Judgment — ECLI:EU:T:2018:54
Date: 2018-02-01
Language of the case: French
Court formation: Sixth Chamber
Subject matter: Agriculture and Fisheries;European Agricultural Guidance and Guarantee Fund (EAGGF)
Procedure: Action for annulment - unfounded;Action for annulment - successful
Origin: France

Summary — Judgment of the General Court (Sixth Chamber), 1 February 2018 1. Agriculture — Financing by the EAGF — Clearance of accounts — Disallowance of expenses arising from irregularities in applying EU rules — Challenge by the Member State concerned — Burden of proof — Shared by the Commission and the Member State (Council Regulation No 1290/2005, Art. 31(1) to (3)) 2. Judicial proceedings — Application initiating proceedings — Formal requirements — Brief summary of the pleas in law on which the application is based (Statute of the Court of Justice, Arts 21, first para., and 53; Rules of Procedure of the General Court, Art. 76) 3. Agriculture — Common agricultural policy — EAFRD financing — Support for rural development — Eligibility of operations and expenses — Reductions and exclusions — Obligation on the Member States to organise an effective system of administrative and on-site inspections — Scope (Commission Regulation No 65/2011, Art. 14, § 2) 4. Agriculture — Common agricultural policy — EAFRD financing — Support for rural development — Eligibility of operations and expenses — Reductions and exclusions — Obligation on the Member States to organise an effective system of administrative and on-site inspections — Two types of control independent in character — None (Commission Regulations No 1975/2006, Art. 5(2), No 1122/2009, Art. 42, and No 65/2011, Arts 4(4), 12 and 15(3)) 5. Agriculture — Common agricultural policy — EAFRD financing — Support for rural development — Improving the environment and the countryside — Compensatory allowances paid to farmers located in areas of natural handicaps — Calculation — Consequences for on-the-spot checks (Council Regulation No 1698/2005, Art. 36(a), (i) and (ii)) 6. Agriculture — EAGGF financing — Clearance of accounts — Definitive refusal to accept responsibility for certain expenses — Need for prior inter partes procedure — Communication by the Commission of the results of verifications — Non-definitive nature — Possibility to make amendments in the light of responses from the Member State concerned in the context of the administrative procedure (Commission Regulation No 885/2006, Art. 11(1)) 1. See the text of the decision. (see paras 29, 30) 2. See the text of the decision. (see para. 35) 3. Even if the EU rules on the granting of aid and premiums do not expressly require Member States to introduce specific supervisory measures and inspection procedures, the fact remains that, under Article 14(2) of Regulation No 65/2011 laying down detailed rules for the implementation of Council Regulation (EC) No 1698/2005, as regards the implementation of control procedures as well as cross-compliance in respect of rural development support measures, it falls to the Member States to carry out on-the-spot checks covering all the commitments and obligations of a beneficiary, including those arising under national law, which can be checked at the time of the visit. Accordingly, as regards a rural development programme adopted by a Member State and approved by the Commission, which provides, for the purposes of admissibility to compensatory allowances for farmers located in areas of natural handicaps, a stocking criterion expressed in livestock units, with the aim of controlling the density of livestock present on forage areas in order to avoid under-grazing and overgrazing, the national authorities are required, during the on-the-spot checks, to determine the stocking criterion by counting the animals present on the holding at the time of the inspection visit, in order to verify meticulously whether that criterion was adhered to and thus to corroborate the data emerging from the administrative checks. (see paras 52, 53) 4. Member States are permitted, in principle, to carry out on-the-spot checks under Article 12 et seq. of Regulation No 65/2011, together with the on-the-spot checks carried out in the context of the identification of bovine animals or beef premiums, provided that two conditions are satisfied, namely, first, that the latter checks constitute checks provided for in the EU rules regarding agricultural subsidies, within the meaning of Article 4 of Regulation No 65/2011 and, secondly, that they can be carried out at the same time as the checks provided for in Article 12 et seq. of that regulation. As regards the second condition, none of the provisions of Regulation No 65/2011 can be interpreted as meaning that, if administrative checks are carried out using information derived from a reliable database, the on-the-spot checks under that regulation are no longer necessary. Indeed, such an interpretation disregards the objective of on-the-spot checks, which includes verifying the conformity of the information contained in the databases established by the Member States, in accordance with Article 15(3) of Regulation No 65/2011 and Article 42 of Regulation No 1122/2009 laying down detailed rules for the implementation of Council Regulation (EC) No 73/2009 as regards cross-compliance, modulation and the integrated administration and control system, under the direct support schemes for farmers provided for that Regulation, as well as for the implementation of Council Regulation (EC) No 1234/2007 as regards cross-compliance under the support scheme provided for the wine sector. In that regard, as concerns the question whether on-the-spot checks carried out in the context of the identification of bovine animals or beef premiums may be used for the checking compliance with the condition of livestock stocking laid down under the compensatory allowances scheme for farmers located in areas of natural handicaps, it is apparent from Article 5(2) of Regulation No 1975/2006 laying down detailed rules for the implementation of Council Regulation (EC) No 1698/2005, as regards the implementation of control procedures as well as cross-compliance in respect of rural development support measures, the wording of which corresponds to that of Article 4(4) of Regulation No 65/2011, that the on-the-spot checks in respect of those allowances are to be carried out at the same time as other checks provided for in the EU rules regarding agricultural subsidies ‘where appropriate’. It follows that, in principle, there may be cases in which it is not possible to carry out on-the-spot checks in respect of those allowances at the same time as other checks provided for in the EU rules regarding agricultural subsidies, since there is no absolute rule that joint checks must be carried out, but merely an option to do so, which is open to exceptions. (see paras 59, 60, 68, 69, 71) 5. Where a Member State which has adopted measures within the meaning of Article 36(a), (i) and (ii) of Regulation No 1698/2005 on support for rural development by the EAFRD makes the award of compensatory allowances for farmers located in areas of natural handicaps subject to a livestock stocking density criterion between a minimum threshold and a maximum ceiling, without specifying whether it is an annual value, an average for the year can be accepted since variations between maximum and minimum values may occur throughout the relevant period and it is impossible to check those values on a daily basis. However, in order to ensure compliance with the condition relating to stocking density, that average should be calculated on the basis of the values that lie between the minimum and maximum values of the range. In that regard, the national authorities are required, during on-the-spot checks, to determine the stocking density criterion by, inter alia, counting the animals at the time of the inspection visit in order to determine whether the maximum and minimum values are adhered to meticulously and thus to corroborate the data emerging from the administrative checks. Moreover, the fact that certain factors influencing the determination of the stocking density, such as the age of the animals, cannot be determined with absolute precision cannot exempt the national authorities from their obligation to carry out checks in that regard. In addition, it is not inconceivable that, as the Commission submits, inspectors carrying out on-the-spot checks may be able to determine with sufficient precision the age of the animals. (see paras 80, 82, 84) 6. See the text of the decision. (see paras 97, 98)