Judgment — ECLI:EU:T:2003:65
Date: 2003-03-11
Language of the case: Italian
Court formation: Fifth Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Agriculture and Fisheries;European Agricultural Guidance and Guarantee Fund (EAGGF)
Concepts: Structural reform of agriculture: joint action;Structural funds;Principle of proportionality;Revocation / Repeal
Procedure: Action for annulment - unfounded
Origin: Italy

Summary of the Judgment 
1. Economic and social cohesion — Structural assistance — Community funding for 
national projects — Applicants for, and beneficiaries of, EAGGF financial assistance 
required to provide information and to act in good faith 
2. Economic and social cohesion — Structural assistance — Community funding — 
The submission of altered information relating to the ordering and delivery of materials 
benefiting from assistance constitutes an irregularity within the meaning of Article 24(2) 
of Regulation No 4253/88 — Breach of the obligation on applicants for, and 
beneficiaries of, EAGGF financial assistance to provide information and to act in good 
faith 
(Council Regulation No 4253/88, Art. 24(2» 
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SUMMARY — CASE T-186/00 
3. Economic and social cohesion — Structural assistance — Community funding — 
EAGGF financial assistance discontinued because of irregularities — Whether per­
missible — Legal basis 
(Council Regulation no 4253/88, Art. 24(2) and (3)) 
4. Acts of the institutions — Withdrawal — Unlawful acts — Conditions — Com­
pliance with the principles of legal certainty and 'protection of legitimate expectations 
5. Agriculture — Common agricultural policy — Structural reform — Common meas-
ures — Improvement of the conditions under which agricultural products are 
processed and marketed — EAGGF financial assistance discontinued for breach of 
fundamental obligations — Breach of the principle of proportionality — None 
(Art. 5, third para., EC; Council Regulation No 355/77) 
1. Applicants for, and beneficiaries of, 
EAGGF aid have an obligation towards 
the Commission to provide infor­
mation and act in good faith. Thus, 
they are required to satisfy themselves 
that they are submitting to the Com­
mission reliable information which is 
not liable to mislead it, otherwise the 
system of controls and evidence set up 
to determine whether the conditions 
for granting aid are fulfilled cannot 
function properly. In the absence of 
reliable information, projects which do 
not fulfil the conditions required could 
become the subject of aid. It follows 
that the obligation on applicants for, 
and beneficiaries of, aid to provide 
information and act in good faith is 
inherent in the EAGGF aid system and 
essential for its effective functioning. 
(see para. 50) 
2. The fact of deliberately sending the 
Commission altered documents con­
cerning the implementation of the pro­
ject for which EAGGF financial assist­
ance has been granted is sufficient to 
establish infringement of the obligation 
to provide information and act in good 
faith, since those alterations are 
intended to conceal from the Commis­
sion the fact that the ordering and 
delivery of the materials benefiting 
from the aid took place before the date 
on which the Commission received the 
application for the aid and are likely to 
mislead the Commission concerning 
the date on which work started, which 
is a significant element of the system set 
up by the EAGGF. Consequently, the 
submission of altered information 
relating to the ordering and delivery 
of materials benefiting from aid con­
stitutes an irregularity within the 
meaning of Article 24(2) of Regulation 
No 4253/88, laying down provisions 
for implementing Regulation (EEC) 
No 2052/88 as regards coordination 
of the activities of the different Struc­
tural Funds between themselves and 
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CONSERVE ITALIA v COMMISSION 
with the operations of the European 
Investment Bank and the other existing 
financial instruments. 
(see paras 53-54) 
3. Under Article 24(2) of Regulation 
No 4253/88, laying down provisions 
for implement ing Regu la t ion 
No 2052/88 as regards coordination 
of the activities of the different Struc­
tural Funds between themselves and 
with the operations of the European 
Investment Bank and the other existing 
financial instruments, the Commission 
may discontinue EAGGF financial aid. 
However, Article 24(3), which relates 
to recovery from the aid beneficiary of 
the sums unduly paid, cannot consti­
tute a legal basis for a decision to 
discontinue assistance. 
(see paras 74, 78) 
4. The administration may withdraw with 
retroactive effect an advantageous 
administrative act vitiated by illegality, 
provided that it does not infringe either 
the principle of legal certainty or that 
of the protection of legitimate expec­
tations. That possibility, which is 
acknowledged where the beneficiary 
of the act did not contribute to its 
illegality, applies a fortiori where the 
illegality is attributable to him. 
(see para. 77) 
5. In discontinuing EAGGF assistance 
granted under Regulation No 355/77 
on common measures to improve the 
conditions under which agricultural 
products are processed and marketed, 
the Commission does not exceed the 
limits of what is appropriate and 
necessary in order to attain the objec­
tive pursued and, therefore, does not 
infringe the principle of proportionality 
laid down in the third paragraph of 
Article 5 EC where the beneficiary of 
the aid has not only misled the Com­
mission as regards when the work 
began but also started the work before 
the date on which the application for 
aid was received by the Commission. 
A breach of obligations whose observ­
ance is of fundamental importance to 
the proper functioning of a Community 
system may be penalised by forfeiture 
of a right conferred by Community 
legislation, such as entitlement to aid. 
First, it is essential for the proper 
functioning of the system for verifying 
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SUMMARY — CASE T-186/00 
proper use of Community funds that 
applicants for aid provide the Commis­
sion with information which is reliable 
and not liable to mislead it. Secondly, 
the condition that work should not 
start before the date on which the 
Commission receives the application 
for aid is fundamental, since it is 
designed to ensure certainty in legal 
relationships and equality of treatment 
as between applicants for aid by ensur­
ing that aid is not granted to under­
takings which have already carried out, 
in whole or in part, the improvements 
which are the subject of the project to 
be subsidised. 
(see paras 83-86, 88-89) 
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