Judgment — ECLI:EU:T:2003:339
Date: 2003-12-11
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: Statement of reasons;Rights of the defence and procedural guarantees;Structural funds;Principle of proportionality
Procedure: Action for annulment - successful
Origin: Italy

Summary of the Judgment 
1. Acts of the institutions — Statement of reasons — Obligation — Scope — Com­
mission decision entailing serious consequences for the beneficiary of Community aid 
(Art. 253 EC) 
2. Community law — Principles — Rights of the defence — Fundamental principle — 
Scope 
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3. Economic and social cohesion — Structural assistance — Community funding — 
EAGGF financial assistance discontinued because of irregularities — Conditions — 
Compliance with the principle of proportionality 
(Art. 5, third para., EC; Council Regulation No 4253/88, Art. 24) 
4. Economic and social cohesion — Structural assistance — Community funding — 
Works forming the subject-matter of aid financed by the EAGGF — Impossibility of 
starting those works before the date on which the Commission receives the 
application — Fundamental character — Works begun some days before that date 
of receipt — Automatic discontinuance or reduction of the aid — None 
1. Under Article 253 EC the reasons 
stated for a measure must disclose 
clearly and unequivocally the reasoning 
of the Community authority which 
adopted it, so as to make the persons 
concerned aware of the reasons for the 
measure and thus enable them to 
defend their rights, and so as to enable 
the Community judicature to exercise 
its supervisory jurisdiction. The extent 
of the obligation to state reasons must 
be assessed in the light of its context. 
Moreover, the statement of reasons 
required by Article 253 EC must be 
appropriate to the nature of the meas­
ure in question. In that regard, the 
grounds for a decision entailing serious 
consequences for the beneficiary of 
Community aid must clearly show the 
grounds justifying the measure adopted 
against it by the administration. 
(see paras 37-38) 
2. Observance of the rights of the defence 
is, in any procedure initiated against a 
person which is liable to culminate in a 
measure adversely affecting that per­
son, a fundamental principle of Com­
munity law which must be guaranteed 
even in the absence of any rules govern­
ing the procedure. That principle 
requires that the addressees of 
decisions which significantly affect 
their interests should be placed in a 
position in which they may effectively 
make known their views. 
(see para. 107) 
3. Article 24 of Regulation No 4253/88 
laying down provisions for implement­
ing Regulation No 2052/88 as regards 
coordination of the activities of the 
different Structural Funds between 
themselves and with the operations of 
the European Investment Bank and the 
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CONSERVE ITALIA v COMMISSION 
other existing financial instruments 
authorises the Commission to reduce 
the Community aid allocated to a 
beneficiary where an operation or 
measure appears to justify only part 
of the aid allocated, if the appropriate 
investigation reveals an irregularity or 
a significant change affecting the 
nature or conditions of the operation. 
If, in the exercise of its discretion, the 
Commission chooses in a decision 
reducing EAGGF aid to reduce the 
aid and not to discontinue it, it cannot 
subsequently rely on the possibility of 
discontinuance contained, for example, 
in explanatory notes concerning appli­
cations for EAGGF aid in order to 
justify that decision. The fact that 
Regulation No 4253/88 allows the 
Commission to discontinue aid in cer­
tain circumstances does not authorise 
it, when it decides to impose a reduc­
tion, to make that reduction without 
taking into account the requirements of 
the principle of proportionality laid 
down by the third paragraph of 
Article 5 EC, which requires that 
measures adopted by Community insti­
tutions must not exceed what is appro­
priate and necessary for attaining the 
objective pursued. 
In that regard, where the Commission 
adopts a method of calculating the 
reduction that consists in reducing not 
the amounts of the preparatory work 
begun before the date on which the 
Commission received the aid appli­
cation but the total amount of all the 
installation work started after that 
date, including the preparatory work, it 
clearly infringes the principle of pro­
portionality in that that method does 
not take due account of the relation­
ship between the seriousness and the 
amount of the infringement committed 
by the beneficiary and the reduction 
made. 
(see paras 127, 129, 135-136, 148) 
4. In the context of structural operations 
financed by the EAGGF, the system 
according to which work for which aid 
is granted should not start before the 
date on which the Commission receives 
the application is fundamental and its 
logical purpose is to enable the com­
petent national authority to check that 
the application in question is indeed 
compatible with the purpose of the 
system established, as regards in par­
ticular whether the work for which 
financing is sought has not already 
been carried out by the applicant. 
It is the national authorities which 
submit the aid project to the Commis-
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SUMMARY — CASE T-306/00 
sion and therefore the Commission 
receives the application on a date 
unknown to the applicant, and an 
unspecified period may elapse between 
the date the application is received by 
the Commission and the time the 
Commission notifies the applicant that 
it has received it. This situation is likely 
to place the applicant in a difficult 
position. On the one hand, if the 
applicant decides to start work before 
the notification it incurs the risk of 
having its aid discontinued due to the 
premature start of the work, if the date 
of receipt notified to it is after work has 
started. On the other hand, if the 
applicant decides to wait for the notifi­
cation and suspends the proposed work 
and too long a period elapses between 
the date the application is received and 
the date on which the applicant is 
notified, the applicant may face dif­
ficulties with regard to its commit­
ments to suppliers and the implemen­
tation of the project. 
Therefore, since the system established 
by the EAGGF permits the applicant to 
start work after the date on which the 
Commission receives the aid appli­
cation and before the aid is granted, 
but does not guarantee notification 
within a reasonable date of receipt, 
the view should be taken that the fact 
of embarking upon work a few days 
before the date of receipt by the Com­
mission, where there is no fraudulent 
intent on the part of the applicant and 
once the national authorities have 
checked that the application is com­
patible with the purpose of the system, 
should not automatically result in dis­
continuance or reduction of the aid, 
and that exercise of that option should 
involve a conscientious assessment of 
those circumstances by the Commis­
sion. 
(see paras 144-146) 
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