Judgment;Abstract — ECLI:EU:T:2023:105
Date: 2023-03-08
Language of the case: Bulgarian
Court formation: First Chamber
Subject matter: Agriculture and Fisheries;European Agricultural Guidance and Guarantee Fund (EAGGF)
Procedure: Action for annulment - unfounded
Origin: Bulgaria

summary report and in the contested decision, only partially match the grounds for initiating the clearance procedure at issue, as explained by the Commission in the communication of findings. 42 However, as described in paragraph 39 above, the Commission invited the Republic of Bulgaria to a second bilateral meeting. In that second invitation, it was pointed out, inter alia, that certain payments could be considered ineligible for Union financing, and it was recommended, on the one hand, that payments deemed to pose a risk to the fund in question should not be renewed, and on the other hand, that irregular payments should be recovered from their respective beneficiaries in accordance with Article 54 of Regulation No 1306/2013. The second invitation to a bilateral meeting also contained a reference to Article 34 of Implementing Regulation No 908/2014 and set out precise details of the irregularities that might justify a financial correction at that stage. It also indicated the corrective measures that should be envisaged. To that extent, the second invitation can be considered to have, in essence, altered the communication of findings sent to the Republic of Bulgaria on 4 January 2017. 43 However, the Commission was only able to take a firm position on the need to initiate the recovery procedure in accordance with Article 54 of Regulation No 1306/2013 at that stage because it had read OLAF’s first report, which had just been sent to it. 44 Moreover, it is apparent from the case file that the Republic of Bulgaria was able to state its views on all the issues raised by the Commission in the second invitation to a bilateral meeting, particularly the issue of the recovery of the disputed expenditure and the application of Article 54 of Regulation No 1306/2013. Thus, the Republic of Bulgaria was able to submit its observations on the subject, first by letter of 22 May 2018 – in other words, before the second bilateral meeting was arranged, as provided for in Article 34 of Implementing Regulation No 908/2014 – and then at the second bilateral meeting and in the subsequent stages of the clearance procedure. 45 Furthermore, it was only during the exchanges described in paragraph 44 above that the Republic of Bulgaria expressly notified the Commission that it did not intend to take any particular action to effect the recovery at that stage, stating that its own competent investigative bodies had not issued a decision in the preliminary procedure initiated on the subject. It was because of that refusal that the Commission, following the second bilateral meeting, informed the Republic of Bulgaria that it expected it to initiate the recovery procedure and instructed it to keep it informed of the progress of that corrective measure. The Republic of Bulgaria also notified the Commission that it would finalise the entry of the amounts in question in the debtors’ ledger, as provided for in Article 54(1) of Regulation No 1306/2013, in the coming weeks. 46 In the light of the foregoing, it is worth mentioning that it was because of the refusal of the Republic of Bulgaria to comply with some of the corrective measures envisaged – namely the prompt recovery of the payments at issue – that, in the request for further information sent on 1 March 2019, the Commission reminded the Republic of Bulgaria of the requirements under Article 54(1) of Regulation No 1306/2013. On that occasion, the Commission pointed out that the Republic of Bulgaria had to request the recovery of undue payments from the beneficiaries within 18 months of the notification of OLAF’s final reports following its two investigations. Moreover, the reference to Article 54 of Regulation No 1306/2013 left no room for doubt as to the possibility of financial corrections in the event of failure to respect that time limit. 47 The parties do not dispute that the Republic of Bulgaria was in a position to state its views on the Commission’s interpretation of Article 54(1) of Regulation No 1306/2013, particularly as regards the point at which the time limit began for initiating proceedings for the recovery of the expenditure at issue from the beneficiaries in question. In its letter of 24 April 2019, the Republic of Bulgaria expressly disagreed with that interpretation, without claiming that it was impossible to initiate the recovery procedure for the expenditure at issue. Those entire debates were, moreover, known to the conciliation body, as evidenced by the summary of the facts contained in its conciliation report. 48 On that basis, the Republic of Bulgaria cannot contend that it was not made aware that a financial correction could be imposed on it if it did not initiate a procedure for the recovery of the expenditure at issue from the beneficiary, in accordance with Article 54 of Regulation No 1306/2013. 49 In addition, since the Commission’s position on the need to recover the expenditure at issue had been communicated to it before the second bilateral meeting, and since all the questions relating to the application, in the present case, of Article 54 of Regulation No 1306/2013 were discussed throughout the remainder of the clearance procedure, including before the conciliation body, it cannot be held that the procedural rights of the Republic of Bulgaria were infringed, nor were its rights of defence, the principle of sincere cooperation, its right to be heard or the principle of good administration. 50 That finding is not called into question by the arguments put forward by the Republic of Bulgaria, according to which (i) the Commission never mentioned any irregularities in the management and control system put in place by the Republic of Bulgaria, nor any deficiencies in the paying agency’s subsequent checks, and (ii) the statement of objections on which the Commission based the contested decision was too late to enable it to adapt its conduct accordingly. 51 The first argument has no bearing on the assessment of the lawfulness of the contested decision, since that decision is not based on alleged deficiencies in the management and control system put in place by the Republic of Bulgaria, but on the failure of the Republic of Bulgaria to recover the expenditure at issue from the beneficiaries within the time limit prescribed in Article 54(1) of Regulation No 1306/2013. 52 As for the second argument, it must be observed, on the one hand, that the assertion that the Commission’s statement of objections could have been sent earlier is unsubstantiated. On the other hand, in so far as the Republic of Bulgaria submits that the letter sent on 1 March 2019 was too late for it to adopt the necessary measures, since the 18-month time limit for initiating the recovery of debts concerning [confidential] was already about to expire, whereas the time limit for the debts of [confidential] had already expired more than 6 months previously, that is consistent with the arguments raised in the context of the third plea. It will therefore be appropriate to analyse that argument in the context of the examination of that plea. 53 Moreover, in so far as the Republic of Bulgaria submits that the Commission’s letter that it received on 12 May 2022 supports the assumptions it makes in the present case, it must be observed that the Republic of Bulgaria does not explain which particular assumptions that finding should apply to, nor is this apparent from reading that letter. 54 The first plea in law must therefore be dismissed in its entirety. The second plea in law, alleging breach of the duty to state reasons 55 The Republic of Bulgaria submits, in essence, that the contested decision is vitiated by an inadequate statement of reasons. It refers to several of the points made in the first plea, which it considers equally relevant for establishing that the contested decision is not sufficiently well founded. It also recalls that it was only at the stage of the invitation to a second bilateral meeting that the Commission first mentioned Article 54(1) of Regulation No 1306/2013, adding that the Commission did not comment on the position expressed by the paying agency in its reply to that invitation, according to which, in the light of OLAF’s first final report, the financial consequences of the action of [confidential] should be shared between itself and the Union. Furthermore, it claims that, although the Commission accepted that the facts set out in OLAF’s final reports constituted offences under the Bulgarian Criminal Code, it merely referred to its interpretation of Article 54(1) of Regulation No 1306/2013 and the need to initiate the administrative procedure to enter the beneficiaries on the list of debtors and to recover the irregular expenditure. At the reply stage, the Republic of Bulgaria alleged that the procedure by which the contested decision came about, as described in the first plea, prevented it from understanding the grounds of the decision. It submits that the Commission should have initiated a new clearance procedure based on the relevant grounds, which it only invoked during the procedure at issue in the present case. 56 The Commission disputes those arguments. 57 It must be recalled, as a preliminary point, that the statement of reasons required by Article 296 TFEU 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 supervisory jurisdiction (see judgment of 29 April 2004, Netherlands v Commission, C‑159/01, EU:C:2004:246, paragraph 65 and the case-law cited). 58 In particular, the purpose of the obligation to state the reasons on which an act adversely affecting an individual is based, which is a corollary of the principle of respect for the rights of the defence, is, first, to provide the person concerned with sufficient information to make it possible to ascertain whether the act is well founded or whether it is vitiated by a defect which may permit its legality to be contested before the Courts of the European Union and, second, to enable the latter to review the legality of that act (see judgment of 16 February 2017, Romania v Commission, T‑145/15, EU:T:2017:86, paragraph 43 and the case-law cited). 59 However, the statement of reasons cannot be required to go into every relevant point of fact and law. Whether the statement of reasons meets the requirements referred to in paragraphs 39 and 40 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 16 February 2017, Romania v Commission, T‑145/15, EU:T:2017:86, paragraph 44 and the case-law cited). 60 It must also be recalled that the decisions taken by the Commission concerning the clearance of accounts of the fund concerned are taken on the basis either of summary reports or of correspondence between the Commission and the Member State concerned (see, to that effect, judgment of 14 March 2002, Netherlands v Commission, C‑132/99, EU:C:2002:168, paragraph 39). In those conditions, the statement of reasons for a decision refusing to charge part of the declared expenditure to it must be regarded as sufficient 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 to the fund concerned (see, to that effect, judgments of 20 September 2001, Belgium v Commission, C‑263/98, EU:C:2001:455, paragraph 98, and of 17 May 2013, Greece v Commission, T‑294/11, not published, EU:T:2013:261, paragraph 94). 61 First, in so far as the Republic of Bulgaria submits that the Commission only mentioned Article 54(1) of Regulation No 1306/2013 in the invitation to a second bilateral meeting, it is sufficient to note that, as stated in paragraphs 38 to 40 above, the Republic of Bulgaria was involved in the process by which the contested decision came about and that, as is apparent from the examination of the first plea in law, the question of the recovery of the debts at issue, in accordance with Article 54 of Regulation No 1306/2008, was discussed between the parties on numerous occasions. 62 Consequently, the Republic of Bulgaria cannot contend that it was not informed of the reasons why the Commission intended to impose the contested financial correction on it, nor that it was unable to understand the grounds of the contested decision on that point. 63 Second, the Republic of Bulgaria submits that the Commission did not reply to the observation, communicated in the reply to the second invitation to a bilateral meeting, that the Union should share the financial consequences of the contested irregularities. 64 In that respect, it is sufficient to note that the Commission expressly replied to that observation in the formal communication, which it sent on 19 November 2019, in accordance with Article 34(3) of Implementing Regulation No 908/2014. Therefore, that argument has no factual basis. 65 Third, the Republic of Bulgaria claims that the Commission did not mention the specific rules derived from EU law which were allegedly infringed by [confidential] and [confidential] and on which it could have relied in requesting the recovery of the debts at issue. 66 Nevertheless, it is clear from all of the foregoing that the Commission’s conclusions, at the various stages of the clearance procedure, were based, inter alia, on interim investigation reports and on OLAF’s final reports. Those included detailed analyses of the irregularities found by OLAF. It is apparent from the minutes of the second bilateral meeting that the Republic of Bulgaria acknowledged, in essence, that the evidence submitted by OLAF was very serious and showed that the expenditure effected in the nine promotion programmes posed a risk to the fund in question. It follows that the Republic of Bulgaria cannot claim that it was unaware that the expenditure was to be recovered since it did not comply with specific EU rules, including Article 54(1) of Regulation No 1306/2013. 67 Fourth, in so far as the Republic of Bulgaria refers to the parts of its pleadings included in the first plea in law, since it considers them relevant for establishing an infringement of Article 296 TFEU, it is sufficient to state that it raises no argument capable of explaining why that should be considered to be the case. 68 In any event, it is clear from all the previous assessments and from the pleas in law and arguments raised by the Republic of Bulgaria in support of its action that the statement of reasons given in the contested decision enabled it to ascertain the reasons for the disputed financial correction and that it also enables the Court to exercise its review. 69 Consequently, the second plea must be dismissed. The third plea in law, alleging incorrect interpretation of Article 54(1) of Regulation No 1306/2013 70 The Republic of Bulgaria submits that the Commission was mistaken in believing that the 18-month time limit prescribed in Article 54(1) of Regulation No 1306/2013 for the paying agency to request recovery of undue payments from the beneficiaries began to run from the date of receipt, by the Member State concerned, of OLAF’s final reports. It takes the view that, where a procedure is initiated under Article 52 of Regulation No 1306/2013, that procedure requires a decision to refuse financing to be adopted following the various steps provided for in Article 34 of Implementing Regulation No 908/2014. It claims that, when OLAF submitted its final reports, the Commission had not yet communicated its final conclusion in accordance with Article 34(4) of that regulation. Moreover, it observes that, in the present case, the amounts indicated in OLAF’s final reports did not match those excluded from Union financing by the contested decision. 71 The Republic of Bulgaria infers from the foregoing that the various documents exchanged during the administrative procedure can only be regarded as preparatory documents for the contested decision and cannot be regarded as a control report or similar document within the meaning of Article 54(1) of Regulation No 1306/2013. It therefore considers that that article must be interpreted as meaning that it is the point at which the contested decision is notified that should be regarded, in the present case, as the point at which such a control report or similar document is received. It also points out, on the basis of Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council of 11 September 2013 concerning investigations conducted by the European Anti-Fraud Office (OLAF) and repealing Regulation (EC) No 1073/1999 of the European Parliament and of the Council and Council Regulation (Euratom) No 1074/1999 (OJ 2013 L 248, p. 1), that the transmission of OLAF’s final reports and recommendations to the national authorities is not accompanied by obligations as to what action should be taken by those authorities. It infers from that that those reports cannot automatically lead to the initiation of administrative or judicial proceedings, nor to the adoption of Union acts such as the contested decision. Lastly, it adds that no information has been provided on the Commission’s interpretation in the form of guidelines or relevant legislation. 72 The Commission disputes those arguments. 73 According to Article 54(1) of Regulation No 1306/2013, ‘for any undue payment following the occurrence of irregularity or negligence, Member States shall request recovery from the beneficiary within 18 months after the approval and, where applicable, reception, by the paying agency or body responsible for the recovery, of a control report or similar document, stating that an irregularity has taken place’. 74 The Republic of Bulgaria submits that, in the present case, only the notification of the contested decision could be regarded as the point at which a control report or similar document is received, since Articles 52 and 54 of Regulation No 1306/2013 must be interpreted together. 75 However, first, under Article 52 of Regulation No 1306/2013, as supplemented by Article 34 of Implementing Regulation No 908/2014, the clearance procedure end with the adoption, by the Commission, of implementing acts determining the amounts to be excluded from Union financing. 76 If the legislature had intended to set the starting point for the 18-month time limit prescribed for Member States to request the recovery of undue payments from their beneficiaries as the time of formal completion of the clearance procedure, as provided for in Article 52 of Regulation No 1306/2013, it would have specifically mentioned the implementing acts referred to in paragraph 74 above. Furthermore, it does not mention a control report or similar document, the use of those two concepts suggesting that they may be documents of various kinds, whereas only decisions can close the conformity clearance procedure. 77 Second, the arguments of the Republic of Bulgaria cannot be accepted where it submits that OLAF’s final reports cannot be likened to the control reports or similar documents referred to in Article 54(1) of Regulation No 1306/2013 because they do not definitively establish the amounts to be excluded from Union financing. 78 The interpretation of the Republic of Bulgaria is based on a misreading of the provision at issue, from which it is clear that the purpose of a control report or similar document is not to establish the amount of expenditure that should be excluded from Union financing, but to indicate the existence of an irregularity. 79 Third, on the basis of Regulation No 883/2013, the Republic of Bulgaria considers that, since OLAF’s final reports cannot automatically lead to the initiation of national administrative or judicial proceedings, they cannot be regarded as control reports or similar documents within the meaning of Article 54(1) of Regulation No 1306/2013. 80 However, in the context of a conformity clearance procedure, the determination of the act on which the obligation of the Member State concerned to request the recovery of undue payments from their beneficiaries is based does not depend on the interpretation of Regulation No 883/2013, but on the interpretation of Regulation No 1306/2013. In other words, the fact that, in essence, it is clear from Article 11 of Regulation No 883/2013 and from the order of 21 June 2017, Inox Mare v Commission (T‑289/16, EU:T:2017:414), that the competent authorities of the Member States decide what action should be taken on completed investigations after receiving OLAF’s final report, does not predetermine whether that final report can be regarded as a control report or similar document within the meaning of Article 54(1) of Regulation No 1306/2013. 81 The obligation to request the recovery of debts affected by the irregularities found in that final report does not stem from Regulation No 883/2013, but from Article 54(1) of Regulation No 1306/2013, which provides that, once the Member State concerned has been notified of the irregularity, it has 18 months in which to request that recovery from the beneficiaries. 82 The third plea must therefore be dismissed in its entirety. The fourth plea in law, alleging an error of assessment in so far as the Commission considered that the paying agency had failed to act with the requisite care and had been negligent 83 The Republic of Bulgaria submits that EU law distinguishes between the concepts of irregularity and fraud. In that respect, it points out that Member States have a freedom of choice as to the penalties applicable. It takes the view that the Commission has failed to assess the circumstances of the case as regards the actions taken by the paying agencies in the light of Bulgarian law and that any negligence has thus been presumed. Specifically, it submits that the paying agency fulfilled its duties by challenging the decisions of its own national courts of first instance by which the decisions suspending payments were annulled and that its authorities had, in any event, provided all the information requested during the clearance procedure. 84 As for the recovery of the debts, it states that by bringing a civil action, not only the beneficiaries of the aid but the individuals implicated may be held liable for the reimbursement of the expenditure, whereas the paying agency would not have had that option in an administrative procedure. By becoming a civil party in criminal proceedings, the State is also able to see the evidence gathered during the preliminary investigation. It adds that the courts have held that the ability of the State to bring a civil action in criminal proceedings constitutes an independent form of action for protecting legitimate rights and interests in the event of an infringement of the general prohibition on causing harm to others, and that it does not compete with the special tax procedure, since they are not interchangeable. 85 Moreover, regarding the adoption of an administrative measure, the Republic of Bulgaria states that the paying agency’s orders to suspend payments were annulled by the Bulgarian national administrative courts. It points out that, nevertheless, the paying agency has not resumed the process of examining payment requests, which led to one of the beneficiaries bringing an action for non-compliance with a judgment. The head of the paying agency was issued with a fine and leave was granted to bring an action for annulment of its implied decision to refuse to resume the process of examining payment requests. Accordingly, it believes that, in order to recover all the sums paid under a specific programme, issuing an opinion concluding that a public debt exists towards the State based on the grounds for suspension of the payments set out in OLAF’s reports would, at this stage, be bound to fail. In the present case, it considers that the details contained in OLAF’s reports have been examined and that actions have been taken on that basis. It also claims that Bulgarian procedural rules impose an obligation to suspend administrative or judicial proceedings in cases where a criminal offence is discovered that could influence the outcome of those proceedings. Furthermore, OLAF has not, to date, reported any infringement by the competent authorities owing to deficiencies in the control system put in place. 86 The Commission disputes those arguments. 87 As a preliminary point, it must be recalled that Article 58(1)(e) of Regulation No 1306/2013 provides that the Member States are to take all measures necessary to ensure effective protection of the financial interests of the European Union, in particular in order to recover the sums lost as a result of irregularities or negligence. In addition, the Member States are to take the necessary measures to initiate court proceedings, where appropriate, in order to recover those sums (judgment of 30 January 2019, Belgium v Commission, C‑587/17 P, EU:C:2019:75, paragraph 66). 88 Article 58(1) of Regulation No 1306/2013, by requiring Member States to ensure the protection of the European Union’s financial interests and to recover sums unduly paid, expresses, as regards the financing of the common agricultural policy, the duty of general diligence laid down in Article 4(3) TEU. That duty, which applies throughout the procedure for the recovery of those sums, means that the national authorities are to effect recovery promptly and in good time, and are to make use of the means of verification and recovery at their disposal in order to ensure that those interests are protected (judgment of 30 January 2019, Belgium v Commission, C‑587/17 P, EU:C:2019:75, paragraph 67). With the passage of time, recovery of the sums unduly paid is likely to become complicated or impossible for reasons such as the fact that undertakings may have ceased trading or accounting documents may have been lost (judgment of 30 January 2020, Portugal v Commission, T‑292/18, EU:T:2020:18, paragraph 65). 89 However, those provisions do not lay down the specific measures which must be adopted for that purpose, in particular the court proceedings which must be initiated in order to recover those sums (judgment of 30 January 2019, Belgium v Commission, C‑587/17 P, EU:C:2019:75, paragraph 68). 90 This means that it falls to the national authorities, subject to compliance with the duty of diligence, to choose the remedies which they deem most appropriate in order to recover the sums in question, having regard to the particular circumstances of the case (judgment of 30 January 2019, Belgium v Commission, C‑587/17 P, EU:C:2019:75, paragraph 70). 91 In the present case, first, it must be determined whether the paying agency of the Republic of Bulgaria neglected its duty of diligence by failing to take, within the time limits prescribed in Article 54(1) of Regulation No 1306/2013, the administrative measures necessary to recover the amounts that OLAF considered had been unduly paid in respect of eight of the programmes in question. Second, it must be assessed whether the Republic of Bulgaria was negligent, within the meaning of Article 54(5)(c) of that regulation, in informing the Commission during the clearance procedure that, until the criminal investigation under way had been completed, the paying agency would not take any action to that effect in respect of the ninth programme. 92 As is apparent from the final opinion in particular, the contested financial correction was imposed on the Republic of Bulgaria on the ground that the Bulgarian paying agency had been negligent in not requesting the recovery of the expenditure at issue from the beneficiaries within the time limits prescribed in Article 54(5)(a) and (c) of Regulation No 1306/2013. 93 However, the Republic of Bulgaria claims, in essence, that the paying agency could not comply with those time limits because, since fraud was involved, criminal proceedings had been initiated which prevented it from commencing a parallel procedure for recovery of the expenditure concerned. It insists that it had to wait for those proceedings to be completed before proceeding with that recovery. 94 In that regard, it is clear from the case-law that, on the one hand, while it is for the Member States of the Union to choose the means conducive to ensuring the effectiveness of controls and the prompt recovery of aid unduly paid, the initiation of criminal proceedings does not necessarily imply that the competent authorities may refrain from any measure aimed, if not at recovery, at least at securing a debt resulting from an undue payment under the fund concerned (see, to that effect, judgment of 10 October 2012, Greece v Commission, T‑158/09, not published, EU:T:2012:530, paragraph 83). On the other hand, in essence, a breach of the duty of diligence which requires the Member States to take all measures necessary to ensure effective protection of the financial interests of the Union and to recover the sums unduly paid cannot be justified by the Member States by relying on the length of administrative or judicial proceedings commenced by the economic agent concerned (judgment of 30 January 2020, Portugal v Commission, T‑292/18, EU:T:2020:18, paragraph 66). 95 In the present case, as confirmed at the hearing, it is common ground that, as of the date of adoption of the contested decision, the Republic of Bulgaria had not taken any civil or administrative action to recover the expenditure at issue. Thus, the only proceedings initiated at that time were criminal in nature and were at the preliminary investigation stage, and not at the judicial stage. Furthermore, the paying agency’s orders, which the Republic of Bulgaria claims were annulled by its national courts, sought to suspend payments in respect of the programmes affected by the fraud mentioned in OLAF’s final reports, and not to recover the amounts already paid. 96 Likewise, the arguments of the Republic of Bulgaria cannot be accepted when it insists that, given the likelihood that the measures taken by the paying agency would be annulled, and had thus proved ineffective and costly, the paying agency had decided not to take any action at that stage. 97 As observed in paragraph 95 above, the paying agency’s orders, which were annulled by the Bulgarian national courts, focused on the suspension of payments to the promotion programmes found in OLAF’s final reports to be at risk, and not on the recovery of the expenditure at issue. 98 In that regard, it is apparent from the case file that not all of the paying agency’s orders were challenged before the national courts of the Republic of Bulgaria. Consequently, there is no evidence to suggest that, had measures to recover the expenditure at issue been adopted, all of them would have been the subject of an application for annulment before those courts. By the same token, hypothetically they could have been annulled by the Bulgarian national courts. 99 In that context, it must also be observed that, under the second subparagraph of Article 54(2) of Regulation No 1306/2013, if the Republic of Bulgaria had adopted administrative measures to recover the sums concerned and, in parallel, the Bulgarian national courts had concluded that there was no irregularity, it could have declared to the fund in question, as expenditure, the financial burden incurred in that respect. 100 Third, it must also be observed that the Republic of Bulgaria gave no indication as to the time limits within which the proceedings initiated were likely to be completed. 101 In the light of all of the foregoing, the fourth plea in law must be dismissed in its entirety. The fifth plea in law, alleging an infringement of Article 54 of Regulation No 1306/2013 and of the principle of proportionality 102 The Republic of Bulgaria notes that the Commission found no irregularities when it audited the various promotion programmes in respect of which the expenditure at issue had ultimately been considered to pose a risk to the fund in question. In addition, it claims that it is clear from Article 54(2) of Regulation No 1306/2013 that the financial burden resulting from the failure to recover sums unduly paid must be shared equally between the Union and the Member State concerned. It adds that there are no conformity clearance rules if the irregularities do not relate to deficiencies in the management and control systems of the Member States. It specifies that payments effected by Member States under the EAGF are reimbursed by the Union budget. Thus, it considers that, in so far as the Member States act on behalf of the Union, it is the Union that should bear the losses caused by the conduct of individuals, when they have done their utmost to ensure the regularity of transactions financed by the EAGF. It therefore considers that, in the present case, responsibility for the financial consequences of the irregularities found by the Commission should be shared with the Union and that the amount of the contested financial corrections is therefore disproportionate. 103 The Commission disputes those arguments. 104 First, the Republic of Bulgaria submits, in essence, that there are no conformity clearance rules if the irregularities found by the Commission do not relate to deficiencies in the management and control systems of the Member States. 105 It is sufficient to note in that regard that it is clear from Article 54(5) of Regulation No 1306/2013 that, in so far as it follows the procedure laid down in Article 52(3) of that regulation, the Commission is entitled, inter alia, to adopt implementing acts excluding from Union financing the amounts charged to the Union budget in three scenarios, which do not necessarily correspond to deficiencies in the management and control systems of the Member States. 106 In the present case, it is common ground that the contested financial correction was adopted on the basis of two of those scenarios – namely, the one provided for in Article 54(5)(a) of Regulation No 1306/2013, which concerns the failure to recover undue expenditure within the time limits prescribed in Article 54(1) thereof, and the one provided for in Article 54(5)(c) of that regulation, which concerns the failure to recover such expenditure due to negligence attributable to the administrative authorities or another official body of the Member State. 107 Accordingly, the argument that the irregularities found by the Commission in the present case do not relate to deficiencies in the management and control systems of the Republic of Bulgaria is irrelevant for assessing the legality of the contested decision and must be dismissed on that ground. 108 Similarly, it follows from the foregoing that the arguments put forward by the Republic of Bulgaria to demonstrate that it has not failed to fulfil its obligations under Council Regulation (EC) No 3/2008 of 17 December 2007 on information provision and promotion measures for agricultural products on the internal market and in third countries (OJ 2008 L 3, p. 1) and Commission Regulation (EC) No 501/2008 of 5 June 2008 laying down detailed rules for the application of Council Regulation (EC) No 3/2008 (OJ 2008 L 147, p. 3), and that the implementation of the ‘promotion programme’ scheme is shared with the Commission, are irrelevant and must also be rejected for the same reason. 109 Second, the Republic of Bulgaria relies on Article 54(2) of Regulation No 1306/2013 to request that the financial burden resulting from the irregularities affecting the expenditure at issue be shared with the Commission. 110 However, recital 37 of Regulation No 1306/2013 states that ‘in certain cases of negligence by the Member State, it is also right to charge the full sum to the Member State concerned’. 111 In the present case, the Commission adopted the contested financial correction because it considered that the failure to adopt any measure to recover the expenditure at issue must be regarded as negligence on the part of the Republic of Bulgaria. 112 Furthermore, it must be observed that Article 54(2) of Regulation No 1306/2013 describes the cases in which the financial burden resulting from irregularities affecting expenditure effected under the EAGF may be shared between the Member State concerned and the Commission. This states that ‘if recovery [of undue payments] has not taken place within four years from the date of the recovery request, or within eight years where recovery is taken in the national courts, 50% of the financial consequences of the non-recovery shall be borne by the Member State concerned and 50% by the Union’s budget’. 113 That provision does not apply in the present case, since no request for recovery, within the meaning of that provision, has been made by the Republic of Bulgaria and such a request has not been brought before its national courts either – which is, moreover, the very reason for the contested financial correction. 114 Consequently, the fifth plea must be dismissed in its entirety and, accordingly, the action must be dismissed. Costs 115 Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. 116 Since the Republic of Bulgaria has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the Commission. On those grounds, THE GENERAL COURT (First Chamber) hereby: 1. Dismisses the action; 2. Orders the Republic of Bulgaria to pay the costs. Kanninen Półtorak Stancu Delivered in open court in Luxembourg on 8 March 2023. [Signatures] * Language of the case: Bulgarian. 1 Confidential information omitted.