whether the 
existence of irregularities justifying a 
penalty under Article 24 of Regulation 
No 4253/88, laying down provisions 
for i m p l e m e n t i n g R e g u l a t i o n 
No 2052/88 as regards coordination 
of the activities of the different Struc­
tural Funds between themselves and 
with the operations of the European 
Investment Bank and the other existing 
financial instruments, has been estab­
lished, that option does not mean, 
however, that the Commission is 
bound by the results of such national 
checks. The checks carried out in the 
context of national criminal proceed­
ings have a different purpose and the 
fact that they reach the conclusion that 
there has been no conduct constituting 
an offence within the meaning of 
national criminal law does not justify 
the conclusion that there is no irregu­
larity within the meaning of that 
Article 24 which could give rise to 
measures at an administrative level 
under that provision. 
(see para. 94) 
5. The application of Article 24 of Regu­
lation No 4253/88, laying down provi­
sions for implementing Regulation 
No 2052/88 as regards coordination 
of the activities of the different Struc­
tural Funds between themselves and 
with the operations of the European 
Investment Bank and the other existing 
financial instruments cannot be ruled 
out on the ground that the penalties 
laid down in that provision only apply 
where the operation being financed has 
not been carried out in whole or in 
part. It is not enough for the bene­
ficiary of assistance to show that the 
project approved by the Commission in 
the award decision has been carried out 
correctly in substance. The beneficiary 
must also be in a position to prove that 
every part of the Community contribu­
tion relates to a service actually pro­
vided which was essential for the 
implementation of the project. 
(see para. 95) 
6. Withdrawal of Community assistance 
due to an irregularity is a penalty in 
that it goes beyond repayment of 
amounts that have been wrongly paid 
as a result of that irregularity. It cannot 
be imposed unless it rests on a clear 
and unequivocal legal basis. 
(see para. 188) 
II - 373