Judgment;Summary — ECLI:EU:C:2024:1052
Date: 2024-12-19
Language of the case: Romanian
Court formation: Eighth Chamber
Subject matter: Agriculture and Fisheries;Economic, social and territorial cohesion;General provisions;Energy;Environment;European Social Fund (ESF);Provisions governing the Institutions;Economic and monetary policy;Research and technological development;Transport;European Regional Development Fund (ERDF);Industrial policy;Tourism;French overseas departments;Cohesion Fund
Procedure: Reference for a preliminary ruling
Origin: Romania

Summary C-392/23 – 1 
Case C-392/23 
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: 
27 June 2023 
Referring court: 
Curtea de Apel Bacău (Romania) 
Date of the decision to refer: 
20 April 2023 
Appellant: 
Rustrans SRL 
Respondent: 
Ministerul Agriculturii și Dezvoltării Rurale – Direcția Generală 
Pescuit – Autoritatea de Management pentru POPAM 
  
Subject matter of the main proceedings 
Contentious administrative appeal brought by the appellant, Rustrans S.R.L., 
against the respondent, the Ministerul Agriculturii și Dezvoltării Rurale – Direcția 
Generală Pescuit – Autoritatea de Management pentru Programul Operational 
pentru Pescuit și Afaceri Maritime (POPAM) (Ministry of Agriculture and Rural 
Development – Directorate-General for Fisheries – Managing Authority of the 
Operational Programme for Maritime Affairs and Fisheries (POPAM); ‘the DGP 
AM POPAM’), seeking the annulment of an administrative act. 
Subject matter and legal basis of the request 
Pursuant to the provisions of Article 267 TFEU, the interpretation is sought of 
Article 48(1)(c) of Regulation (EU) No 508/2014, Articles 4, 69 and 125 of 
Regulation (EU) No 1303/2013, and Article 33 of Regulation (EU, Euratom) 
2018/1046. 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-392/23 
 
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Questions referred for a preliminary ruling 
(1) For the purpose of modernising an aquaculture unit by means of the 
investment referred to in Article 48(1)(c) of Regulation No 508/2014, does the 
contribution in kind of land adjoining ponds, aquaculture plants or tanks made of 
concrete, as well as buildings present on that land, constitute eligible expenditure 
within the meaning of Article 69 of Regulation No 1303/2013 where 
modernisation of the aquaculture unit is carried out through the purchase of 
equipment, technological machinery and materials for the fish farm? 
(2) Must Article 48(1)(c) of Regulation No 508/2014, read in conjunction with 
Articles 4 and 125 of Regulation No 1303/2013 and Article 33 of Regulation 
2018/1046 on the principle of sound financial management, be interpreted as 
meaning that there is no direct link between the modernisation of an aquaculture 
unit by means of expenditure on the purchase of equipment, technological 
machinery and materials for the fish farm located on the land and the contribution 
in kind of the land adjoining concrete ponds, land adjoining ponds for aquaculture 
plants, land adjoining concrete tanks and buildings located on that land? 
(3) Does the 10% limit referred to in Article 69(3)(b) of Regulation 
No 1303/2013 apply only to contributions consisting of land and buildings for 
which a cash payment is made for the purposes of a lease agreement [referred to 
in Article 69(1)(d)] or does it also apply to the contribution in kind [consisting of] 
land and immovable property belonging (not rented) to the beneficiaries? 
(4) Does Article 69 of Regulation No 1303/2013 set a limit of 10% only for the 
contribution in kind consisting of land or does it set a limit of 10% for the 
contribution in kind consisting of land and buildings? 
Provisions of European Union law relied on 
Article 48(1)(c) of Regulation (EU) No 508/2014 of the European Parliament and 
of the Council of 15 May 2014 on the European Maritime and Fisheries Fund and 
repealing Council Regulations (EC) No 2328/2003, (EC) No 861/2006, (EC) 
No 1198/2006 and (EC) No 791/2007 and Regulation (EU) No 1255/2011 of the 
European Parliament and of the Council. 
Articles 4, 69 and 125 of Regulation (EU) No 1303/2013 of the European 
Parliament and of the Council of 17 December 2013 laying down common 
provisions on the European Regional Development Fund, the European Social 
Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development 
and the European Maritime and Fisheries Fund and laying down general 
provisions on the European Regional Development Fund, the European Social 
Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and 
repealing Council Regulation (EC) No 1083/2006. 
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Article 33 of Regulation (EU, Euratom) 2018/1046 of the European Parliament 
and of the Council of 18 July 2018 on the financial rules applicable to the general 
budget of the Union, amending Regulations (EU) No 1296/2013, (EU) 
No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, 
(EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision 
No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012. 
Provisions of national law relied on 
Ordonanța de urgență a Guvernului nr. 66 din 29 iunie 2011 privind prevenirea, 
constatarea și sancționarea neregulilor apărute în obținerea și utilizarea fondurilor 
europene și/sau a fondurilor publice naționale aferente acestora (Government 
Emergency Order No 66 of 29 June 2011 on the prevention, detection and 
sanctioning of irregularities in obtaining and using EU funds and/or related 
national public funds; ‘the OUG No 66/2011’): Article 2(1)(a), which defines the 
irregularities; Article 3, on the principles to observe when selecting and approving 
funding applications; and Article 45, which lays down the right and duty of the 
DGP AM POPAM to perform audits on the expenditure approved for funded 
projects. 
Hotărârea Guvernului nr. 347 din 11 mai 2016 privind stabilirea cadrului general 
de implementare a operațiunilor cofinanțate din Fondul European pentru Pescuit și 
Afaceri Maritime prin Programul operațional pentru pescuit și afaceri maritime 
2014-2020 (Government Decision No 347 of 11 May 2016 laying down the 
general framework for the implementation of operations co-financed by the 
European Maritime and Fisheries Fund through the Operational Programme for 
Maritime Affairs and Fisheries 2014–2020) (version in force on the date the 
funding was granted) (‘HG No 347/2016’). 
Article 4 lays down the conditions for expenditure to be eligible for funding, 
including the condition that expenditure be borne and actually incurred by the 
beneficiary [paragraph (1)(a)], and the condition that it be accompanied by 
invoices and supporting documents attesting to the payment and actual incurring 
of expenditure [paragraph (1)(b)]. 
Pursuant to Article 5: 
‘(1) By way of derogation from the provisions of Article 4(1)(a) and (b), the 
contribution in kind is considered eligible for funding if it meets the conditions 
laid down in Article 69(1) of Regulation (EU) No 1303/2013 of the European 
Parliament and of the Council. 
(2) Under the Operational Programme for Maritime Affairs and Fisheries 
2014–2020, equipment, plant and machinery, land, buildings and immovable 
property are recognised as contributions in kind. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-392/23 
 
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(3) The contribution in kind consisting of the assets referred to in paragraph (2) 
must also fulfil the following cumulative conditions: 
(a) the subject of the contribution in kind must have been purchased or 
constructed by the beneficiary through sources of financing other than non-
repayable public subsidies; 
(b) the assets must be free of any encumbrances/prohibitions affecting the 
implementation of the operation and must not be the subject of disputes relating to 
the right asserted by the potential applicant, pending before the courts, when the 
funding application is submitted; 
(c) the contribution in kind must be necessary and closely related to the 
implementation of the operation; 
(d) the value of the goods must be certified by an authorised expert who is 
independent of the beneficiary of the operation, in accordance with the legal 
provisions in force. In the case of land, the amount of the contribution in kind may 
not exceed the limit laid down in Article 69(3)(b) of Regulation (EU) 
No 1303/2013 of the European Parliament and of the Council.’ 
Pursuant to Article 7: 
‘(1) The cost of the purchase of land with or without buildings shall be eligible 
for funding up to a maximum of 10%, or 15% in the case of derelict sites and sites 
formerly in industrial use which comprise buildings, of the total eligible 
expenditure required by the operation, in accordance with the provisions of 
Article 69(3)(b) of Regulation (EU) No 1303/2013. 
(2) The land referred to in paragraph (1) must be used for the purposes defined 
within the framework of the funded operation, in accordance with the provisions 
laid down in the funding agreement. Otherwise, the beneficiary is required to 
return the corresponding non-repayable funds, in accordance with the legal 
provisions in force. 
(3) Where a building is purchased for demolition and subsequent use of the land 
for the purpose of achieving the objectives of the operation, only the cost of 
purchasing the land shall be eligible, if it complies with the provisions of 
paragraphs (1) and (2).’ 
Ordinul nr. 816/2016 din 24 mai 2016 al ministrului agriculturii și dezvoltării 
rurale privind aprobarea Listei detaliate a cheltuielililor eligibile pentru 
operațiunile finanțate, inclusiv cheltuielile de personal ale Autorității de 
Management, în cadrul Programului operațional pentru pescuit și afaceri maritime 
2014-2020 (Order No 816 of 24 May 2016 of the Minister for Agriculture and 
Rural Development approving the detailed list of eligible expenditure for funded 
operations, including expenditure for the staff of the Management Authority, 
within the framework of the Operational Programme for Maritime Affairs and 
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Fisheries 2014–2020 (version in force on the date the funding was granted), 
Annex, letter J, measure II.2. Productive investments in aquaculture. 
Succinct presentation of the facts and procedures in the main proceedings 
1 Through an appeal brought before the Curtea de Apel Bacău – Secția a II-a civilă 
și de contencios administrativ și fiscal (Court of Appeal of Bacău – Second Civil 
Chamber for administrative and tax matters) of 7 November 2022, the appellant, 
SC Rustrans SRL requested, in proceedings against the DGP AM POPAM, the 
annulment of the report establishing irregularities and settlement of credit entry 
No 292304/19.10.2022, as well as the exemption from the payment of a debt of 
3 378 392.20 Romanian lei (RON). 
2 The appellant submitted a funding application to the DGP AM POPAM for the 
purposes of implementing the project entitled ‘Extinderea si diversificarea 
activității companiei RUSTRANS SRL pe segmentul de acvacultură’ (Extension 
and diversification of the activity of RUSTRANS SRL in the aquaculture sector), 
SMIS reference 121910 under Union Priority No 2: Fostering environmentally 
sustainable, resource efficient, innovative, competitive and knowledge-based 
aquaculture, measure II.2: Productive investments in aquaculture – 
Article 48(1)(a) to (d) and (f) to (h) [of Regulation (EU) No 508/2014] (POPAM). 
In this project, it was specified that a plot of land and related buildings would be 
contributed in kind. 
3 According to the feasibility study, SC Rustrans SRL set the following objectives 
for the investment project: 
– strengthening the competitiveness of the undertaking by investing in the 
modernisation of the aquaculture unit; 
– increasing production capacity following the purchase of technological 
equipment and efficient specialist aquaculture facilities; 
– optimising production costs and improving the efficiency of the business 
through the purchase of efficient technologies and equipment. 
4 Subsequently, funding contract No 155/18.09.2018 was entered into, the total 
amount of which was RON 19 151 676.06: total amount eligible for funding – 
RON 17 477 871.93; amount of eligible co-financing from the beneficiary – 
RON 12 466 155.03; amount eligible for non-repayable funding – 
RON 5 011 716.90. The amount of eligible co-financing from the beneficiary is 
composed of the contribution in kind consisting of built-on land, buildings and 
special constructions assessed in accordance with the legislative procedure as 
follows: built-on land: RON 2 343 160, buildings and special constructions: 
RON 10 972 682. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-392/23 
 
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5 Since the project implementation period was extended by 6 months beyond the 
initial 24-month period, a reduction of 0.5% of the eligible non-repayable amount 
was applied. 
6 The project is currently under way and is being audited; four applications for 
reimbursement have been made, as a result of which a total amount of 
RON 4 826 294.03 has been paid out, of which RON 3 619 720.51 is from the 
EMFAF [European Maritime, Fisheries and Aquaculture Fund] (75%) and 
RON 1 206 573.51 is a contribution from the national budget (25%). 
7 In the report establishing irregularities and the settlement of credit entry 
No 292304/19.10.2022, it was found that there were irregularities within the 
meaning of Article 2(1)(a) of OUG No 66/2011 (offences, irregularities and non-
compliance with national and/or European legal provisions resulting from an act 
or omission by the beneficiary which affected or was likely to affect the EU 
budget) as regards the direct link between the contribution in kind and the 
operation funded for that purpose; the principle of sound financial management, 
referred to in Article 125(2) of Regulation (EU) No 1303/2013, was considered to 
be clearly applicable. 
In addition, irregularities were found with regard to ineligible expenditure relating 
to the contribution in kind – land and/or buildings provided by the beneficiary – in 
that the 10% limit laid down in Article 69(1) of Regulation (EU) No 1303/2013 
was exceeded. A tax credit was established in the amount of RON 3 378 392.20, 
of which RON 2 533 794.15 was a contribution from EU funds, and 
RON 844 598.05 was a national public contribution from the state budget. 
8 The report was drawn up following audits carried out on the basis of a 
recommendation from the European Commission’s DG MARE, which in 2021 
identified an irregularity with regard to the expenditure relating to the contribution 
in kind – land and buildings – made by the beneficiaries in connection with the 
funded projects, in so far as the ceiling of 10% of the total expenditure of the 
project/operation was exceeded, infringing the provisions of Article 69(1) and 
(3)(b) of Regulation (EU) No 1303/2013, and in terms of the lack of connection 
between the contribution in kind and the funded operation, in the light of the 
principle of sound financial management enshrined in Article 4 and Article 125(1) 
of Regulation (EU) No 1303/2013 and Article 33 of Regulation (EU, Euratom) 
2018/1046, and in the light of the principle of efficiency, enshrined in the 
provisions of Article 48(1)(c) of Regulation (EU) No 508/2014. These audits by 
the European Commission resulted in a final audit report. 
The essential arguments of the parties in the main proceedings 
9 The appellant argued that the respondent’s decision was unlawful, claiming that 
the fault of the DGP AM POPAM, which was required to audit in detail all the 
projects in the light of the applicable national and EU rules, was obvious. In its 
opinion, it is incorrect to find an irregularity, in the sense of an infringement of 
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Article 69(3)(b) of Regulation (EU) No 1303/2013, as a result of exceeding the 
percentage of 10% allegedly applicable to the entire contribution in kind made by 
the beneficiary, since that provision was misinterpreted. 
10 The appellant submits that the 10% limit does not apply globally to its entire 
contribution, but only to the contribution consisting of land, which is also 
supported by the national legislation in force at the time the funding was granted, 
namely Article 5 of HG No 347/2016. The last sentence of Article 5(3)(d) of HG 
No 347/2016 refers strictly to the percentage limit laid down in Article 69 of 
Regulation (EU) No 1303/2013, but that limit is laid down only in respect of land 
and not in respect of buildings or other immovable property. 
11 The appellant also stated that Article 69(1) of Regulation (EU) No 1303/2013 
provides that costs relating to ‘the purchase of land not built on and land built on 
in the amount exceeding 10% of the total eligible expenditure for the operation 
concerned’ are not eligible for funding. In the present case, however, the land was 
not purchased but was already owned. The appellant also submitted that the 
provisions of Article 69(1) of Regulation (EU) No 1303/2013 also lay down a 
limit of 10% in the case of the leasing of land, but that the latter provision does 
not apply either. 
12 According to the appellant, the irregularity relating to the lack of a direct link 
between the contribution in kind consisting of the land and the buildings, 
contributed to the project by the beneficiary, and the whole of the funded 
operation is also unfounded. The contribution in kind consists of the land on 
which some fish tanks are located. Those assets are the central and indispensable 
element of the aquaculture business. There is therefore a direct link between them 
and the operation proposed for funding, namely the purchase of equipment, 
machinery and facilities. The purchases made under the funding programme 
concerned only the equipment and machinery necessary for the expansion and 
diversification of SC Rustrans SRL’s business in the aquaculture sector. There is a 
clear link between the contribution in kind (land on which the tanks, ponds and all 
adjacent constructions which form the fish farm are located) and the equipment 
and machinery purchased in the context of the project. 
13 The respondent contended that the appeal should be dismissed. As regards the 
existence of fault on the part of the authority, it pointed out that the DGP AM 
POPAM had the power to find and sanction irregularities even after the project 
had been audited and assessed, although it should have found them at the stage 
prior to signing the contract. 
14 As regards the 10% limit laid down by Regulation (EU) No 1303/2013, the 
respondent stated that, in the case of land and immovable property, the percentage 
of contributions in kind is limited to 10% of the total eligible expenditure relating 
to the funded operation, in accordance with Article 69(3) of Regulation (EU) 
No 1303/2013. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-392/23 
 
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15 As regards the lack of a direct link between the contribution in kind and the 
funded operation, the respondent argued that the buildings contributed in kind to 
fund the project were not directly linked to the funded operation (purchase of 
equipment, machinery and materials). The activities carried out within the project, 
as described in the funding application, do not directly involve the buildings with 
which the appellant co-financed the project, but involve equipping the fish farm to 
carry out the specific activity, such that the contribution and the direct link 
between the immovable property (land and buildings) and the operation proposed 
for funding, namely the purchase of equipment, machinery and equipment, is not 
clear. 
16 Therefore, in accordance with the principle of efficiency, only the costs necessary 
for the modernisation of existing aquaculture plant and those related to that 
modernisation are eligible under that provision; consequently, the costs relating to 
existing land and/or immovable property on that land cannot not be considered 
eligible for the funded activity (purchase of equipment), as they are not necessary 
to achieve the objective. 
Succinct presentation of the reasoning in the request for a preliminary ruling 
17 As regards the question of the lack of a direct link between the contribution in 
kind and the funded operation, the referring court notes that, in assessing 
compliance with the principle of sound financial management and the principle of 
efficiency, the opinions of the Commission and the Romanian State differed, in 
that each party justified the costs necessary for the modernisation of existing 
aquaculture units differently: according to the Romanian State, the land and the 
buildings (farm) should also have been included since, without them, the project 
would not have been possible, whereas, according to the Commission, the land 
and the buildings were a prerequisite for the modernisation operation. 
18 When granting the funds, the Romanian State therefore considered, like the 
appellant, that, in order to achieve the objective, namely to increase production 
volume, an aquaculture farm needed both means of production (assets and 
equipment) and land and buildings (for example, tanks). Without the existing fish 
farm and its land, the project would not have been possible. The value of the 
existing farm to be modernised is part of the ‘technological flow’ and, therefore, 
of the funded operation. 
19 Subsequently, following the binding conclusions of the European Commission 
auditors, the respondent is of the opinion that immovable property consisting of 
land and buildings is not directly related to the modernisation process described in 
the funding application, since the purchase of equipment, machinery and facilities 
funded by the project does not concern immovable property, buildings and land 
contributed in kind. Although the object of the contribution in kind (fish farm 
and/or the related land) is a precondition for the very existence of a modernisation 
project, its value is not part of the costs associated with the modernisation process. 
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20 In accordance with the principle of sound financial management and the principle 
of efficiency, only the costs necessary for and associated with the modernisation 
of the existing aquaculture units are eligible for funding under that provision. 
Costs relating to land and buildings are not considered eligible for the funded 
activity (purchase of equipment) as they are not necessary to achieve the 
corresponding objective. 
21 As regards the question of exceeding the 10% limit laid down in Article 69(1) of 
Regulation (EU) No 1303/2013 on the contribution in kind – land and/or 
buildings – contributed by the beneficiary, the interpretation of the provisions of 
that article is at issue, namely whether the 10% limit applies only to land or also to 
buildings and whether it applies only to certain operations (purchases, leases), 
whereas the differences of opinion result from the provisions of national law and 
concern the implementing rules for the provisions of EU law. 
22 At issue in the present case is the applicability of the 10% limit only to the 
contribution in kind consisting of land, as expressly stated in the wording of 
Article 5(3) of HG No 347/2016, or to the contribution in kind consisting of land 
and buildings, in so far as the second subparagraph of Article 69(1) of Regulation 
No 1303/2013 applies, since there is no need to distinguish between contributions 
in kind made with or without negligible cash payments in respect of the lease.