Judgment — ECLI:EU:C:2016:532
Date: 2016-07-07
Language of the case: Slovenian
Court formation: Fifth Chamber
Subject matter: Agriculture and Fisheries
Procedure: Reference for a preliminary ruling
Origin: Slovenia

Summary — Judgment of the Court (Fifth Chamber), 7 July 2016 1. Acts of the institutions — Regulations — Direct applicability — Competence for implementation conferred on a Member State — Limits (Art. 288, second para., TFEU) 2. Agriculture — Common agricultural policy — EAFRD financing — Support for rural development — Eligibility of operations and expenditure — Temporal condition — National legislation restricting the eligibility of expenditure to expenditure incurred after the grant of support — Lawfulness (Council Regulation No 1698/2005, Recital 5 and Art. 71) 3. Agriculture – Common agricultural policy – EAFRD financing – Support for rural Agriculture — Common agricultural policy — EAFRD financing — Support for rural development — Eligibility of operations and expenditure — Reductions and exclusions — National legislation providing for the rejection of a payment claim in its entirety where expenditure incurred prior to the adoption of the decision granting support — Unlawful (Council Regulation No 1698/2005, Art. 71(3); Commission Regulation No 65/2011, Art. 30) 1. See the text of the decision. (see paras 34, 35) 2. Article 71 of Regulation No 1698/2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) must be interpreted as not precluding national legislation under which expenditure is eligible for an EAFRD contribution to the co-financing of an operation selected by the Managing Authority of the rural development programme in question or under its responsibility only where it is incurred after the adoption of the decision granting such support. Under Article 71(3) of Regulation No 1698/2005, the rules on eligibility of expenditure are, as a general rule, to be set at national level, subject to the special conditions laid down in that regulation for certain rural development measures. It follows that, in so far as that provision confers on the Member States the power in principle to set the rules on eligibility of expenditure, the Member States are justified in laying down a condition of eligibility as regards expenditure, inter alia linked to that expenditure being incurred after the approval of the application for support. Furthermore, since the objective of Regulation No 1698/2005 is, as set out in recital 5 thereof, to support rural development, a condition limiting the eligibility of expenditure relating to a co-financed operation only to expenditure incurred after the decision granting support is consistent with that objective since it ensures a more efficient allocation of EAFRD funds. (see paras 37, 39, 41, 45, operative part 1) 3. Article 71(3) of Regulation No 1698/2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD), read in conjunction with Article 30 of Regulation No 65/2011 laying down detailed rules for the implementation of Regulation No 1698/2005, must be interpreted as precluding national legislation which provides for the rejection in its entirety of a payment claim relating to an operation selected for EAFRD co-financing where certain expenditure incurred in respect of that operation was incurred prior to the adoption of the decision granting such support, where the beneficiary of the support did not intentionally make a false declaration in its payment claim. The Member States cannot apply so radical a payment refusal measure to situations other than the situation provided for in Article 30(2) of Regulation No 65/2011, in which a false declaration is made intentionally by the beneficiary of the support. In all other cases, Article 30 of that regulation provides for a reduction of the amount of support, calculated in accordance with the method laid down in Article 30(1) of that regulation. Such a method, consisting in excluding ineligible expenditure, includes a dissuasive factor, since the amount actually payable is reduced by a substantially higher amount than that corresponding to the ineligible expenditure. In those circumstances, such a method tends to prevent ‘deadweight’ effects whilst conserving a proportionate character, since expenditure that is in fact eligible is not entirely excluded from support. (see paras 53-55, operative part 2)