Judgment — ECLI:EU:T:2018:538
Date: 2018-09-13
Language of the case: Czech
Court formation: Fifth Chamber
Subject matter: Agriculture and Fisheries;European Agricultural Guidance and Guarantee Fund (EAGGF)
Procedure: Action for annulment - unfounded;Action for annulment - successful
Origin: Czechia

Judgment of the General Court (Fifth Chamber) of 13 September 2018 – Czech Republic v Commission (Case T‑627/16) (EAGF — Expenditure excluded from financing — Expenditure incurred by the Czech Republic — Decoupled direct aid — Remote-sensing checks — Wine-growing sector — Cross-compliance — Reoccurrence of non-compliance) 1. Agriculture — Financing by the EAGF — Clearance of accounts — Disallowance of expenses arising from irregularities in applying EU rules — Challenge by the Member State concerned — Burden of proof — Shared by the Commission and the Member State (Council Regulation No 1290/2005; Commission Regulation No 1122/2009) (see paras 20, 21, 70) 2. Agriculture — Financing by the EAGF — Grant of aid and premiums — Obligation on the Member States to organise an effective system of administrative and on-site inspections — Scope — Recourse to the option of sampling — Obligation to increase the sample in the event that irregularities are found — Scope — Application in the event of the discovery of over-declaring an area (Commission Regulation No 1122/2009, Arts 33, 57(3) and 58) (see paras 30, 32, 35-38) 3. Agriculture — Common organisation of the markets — Support for restructuring and conversion in the wine sector — Controls in the wine sector — On-the-spot checks — Possibility to proceed with sampling — Limits — Obligation to carry out systematic on-the-spot checks before the payment of investment aid — Scope (Council Regulations No 1234/2007, Art. 103u, and No 479/2008, Art. 15; Commission Regulations No 1975/2006, Arts 25 and 27, and No 555/2008, Arts 19 and 77(5)) (see paras 56, 60-63) 4. Agriculture — Financing by the EAGF — Grant of aid and premiums — Obligation on the Member States to organise an effective system of administrative and on-site inspections — Scope — Selection of control samples for the purpose of on-the-spot checks — Requirement for a prior risk analysis (Commission Regulation No 1122/2009, Art. 51(1) and (2)) (see para. 77) 5. Agriculture — Common agricultural policy — Direct support schemes — Common rules — Minimum requirements for good agricultural and environmental conditions — Definition of those requirements by the Member States — Obligation — Scope (Council Regulation No 73/2009, Art. 6(1) and Annex III) (see paras 84, 85) 6. Agriculture — Common agricultural policy — Direct support schemes — Common rules — Statutory management requirements — Good agricultural and environmental conditions — Obligation to review observance of those conditions — Scope (Commission Regulation No 1122/2009, Art. 53(1)) (see para. 96) 7. Agriculture — Common agricultural policy — Direct support schemes — Common rules — Statutory management requirements — Requirements on the identification and registration of animals — Scope — Loss of ear tags without wrongdoing on the part of the operator — Circumstance insufficient to exclude any finding of infringement (European Parliament and Council Regulation No 1760/2000, Arts 4(1) and 5; Council Regulation No 73/2009, Annex II) (see para. 118) 8. Agriculture — Common agricultural policy — Direct support schemes — Common rules — Statutory management requirements — Requirements for the reporting of movements of ovine and caprine animals — Necessity for the competent authority to monitor compliance with the obligation to declare such movements within the applicable period — None (Council Regulations No 21/2004, Art. 8(2) and No 73/2009, Annex II; Commission Regulation No 1122/2009, Art. 26(1)) (see paras 122, 123) 9. Action for annulment — Purpose — Decision based on several pillars of reasoning, each sufficient to justify the operative part — Annulment of such a decision — Conditions (Art. 263 TFEU) (see para. 126) 10. Agriculture — Financing by the EAGF — Clearance of accounts — Disallowance of expenses arising from irregularities in applying EU rules — Financial correction — Assessment of the level of failure to act and the degree of risk for the Fund — Reliance by the Member State concerned of elements demonstrating a maximum loss for the Fund limited to an amount less than that resulting from the proposed flat rate — Lack of presentation of a structured calculation during the administrative action preceding the adoption of the decision by the Commission — Rejection (European Parliament and Council Regulation No 1306/2013, Art. 52(2); Commission Regulation No 907/2014, Art. 12(1) and (8)) (see paras 138, 139, 143, 144, 147) 11. Agriculture — Common agricultural policy — Direct support schemes — Common rules — Statutory management requirements — Optional nature for the Member States which acceded to the Union on 1 May 2004 — Consequences — Commission decision imposing a financial correction because of failure by a farmer of such a Member State to observe a regulatory management requirement — Not permissible (European Parliament and Council Regulation No 1306/2013, Art. 52(1); Council Regulation No 1782/2003, Art. 143b(6); Commission Regulation No 907/2014, Art. 12(6)) (see paras 160, 162, 163) Re: Application based on Article 263 TFEU seeking annulment of Commission Implementing Decision (EU) 2016/1059 of 20 June 2016 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) (OJ 2016 L 173, p. 59), in so far as it excludes the payments made by the Czech Republic under the EAGF in the amount of EUR 30 206 401.58. Operative part The Court: 1. Annuls Commission Implementing Decision (EU) 2016/1059 of 20 June 2016 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 excludes the payments made by the Czech Republic under the EAGF in the amount of EUR 6 356 909.30 in respect of cross-compliance checks for the financial year 2011; 2. Dismisses the action as to the remainder; 3. Orders the European Commission, the Czech Republic and the Kingdom of Sweden to bear their own costs.