Summary;Judgment — ECLI:EU:C:2024:568
Date: 2024-07-04
Language of the case: Hungarian
Court formation: Sixth Chamber
Subject matter: Agriculture and Fisheries;Agricultural structures
Procedure: Reference for a preliminary ruling
Origin: Hungary

Summary C-538/22 – 1 
Case C-538/22 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
11 August 2022 
Referring court: 
Fővárosi Törvényszék (Budapest High Court, Hungary) 
Date of the decision to refer: 
25 July 2022 
Applicant: 
SB 
Defendant: 
Agrárminiszter (Minister for Agriculture, Hungary) 
  
Subject matter of the main proceedings 
Agriculture – Common Agricultural Policy – Delegated Regulation (EU) 
No 640/2014 – Animal aid schemes – Application for coupled support for suckler 
cows – Admissibility criteria – Basis of calculation – Refusal of an application for 
support which does not comply with national legislation 
Subject matter and legal basis of the request for a preliminary ruling 
Interpretation of point 18 of Article 2(1), Article 30(3) and Article 31(3) of 
Commission Delegated Regulation (EU) No 640/2014 
Article 267 TFEU 
Questions referred for a preliminary ruling 
(1) Is the practice of a Member State compliant with Article 30(3) of 
Commission Delegated Regulation (EU) No 640/2014 of 11 March 2014 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-538/22 
 
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supplementing Regulation (EU) No 1306/2013 of the European Parliament 
and of the Council with regard to the integrated administration and control 
system and conditions for refusal or withdrawal of payments and 
administrative penalties applicable to direct payments, rural development 
support and cross compliance (‘Delegated Regulation No 640/2014’), 
having regard to recitals 28 and 31, points 16 and 18 of Article 2(1) and 
Article 31(1) to (3) thereof, if that practice establishes that where, under the 
aid eligibility criterion introduced by the Member State, the calving rate 
achieved for the number of declared animals is less than the rate required 
and stipulated for declared animals, the application for payment of coupled 
support for suckler cows must be refused in its entirety, even where the 
required calving rate is met by a smaller number of declared animals, 
because where the calving percentage is less than that required by the 
national legislation, the result is that none of the declared animals is 
eligible? 
(2) If the response to the previous question is in the negative, in the present 
case, where the calving percentage achieved is less than that required by the 
national legislation, having regard to the requirements for a graded and 
proportionate approach established in recitals 28 and 31 of the aforesaid 
regulation and the articles of EU law cited in the first question referred for a 
preliminary ruling, must the number of eligible animals within the meaning 
of point 18 of Article 2(1) and Article 30(3) of the regulation be determined: 
(a) by classing as eligible animals only those which have calved; or  
(b) by classing as eligible animals those animals from among the declared 
animals which comprise the group in which the calving rate stipulated 
in the national legislation is reached? 
(3) Having regard to Article 30(3) and Article 31(1) and (2) of Delegated 
Regulation No 640/2014 and the requirement for proportionality established 
in recital 31 thereof, must Article 31(3) of that regulation be interpreted as 
meaning that the penalty is to be determined on the basis of the ratio of the 
non-compliant to compliant animals, or on the basis of the ratio of the 
declared animals to the compliant animals, and also that the quotient thus 
obtained must still be multiplied by 100, in a percentage calculation? 
Provisions of European Union law relied on 
Commission Delegated Regulation (EU) No 640/2014 of 11 March 2014: 
recitals 28 and 31, points 2, 16 and 18 of Article 2(1), Article 30(3) and 
Article 31(1) to (3) 
AGRÁRMINISZTER 
 
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Provisions of national law relied on 
A termeléshez kötött közvetlen támogatások igénybevételének szabályairól szóló 
9/2015. (III. 13.) FM rendelet (Order No 9 of 13 March 2015 on the scheme for 
direct coupled support; ‘the Ministerial Order’), issued by the Minister for 
Agriculture 
Paragraph 4 
‘(2) The Public Treasury shall adopt the aid decision after performing the checks 
established … in Commission Delegated Regulation (EU) No 640/2014 … and 
having regard to the rules on reductions and other penalties provided for therein. 
… 
(4) Where the check identifies non-compliance with the aid requirements, 
including cross-compliance, in determining the amount of the said aid, the legal 
consequences established in Articles 13, 15, 30 to 32, 34 and 37 to 41 of 
Commission Delegated Regulation (EU) No 640/2014 shall apply in the case of 
the aid provided for in Chapter II ….’ 
Paragraph 7 
‘(3) The minimum number of eligible animals … is one.’ 
Paragraph 11(1) 
‘(e) Farmers are entitled to receive the suckler cow premium … where more than 
50% of the herd declared for the purposes of the aid comprises calves intended for 
meat production and at least 30% of the animals included in the aid application 
have calved during the year in question; calves born to mothers included in the aid 
application during the retention period must be held in the same herd as their 
mothers for at least one month from the date of their birth ….’ 
Succinct presentation of the facts and procedure in the main proceedings 
1 On 9 May 2019, the applicant submitted an application, to the first-tier authority 
responsible for agricultural support payments, for payment of coupled support for 
suckler cows (suckler cow premium) in respect of 11 animals. On 25 June 2020, 
the authority refused the application for payment of the premium on the grounds 
that only three of the 11 animals had calved during the period in question, 
producing a calving rate of 27%, which did not meet the requirement in 
Paragraph 11(1)(e) of the Ministerial Order. In such circumstances, none of the 
animals included in the application was eligible, nor did Article 31 of Delegated 
Regulation No 640/2014 apply. 
2 In response to an administrative appeal lodged by the applicant, the Minister for 
Agriculture confirmed the decision of the first-tier authority and declared that, 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-538/22 
 
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since the calving rate of 30% had not been met among the animals included in the 
aid application, the number of eligible animals was zero, in accordance with 
Paragraph 7(3) of the Ministerial Order. 
3 The applicant has brought an administrative-law action against the decision issued 
by the second-tier authority, claiming that the defendant breached Articles 30 and 
31 of Delegated Regulation No 640/2014 by failing to apply the legal 
consequences of those provisions or to apply the penalties and reductions in 
support provided for therein, and that it did not establish the number of animals 
determined, within the meaning of point 18 of Article 2(1) of the regulation, nor 
the number of non-compliant animals, but simply had regard to the number of 
declared animals within the meaning of point 16 of Article 2(1) of Delegated 
Regulation No 640/2014, whereas Article 30(3) of the regulation establishes that 
the aid is to be calculated on the basis of the animals determined. 
The essential arguments of the parties in the main proceedings 
4 The defendant argues that if the calving rate of 30% established in the applicable 
national legislation is not reached by the animals included in the aid application, 
no animal is eligible, and therefore the application for payment of the suckler cow 
premium must be refused in its entirety, even where the requirement is satisfied by 
a smaller group of animals than that included in the aid application. Consequently, 
the fact that the calving rate does not satisfy the rate stipulated in the Ministerial 
Order affects all the animals declared in the aid application. The defendant’s 
interpretation is that there should be no payment of any reduced amount of aid. 
5 The defendant also takes the view that Article 31 of Delegated Regulation 
No 640/2014 establishes the rules that are to apply where some of the animals do 
not satisfy the requirements, whereas, in the present case, the minimum required 
calving rate was not achieved across the whole of the applicant’s herd; that is to 
say, the penalty was not imposed on the ground that some of the animals failed to 
meet the requirements. 
6 The defendant also points out that the national legislation at issue forms part of the 
regulation of the aid requirements made by Member States. 
7 The applicant argues that the defendant’s interpretation of the law is contrary to 
the provisions of Delegated Regulation No 640/2014, since it fails to take into 
account the fact that the regulation does not require compliance in full with the aid 
requirements, and that it governs not only support payments but also reduced 
support payments. 
8 In that regard, the applicant maintains that 10 animals can be considered to be 
‘determined’ within the meaning of Delegated Regulation No 640/2014 because 
three of them had calved, and therefore the calving rate of 30% is met for 10 
animals, irrespective of the fact that it is not met for 11 animals (27%). The 
applicant infers from this that, pursuant to Article 30(3) and point 18 of 
AGRÁRMINISZTER 
 
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Article 2(1) of the regulation, he is entitled to receive a reduced amount of aid in 
respect of 10 animals. 
9 Article 31(1) and (3) of Delegated Regulation No 640/2014 provides for a 
reduction in support in the event of minor deficiencies. In the applicant’s opinion, 
in the present case, that reduction should be 10%, being the percentage ratio of the 
additional non-compliant animal in excess of the 10 animals to the 10 compliant 
animals ((l/10) × 100 = 10%). However, in this case the defendant did not apply 
Article 31 of Delegated Regulation No 640/2014. 
Succinct presentation of the reasoning in the request for a preliminary ruling 
10 The referring court doubts whether the practice of a Member State which 
unreasonably rules out the possibility of reducing the amount of aid in those cases 
where the aid requirements are not satisfied in full complies with EU law. 
11 In the view of the referring court, the principles established in Delegated 
Regulation No 640/2014 are binding in this case, because the Ministerial Order 
which provides the basis for the contested decision applies an EU rule which has 
direct effect. The legislature’s intention in this area was that aid payments might 
also be made – albeit at a reduced level – where the requirements are partially 
satisfied. With regard to the aid in question, the Ministerial Order itself expressly 
refers to the provisions of Articles 30 to 32 of Delegated Regulation No 640/2014 
concerning reductions in support. However, in the present case the defendant 
ruled out the application of Article 31 of the regulation. 
12 According to the referring court, the defendant is acting unlawfully in treating the 
11 animals declared by the applicant as a given unit, thereby ruling out the 
possibility of forming other (smaller) groups within that unit. By contrast, there is 
no provision of national or EU law which permits the group as a whole and the 
number of declared animals and animals determined, together with other 
requirements based on those concepts, to be verified solely and exclusively on the 
basis of the same group of animals (the group of declared animals). Under EU 
law, what must be examined when defining the concept of eligible animals is 
precisely whether each individual animal meets the requirements, and the same 
applies when calculating the basis for and amount of the penalty. 
13 The combined application of national and EU rules may give rise to at least three 
different interpretations regarding the ratio of non-compliant animals to animals 
determined, which is to provide the basis for determining the amount of the 
reduction pursuant to Article 31(3) of Delegated Regulation No 640/2014. 
According to the defendant’s practice described in the first question referred, the 
ratio is 11/0, whereas under the calculation method set out in subparagraph (a) of 
the second question referred it is 8/3, and according to the applicant’s method 
described in subparagraph (b) of that question it is 1/10. 
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14 In that regard, the referring court requests clarification of whether the numerator 
in the ratio provided for in Article 31(3) of Delegated Regulation No 640/2014 
should be the number of declared animals in the group which is affected by non-
compliance, or the number of non-compliant animals; that is to say, whether the 
animals determined (that is, the compliant animals) should be compared with the 
declared animals or with the non-compliant animals, having regard also to 
Article 30(3) of Delegated Regulation No 640/2014, which also establishes that 
the amount of aid is to be calculated on the basis of the animals determined as 
compared with the animals declared, rather than on the basis of the animals 
determined as compared with the non-compliant animals. 
15 The referring court is aware that, when calculating the amount of aid in 
accordance with Article 31(3) of Delegated Regulation No 640/2014, the 
defendant’s practice in other cases has been to multiply the ratio of the non-
compliant animals to the animals determined by 100, although this is not 
expressly provided for in Article 31(3) of the regulation. In the view of the 
referring court, in the case of the calculation set out in subparagraph (a) of the 
second question referred, multiplying by 100 does not comply with Article 31(1) 
and (2) of Delegated Regulation No 640/2014 or with the principle of 
proportionality, since there are nearly three times as many compliant animals as 
non-compliant animals (8/3 = 2.666), which would mean that the aid would be 
reduced by 266%; however, in this case, that is not possible under Article 31(2) of 
Delegated Regulation No 640/2014. 
16 Since the applicant argues that the defendant’s interpretation of the law is contrary 
to Article 30(3) and Article 31(1) and (3) of Delegated Regulation No 640/2014, 
the response of the Court of Justice in this case is relevant to resolving the dispute 
over the applicability of the aforesaid provisions of the regulation. 
17 Finally, the referring court notes that, while the Court of Justice has already 
provided an interpretation of certain provisions of the aforesaid regulation in its 
judgment of 16 December 2021, Euro Delta Danube (EU:C:2021:1021), it has not 
yet ruled on the provisions concerning aid for livestock. Moreover, in the light of 
this national legal practice, the correct application of EU law, which in the present 
case has direct effect, is not so obvious as to leave no scope for any reasonable 
doubt.