62002CC0312_EN
Opinion of the Advocate-General
Opinion of the Advocate-General
1. In the present case Sweden seeks the annulment of Commission Decision 2002/524/EC of 26 June 2002 excluding from Community financing certain expenditure incurred by the Member States under the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF) (2) in so far as it excludes from Community financing expenditure of SEK 18 555 850 incurred by Sweden.
In the alternative, Sweden asks the Court to reduce the sum excluded from Community financing to SEK 11 817 748 or, in the further alternative, SEK 12 436 091.
2. The expenditure in question concerns fees charged by Sweden for the provision of maps.
Swedish legislation provided that applicants for Community agricultural aid for a given area were to pay a fee in order to receive the map to be attached to the aid application.
The Commission considered that charging such fees was contrary to Community legislation (3) requiring the aid to be paid in full.
Decision 2002/524 accordingly excluded from Community financing a sum representing map fees charged in 1999. (4)
Relevant legislation
3. The basic rules on the financing of the Common Agricultural Policy were at the material time laid down in Regulation No 729/70 (5) which provided that the Fund should finance common measures adopted in order to achieve the objectives set out in Article 33(1)(a) EC, including intervention intended to stabilise the agricultural markets, undertaken in accordance with Community rules within the framework of the common organisation of agricultural markets. (6)
4. Article 5 of Regulation No 729/70 provided for the clearance of the accounts submitted by the national bodies empowered to effect expenditure on transactions eligible to be financed by the Fund.
The first subparagraph of Article 5(2)(c) explicitly required the Commission to exclude from Community financing expenditure which had not been effected in compliance with Community rules.
5. Article 30a of Regulation No 805/68 on the common organisation of the market in beef and veal (7) provides that the amounts to be paid pursuant to that regulation ‘shall be paid in full to the beneficiaries’.
6. Article 15(3) of Regulation No 1765/92 establishing a support system for producers of certain arable crops (8) provides that the payments referred to in that regulation ‘are to be paid over to the beneficiaries in their entirety’.
7. The first subparagraph of Article 8(1) of Regulation No 1663/95 laying down detailed rules for the application of Council Regulation (EEC) No 729/70 regarding the procedure for the clearance of the accounts of the EAGGF Guarantee Section (9) provides:
‘If, as a result of an enquiry, the Commission considers that expenditure has not been effected according to Community rules, it shall notify the Member State concerned of the results of its checks and indicate the corrective measures to be taken to ensure future compliance.’
Background
8. On 17 April 1997 Sweden adopted Förordningen [Regulation] 1997:183 concerning fees for maps in the context of agricultural aid. (10)
Förordningen 1997:183 provided that applicants for Community aid for a given area were to pay a fee in order to receive the map to be attached to the aid application.
The fee was SEK 10 per hectare of the relevant area up to a maximum of SEK 3 000.
Förordningen 1997:183 was repealed on 1 July 2000 and was accordingly applicable only in 1998 and 1999.
It is estimated that a total of SEK 62 291 350 was paid in map fees, of which SEK 31 871 925 appears to be attributable to 1998 and SEK 30 419 425 to 1999.
9. On 26 June 2002 the Commission decided to exclude SEK 18 555 850 from Community financing on the ground of non-compliance with Article 15 of Regulation No 1765/92 and Article 30a of Regulation No 805/68. (11)
10. It is common ground that that exclusion concerns expenditure effected in 1999 alone, the Commission having taken the view that fees paid in 1998 (the first year that Förordningen 1997:183 was applicable) could be regarded as consideration for the service of providing a map which might be of general use to the farmer concerned.
It may be assumed (although it is nowhere explicitly stated in the documents before the Court) that the amount excluded, which represents only a proportion of the total fees charged in 1999, reflects only the fees charged for maps supplied in connection with applications for aid covered by the regulations in issue.
11. Sweden initially argued, as its principal submission, that the letter by which the Commission first communicated its concerns contained no evaluation of the expenditure to be excluded from Community financing, as required by Article 8(1) of Regulation No 1663/95, (12) but conceded in its reply that the applicable version of Article 8(1) (13) no longer included such a requirement.
Breach of Article 15 of Regulation No 1765/92 and Article 30a of Regulation 805/68
12. Sweden submits that Förordningen 1997:183 is not incompatible with Article 15 of Regulation No 1765/92 or Article 30a of Regulation No 805/68 since the amounts to which Swedish farmers were entitled pursuant to Community law were paid to them in full.
13. Both parties refer to the decision of the Court in Kellinghusen and Ketelsen. (14)
That case concerned the lawfulness of national legislation requiring administrative fees to be paid by applicants for the compensatory payments provided for by Regulations Nos 1765/92 805/68.
14. The Court noted first that Community regulations must be uniformly applied in all the Member States and have, so far as possible, the same effect throughout the territory of the Community. (15)
It then ruled as follows:
‘As the Commission has correctly pointed out, the objective of compensating the loss of income caused by the reduction of the institutional prices can be achieved only if the compensatory aid is paid in full to the farmers affected by the consequences of the reform of the common agricultural policy.
In fact, to allow Member States the freedom to reduce the levels of compensatory aid by making a deduction of or charging fees for administrative expenses would lead to different compensation for the loss of income of the farmers in one Member State and between the farmers of different Member States, which could interfere with the uniform application of Community law, which is necessary in order to avoid unequal treatment of producers and traders (Case C-132/95 Jensen and Korn- og Foderstofkompagniet
[1998] ECR I-2975, paragraph 49).
Accordingly, Article 15(3) of Regulation No 1765/92, and Article 30a of Regulation No 805/68, as inserted by Regulation No 2066/92, prohibit the authorities in the Member States from making a deduction from the payments made or from demanding the payment of administrative fees charged for processing applications and having the effect of reducing the amount of the aid.’ (16)
15. In my view, that ruling applies equally to the map fees at issue in the present case.
16. Sweden argues that those fees were not charged in order to cover the Swedish authorities’ administrative expenses but as consideration for supplying the maps and that the amount of the total fees collected was less than the cost of producing the maps.
Moreover the fees were not a condition of processing aid applications:
maps were sent to all the farmers concerned and the fees subsequently invoiced.
Aid applications were examined, and aid granted, irrespective of whether the map fees had been paid.
17. I am not convinced, however, that those factors are relevant:
as the Commission points out, applicants were none the less required to lodge a map at the same time as the aid application and to pay the fee for that map.
As I commented in my Opinion in Kellinghusen and Ketelsen, ‘if the prohibition on deductions is to be effective, it cannot be interpreted in a purely formal manner as covering only deductions which are actually made on the occasion of the payments.
Thus the prohibition of any deduction must of necessity extend to all charges which are directly and inseparably linked to the amounts disbursed.’  (17)
18. The Commission refers to a letter from the Swedish Ministry of Agriculture to the Director General of DG VI (now DG Agriculture) dated 2 February 1998 and replying to a request for information concerning the establishment in Sweden of an integrated administration and control system for certain Community aid schemes as required by Regulation No 3508/92. (18)
In that letter (19) the Swedish Government explains that that regulation requires an identification system for agricultural parcels to be used as a basis for processing area aid applications.
Since the available maps were inadequate, an identification system was set up, based on blocks covered by special numbered maps.
Since the competent authority uses those maps when processing aid applications, they must be used by applicants.
The creation of the maps gave rise to major one-off costs.
Sweden considered various possibilities for financing the system, finally opting for the levying of a fee on the maps.
19. It appears therefore that the map fees were intended to finance the system of parcel identification introduced in Sweden pursuant to Regulation No 3508/92 and hence to cover the Swedish authorities’ administrative expenses.
Fees for maps of fodder areas
20. In the alternative Sweden submits that fees for maps of fodder areas cannot be excluded from Community financing because the Commission’s letter of 24 October 2000, which is headed ‘Communication pursuant to Article 8(1) of Regulation (EC) No 1663/95’, mentioned only prohibited deduction of arable area aid.
Fodder areas however are part of the livestock premium regime.
It was not until a second communication pursuant to Article 8(1), received on 6 August 2001, that the Commission stated that fees for maps of fodder areas would also be excluded from Community financing.
21. The Commission states that it was not until May 2001 that it received detailed information from Sweden on fodder area aid paid.
Since there was no obligation to include in the first communication of 24 October 2000 an evaluation of the expenditure proposed to be excluded, (20) the fact that that communication mentioned only arable area aid did not vitiate it.
Nor can Sweden argue that it was as a result unable to determine what corrective measures to take, since it had abolished the map fees for both arable and fodder areas on 1 July 2000.
22. In those circumstances it seems to me that Sweden’s submission must be rejected.
Fees for maps of areas for which agro-environmental or regional aid had also been sought
23. Sweden further submits that the map fees were not unlawful where the maps were of areas for which agro-environmental or regional aid had also been sought.
Article 15 of Regulation No 1765/92 and Article 30a of Regulation No 805/68 do not concern agro-environmental or regional aid.
Where the same area was the subject of both an application for arable area or livestock aid and an application for agro-environmental or regional aid, the fee for the map concerned was the same as it would have been had the application been for arable area or livestock aid alone.
The Commission however proposes to exclude fees for maps of areas which were the subject of both types of aid (on the one hand, agro-environmental or regional aid, and on the other, arable area or livestock aid).
24. I do not see how that argument helps Sweden.
The Commission has excluded an amount equivalent to the map fees paid by applicants for arable area or livestock aid on the ground that such payments are deductions prohibited by Article 15 of Regulation No 1765/92 and Article 30a of Regulation No 805/68.
I have indicated above that I consider the Commission’s understanding of those provisions to be correct.
The fact that such applicants also applied for other types of aid cannot have any bearing on the infringements of Articles 15 and 30a or on the consequences of those infringements.
Conclusion
25. In the light of the above, I consider that the Court should:
(1) dismiss the application;
(2) order the applicant to bear the costs.
(1) .
(2)
–	OJ 2002 L 170, p. 77.
(3)
–	Set out in paragraphs 5 and 6 below.
(4)
–	See further paragraph 10 below.
(5)
–	Regulation (EEC) No 729/70 of the Council of 21 April 1970 on the financing of the common agricultural policy, OJ, English Special Edition 1970 (I), p. 218, as amended in particular by Council Regulation (EC) No 1287/95 of 22 May 1995, OJ 1995 L 125, p. 1.
Regulation No 729/70 was replaced, with effect for expenditure from 1 January 2000, by Council Regulation (EC) No 1258/1999 of 17 May 1999 on the financing of the common agricultural policy, OJ 1999 L 160, p. 103.
(6)
–	Articles 1(3) and 3(1).
(7)
–	Regulation (EEC) No 805/68 of the Council of 27 June 1968, OJ, English Special Edition 1968 (I), p. 187, as amended by in particular Council Regulation (EEC) No 2066/92 of 30 June 1992, OJ 1992 L 215, p. 49.
(8)
–	Council Regulation (EEC) No 1765/92 of 30 June 1992, OJ 1992 L 181, p. 12.
(9)
–	Commission Regulation (EC) No 1663/95 of 7 July 1995, OJ 1995 L 158, p. 6, as amended by Commission Regulation (EC) No 2245/1999 of 22 October 1999, OJ 1999 L 273, p. 5.
(10)
–	Förordningen (1997:183) om kartavgift i ärenden om jordbruksstöd.
(11)
–	The decision refers to Article 30 of Regulation No 805/68;
it is clear, however, and Sweden accepts, that Article 30a is meant.
(12)
–	Cited in note 9.
(13)
–	Article 8(1) was replaced with effect from 30 October 1999 by Regulation No 2245/1999, cited in note 9;
the Commission’s communication was dated 24 October 2000.
(14)
–	Joined Cases C-36/97 and C-37/97 [1998] ECR I-6337.
(15)
–	Paragraph 16 of the judgment, citing Case 819/79 Germany
v Commission
[1981] ECR 21, paragraph 10.
(16)
–	Paragraphs 19 to 21 of the judgment.
(17)
–	Paragraph 13.
(18)
–	Council Regulation (EEC) No 3508/92 of 27 November 1992 establishing an integrated administration and control system for certain Community aid schemes, OJ 1992 L 355, p. 1.
(19)
–	Annexed by the Commission to its defence.
(20)
–	See paragraph 11 above.