Abstract;Judgment — ECLI:EU:T:2023:787
Date: 2023-12-06
Language of the case: Czech
Subject matter: Agriculture and Fisheries;Agricultural structures
Procedure: Action for annulment - unfounded;Action for annulment - successful
Origin: Czechia

summary report (‘the summary report’) in which it summarised the various stages of the audit mission, the scope of the observations put forward by the Czech Republic during the conformity clearance procedure and the reasons for its final conclusions. 29 On 17 November 2021, the Commission adopted the contested decision imposing a financial correction in the amount of EUR 44 098 570.70 on the Czech Republic. B. Follow-up audit mission AA/2020/012/CZ 30 Before the conclusion of the audit mission, the Commission initiated a follow-up audit mission in relation to the Czech Republic in order to explore in greater depth certain matters that had been examined previously in the audit mission (AA/2020/012/CZ; ‘the follow-up audit mission’), on the basis of Article 52 of Regulation No 1306/2013 and Article 34 of Implementing Regulation No 908/2014. The follow-up audit mission focused inter alia on infringements concerning the identification of permanent grassland. 31 From 31 August 2020 to 4 September 2020, in the context of the follow-up audit mission, the Commission carried out a follow-up on-the-spot check in the Czech Republic. 32 By letter of 23 October 2020, the Commission notified the Czech authorities of the results of its checks, in accordance with Article 34(2) of Implementing Regulation No 908/2014. In that letter, it indicated inter alia that the follow-up audit mission had identified a number of deficiencies in the classification of permanent grassland, contrary to Article 4(1)(h) of Regulation No 1307/2013. It stated that it was the same deficiencies as had been found in the preliminary conclusions of the audit mission. The Commission also asked the Czech authorities to provide additional information. 33 On 1 July 2021, a bilateral follow-up meeting took place between the Commission and the Czech authorities. 34 By letter of 30 July 2021, the Czech authorities provided the Commission with additional information concerning the classification of permanent grassland within the meaning of Article 4(1)(h) of Regulation No 1307/2013 (‘the letter of 30 July 2021’). 35 On 24 August 2021, the Commission sent the Czech Republic the minutes of the bilateral follow-up meeting. In that document the Commission: – stated that, further to the information provided by the Czech authorities at the bilateral follow-up meeting and in the letter of 30 July 2021, it considered the question whether there was an infringement relating to the identification of permanent grassland for the period covered by the follow-up audit mission to be closed; – expressed its regret that the information provided, which was also relevant in relation to the audit mission, had not been provided by the Czech authorities in the course of the conformity clearance procedure that led to the adoption of the contested decision. II. Forms of order sought 36 The Czech Republic claims that the Court should: – annul in part the contested decision in so far as it concerns the Commission’s imposition of the contested financial correction due to the infringements relating to the status of active farmer, the identification of permanent grassland, the selection of the control sample, the recovery of undue payments and the late submission of the application, and also under the financial discipline scheme; – order the Commission to pay the costs. 37 The Commission contends that the Court should: – dismiss the application; – order the Czech Republic to pay the costs. III. Substance 38 The Czech Republic puts forward six pleas in law in support of its action, contesting: (i) the infringement relating to the status of active farmer; (ii) the infringement relating to the identification of permanent grassland; (iii) the infringement relating to the selection of the control sample; (iv) the infringement relating to the recovery of undue payments; (v) the infringement relating to the late submission of the application; and (vi) the financial discipline scheme. A. First plea: infringement relating to the status of active farmer 39 The first plea contesting the infringement relating to the status of active farmer comprises two parts. 1. First part of the first plea: unlawfulness of the Commission’s imposition the contested financial correction when the Czech Republic did not infringe Article 9(2) of Regulation No 1307/2013 40 The Czech Republic puts forward two complaints in the first part of the first plea. (a) First complaint: infringement of the third subparagraph of Article 9(2) of Regulation No 1307/2013 due to the use of a single criterion to prove fulfilment of two of the three conditions provided for by that provision 41 By its first complaint, the Czech Republic submits that it did not infringe the third subparagraph of Article 9(2) of Regulation No 1307/2013. Its decision to use a single criterion to prove fulfilment of both the condition laid down in letter (b) of the third subparagraph of Article 9(2) of Regulation No 1307/2013, under which the applicant’s agricultural activities are not insignificant (‘the (b) condition’), and that provided for in letter (c) of the third subparagraph of Article 9(2) of the same regulation, under which the applicant’s principal business or company objects consist of exercising an agricultural activity (‘the (c) condition’), is not unlawful. 42 The Commission disputes that complaint. 43 As a preliminary point, the General Court finds that the first subparagraph of Article 9(2) of Regulation No 1307/2013 establishes a simple presumption that natural or legal persons, or groups of natural or legal persons, who carry out an activity included in the exclusion list are not to be considered active farmers and are not eligible to receive direct payments under the EAGF and the EAFRD (‘the simple presumption’). Under the third subparagraph of Article 9(2) of Regulation No 1307/2013, however, those same natural or legal persons or groups of natural or legal persons may rebut the simple presumption by providing verifiable evidence, in the form that is required by Member States, which demonstrates any one of the following: – that the annual amount of direct payments is at least 5% of the total receipts that it obtained from non-agricultural activities in the most recent fiscal year for which such evidence is available; – that its agricultural activities are not insignificant; – that its principal business or company objects consist of exercising an agricultural activity. 44 The criteria for the application of the conditions provided for by the third subparagraph of Article 9(2) of Regulation No 1307/2013 are set out in Article 13 of Commission Delegated Regulation (EU) No 639/2014 of 11 March 2014 supplementing [Regulation No 1307/2013] and amending Annex X to that Regulation (OJ 2014 L 181, p. 1). That provision provides as follows: – for the purposes of the (b) condition, that the applicant’s agricultural activities are not insignificant if the total receipts obtained by the applicant from agricultural activities in the most recent fiscal year for which such evidence is available represent at least one third of the total receipts obtained in the most recent fiscal year for which such evidence is available; Member States may, however, establish alternative criteria allowing the applicant to demonstrate that its agricultural activities are not insignificant. – for the purposes of the (c) condition, that an agricultural activity is to be considered to be the principal business or company object of a legal person if recorded as a principal business or company object in the official business register or any equivalent official evidence of a Member State; in the case of a natural person, equivalent evidence is to be required; Member States may, however, establish alternative criteria according to which an agricultural activity is to be considered to be a principal business or company object of a natural or legal person. 45 It is in that context that the four arguments put forward by the Czech Republic must be analysed. (1) First argument: the third subparagraph of Article 13(1) and the third subparagraph of Article 13(3) of Delegated Regulation No 639/2014 allows Member States to identify criteria other than those defined therein and does not provide for any restrictions as to which criteria may be chosen 46 By its first argument, the Czech Republic submits that the criteria for the interpretation of the (b) condition and the (c) condition are laid down in Article 13(1) and (3) of Delegated Regulation No 639/2014. 47 In that regard, the Czech Republic submits that the first subparagraph of Article 13(1) and the first subparagraph of Article 13(3) of Delegated Regulation No 639/2014 lay down two different criteria for assessing fulfilment of the (b) condition and the (c) condition. In its submission, that provision provides that, in order to prove fulfilment of the (b) condition, it must be demonstrated that at least a third of the applicant’s receipts are agricultural receipts (‘the agricultural receipts criterion’) and, to prove fulfilment of the (c) condition, it must be demonstrated that the aid applicant’s exercise of an agricultural activity is recorded in the official business register or any equivalent official evidence. The Czech Republic observes, however, that, by way of derogation from those criteria, the third subparagraph of Article 13(1) and the third subparagraph of Article 13(3) of Delegated Regulation No 639/2014 allow the Member States to establish alternative criteria enabling proof to be made out that the aid applicant fulfils the (b) condition and the (c) condition. 48 In addition, in the Czech Republic’s submission, the first subparagraph of Article 13(1) and the first subparagraph of Article 13(3) of Delegated Regulation No 639/2014 do not provide for any restrictions as to the Member States’ choice of alternative criteria to be adopted in order to prove that the (b) condition and the (c) condition are fulfilled, and nor do they prevent those States from using the same criterion to prove observance of both conditions, since they enjoy broad discretion in that regard. 49 Consequently, the Czech Republic takes the view that it was free, in the present case, to apply the agricultural receipts criterion to prove that the (b) condition and the (c) condition were fulfilled. That is a relevant criterion for demonstrating not only that the applicant’s agricultural activities were not insignificant ((b) condition), but also that the agricultural activity was the applicant’s principal business or part of the company object ((c) condition). 50 Although it is undeniable that the third subparagraph of Article 13(1) and the third subparagraph of Article 13(3) of Delegated Regulation No 639/2014 allow the Member States to identify criteria other than those defined therein and do not provide for any restrictions as to the choice thereof, the fact remains that the Member States must use those alternative criteria to assess the fulfilment of the three conditions laid down in the third subparagraph of Article 9(2) of Regulation No 1307/2013. 51 Thus, the choice of other criteria by the Member States within the meaning of the third subparagraph of Article 13(1) and the third subparagraph of Article 13(3) of Delegated Regulation No 639/2014 cannot lead to the conditions laid down in the third subparagraph of Article 9(2) of Regulation No 1307/2013 being deprived of their purpose, thereby restricting the possibilities for aid beneficiaries to rebut the simple presumption. 52 In the present case, the Czech Republic’s use of the agricultural receipts criterion to prove fulfilment of both the (b) condition and the (c) condition limited to two the options available to aid beneficiaries for rebutting the simple presumption. That choice thus disregards the third subparagraph of Article 9(2) of Regulation No 1307/2013, which expressly provides that the aid beneficiary is to be able to rebut the simple presumption in three different ways. 53 The first argument must therefore be rejected. (2) Second argument: in the Czech Republic, there was no official business register or equivalent official evidence enabling proof to be made out that the aid applicant’s principal business or company object was an agricultural activity 54 By its second argument, the Czech Republic submits that the choice to use the agricultural receipts criterion to prove fulfilment of both the (b) condition and the (c) condition was made necessary by the fact that, in its national law, there was no official business register or equivalent official evidence enabling proof to be made out that the aid applicant’s principal business or company object was an agricultural activity, as provided for in letter (c) of the third subparagraph of Article 9(2) of Regulation No 1307/2013 and by the second subparagraph of Article 13(3) of Delegated Regulation No 639/2014. 55 It should be noted that, although in its national law there was no official business register or equivalent official evidence enabling proof to be made out of fulfilment of the (c) condition, the Czech Republic was free under the third subparagraph of Article 13(3) of Delegated Regulation No 639/2014 to provide for an alternative criterion for proving fulfilment of the (c) condition. 56 It follows that, in the present case, the Czech Republic could have chosen a different criterion to prove fulfilment of the (c) condition, without having to resort to the agricultural receipts criterion, which it had used previously to prove fulfilment of the (b) condition. 57 The second argument must therefore be rejected. (3) Third argument: the possibility of applying the agricultural receipts criterion for proving fulfilment of both the (b) condition and the (c) condition had been confirmed by the Commission 58 By its third argument, the Czech Republic submits that the possibility of applying the agricultural receipts criterion for proving fulfilment of both the (b) condition and the (c) condition had been confirmed by the Commission at a presentation to the Member States held on 27 October 2015 to assess the status of active farmer (‘the presentation to the Member States’). 59 It should be observed that, even if the presentation to the Member States can bind the Commission in the interpretation to be given to the third subparagraph of Article 9(2) of Regulation No 1307/2013, the Commission has stated that the agricultural receipts criterion could be applied as an alternative criterion to demonstrate fulfilment of the (c) condition only if the Member State did not also use it to prove compliance with the (b) condition. 60 Consequently, the third argument must be rejected. (4) Fourth argument: Article 9(7) of Regulation No 1307/2013, as amended by Regulation 2017/2393, provides that the Member States may decide that only one or two of the conditions laid down in the third subparagraph of Article 9(2) of Regulation No 1307/2013 may be relied on to establish the aid applicant’s status as active farmer 61 By its fourth argument, the Czech Republic submits that Article 9(7) of Regulation No 1307/2013, as amended by Regulation (EU) 2017/2393 of the European Parliament and of the Council of 13 December 2017 amending Regulations (EU) No 1305/2013 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD), (EU) [No 1306/2013], (EU) [No 1307/2013], (EU) No 1308/2013 establishing a common organisation of the markets in agricultural products and (EU) No 652/2014 laying down provisions for the management of expenditure relating to the food chain, animal health and animal welfare, and relating to plant health and plant reproductive material (OJ 2017 L 350, p. 15), provides that the Member States may decide that only one or two of the conditions laid down in the third subparagraph of Article 9(2) of Regulation No 1307/2013 may be relied on to establish the aid applicant’s status as active farmer. 62 It is true that Article 9(7) of Regulation No 1307/2013, in the version thereof currently in force following the entry into force of Regulation 2017/2393, provides that the Member States may decide that only one or two of the conditions included in the third subparagraph of Article 9(2) of Regulation No 1307/2013 may be relied on by persons or groups of persons in order to demonstrate that they are active farmers. 63 However, that possibility is limited in time, inasmuch as the Member States may rely on it only as from the year 2018, and is subject to the condition that the Member State concerned must notify the Commission no later than 31 March 2018 if the decision applies as from the year 2018 or 1 August of the year preceding the application of the decision, if it applies as from a subsequent year. 64 In the present case, the audit mission that led to the adoption of the contested decision covers the years 2015 to 2017. The possibility afforded to the Member States by the new Article 9(7) of Regulation No 1307/2013 to limit the conditions laid down in the third subparagraph of Article 9(2) of that regulation to one or two could be utilised only as from 2018, and thus subsequently to the facts of the present case; it must therefore be held to be irrelevant for resolving the present case. 65 Consequently, the fourth argument must be rejected, as must, therefore, the first complaint in its entirety. (b) Second complaint: infringement of Article 9(2) of Regulation No 1307/2013 due to a failure to take related companies into account in the check of the aid applicant’s status as an active farmer 66 By its second complaint, the Czech Republic submits that it did not infringe Article 9(2) of Regulation No 1307/2013 due to a failure to take related companies into account in the check of the aid applicant’s status as an active farmer. 67 It submits in that regard that the expression ‘groups of natural or legal persons’ in Article 9(2) of Regulation No 1307/2013 refers only to groups of natural or legal persons, to the exclusion of related companies. In the Czech Republic’s submission, that means that it is only in relation to a group as a whole that a determination must be made as to whether the conditions laid down in that provision allowing the aid applicant to be eligible for the status of active farmer are fulfilled. 68 The Commission disputes that complaint. 69 It should be noted, as a preliminary point, that the concept of groups of natural or legal persons in Article 9(2) of Regulation No 1307/2013, the wording of which is reiterated in paragraph 43 above, is not defined either by Regulation No 1307/2013 or by Delegated Regulation No 639/2014, even though it provides for criteria for the implementation of Article 9 of Regulation No 1307/2013. 70 As regards related companies, it should be noted that no reference to, still less any definition of, that concept is to be found in Regulation No 1307/2013 or Delegated Regulation No 639/2014, or in the Commission’s Guidance document of 15 April 2014 on the implementation of Article 9 of Regulation (EU) No 1307/2013. 71 Yet in its presentation to the Member States, the Commission indicated that Article 9(2) of Regulation (EU) No 1307/2013 had to be interpreted as meaning that activities included in the exclusion list could be carried out by natural or legal persons or by groups thereof or through a related company. 72 Moreover, in a letter sent to the German Ministry of Food and Agriculture on 29 January 2016, which was then made available to other Member States, the Commission stated that ‘related company’ for the purposes of Article 9(2) of Regulation No 1307/2013 meant any entity directly or indirectly related to the applicant through a relationship of control taking the form of whole or majority ownership. 73 It is in that context that the four arguments put forward by the Czech Republic in support of its second complaint must be analysed. (1) First argument: the inclusion of related companies in the scope of Article 9(2) of Regulation No 1307/2013 is contrary to the wording of that provision 74 By its first argument, the Czech Republic submits that it is not apparent from the wording of Article 9(2) of Regulation No 1307/2013 that companies related to the aid applicant must be taken into account when a Member State verifies compliance with the eligibility criteria for active farmer status. In the Czech Republic’s submission, it follows that Article 9(2) of Regulation No 1307/2013 must be interpreted as meaning that that no direct payments are to be granted to natural or legal persons, or groups of natural or legal persons, who themselves undertake any of the activities on the exclusion list. 75 The Commission disputes that argument. 76 In the first place, the concept of ‘related companies’ is not to be found in Article 9(2) of Regulation No 1307/2013. 77 In the second place, it should be noted that a group is, in essence, defined as a group of entities related to each other within a single organisation. Thus the term ‘group’ must be interpreted as being similar to the term ‘grouping’ and referring to any association of natural or legal persons related to each other within a more or less structured single organisation. It follows that a group of natural or legal persons includes related companies. 78 In those circumstances, the Court finds that, as per the wording of Article 9(2) of Regulation No 1307/2013, the aid applicant, which may be a group of natural or legal persons, may carry out the activities included in the exclusion list directly or indirectly, or through a related company forming part of the same group. Similarly, if the aid applicant is not a group but a natural or legal person forming part of a group, that applicant may carry out the activities included in the exclusion list directly or indirectly, or through a related company forming part of the same group. 79 The first argument must therefore be rejected. (2) Second argument: the inclusion of related companies in the scope of Article 9(2) of Regulation No 1307/2013 is contrary to the definition of ‘farmer’ contained in Article 4(1)(a) of Regulation No 1307/2013 80 By its second argument, the Czech Republic submits that the concept of ‘active farmer’ within the meaning of Article 9(2) of Regulation No 1307/2013 must be interpreted in the light of the concept of ‘farmer’ under Article 4(1)(a) of that regulation. However, both the concept of ‘active farmer’ and ‘farmer’ refer to the applicants themselves, not related companies. 81 The Commission disputes that argument. 82 It should be noted that Article 4(1)(a) of Regulation No 1307/2013 defines a farmer as a natural or legal person, or a group of natural or legal persons, irrespective of the legal status granted to such a group and its members by national law, whose holding is situated within the territorial scope of the Treaties, as defined in Article 52 TEU, read in conjunction with Articles 349 and 355 TFEU. 83 The existence of a link between the concept of ‘active farmer’ within the meaning of Article 9(2) of Regulation No 1307/2013 and that of ‘farmer’ within the meaning of Article 4(1)(a) of that same regulation is confirmed by the case-law, which has held that, in order to be eligible for the status of active farmer, a person must first satisfy the requirements referred to in Article 4(1)(a) of Regulation No 1307/2013 concerning the concept of farmer (see, to that effect, judgment of 7 April 2022, Avio Lucos, C‑176/20, EU:C:2022:274, paragraph 54). 84 The existence of a link between the concept of ‘farmer’ and that of ‘active farmer’ does not, however, call into question the finding set out in paragraph 78 above, to the effect that, under Article 9(2) of Regulation No 1307/2013, the aid applicant may carry out the activities included in the exclusion list directly or indirectly, or through a related company forming part of the same group. 85 Contrary to the Czech Republic’s contentions, the wording of Article 4(1)(a) of Regulation No 1307/2013 does not suggest that, in order to be categorised as a farmer, a natural person, a legal person or a group of natural or legal persons must carry out their activities directly. 86 The second argument must therefore be rejected. (3) Third argument: the inclusion of related companies in the scope of Article 9(2) of Regulation No 1307/2013 is contrary to the purpose of that provision 87 By its third argument, the Czech Republic submits that the inclusion of related companies in the scope of Article 9(2) of Regulation No 1307/2013 is contrary to the purpose of that provision, which is to limit direct payments under the common agricultural policy to farmers who themselves exercise a non-marginal agricultural activity. 88 The Commission disputes that argument. 89 It should be noted that the purpose of the rules concerning the concept of ‘active farmer’ is explained in recital 10 of Regulation No 1307/2013, which states inter alia: ‘Experience acquired in the application of the various support schemes for farmers has shown that support was in a number of cases granted to natural or legal persons whose business purpose was not, or was only marginally targeted at an agricultural activity. To ensure that support is better targeted, Member States should refrain from granting direct payments to certain natural and legal persons unless such persons can demonstrate that their agricultural activity is not marginal. …’ 90 It follows that, contrary to the Czech Republic’s contentions, recital 10 of Regulation No 1307/2013 does not require that those activities included in the exclusion list be exercised directly by the applicants, whether they are a natural person, a legal person or a group of natural or legal persons. 91 In view of its purpose, which is to avoid the risk of fraudulent use of the Union budget and limit payments under the CAP to those farmers who genuinely carry out agricultural activity, Article 9(2) of Regulation No 1307/2013 must be interpreted as applying independently of the fact that the applicant, be it a natural or legal person, or the group concerned, carries out one of the activities included in the exclusion list directly or through related companies. 92 If the related companies were not taken into account, the applicants could in fact distribute their activities across a number of related legal entities in order to circumvent the limits placed by that provision on the recognition of their status as active farmer. The check carried out by the competent authorities of the Member States would then be limited to those agricultural activities exercised directly by the applicant, excluding those carried out through related companies. 93 In that regard, in the reply, the Czech Republic submits that the risk that the applicant for aid will deliberately split its activities into different legal entities in order to circumvent the application of Article 9(2) of Regulation No 1307/2013 is countered by Article 60 of Regulation No 1306/2013. 94 However, in the first place it should be noted that Article 60 of Regulation No 1306/2013 does not suffice to avoid the risk of EU budget fraud arising from an applicant’s splitting of its activities in its capacity as an active farmer. That provision reads as follows: ‘Without prejudice to specific provisions, no advantage provided for under sectoral agricultural legislation shall be granted in favour of a natural or legal person in respect of whom it is established that the criteria required for obtaining such advantages were created artificially, contrary to the objectives of that legislation.’ 95 In the second place, according to settled case-law, evidence of artificial conditions within the meaning of Article 60 of Regulation No 1306/2013 requires, first, a combination of objective circumstances in which, despite formal observance of the conditions laid down by the relevant rules, the purpose of those rules has not been achieved, and, second, a subjective element consisting in the intention to obtain an advantage from the EU rules by creating artificially the conditions laid down for obtaining it (see, to that effect, judgments of 21 July 2005, Eichsfelder Schlachtbetrieb, C‑515/03, EU:C:2005:491, paragraph 39, and of 7 February 2023, Confédération paysanne and Others (In vitro random mutagenesis), C‑688/21, EU:C:2023:75, paragraph 33). 96 In those circumstances, given the broad scope of Article 60 of Regulation No 1306/2013 and the evidentiary constraints established by the case-law referred to in paragraph 95 above, it is possible that an abusive practice consisting in circumventing the application of the rules relating to the status of active farmer does not come within the scope of Article 60 of Regulation No 1306/2013, but still constitutes an infringement of Article 9(2) of Regulation No 1307/2013. 97 Thus, it cannot be argued that that provision alone suffices to avoid the risk that the applicant for aid will split its activities into different legal entities in order to circumvent the check of its status as an active farmer under Article 9(2) of Regulation No 1307/2013. 98 The third argument must therefore be rejected. (4) Fourth argument: the inclusion of related companies in the scope of Article 9(2) of Regulation No 1307/2013 is contrary to the principle of legal certainty 99 By its fourth argument, the Czech Republic submits that, in accordance with the principle of legal certainty, the Commission may impose a financial correction on a Member State only if the infringement it alleges against is clearly and specifically apparent from the applicable legal framework. In the present case, however, the inclusion of the related companies in the scope of Article 9(2) of Regulation No 1307/2013 is not clearly and specifically apparent from the applicable legal framework. 100 The Commission disputes that argument. 101 According to settled case-law, where an obligation imposed on Member States may have financial consequences for them, that obligation must be sufficiently clear and precise, in order to enable them to understand its scope and comply with it. The principle of legal certainty – which is one of the general principles of EU law – requires that rules of law be clear and precise and predictable in their effect, so that interested parties can ascertain their position in situations and legal relationships governed by EU law (see, to that effect, judgments of 6 September 2018, Czech Republic v Commission, C‑4/17 P, EU:C:2018:678, paragraph 58; of 17 November 2022, Avicarvil Farms, C‑443/21, EU:C:2022:899, paragraph 46; and of 19 December 2019, Czech Republic v Commission, T‑509/18, EU:T:2019:876, paragraph 40). 102 In the present case, it is clearly and specifically apparent within the meaning of that case-law that a group of natural or legal persons or a natural or legal person forming part of a group may carry out the activities included in the exclusion list directly or indirectly, or through a related company forming part of the same group. 103 In those circumstances, the fourth argument must be dismissed. 104 Consequently, the second complaint must be rejected, as must, therefore, the first part of the first plea in its entirety. 2. Second part of the first plea: infringement by the Commission of Article 52(2) of Regulation No 1306/2013 and of the principle of proportionality, on the ground that the amount of the contested financial correction for the alleged infringement relating to the status of active farmer is not commensurate with the gravity of the alleged non-conformity 105 By the second part of the first plea, the Czech Republic submits that the Commission infringed Article 52(2) of Regulation No 1306/2013 and of the principle of proportionality, on the ground that the amount of the contested financial correction for the alleged infringement relating to the status of active farmer is not commensurate with the gravity of the alleged non-conformity. 106 As a preliminary point, it should be noted that Article 52(2) of Regulation No 1306/2013 provides for three types of corrections: a ‘calculated’ correction; an ‘extrapolated’ correction; and a ‘flat-rate’ correction. It also establishes a hierarchy of those corrections. A calculated correction is applied when unduly spent precise amounts can be identified. Where they cannot, an extrapolated correction or flat-rate correction may be applied, although a flat-rate correction is applied only where, due to the nature of the case or because the Member State has not provided the Commission with the necessary information, it is not possible with proportionate effort to identify more precisely the financial damage to the European Union. 107 It is also apparent from Article 12(6) of Delegated Regulation No 907/2014 that it is only where the conditions for applying a calculated correction or an extrapolated correction are not met or the nature of the case is such that the amounts to be excluded cannot be determined with clarity that the Commission may apply a flat-rate correction, taking into account the nature and gravity of the infringement and its own estimation of the risk of financial damage to the European Union. When applying a flat-rate correction, the Commission, whilst making proportionate effort, must also take into account the type of non-conformity found and, inter alia, determine whether there are deficiencies relating to a key control or an ancillary control. 108 Moreover, according to settled case-law, the principle of proportionality, which is one of the general principles of EU law, requires that acts adopted by European Union institutions do not exceed the limits of what is appropriate and necessary in order to attain the legitimate objectives pursued (see judgment of 12 February 2020, Hungary v Commission, T‑505/18, not published, EU:T:2020:56, paragraph 105 and the case-law cited). Consequently, where there is a choice between several appropriate measures, recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued (see judgment of 3 March 2016, Spain v Commission, T‑675/14, not published, EU:T:2016:123, paragraph 51 and the case-law cited). 109 In the present case, the Commission imposed a single flat-rate correction on the Czech Republic for the two components of the infringement relating to the status of active farmer contested under the first part of the first plea, namely infringement of the third subparagraph of Article 9(2) of Regulation No 1307/2013 due to the use of a single criterion to prove fulfilment of two of the three conditions provided for by that provision and infringement of Article 9(2) of Regulation No 1307/2013 due to the failure to take into account related companies in the check of the aid applicant’s status as active farmer. The flat-rate correction imposed by the Commission amounts to 5% to 10% of the payments made by the Czech Republic in breach of the provisions relating to the status as active farmer. 110 It is in that context that the two complaints put forward by the Czech Republic in support of the second part of the first plea must be analysed. (a) First complaint: no financial damage justifying the Commission’s imposition of the contested financial correction for the alleged infringement relating to the status as active farmer 111 By its first complaint, the Czech Republic submits that the alleged infringement relating to the status as active farmer did not cause any financial damage to the European Union capable of justifying the Commission’s imposition of the contested financial correction. 112 In that regard, the Czech Republic observes that, as indicated in the letter of 11 December 2018 and in a letter of 9 October 2015 from the Czech Ministry of Agriculture, following the rejection of the applications for the status of active farmer on the basis of Article 9(2) of Regulation No 1307/2013, the amounts intended for active farmers had not been used by its authorities to benefit other farmers under different aid schemes. Consequently, the Czech Republic submits that the rejection of the applications for the status of active farmer did not lead to increases in payments to other farmers and that no financial damage arose from the rejection of those applications. 113 The Czech Republic further submits that none of the applicants whose application for status as an active farmer was refused by its authorities on the basis of the criterion relating to agricultural receipts to prove fulfilment of the (c) condition could have enjoyed such status and the related payments under the EAGF and the EAFRD had a different criterion been used. Thus, in the Czech Republic’s submission, no financial damage to the European Union can arise from the rejection of those aid applications. 114 The Commission disputes that complaint. 115 As a preliminary point, it should be noted that, according to settled case-law, it is for the Commission, when it contests the findings of checks conducted by the national authorities and for the purpose of proving an infringement of the rules of the CAP, to put forward evidence establishing genuine and reasonable doubt about the checks conducted by the national authorities or the figures provided by them. It is not incumbent on the Commission to demonstrate exhaustively that there were deficiencies in those checks or inaccuracies in those figures. That easing of the requirement of the proof to be provided by the Commission is explained by the fact that it is the Member State which is best placed to gather and verify the data necessary for the clearance of the agricultural funds accounts (see, to that effect, judgments of 19 December 2019, Greece v Commission, T‑295/18, not published, EU:T:2019:880, paragraph 77 and the case-law cited, and of 25 June 2020, Poland v Commission, T‑506/18, not published, EU:T:2020:282, paragraph 31 and the case-law cited). 116 Thus, in accordance with the case-law, if the Commission expresses genuine and reasonable doubt, it is for the Member State to present highly detailed and complete proof of those checks or figures and, if necessary, of the inaccuracy of the Commission’s statements (see judgment of 12 November 2015, Italy v Commission, T‑255/13, not published, EU:T:2015:838, paragraph 55 and the case-law cited). 117 It follows that the Member State concerned cannot rebut the Commission’s findings without substantiating its own assertions by adducing evidence of a reliable and operational supervisory system. If it is not able to show that the Commission’s findings are inaccurate, they may give rise to serious doubts as to the existence of an adequate and effective series of supervisory measures and inspection procedures (see judgments of 19 December 2019, Greece v Commission, T‑295/18, not published, EU:T:2019:880, paragraph 77 and the case-law cited, and of 25 June 2020, Poland v Commission, T‑506/18, not published, EU:T:2020:282, paragraph 31 and the case-law cited). 118 In the present case, in the conformity clearance procedure that led to the contested decision, the Commission found that the rejection of the applications for the status of active farmer could entail the risk of increases in the payments made by the Czech Republic to other farmers under different aid schemes. In that regard, the Commission submitted that the amount of direct payments that could be granted each year to a Member State may not exceed the ceiling established in accordance with Article 6 of Regulation No 1307/2013. Thus, in the Commission’s submission, following the rejection of the applications for status as active farmer, there could be a risk that, within the limits of the authorised ceiling, the Czech Republic might use the funds intended for payments under provisions governing the status of active farmer to provide higher amounts of financing to farmers under other aid schemes. The Commission takes the view that the increase in payments made under other aid schemes entails a risk for the Union budget, since it was not substantiated by factors specific to those aid schemes, but is merely the consequence of the rejection of the applications for status as active farmer. 119 In those circumstances, in accordance with the case-law cited in paragraphs 115 and 117 above, in order to dispel the genuine and reasonable doubt expressed by the Commission, the Czech Republic ought to have provided highly detailed and complete proof that the rejection of the applications for status as active farmer on the basis of Article 9(2) of Regulation No 1307/2013 does not give rise to any financial damage to the Union budget. 120 That did not take place in this case. 121 First, it is true that, in the letter of 11 December 2018, the Czech Republic provided indications about nine applicants who were not granted status as active farmers under Article 9(2) of Regulation No 1307/2013 and noted that that exclusion had not given rise to any financial damage to the Union budget because it had not led to any increases in the payments made to other farmers. However, it provided no evidence in support of its allegations. 122 Second, in the application, the Czech Republic refers to a letter sent on 27 October 2015 by the Department of direct payments of its Ministry of Agriculture to the Directorate of the Department of direct payments and environmental aid of the National agricultural intervention fund, which stated that the Czech Minister for Agriculture had approved the single area payments, the payments for agricultural practices beneficial to the climate and the environment and the payments to young farmers. It is not disputed that that letter was not communicated to the Commission under the conformity clearance procedure and accordingly could not be taken into consideration at the time of adoption of the contested financial correction. Even if that letter had been sent to the Commission as part of the conformity clearance procedure, it should be noted that it does not prove that the rejection of the applications for status as active farmer for the years 2015 to 2017 on the basis of Article 9(2) of Regulation No 1307/2013 did not cause any financial damage to the European Union. It merely fixed the rate of certain agricultural payments for the year 2015. 123 Third, the Czech Republic has not adduced any evidence in support of its claim that none of the applicants whose application for status as an active farmer was refused by its authorities on the basis of the criterion relating to agricultural receipts to prove fulfilment of the (c) condition could have enjoyed such status and the related payments under the EAGF and the EAFRD had a different criterion been used. 124 As a result, the first complaint must be rejected. (b) Second complaint: lack of precision in the determination of the amount of the contested financial correction for the alleged infringement relating to the status as active farmer 125 By its second complaint, the Czech Republic maintains that, even if the infringement relating to the status of active farmer did cause financial damage to the European Union, that damage ought to have been calculated by the Commission in a precise manner and ought not to have been the subject of a flat-rate correction. 126 The Commission disputes that complaint. 127 As a preliminary point, it should be borne in mind that the Commission may apply a flat-rate financial correction when it is not possible with proportionate effort to identify more precisely the financial damage caused to the European Union, inter alia because the Member State has not provided the necessary information to the Commission under Article 52(2) of Regulation No 1306/2013. 128 In that regard, it should be noted that the letter of 11 December 2018 specifies the total number of applicants excluded from the status of active farmer, but does not state the damage that that exclusion might have caused to the EAGF and the EAFRD. 129 Moreover, neither the letter of 11 December 2018 nor the subsequent documents sent by the Czech authorities to the Commission as part of the conformity clearance procedure state anything as to the financial damage that may arise from the failure to take account of related companies as part of the check of the aid applicant’s active farmer status. 130 In those circumstances, given the importance and nature of the non-conformity found, which arose from a key control, and the impossibility of identifying more precisely with proportionate effort the financial damage caused to the European Union following the rejection of the aid applications relating to the status of active farmer, the Commission cannot be said to have infringed Article 52(2) of Regulation No 1306/2013 and the principle of proportionality in imposing the flat-rate correction of 5% on 10% of the payments made contrary to EU law for infringement relating to the status of active farmer. 131 Hence the second complaint must be rejected, as must, therefore, the second part of the first plea. 132 As a result, the first plea must be rejected. B. Second plea: infringement relating to the identification of permanent grassland 133 The second plea, which comprises two parts, concerns the infringement relating to the identification of permanent grassland. 1. First part of the second plea: unlawfulness of the Commission’s imposition of the contested financial correction relating to the infringement relating to the identification of permanent grassland due to the failure, in the audit mission, to take account of the results of the follow-up audit mission dismissing the existence of that infringement 134 The Czech Republic puts forward three complaints under the first part of the second plea. (a) First complaint: infringement by the Commission of Article 52(1) of Regulation No 1306/2013, Article 34(1) and (6) of Implementing Regulation No 908/2014 and of the principle of sound administration 135 By its first complaint, the Czech Republic submits that, by failing to take into account, as part of the audit mission, the results of the follow-up audit mission that had found no infringement relating to the identification of permanent grassland, the Commission disregarded Article 52(1) of Regulation No 1306/2013, Article 34(1) and (6) of Implementing Regulation No 908/2014 and the principle of sound administration. 136 As a preliminary point, it should be borne in mind that there was some temporal overlap between the audit mission and the follow-up audit mission. The audit mission was opened on 18 September 2017 (at the start of the first on-the-spot audit) and was closed, following the sending of the summary report on 21 October 2021, by the adoption of the contested decision on 17 November 2021. The follow-up audit mission commenced on 31 August 2021 (at the start of the follow-up audit) and ended, for the infringement relating to the identification of permanent grassland, on 24 August 2021, with the adoption of the minutes of the bilateral follow-up meeting, which brought the question whether that infringement had occurred to a close. 137 In those circumstances, given that the summary report and the contested decision were adopted, in the context of the follow-up audit mission, after the question whether there had been an infringement relating to the identification of permanent grassland had been closed, it must be examined whether, as part of the audit mission, the Commission ought to have decided on the question whether there had been an infringement relating to the identification of permanent grassland in view of the information that came to light in the course of the follow-up audit mission. 138 In that regard, it should be borne in mind that, in accordance with Article 52(1) of Regulation No 1306/2013, where the Commission finds that expenditure has not been effected by a Member State in accordance with EU law, it is to adopt a decision determining the amounts to be excluded from EU financing. 139 It should also be noted that Article 34(1) and (6) of Implementing Regulation No 908/2014 makes the Commission’s decision to exclude expenditure effected by a Member State in violation of the applicable rules from Union financing subject to compliance with the conformity clearance procedure. 140 Furthermore, according to settled case-law, the guarantees conferred by the EU legal order in administrative procedures include, in particular, the principle of sound administration, enshrined in Article 41 of the Charter of Fundamental Rights of the European Union. Under that provision, the right to sound administration includes, inter alia, the right of every person to have his or her affairs handled impartially, fairly and within a reasonable period of time by the institutions, bodies and agencies of the Union. That right reflects a general principle of EU law (judgments of 8 May 2014, N., C‑604/12, EU:C:2014:302, paragraph 49, and of 1 June 2016, Wolf Oil v EUIPO – SCT Lubricants (CHEMPIOIL), T‑34/15, not published, EU:T:2016:330, paragraphs 69 and 70). 141 In that regard, the Court finds that the principle of sound administration does not require the EU institutions to prolong administrative procedures indefinitely, but takes the form of provisions providing for time limits for the conduct of those procedures and, in that context, the sending of information by the Member States to the EU institutions. The fixing of those time limits enables the requirement of guaranteeing that administrative procedures are completed within a reasonable period of time to be reconciled with the rights of the defence, and to ensure that the EU institutions receive relevant information from the Member States in a timely manner and may take into account, carefully and impartially, all the information relevant to the case. 142 As regards the conformity clearance procedure, the principle of sound administration follows from Article 52(1) of Regulation No 1306/2013 and Article 34(1) and (6) of Implementing Regulation No 908/2014, which make the Commission’s obligation diligently to take account of the information sent by the Member States subject to compliance by the latter with the time limits provided for in those provisions for sending it. 143 It is in that context that the three arguments put forward by the Czech Republic in support of its first complaint must be analysed. (1) First argument: scope of Article 52(1) of Regulation No 1306/2013 and Article 34(1) and (6) of Implementing Regulation No 908/2014 144 By its first argument, the Czech Republic submits that the time limits provided for in Article 52 of Regulation No 1306/2013 and Article 34(1) and (6) of Implementing Regulation No 908/2014, for the sending by a Member State of information to the Commission in the context of the conformity clearance procedure, do not apply when the Commission has to determine whether there has been an infringement of EU law, but only when it has to determine the amount of the financial correction to be applied. In the Czech Republic’s submission, that means that the Commission may have regard to the late sending of the information by a Member State when it has to determine the amount of the financial correction, but not when it has to decide whether there are constitutive elements of an infringement of EU law. 145 The Commission disputes that argument. 146 It should be noted that it is apparent from the wording of Article 52(1) of Regulation No 1306/2013 and Article 34(1) and (6) of Implementing Regulation No 908/2014 that the determination of the amounts to be excluded from Union financing is intrinsically linked to the Commission’s finding of an infringement of EU law. The Commission may not impose a financial correction unless all of the constitutive elements of an infringement of EU law, which is the necessary prerequisite to any determination of the amount of a financial correction, are present. 147 Consequently, the time limits for the Member States to send information provided for by Article 52 of Regulation No 1306/2013 and Article 34(1) and (6) of Implementing Regulation No 908/2014 cannot be interpreted as applying only when the Commission has to determine the amounts to be excluded from Union financing and not concerning the hypothetical situation in which the Commission has to determine whether there has been an infringement of EU law, that assessment of the infringement and determination of a financial correction being intrinsically linked. 148 The first argument must therefore be rejected. (2) Second argument: novelty of the information provided by the Czech authorities in the context of the follow-up audit mission 149 By its second argument, the Czech Republic submits that the information regarding the infringement relating to the identification of permanent grassland it provided to the Commission in the context of the follow-up audit mission was not new and had already been provided during the audit mission. Consequently, the temporal limitation provided for in Article 34(6) of Implementing Regulation No 908/2014, under which the Member States may not provide the Commission with information after the Commission has sent out its preliminary conclusions (except in those cases provided for by that provision), is not applicable in the present case. 150 The Commission disputes that argument. 151 In the first place, it should be borne in mind that, in the letter of findings sent on 30 November 2017, the Commission noted deficiencies in the system of checks put in place by the Czech Republic regarding the identification of permanent grassland, contrary to Article 4(1)(h) of Regulation No 1307/2013. 152 In the second place, in the minutes of the bilateral meeting of 11 September 2018, the Commission requested additional information from the Czech authorities concerning the classification of fallowland and reiterated its doubts as to the appropriateness of the system of checks for the rule under which permanent grassland is land used to grow grasses or other herbaceous forage naturally (self-seeded) or through cultivation (sown) and that has not been included in the crop rotation of the holding for five years or more and, where Member States so decide, has not been ploughed for five years. 153 In the third place, in the preliminary conclusions, the Commission stated, inter alia, that: – before 2015, the Czech authorities did not have information about the history of the use of the land and were thus unable to check the implementation of the rule cited in paragraph 152 above; – after 2015, the reason why the Czech authorities had used three different codes to refer to uncultivated land which, after the expiry of the five-year time limit, was destined to become permanent grassland, namely the code ‘G’ for grassland contained in uncultivated arable land, the code ‘R’ for uncultivated arable land that was not considered to be grassland, and the code ‘U’ for fallowland, was not clear; in the Commission’s view, the use of a number of codes entailed a risk that land might not be declared correctly as permanent grassland. 154 In the fourth place, the question whether there was an infringement relating to the identification of permanent grassland was not part of the request for conciliation made by the Czech authorities. 155 In the fifth place, no information about the infringement relating to the identification of permanent grassland was included in the additional information sent by the Czech authorities to the Commission following receipt of the report from the conciliation body. 156 In the sixth place, it should be noted that, in the final conclusions and in the summary report, in reiterating the arguments cited in paragraph 153 above, the Commission confirmed that there was an infringement relating to the identification of permanent grassland and, by the adoption of the contested decision, imposed on the Czech Republic a financial correction of EUR 14 923 784.40 for that infringement. 157 In the seventh place, it should be borne in mind that, as indicated in the minutes of the bilateral follow-up meeting, the Czech authorities provided the Commission, for the first time, at that meeting and in the letter of 30 July 2021, with examples and clear, substantiated information concerning the classification system for grassland situated on arable land and fallowland. 158 It is also apparent from the minutes of the bilateral follow-up meeting that it was on the basis of that information that the Commission decided to bring to a close the question whether there was an infringement relating to the identification of permanent grassland in the context of the follow-up audit mission and regretted that that information, which would also have been relevant in the context of the audit mission, had not been provided by the Czech authorities in the context of the conformity clearance procedure that led to the adoption of the contested decision. 159 In that regard, it must be borne in mind that, according to the case-law cited in paragraphs 115 to 117 above, in the context of the conformity clearance procedure it is for the Member State to present highly detailed and complete proof of its checks or figures and, if necessary, of the inaccuracy of the Commission’s statements. Thus, if the Member State concerned is not able, within the time limits provided for by Article 52 of Regulation No 1306/2013 and Article 34 of Implementing Regulation No 908/2014, to show that the Commission’s findings are inaccurate, they may give rise to serious doubts as to the existence of an adequate and effective series of supervisory measures and inspection procedures. 160 In the present case, in the course of the audit mission, the Czech Republic did not present highly detailed and complete proof of its checks or figures as regards the identification of permanent grassland and did not manage to demonstrate the inaccuracy of the Commission’s statements. It was only during the follow-up audit mission that the Czech Republic, for the first time, presented additional detailed explanations and evidence, which enabled the Commission to establish that there had been no infringement relating to the identification of permanent grassland. 161 In those circumstances, the second argument must be rejected. (3) Third argument: the conditions laid down in Article 34(6) of Implementing Regulation No 908/2014 162 By its third argument, the Czech Republic submits that, in the context of the audit mission, the Commission ought to have taken into account the information regarding the infringement relating to the identification of permanent grassland sent by the Czech authorities in the course of the follow-up audit mission. That information fulfilled the two conditions in Article 34(6) of Implementing Regulation No 908/2014, allowing a Member State to provide information to the Commission after the latter has sent preliminary conclusions. 163 The Commission disputes that argument. 164 It should be borne in mind that Article 34(6) of Implementing Regulation No 908/2014 provides that information communicated by a Member State after the Commission has notified to it the preliminary conclusions of the audit mission may be taken into account only: (a) where it is necessary to avoid the gross overestimation of the financial damage caused to the Union budget; and (b) if the late transmission of the information is duly justified by external factors and does not jeopardise the timely adoption by the Commission of the decision pursuant to Article 52 of Regulation No 1306/2013. 165 The Court finds in that regard that, although the French-language version of Article 34(6) of Implementing Regulation No 908/2014 is ambiguous as to the cumulative or alternative nature of the conditions laid down in that provision, it is apparent from the analysis of the other language versions of that provision that those conditions are cumulative in nature. By way of example, in the Portuguese-language version of Article 34(6) of Implementing Regulation No 908/2014, it is stated that a Member State may send information to the Commission after the latter has notified it of the preliminary conclusions of the audit mission where two cumulative conditions provided for therein are fulfilled. That cumulative nature was, moreover, confirmed by the parties at the hearing. 166 In the present case, as indicated in paragraph 157 above, the information regarding the infringement relating to the identification of permanent grassland was provided by the Czech authorities to the Commission at the bilateral follow-up meeting and in the letter of 30 July 2021, that is to say, after the Commission sent the preliminary conclusions of the audit mission on 20 December 2019. 167 It must accordingly be determined whether the two conditions provided for by Article 34(6) of Implementing Regulation No 908/2014, allowing for information provided belatedly to be taken into account, were fulfilled in the present case. 168 As regards the first condition laid down in Article 34(6)(a) of Implementing Regulation No 908/2014, the Court finds that the information provided by the Czech authorities at the bilateral follow-up meeting and on 30 July 2021 concerning the identification of permanent grassland was necessary to avoid the gross overestimation of the financial damage caused to the Union budget. It sought to avoid the imposition of a financial correction for an infringement found not to have occurred in the follow-up audit mission. The Commission’s failure to take account of that information in the context of the audit mission led to an overestimation of the financial damage caused to the European Union in the amount of EUR 14 923 784.40, equivalent to the amount of the financial correction imposed on the Czech Republic for the infringement relating to the identification of permanent grassland. 169 The condition laid down in Article 34(6)(a) of Implementing Regulation No 908/2014 is, therefore, fulfilled in the present case. 170 As regards the second condition laid down in Article 34(6)(b) of Implementing Regulation No 908/2014, it should be noted that the sending of information regarding the infringement relating to the identification of permanent grassland at the bilateral follow-up meeting and in the letter of 30 July 2021 was not justified by external factors. That information was already available at the time of the audit mission, but had not been transmitted in a clear and substantiated manner to the Commission. It follows that the Czech Republic should have and could have sent that information to the Commission in compliance with the time limits provided for in Article 34(6) of Implementing Regulation No 908/2014. 171 Consequently, the condition laid down in Article 34(6)(b) of Implementing Regulation No 908/2014 is not fulfilled in the present case. 172 Consequently, the third argument must be rejected, as must, therefore, the first complaint in its entirety. (b) Second complaint: infringement by the Commission of the principle of the protection of legitimate expectations 173 By its second complaint, the Czech Republic maintains that the Commission infringed the principle of the protection of legitimate expectations on the ground that the decision to bring to a close, in the context of the audit mission, the question whether there was an infringement relating to the identification of permanent grassland gave rise to a legitimate expectation on its part that no financial correction would be imposed for that infringement, even in the context of the audit mission. 174 In the Czech Republic’s submission, that expectation was all the more legitimate given that, for another deficiency in the system of checks put in place by the Czech authorities to verify the grant of aid under the EAGF and the EAFRD relating to the declaration of agricultural areas, in the final conclusions of the audit mission the Commission had taken into account the results of the follow-up audit mission and had decided to close the corresponding point. 175 The Commission disputes that complaint. 176 According to settled case-law, the principle of the protection of legitimate expectations is among the fundamental principles of EU law. The right to rely on that principle extends to any person with regard to whom an institution of the European Union has given rise to justified hopes. In whatever form it is given, information which is precise, unconditional and consistent and comes from authorised and reliable sources constitutes assurances capable of giving rise to such hopes. However, a person may not plead an infringement of that principle unless he or she has been given precise assurances by the administration (see, to that effect, judgment of 18 January 2023, Romania v Commission, T‑33/21, EU:T:2023:5, paragraph 69 and the case-law cited). 177 In the first place, it should be borne in mind that it was in the minutes of the bilateral follow-up meeting that the Commission informed the Czech Republic of its decision to close, in the context of the follow-up audit mission, the question whether there was an infringement relating to the identification of permanent grassland. 178 The minutes of the bilateral follow-up meeting do not establish the Commission’s definitive position on whether there has been an infringement of EU law, but rather constitute a preliminary stage of the conformity clearance procedure summarising the exchanges that have taken place between the parties at the time of the bilateral meeting (see, to that effect, judgment of 18 September 2003, United Kingdom v Commission, C‑346/00, EU:C:2003:474, paragraphs 69 and 70). The Commission’s definitive position as to whether there has been an infringement of EU law is established only in the final conclusions of the audit mission, sent to the Member State in accordance with Article 34(4) of Implementing Regulation No 908/2014, and in the summary report containing a detailed explanation of the reasons that led to certain expenditure being excluded from Union financing. 179 In those circumstances, since the minutes of the bilateral follow-up meeting did not express the Commission’s definitive position as to whether there was an infringement relating to the identification of permanent grassland, it could not give rise to a legitimate expectation on the part of the Czech Republic about that position and that a financial correction would not be applied for that infringement in the context of the audit mission. 180 In the second place, even if the minutes of the bilateral follow-up meeting could be viewed as a document establishing the Commission’s definitive position on whether there had been an infringement relating to the identification of permanent grassland, it should be noted that the decision to close, in the context of the follow-up audit mission, the question whether there was an infringement relating to the identification of permanent grassland does not provide information which is precise, unconditional and consistent within the meaning of the case-law cited in paragraph 176 above, capable of giving rise to a legitimate expectation on the part of the Czech Republic that a financial correction would not be applied for that infringement in the context of the audit mission. 181 It is true that the Commission expressed regret in the minutes of the bilateral follow-up meeting that the Czech authorities had not sent, in the context of the audit mission, the information regarding the infringement relating to the identification of permanent grassland in the course of the follow-up audit mission. The Commission considers that that information as well would have been pertinent in the context of the audit mission. 182 In the minutes of the bilateral follow-up meeting, however, the Commission was silent as to whether that new information should be taken into account in the context of the audit mission and expressed no position either on the alleged infringement or on the application of a financial correction for the infringement relating to the identification of permanent grassland. 183 It follows that the Commission did not disregard the principle of the protection of legitimate expectations in not taking into account, in the context of the audit mission, the results of the follow-up audit mission pertaining to the infringement relating to the identification of permanent grassland. 184 That finding cannot be called into question by the Czech Republic’s argument that, as regards the deficiencies found by the Commission concerning the Czech authorities’ declaration of agricultural areas, the Commission had taken into account the results of the follow-up audit mission in the final conclusions of the audit mission and had decided to close the corresponding point. 185 That argument is not relevant. It follows from the final conclusions of the audit mission that, at the time of the follow-up audit mission carried out by the Commission in the Czech Republic from 31 August to 4 September 2020, the Czech authorities had provided it with new information concerning the declaration of agricultural areas. That information, which was sent before the adoption of the final conclusions of the audit mission on 26 March 2021, had been taken into account by the Commission in the context of the audit mission and had made it possible to close the corresponding point in the final conclusions. 186 It follows that, unlike the information regarding the infringement relating to the identification of permanent grassland that was sent by the Czech authorities after the final conclusions had been sent by the Commission, the information relating to the declaration of agricultural areas was provided before that sending. 187 Consequently, in view of the difference in timing of when those two sets of information were sent, the closure of the point regarding whether there was an infringement relating to the declaration of agricultural areas could not give rise to any legitimate expectation on the part of the Czech Republic that a financial correction would not be applied for the infringement relating to the identification of permanent grassland. 188 The second complaint must therefore be rejected. (c) Third complaint: infringement by the Commission of the second paragraph of Article 296 TFEU 189 By its third complaint, the Czech Republic submits that the Commission infringed the second paragraph of Article 296 TFEU in failing to refer, in the statement of reasons for the contested decision and in the summary report, to its findings in the minutes of the bilateral follow-up meeting that led to the closure of the point regarding the infringement relating to the identification of permanent grassland. Thus, in the Czech Republic’s submission, the statement of reasons in the contested decision and in the summary report do not afford an understanding of why the Commission did not take into account, in the context of the audit mission, the results of the follow-up audit mission regarding the infringement relating to the identification of permanent grassland. 190 The Commission disputes that complaint. 191 According to settled case-law, the duty to state reasons established by Article 296 TFEU is an essential procedural requirement which must be distinguished from the question whether the reasoning is well founded, which is concerned with the substantive legality of the measure at issue. With that in mind, the statement of reasons must be appropriate to the act at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in question in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the competent court to exercise its power of review (judgments of 29 September 2011, Elf Aquitaine v Commission, C‑521/09 P, EU:C:2011:620, paragraphs 146 and 147; of 9 September 2020, Greece v Commission, T‑46/19, not published, EU:T:2020:396, paragraph 47; and of 18 January 2023, Romania v Commission, T‑33/21, EU:T:2023:5, paragraph 36). 192 It cannot, however, be a requirement that the statement of reasons must go into every relevant point of fact and law. The question whether the statement of the reasons for a decision meets the requirements referred to in paragraph 191 above must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (see judgment of 18 January 2023, Romania v Commission, T‑33/21, EU:T:2023:5, paragraph 38 and the case-law cited). 193 It follows that, according to the case-law, in the conformity clearance procedure, the obligation to state reasons must be regarded as having been sufficiently discharged if the Member State to which the decision was addressed was closely involved in the process by which the decision came about and was aware of the reasons for which the Commission took the view that it must not charge the sum in dispute (see judgment of 16 February 2017, Romania v Commission, T‑145/15, EU:T:2017:86, paragraph 45 and the case-law cited). 194 In that regard, where the Commission rejects sufficiently precise details of the assessment put forward by the competent national authorities, it must set out, inter alia in its exchanges with the Member State concerned and in the summary report, the evidence substantiating the serious and reasonable doubt it has about the figures communicated by the national authorities or the results of checks made by them, with the result that that evidence must feature in the acts adopted by the Commission in the course of the conformity clearance procedure and in the statement of reasons for the ensuing decision taken (see, to that effect, judgments of 16 February 2017, Romania v Commission, T‑145/15, EU:T:2017:86, paragraph 47, and of 9 September 2020, Greece v Commission, T‑46/19, not published, EU:T:2020:396, paragraph 49). 195 In the present case, it is not disputed that the Czech authorities were closely involved in the process by which the contested decision came about and were aware of the reasons relied on as a basis for that decision. That decision was adopted following an adversarial procedure in which the Commission and the Czech authorities had the opportunity on several occasions to exchange their points of view about the finding of infringement relating to the identification of permanent grassland. 196 The Court further finds that, in the context of the audit mission, no sufficiently detailed evidence was provided by the Czech authorities regarding the infringement relating to the identification of permanent grassland. 197 Moreover, as indicated in paragraphs 153 and 156 above, in the preliminary conclusions, in the final conclusions and in the summary report, the Commission provided a clear statement of reasons for the imposition of a financial correction for the infringement relating to the identification of permanent grassland. 198 In those circumstances, it cannot be said that the Commission disregarded its obligation to provide a statement of reasons within the meaning of the case-law cited in paragraph 193 above and the second paragraph of Article 296 TFEU. 199 Consequently, the third complaint must be rejected, as must, therefore, the first part of the second plea in its entirety. 2. Second part of the second plea: unlawfulness of the Commission’s imposition of the contested financial correction when the system for identifying permanent grassland in the Czech Republic complied with EU law 200 By the second part of the second plea, the Czech Republic submits that the Commission infringed Article 52(1) of Regulation No 1306/2013 by imposing on it the contested financial correction regarding the infringement relating to the identification of permanent grassland when its system for identifying permanent grassland in the Czech Republic complied with EU law. 201 The Commission disputes this part. 202 It should be borne in mind that, in the context of the conformity clearance procedure that led to the adoption of the contested decision, it was found that: – the Czech Republic had not presented highly detailed and complete proof of its checks within the meaning of the case-law cited in paragraph 115 above, as regards the identification of permanent grassland, and had not managed to demonstrate the inaccuracy of the Commission’s findings; it was only at the time of the follow-up audit mission and by its letter of 30 July 2021 that the Czech Republic presented, for the first time, clear explanations and additional evidence that enabled the Commission to ascertain that there was no infringement relating to the identification of permanent grassland (see paragraph 160 above); – since the conditions laid down in Article 34(6) of Implementing Regulation No 908/2014, allowing information communicated belatedly by the Member State after the Commission has sent the preliminary conclusions to be taken into account, are not cumulatively fulfilled in the present case, the Commission was not required to take into account, in the context of the audit mission, the results of the follow-up audit mission to the effect that there was no infringement relating to the identification of permanent grassland (see paragraph 171 above). 203 In those circumstances, the information and explanations provided by the Czech Republic in the application relating to the identification of permanent grassland and which were not sent to the Commission in the context of the conformity clearance procedure may not be taken into account, as they were sent in breach of the time limits provided for in Article 52 of Regulation No 1306/2013 and Article 34 of Implementing Regulation No 908/2014. 204 Consequently, the second part of the second plea must be rejected, as must, therefore, the second plea in law in its entirety. C. Third plea: infringement relating to the selection of the control sample 205 The third plea, contesting the infringement relating to the selection of the control sample, comprises four parts. 206 However, by their responses to a measure of organisation of procedure and a question posed by the Court at the hearing, the parties stated explicitly that the third and fourth parts of the third plea, relating to: (i) infringement by the Commission of Article 34(2) of Implementing Regulation No 908/2014 due to its failure to specify, in its letter of findings, the infringement relating to the selection of the control sample relating to greening; and (ii) infringement by the Commission of Article 35 of Implementing Regulation No 809/2014, due to the taking into account of the irregularities of the SAPS scheme under the greening scheme, had to be considered ineffective in the event of the second plea, regarding the infringement relating to the identification of permanent grassland, being rejected by the Court. 207 The financial correction imposed by the Commission on the Czech Republic for the infringement relating to the selection of the control sample relating to greening, which is the subject of the third and fourth parts of the third plea, was absorbed by the financial correction for the infringement relating to the identification of permanent grassland and was not taken into account by the Commission when it determined the amount of the contested financial correction. 208 Thus, since the second plea has been rejected, the third and fourth parts of the third plea must be rejected as ineffective. An examination of them is irrelevant to the assessment of the well-foundedness of the imposition of the contested financial correction. 209 Hence it is appropriate to examine only the first and second parts of the third plea. 1. First part of the third plea: unlawfulness of the Commission’s imposition of the contested financial correction for the infringement relating to the selection of the control sample relating to the standard checks when the Czech Republic did not infringe Article 30(a) and Article 33a of Implementing Regulation No 809/2014, as amended by Implementing Regulation 2016/1394 210 By the first part of the third plea, the Czech Republic submits that the Commission disregarded Article 30(a) and Article 33a of Implementing Regulation No 809/2014, as amended by Implementing Regulation 2016/1394, in finding that, for the SAPS scheme, the aid beneficiaries undergoing a follow-up on-the-spot check because, in the preceding year, they were subject to a reduced administrative penalty within the meaning of Article 33a of Implementing Regulation No 809/2014, as amended by Implementing Regulation 2016/1394 (‘the beneficiaries who were subject to a reduced administrative penalty’), had to be distinguished from the beneficiaries who were subject to a standard check under Article 30(a) of Implementing Regulation No 809/2014 (‘the beneficiaries who were subject to a standard check’). 211 In that regard, the Czech Republic submits that it did not infringe EU law when, in 2017, among the 87 beneficiaries who were subject to a reduced administrative penalty in 2016, 75 had been included in the sample of 5% of the beneficiaries who were subject to a standard check and 12 who had been subject to a follow-up on-the-spot check. 212 The Commission disputes the first part of the third plea. 213 It should be borne in mind that, in accordance with Article 30(a) of Implementing Regulation No 809/2014, for area-related aid schemes other than the payment in favour of agricultural practices beneficial for the climate and the environment, the control sample for on-the-spot checks carried out each year must cover at least 5% of all beneficiaries applying for the basic payment scheme or the single area payment scheme. 214 It should also be noted that Article 33a of Implementing Regulation No 809/2014, as amended by Implementing Regulation 2016/1394, entitled ‘Additional control rate for on-the-spot checks to follow-up the beneficiaries referred to in Article 19a(2) of [Regulation No 640/2014]’, provides as follows in paragraph 1: ‘The beneficiaries who were subject to a reduced administrative penalty in accordance with Article 19a(2) of Delegated Regulation (EU) 2014/2014 for an area-related aid scheme or support measure following an over-declaration identified in the course of an on-the-spot check shall be subject to a follow-up on-the-spot check for that given aid scheme or support measure in the following claim year.’ 215 It is apparent, inter alia, from a reading of those provisions that, by their object and purpose, standard checks are not the same thing as follow-up on-the-spot checks. 216 As regards their object, standard checks concern 5% of all beneficiaries applying for the basic payment scheme or the single area payment scheme, whereas follow-up on-the-spot checks concern only beneficiaries who were subject to a reduced administrative penalty for having made, in the preceding year, an over-declaration of the areas eligible for aid. 217 As regards their purpose, that of standard checks is to fix a minimum number of beneficiaries subject to a check in order to ensure efficient verification by the Commission of compliance with the provisions governing the different aid schemes and support measures, whereas, as is apparent from recital 1 of Commission Implementing Regulation (EU) 2016/1394 of 16 August 2016 amending Implementing Regulation (EU) No 809/2014 laying down rules for the application of [Regulation No 1306/2013] (OJ 2016 L 225, p. 50), the follow-up checks have as their object to verify whether, following the application of a reduced administrative penalty for a first area over-declaration, the aid beneficiaries have committed a new infringement giving rise to the application of a full administrative penalty. 218 The specific nature of the follow-up on-the-spot checks is confirmed by the title of Article 33a of Implementing Regulation No 809/2014, as amended by Implementing Regulation 2016/1394, which expressly categorises them as ‘additional control[s]’, which suggests that they are to be distinguished from standard checks inasmuch as they make the aid beneficiaries subject to an additional check which must be implemented where the conditions laid down in that article are met. 219 Thus, the Court finds that the Commission did not disregard Article 30(a) and Article 33a of Implementing Regulation No 809/2014, as amended by Implementing Regulation 2016/1394, since it found that the beneficiaries who were subject to a reduced administrative penalty during the preceding year had to be distinguished from those who were subject to standard checks. 220 That finding cannot be called into question by the three arguments put forward by the Czech Republic. 221 By its first argument, the Czech Republic submits that the exclusion of the beneficiaries who were subject to a reduced administrative penalty from the sample of beneficiaries who were subject to a standard check would lead to an absurd result in which the beneficiaries who were subject to a reduced administrative penalty on the ground that, in the preceding year, they made an area over-declaration, are not subject to a standard check, but only to a follow-up on-the-spot check. Thus, in the Czech Republic’s submission, those farmers would be placed in a more favourable position than other farmers. 222 In that regard, the Court finds that the follow-up on-the-spot checks are not intended to be alternative checks, but rather supplementary checks that are in addition to the standard checks and are intended to provide for a reinforced system of checks for the beneficiaries who were subject to a reduced administrative penalty the preceding year. In addition to a standard check, those beneficiaries must be subject to a follow-up on-the-spot check to ascertain whether they have committed a new infringement of EU law which might entail their being subject to a full administrative penalty. It follows that the beneficiaries who were subject to a reduced administrative penalty are not in a more favourable situation than other beneficiaries. 223 The first argument must therefore be rejected. 224 By its second argument, the Czech Republic submits that the exclusion of the beneficiaries who were subject to a reduced administrative penalty from the sample of beneficiaries who were subject to a standard check is contrary to the letter of Article 30(a) of Implementing Regulation No 809/2014, which provides that 5% of all beneficiaries applying for the basic payment scheme are subject to a standard check. In the Czech Republic’s submission, in excluding the beneficiaries who were subject to a reduced administrative penalty from the sample of beneficiaries who were subject to a standard check, that provision no longer covers 5% of all beneficiaries, but only 5% of a segment of them. 225 In that regard, it should be noted that the follow-up on-the-spot checks are supplementary checks which, among the means available to the Commission to verify EU law conformity of aid granted by the EU agricultural funds, are in addition to the standard checks. Thus, standard checks and follow-up on-the-spot checks have a different scope and purpose and should not be confused by the national authorities. 226 A Member State’s choice of the sample of beneficiaries who were subject to a standard check and a follow-up on-the-spot check must not, in practice, disregard the distinction between those checks. That is why, in the present case, the Commission was correct in finding that the Czech Republic had infringed Article 30(a) and Article 33a of Implementing Regulation No 809/2014, as amended by Implementing Regulation 2016/1394, when, among the 87 beneficiaries who had been subject to a reduced administrative penalty in 2016, 75 had been included in the sample of the beneficiaries who were subject to a standard check and 12 had been subject to a follow-up on-the-spot check. 227 In that scenario, the sample of beneficiaries who were subject to a standard check were, by a large majority, beneficiaries who were subject to a reduced administrative penalty in relation to all the other beneficiaries who ought to have been subject to a check, and only 12 who had been subject to a reduced administrative penalty had been subject to a follow-up on-the-spot check. 228 It follows that, in the choice of samples of beneficiaries who should be subject to a standard check and beneficiaries who should be subject to a follow-up on-the-spot check, the Czech Republic ought to have taken into account the difference between those checks, by ensuring, first, that all beneficiaries, and not only a vast majority of those who were subject to a reduced administrative penalty, were made subject to standard checks and, second, that all beneficiaries who were subject to a reduced administrative penalty were made subject to a follow-up on-the-spot check. 229 The second argument must therefore be rejected. 230 By its third argument, the Czech Republic submits that the exclusion of the beneficiaries who were subject to a reduced administrative penalty from the sample of beneficiaries who were subject to a standard check is contrary to Article 34(1) of Implementing Regulation No 809/2014, which allows only beneficiaries whose application is held to be ineligible to be excluded from the control sample. 231 Article 34(1) of Implementing Regulation No 809/2014 provides: ‘Applications or applicants found not to be admissible or not eligible for payment at the time of submission or after administrative or on-the-spot checks shall not form part of the control population.’ 232 In that regard, the Court finds that the exclusion from the control sample of beneficiaries whose application is held to be inadmissible within the meaning of Article 34(1) of Implementing Regulation No 809/2014 is irrelevant to the present case, which involves a determination of the scope of standard checks and follow-up on-the-spot checks which, by definition, presuppose that applicants included in the control sample are deemed to be eligible and may accordingly be subject to a standard check or a follow-up on-the-spot check. 233 Consequently, the third argument must be rejected, as must, therefore, the first part of the third plea in its entirety. 2. Second part of the third plea: infringement by the Commission of Article 52(2) of Regulation No 1306/2013 and of the principle of proportionality, on the ground that the amount of the contested financial correction for the infringement relating to the selection of the control sample relating to standard checks is not commensurate with the gravity of the alleged non-conformity 234 By the second part of the third plea, the Czech Republic submits that the Commission infringed Article 52(2) of Regulation No 1306/2013 and the principle of proportionality, on the ground that the amount of the contested financial correction for the infringement relating to the selection of the control sample relating to standard checks, amounting to EUR 18 833.24, is not commensurate with the gravity of the alleged non-conformity. 235 More specifically, the Czech Republic submits that, in order to arrive at that amount, the Commission based itself: – for the year 2017, on a calculation of the financial damage to the Union budget arising from the infringement relating to the selection of the control sample relating to standard checks, totalling EUR 6 277.75; – for the years 2015 and 2016, on the basis that the same damage as that calculated for 2017 occurred in 2015 and 2016, whereas, in the Czech Republic’s submission, that basis is unsubstantiated and has no factual or legal foundation; 236 The Commission disputes the second part of the third plea. 237 As a preliminary point, it should be borne in mind that, according to the wording of Article 52(2) of Regulation No 1306/2013, the Commission is to assess the amounts to be excluded from the Union financing on the basis, inter alia, of the gravity of the non-conformity recorded, the nature of the infringement and the financial damage caused to the European Union. 238 Moreover, according to the case-law cited in paragraph 108 above, the principle of proportionality, which is one of the general principles of EU law, requires that acts adopted by EU institutions do not exceed the limits of what is appropriate and necessary in order to attain the objective pursued. This means that where there is a choice between several appropriate measures, recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued. 239 It should also be borne in mind that, according to the case-law cited in paragraph 115 above, it is for the Commission, when it contests the findings of checks conducted by the national authorities and for the purpose of proving an infringement of the rules of the CAP, to put forward evidence establishing genuine and reasonable doubt about the checks conducted by the national authorities or the figures provided by them. Thus, in accordance with the case-law cited in paragraph 116 above, if the Commission expresses genuine and reasonable doubt, it is for the Member State to present highly detailed and complete proof of those checks or figures and, if necessary, of the inaccuracy of the Commission’s statements. 240 Yet in the present case the Commission has not presented any proof establishing that the doubt it has as to the possibility that the financial damage of EUR 6 277.75 caused to the European Union in 2017 also occurred in 2015 and 2016 is a genuine and reasonable doubt within the meaning of the case-law. 241 In the first place, in the preliminary conclusions, in the final conclusions and in the summary report, the Commission merely indicated that the amount of the contested financial correction imposed for the infringement relating to the selection of the control sample relating to the standard checks, totalling EUR 18 833.24, also covered the risk of not recovering retroactively the irregular payments for the years 2015 and 2016. 242 It did not, however, adduce any evidence showing why the damage that occurred in 2017 could have also occurred in 2015 and 2016 and given rise to an obligation of retroactive recovery. 243 In the second place, in support of its position in the preliminary conclusions, the Commission referred to Article 3 of Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European Communities financial interests (OJ 1995 L 312, p. 1), which, in its view, justifies the retroactive recovery of sums unduly paid to farmers. 244 However, Article 3 of Regulation No 2988/95 provides that, in order to protect the European Union’s financial interests, the limitation period for proceedings for undue payments is to be four years as from the time when the irregularity having caused financial damage to the European Union was committed, although the sectoral rules may make provision for a shorter period which may not be less than three years. 245 According to the case-law, by adopting Regulation No 2988/95, and in particular the first subparagraph of Article 3(1) thereof, the EU legislature intended to establish a general rule on limitation which was applicable in that area and by which it intended, first, to define a minimum period applied in all the Member States and, second, to waive the possibility of recovering sums wrongly received from the Union budget after the expiry of a four-year period after the irregularity affecting the payments at issue was committed. It follows that, as from the date on which Regulation No 2988/95 entered into force, any advantage wrongly received from the Union budget can, as a rule and apart from in the sectors for which the EU legislature has prescribed a shorter period, be recovered by the competent authorities of the Member States within a period of four years (judgments of 29 January 2009, Josef Vosding Schlacht-, Kühl- und Zerlegebetrieb and Others, C‑278/07 to C‑280/07, EU:C:2009:38, paragraph 27, and of 29 March 2012, Pfeifer & Langen, C‑564/10, EU:C:2012:190, paragraph 37). 246 The reference to that provision is, accordingly, irrelevant to the present case, since it does not enable an understanding of why the damage to the Union budget that occurred in 2017 also occurred in 2015 and 2016. 247 In the third place, in order to justify its allegations, the Commission refers, for the first time in its statement in defence, to Article 63 of Regulation No 1306/2013 and Article 7 of Implementing Regulation No 809/2014 which, in its view, justify retroactive recovery of the undue payments. 248 However, according to settled case-law, the Commission must state with sufficient precision the object of the investigation carried out and the deficiencies found in the course of that investigation in the communication sent on the basis of Article 34(2) of Implementing Regulation No 908/2014 (see judgment of 7 September 2022, Slovakia v Commission, T‑40/21, not published, EU:T:2022:515, paragraph 46 and the case-law cited). 249 Moreover, the Commission may not complete the statement of reasons in the contested decision in the course of the legal proceedings (see, to that effect, judgments of 24 May 2007, Duales System Deutschland v Commission, T‑289/01, EU:T:2007:155, paragraph 132, and of 15 December 2021, Oltchim v Commission, T‑565/19, EU:T:2021:904, paragraph 275). 250 It follows that, since the Commission did not refer to Article 63 of Regulation No 1306/2013 or Article 7 of Implementing Regulation No 809/2014 in the letter of findings and the subsequent documents it sent to the Czech Republic in the context of the conformity clearance procedure that gave rise to the contested decision, it may not rely on those provisions to substantiate its allegations concerning the existence, in 2015 and 2016, of financial damage to the Union budget in the same amount as that which occurred in 2017. 251 In any event, even if the Commission could substantiate its allegations on the basis of Article 63 of Regulation No 1306/2013 and Article 7 of Implementing Regulation No 809/2014, those provisions do not prove that the doubt it expressed as to the existence, in 2015 and 2016, of financial damage to the Union budget in the same amount as that which occurred in 2017 constitutes a genuine and reasonable doubt within the meaning of the case-law cited in paragraph 115 above. 252 Article 63 of Regulation No 1306/2013 and Article 7 of Implementing Regulation No 809/2014 set out the procedure to be followed and the time limits for the recovery of undue payments, but contain nothing substantiating the Commission’s allegation that the infringement relating to the selection of the control sample relating to the standard checks that occurred in 2017 necessarily also occurred in 2015 and 2016. 253 In those circumstances, the Court finds that the Commission has failed to prove that the doubt it expressed as to the existence, in 2015 and 2016, of the same financial damage as that which occurred in 2017 was genuine and reasonable within the meaning of the case-law cited in paragraph 115 above. 254 Consequently, the Court upholds the second part of the third plea and accordingly annuls the contested decision in so far as it concerns the imposition by the Commission on the Czech Republic of the contested financial correction for the infringement relating to the selection of the control sample relating to the standard checks in the amount of EUR 18 833.24. D. Fourth plea: infringement relating to the recovery of undue payments 255 The fourth plea, contesting the infringement relating to the recovery of undue payments, comprises two parts. 256 By the first part of the fourth plea, the Czech Republic submits that the Commission disregarded Article 63 of Regulation No 1306/2013 and Article 7 of Implementing Regulation No 809/2014, since, in the context of the audit mission, it found that the Czech authorities ought to have, through the LPIS, verified the eligibility of an agricultural area not only for the year covered by the procedure for recovering undue payments, but also for the preceding years. 257 In that regard, the Czech Republic submits that Article 63 of Regulation No 1306/2013 and Article 7 of Implementing Regulation No 809/2014 set out the procedure to be followed for recovering sums unduly paid to farmers for areas that are not eligible for aid. Those provisions do not, in the Czech Republic’s submission, concern the separate question whether and how Member States are required to find out whether an area eligible for aid during one year also was so in preceding years. 258 It follows, according to the Czech Republic, that, under Article 63 of Regulation No 1306/2013 and Article 7 of Implementing Regulation No 809/2014, it was required, at the time of the annual update of the LPIS, to strike off the aid-ineligible areas for which a recovery procedure was under way, but was not required to verify whether those same surfaces were also ineligible during the preceding years and whether any aid paid for those years was to be recovered. 259 The Commission disputes this part. 260 First of all, it should be noted that, for the infringement relating to the recovery of undue payments, the Commission imposed on the Czech Republic: – for the SAPS scheme, a financial correction of EUR 17 855 884.41; – for the greening scheme, a financial correction of EUR 7 832 400; – for the YF scheme, a flat-rate correction of 2% of 100% of expenditure incurred in breach of EU legal rules. 261 However, the corrections imposed for the greening and YF schemes were absorbed by the correction imposed for the infringement relating to the identification of permanent grassland forming part of the second plea. 262 Consequently, as confirmed by the parties in their responses to a measure of organisation of procedure and to a question put by the Court at the hearing, should the second plea be rejected, the fourth plea must be held to be ineffective inasmuch as it concerns the imposition of financial corrections for the greening and YF schemes. Since the corrections relating to the greening and YF schemes were absorbed by the correction regarding the infringement relating to the identification of permanent grassland, an examination of them is irrelevant for assessing the well-foundedness of the imposition of the contested financial correction. 263 As regards the correction imposed for the SAPS scheme, first of all, it should be noted that Article 63 of Regulation No 1306/2013 provides, in essence, that, where a finding is made that a beneficiary is not complying with the conditions for the grant of the aid, the Member State concerned must not pay the aid or must withdraw all or part of it and the amounts, including the interest relating thereto, must be recovered. That same provision states that, where sectoral agricultural legislation so provides, Member States are also to impose administrative penalties. Moreover, Article 7 of Implementing Regulation No 809/2014 provides, in essence, that, in the event of undue payment, the beneficiary concerned has the obligation to reimburse the amounts at issue, together with interest, where applicable. 264 It follows that Article 63 of Regulation No 1306/2013 and Article 7 of Implementing Regulation No 809/2014 do not impose an obligation on Member States to verify, retroactively, whether an area ineligible for aid during one year also was so during preceding years. 265 Next, it should be borne in mind that the Member States’ alleged obligation to carry out a retroactive check of the ineligibility of an area does not come from Article 3 of Regulation No 2988/95. As observed in paragraph 244 above, that provision merely indicates that the limitation period for proceedings for undue payments is to be four years, unless the sectoral rules make provision for a shorter period of three years. 266 Lastly, it should be noted that it is true that, in the judgment of 7 September 2022, Slovakia v Commission, T‑40/21, not published, EU:T:2022:515, paragraphs 54 and 55, the Court stated that, on the basis of the information contained in the letter of findings sent by the Commission pursuant to Article 34(2) of Implementing Regulation No 908/2014, Slovakia ought to have included in the assessment of the potential risk for the EAGF, for the application years 2015 and 2016, the financial impact of non-recovery of aid unduly paid for the three preceding application years. However, the Court stated that the fact that the calculation of the risk run by the EAGF for the application years 2015 and 2016 had to take account of the impact of there being no recovery procedure for the payments unduly made for the three preceding application years arose from a particularity of the Slovak system of checks of which the Slovak authorities could not be unaware. As a result, that judgment does not give rise to any obligation for the Member State to verify, retroactively, whether an area ineligible for aid during one year was also ineligible during the preceding years. 267 It follows that the first part of the fourth plea must be upheld. 268 Consequently, without it being necessary to examine the second part of the fourth plea, the contested decision must be annulled in so far as it relates to the financial correction applied to the expenditure incurred by the Czech Republic in the context of the SAPS scheme, for the alleged infringement relating to the recovery of undue payments, in the amount of EUR 17 855 884.41. E. Fifth plea: infringement relating to the late submission of the application 269 By its fifth plea, the Czech Republic alleges unlawfulness of the Commission’s imposition of the contested financial correction regarding the infringement relating to the late submission of the application due to the failure to apply the 1% reduction in respect of applications for aid or payment submitted online without electronic signature within the time limits provided for in Article 13 of Regulation No 604/2014 and completed within the following five days at the competent office, with the handwritten signature of the applicant. 270 The Czech Republic puts forward four arguments in support of that plea. 271 In the first place, it submits that no provision of EU law prevents an application that has been submitted online from being subsequently completed in person by the handwritten signature of the applicant. In that regard, the Czech Republic observes that Article 13 of Regulation No 640/2014 indicates the procedure to be followed in the event of a late submission of an application for aid or payment, but does not provide that applications submitted online and subsequently completed in person by the handwritten signature of the applicant constitute late applications. Moreover, it takes the view that Article 72 of Regulation No 1306/2013 does not include the applicant’s signature among the mandatory items on an application. 272 In the second place, the Czech Republic submits that, in its national law, the in-person signature, in the presence of the applicant, of an application submitted online is necessary to authenticate the submission, but does not constitute a condition of eligibility of the application. The handwritten signature makes it possible to verify that the entity submitting the application is the one for which the application is submitted (Article 37(4) of the Czech Administrative Code (Zákon č. 500/2004 Sb., správní řád)). 273 In the third place, the Czech Republic observes that, in its national law, the only thing the applicant may add to an application deposited online is his or her handwritten signature, which must be added at the competent office within five days following the online submission of the application. No additions or modifications to the application may be made between the moment when the application is submitted online and that of the in-person signature, or at the time of the in-person signature. 274 In the fourth place, the Czech Republic submits that the in-person authentication of an application submitted previously online is a common mechanism in EU law, provided for, inter alia, by Article 57(7) of the Rules of Procedure of the Court of Justice. 275 The Commission disputes those arguments. 276 As regards the first and second arguments put forward by the Czech Republic, which it is appropriate to address together, the Court finds that it is for the Member States to define the rules establishing, in their national law, the detailed rules for submitting applications for aid and payment; these must, however, be compatible with EU law. 277 It should be borne in mind in that regard that, under Article 13 of Regulation No 640/2014, applications for aid or payment submitted after the final date fixed by the Commission give rise to the application of a reduction of 1%. 278 The indication of the identity of the aid beneficiary is one of the items of information that must be included in the application for aid or payment in order for it to be considered eligible, provided that it was submitted within the time limits fixed in accordance with Article 13 of Regulation No 640/2014. Although Article 72 of Regulation No 1306/2013 does not include the signature of the applicant among the items that must be included in an application for aid or payment, it provides that that application must contain ‘any other information provided for in this Regulation or required with a view to the implementation of the relevant sectoral agricultural legislation or by the Member State concerned’. In that regard, Article 14(1) of Implementing Regulation No 809/2014, which sets out the detailed rules of application of Regulation No 1306/2013, provides that, in order to be considered eligible, an application for aid or payment must include inter alia the identity of the beneficiary. 279 It is apparent from the parties’ written pleadings that, under Czech law, the handwritten signature of the application is an obligatory formality, failure of which to observe will result in the application not being accepted. As indicated by the Czech authorities in their observations of 1 October 2018 on the minutes of the bilateral meeting, online submission of an application without electronic signature must be confirmed by a handwritten signature within five days. In that scenario, if the applicant signs the application in person, at the competent office, within the time limits and in observance of the formalities prescribed by law, the date of submission of the application is considered to be the date of its online submission. However, if the applicant does not sign the application in person or does not observe the formalities prescribed by law, the application is deemed ineligible and is not taken into account by the competent authorities. 280 It follows that, as observed by the Czech authorities, the handwritten signature of the application submitted online without electronic signature not only fulfils the function of authentication of the submission of the application, but is also a condition of eligibility of the application. Only applications completed in person by a handwritten signature of the applicant are processed by the competent authorities. 281 Consequently, although, in the present case, the applications were submitted online without electronic signature within the time limits provided for by Article 13 of Regulation No 640/2014, they did not contain the handwritten signature of the applicants, even though that was decisive information for verifying their identity and deciding on their eligibility within the meaning of Article 72 of Regulation No 1306/2013, read in conjunction with Article 14(1) of Implementing Regulation No 809/2014. 282 In those circumstances, the Court finds that, since, on the date of their submission online, the applications were lacking an essential element for decision on their eligibility and that element, namely the handwritten signature of the applicants, was provided after the expiry of the time limits provided for by Article 13 of Regulation No 640/2014, those applications were submitted late, which ought to have given rise to a reduction of 1%. 283 The first and second arguments must therefore be dismissed. 284 As regards the third argument, the Court finds that it is completely irrelevant to the present case. Although, between the date of submission online and that of the in-person signature, the content of the applications for aid or payment underwent no modifications, they were incomplete on the date of their submission online, given that there was no signature; as a result, they did not fulfil the eligibility criteria provided for by EU law. 285 The third argument must therefore be rejected. 286 As regards the fourth argument, it should be noted that the fact that, under Article 57(7) of its Rules of Procedure, the Court of Justice allows for the signed original of procedural documents to be lodged with the Registry by the parties no later than 10 days after the sending of the copy of that document, is also irrelevant to the present case. In any event, the situation intended to be covered by Article 57(7) of the Rules of Procedure of the Court of Justice differs from the present case inasmuch as, according to the wording of that provision, the original of the document sent by the parties to the Court of Justice within 10 days must be the same document as the one sent previously, including with respect to the signature thereof, which must have been placed on the document at the time of sending of the procedural documents. 287 Consequently, the fourth argument must be rejected, as must, therefore the fifth plea in its entirety. F. Sixth plea: the financial discipline scheme 288 By its sixth plea, the Czech Republic submits that the Commission infringed Article 52(2) of Regulation No 1306/2013 and the principle of proportionality, on the ground that the 2% flat-rate correction imposed on it under the financial discipline scheme is not commensurate with the gravity of the alleged non-conformity. 289 The Commission disputes that plea. 290 As a preliminary point, it should be noted that the financial discipline procedure, provided for in Articles 25 and 26 of Regulation No 1306/2013 and Article 8 of Regulation No 1307/2013, is distinct from the conformity clearance procedure provided for in Article 52 of Regulation No 1306/2013 and Article 34 of Implementing Regulation No 908/2014. 291 The conformity clearance procedure is intended to allow the Commission, following an adversarial procedure, to exclude from the Union financing expenditure incurred by a Member State in breach of EU law. 292 As to the financial discipline scheme, it is aimed at enabling Member States to transfer to the Commission appropriations initially intended for direct payments to farmers in order to establish a reserve to finance a potential crisis that could arise in the agricultural sector. Nevertheless, if those appropriations are not used, they are returned in subsequent years by the Commission to the Member States, who then pass them on to the farmers initially concerned by a reduction in the direct payments to which they were entitled. 293 In the present case, the reimbursement of the appropriations initially deducted from the farmers under the financial discipline scheme was made by the Commission to the Czech Republic through the reimbursement regulations. 294 The Czech Republic puts forward two arguments in support of its plea. 295 By its first argument, the Czech Republic submits that, in so far as the flat-rate correction imposed in the context of the financial discipline scheme reflects the corrections applied by the Commission in the context of the audit mission for the SAPS, YF, greening and VCS schemes, the amount thereof should be the same as the corrections imposed for each of those schemes. Yet the Czech Republic observes that, for the VCS scheme, in the context of the audit mission the Commission applied a flat-rate correction of 5% of 10% of the expenditure incurred in breach of that scheme. In the Czech Republic’s submission, it follows that the same correction of 5% of 10% of the expenditure incurred ought to have been applied by the Commission at the time of determining, for the VCS scheme, the amount of the flat-rate correction imposed in the context of the financial discipline scheme. 296 It is not disputed in that regard that, in the present case, in the context of the conformity clearance procedure that led to the contested decision, the Czech authorities provided the Commission with a single budget line for all of the aid schemes subject to financial discipline. That means that the Czech authorities did not indicate, for each aid scheme, the amount of the appropriation which was first paid to the Commission, then transferred to them through the reimbursement regulations, but rather referred to a single amount for the different aid schemes. Thus, it was that single amount that the Commission took into account to determine the amount of the flat-rate correction imposed in the context of the financial discipline scheme. 297 However, in the request for conciliation of 4 February 2020, the Czech Republic criticised the Commission for having failed to apply, in the calculation of the flat-rate correction relating to the financial discipline scheme for the VCS scheme, a reduced correction corresponding to 5% of 10% of the expenditure incurred in breach of EU law that it had applied, for that same scheme, in the context of the audit mission. 298 Yet, neither in their letter of 13 November 2020 further to the receipt of the conciliation body’s report, nor in their subsequent exchanges, did the Czech authorities provide the Commission with information enabling a precise distinction to be made, in the single budget item relating to the appropriations that were subject to the reimbursement regulations, of the part relating to the VCS scheme. 299 In those circumstances, the Commission decided, in the final conclusions and in the summary report, to apply a single flat-rate correction of 2% to all of the appropriations that had been subject to the financial discipline scheme. 300 It should be borne in mind in that regard that, in accordance with Article 52(2) of Regulation No 1306/2013 and Article 12(2) of Delegated Regulation No 907/2014, the Commission bases the exclusion of an expense from the Union financing on the identification of amounts unduly spent only where identification can be made with proportionate effort. 301 Moreover, according to the case-law cited in paragraph 108 above, the principle of proportionality requires that acts adopted by EU institutions not exceed the limits of what is appropriate and necessary in order to attain the objective pursued. 302 In the present case, the Czech Republic failed to provide the Commission with information enabling it to identify, in the single budget item relating to the appropriations that were subject to the reimbursement regulations, the part relating to the VCS scheme. Thus, the Commission was correct in deciding, using proportionate effort in accordance with Article 52(2) of Regulation No 1306/2013, Article 12(2) of Delegated Regulation No 907/2014 and the principle of proportionality, to apply a single flat-rate correction for all of the aid schemes under the financial discipline scheme. 303 The first argument must therefore be rejected. 304 By its second argument, the Czech Republic submits that, if the Court were to annul, in whole or in part, the corrections for the SAPS, YF, greening and VCS schemes imposed by the Commission in the context of the conformity clearance procedure that led to the adoption of the contested decision, then it should also annul, automatically and generally, in a commensurate amount, the correction imposed under the financial discipline scheme, since it is no longer commensurate with the financial damage allegedly caused to the Union budget. 305 It should be noted in that regard that the imposition of a correction for financial discipline is linked to the corrections imposed by the Commission in the context of the conformity clearance procedure for the aid schemes subject to financial discipline. In order to guarantee as much correlation as possible between the direct payments made each year to farmers and the appropriations deducted on those payments by way of financial discipline, which will potentially be reimbursed to those farmers in subsequent years, if the Commission imposes a correction for irregularities identified in the direct payments in the context of the conformity clearance procedure, then it must also impose a correction on the appropriations subject to financial discipline. 306 Yet no automatic mechanism has been identified between the Commission’s application of a correction for a given aid scheme in the context of the conformity clearance procedure and the imposition by it of a correction for the amounts arising from that same aid scheme which were reimbursed to the Member States by way of financial discipline. 307 In the first place, under Article 26 of Regulation No 1306/2013, the amounts transferred to the Commission under the financial discipline scheme are, where applicable, returned to the farmers by way of financial discipline using a set adjustment rate, which applies to all payments made under the different aid schemes. 308 Thus, the amount of the correction imposed for financial discipline is calculated by the Commission on a flat-rate basis for all aid schemes and is not necessarily linked to the amount of the correction imposed by it, in the context of the conformity clearance procedure, for irregularities identified in the direct payments made to farmers in relation to a specific aid scheme. 309 In the second place, as indicated in paragraph 302 above, the possibility for the Commission to identify, using proportionate effort, from among the appropriations subject to financial discipline, those relating to each aid scheme concerned by the conformity clearance procedure, depends on the available information provided by the Member States in each case. 310 Thus, it cannot be argued that the total or partial annulment of the contested financial correction imposed for a given aid scheme would lead, automatically and generally, to annulment of the flat-rate correction applied by way of financial discipline. 311 Consequently, the second argument must be rejected, as must, therefore, the sixth plea in its entirety. 312 In the light of the foregoing considerations, the contested decision must be annulled in so far as it imposes on the Czech Republic the contested financial correction by reason of, first, the infringement relating to the selection of the control sample relating to the standard checks, in the amount of EUR 18 833.24 and, second, the infringement relating to the recovery of undue payments, in the amount of EUR 17 855 884.41; the action must be dismissed as to the remainder. IV. Costs 313 Under Article 134(3) of the Rules of Procedure of the General Court, where each party succeeds on some and fails on other heads of claim, the parties are to bear their own costs. Since the action has been partly upheld, each party must be ordered to bear their own costs. On those grounds, THE GENERAL COURT (Tenth Chamber) hereby: 1. Annuls Commission Implementing Decision (EU) 2021/2020 of 17 November 2021 excluding from European Union financing certain expenditure incurred by the Member States under the European Agricultural Guarantee Fund (EAGF) and under the European Agricultural Fund for Rural Development (EAFRD) in so far as it imposes a financial correction on the Czech Republic by reason of, first, infringement of provisions of EU law concerning the selection of the sample of beneficiaries of aid subject to a standard check, in the amount of EUR 18 833.24, and, second, deficiencies in the check aimed at ascertaining whether an area that was ineligible for aid for one year was also ineligible for the preceding years and ought to have triggered the opening of a procedure to recover the undue payments under the single area payment scheme, in an amount of EUR 17 855 884.41; 2. Dismisses the action as to the remainder; 3. Orders each party, the Czech Republic and the European Commission, to bear its own costs. Jaeger Nihoul Verschuur Delivered in open court in Luxembourg on 6 December 2023. [Signatures] * Language of the case: Czech.