OPINION OF ADVOCATE GENERAL
ĆAPETA
delivered on 25 September 2025 (1)
Case C‑434/24
JD
v
Ministerul Agriculturii şi Dezvoltării Rurale – Agenţia de Plăţi şi Intervenţie pentru Agricultură (APIA) – Centrul Judeţean Bistriţa-Năsăud
(Request for a preliminary ruling from the Curtea de Apel Cluj (Court of Appeal, Cluj, Romania))
( Reference for a preliminary ruling – Agriculture – Common agricultural policy – Direct support schemes – Single area payment scheme – Regulation (EU) No 1306/2013 – Article 63(1) – Withdrawal of aid – Non-compliance with the eligibility criteria – Cancellation with retroactive effect of the lease agreement for the agricultural area – Principle of proportionality )
I.      Introduction
1.        This request for a preliminary ruling from the Curtea de Apel Cluj (Court of Appeal, Cluj, Romania) relates to the interpretation of Article 63(1) of Regulation (EU) No 1306/2013 (2) on the financing, management and monitoring of the common agricultural policy (‘the CAP’).
2.        Article 63(1) of Regulation No 1306/2013 provides for the withdrawal of financial aid already granted to a beneficiary where that beneficiary does not comply with the eligibility criteria for granting the aid.
3.        The main issue arising in the present case concerns whether the retroactive cancellation of a lease agreement for the agricultural area concerned puts a farmer in a situation of non-compliance with the eligibility criteria, justifying withdrawal of the aid under that provision.
II.    Relevant law
A.      European Union law
4.        Article 63(1) of Regulation No 1306/2013 states:
‘Where it is found that a beneficiary does not comply with the eligibility criteria, commitments or other obligations relating to the conditions for the granting of the aid or support, as provided for in the sectoral agricultural legislation, the aid shall not be paid or shall be withdrawn in full or in part and, where relevant, the corresponding payment entitlements as referred to in Article 21 of Regulation (EU) No 1307/2013 shall not be allocated or shall be withdrawn.
Where the non-compliance concerns national or Union rules on public procurement, the part of the aid not to be paid or to be withdrawn shall be determined on the basis of the gravity of the non-compliance and in accordance with the principle of proportionality. The legality and regularity of the transaction shall only be affected up to the level of the part of the aid not to be paid or to be withdrawn.’
B.      Romanian law
5.        Article 1254 of the Codul civil (Civil Code) states:
‘1.      A contract which is rendered null and void or which is cancelled is deemed never to have been concluded.
2.      The cancellation of the contract shall, in accordance with the conditions laid down by law, result in the annulment of successive acts concluded on the basis of that contract.
3.      Where the contract is cancelled, each party shall reimburse the other in kind or equivalent for services received, in accordance with the provisions of Articles 1639 to 1647, even if those services were rendered successively or were continuous.’
6.        Article 6(1) of OUG No 66/2011 (3) states:
‘The authorities responsible for the European funds shall be obliged to exclude, in whole or in part, from the reimbursement/payment of the expenses incurred and declared by the beneficiaries any expenditure that does not comply with the conditions of lawfulness or conformity laid down by the provisions of the national and [Union] legislation in force, in a situation where – in the payment claim verification process – they determine that such expenditure does indeed exist.’
7.        Article 8(1)(n) of OUG No 3/2015 (4) states:
‘In order to benefit from the direct payments provided for in Article 1(2), farmers must: … present, when filing a single payment application or amendments thereto, the necessary documents proving the legal use of the agricultural land, including land containing ecological focus areas, and of animals. These documents must be signed prior to the filing of the single payment application and must be valid at least until 1 December of the application year’.
8.        Article 5(2) of Order No 619/2015 (5) states:
‘The documents proving that the declared eligible land is at the farmer’s disposal, in accordance with Article 8(1)(n) of [OUG No 3/2015], are:
…
(b)      a certified copy of the original of the agreement for the leasing/concession of the agricultural area, concluded between the farmer and the administrative territorial units, as the case may be;
…’
III. The main proceedings, the questions referred for a preliminary ruling and the procedure before the Court
9.        On 24 May 2018, JD entered into an agreement with the local council of the municipality of Chiochiș (Romania) concerning the lease of an area of 58.32 hectares of pastureland (‘the lease agreement’).
10.      Approximately a year later, on 10 May 2019, JD submitted an application for financial aid for the year 2019, covering an area of 41.69 hectares of pastureland which had been allocated to JD under that lease agreement. That aid, which JD received, was financed by EU agricultural funds, in particular under the single area payment scheme (‘SAPS’), as well as by national funds.
11.      On the same day that JD applied for financial aid, 10 May 2019, the Tribunalul Bistrița-Năsăud (Regional Court, Bistrița-Năsăud, Romania) annulled the procedure for allocating the pastureland to JD. (6) That judgment resulted from that court’s findings that the requirements imposed under Romanian law for the procedure for awarding the pastureland had not been complied with, as there had been no publication by the local council of a call for tenders by direct negotiation within the prescribed time period. The consequence of that judgment was that all subsequent acts, including the lease agreement, were cancelled with retroactive effect.
12.      By judgment of 5 March 2020, (7) the Curtea de Apel Cluj (Court of Appeal, Cluj) dismissed the appeal brought by JD against the judgment of the lower court as having been filed out of time.
13.      On 24 November 2022, having become aware, following an investigation, that the lease agreement had been cancelled, the APIA, (8) as the competent authority, issued a statement requiring JD to repay the entire amount of the financial aid. (9)
14.      JD lodged a complaint against that statement with the APIA, which was dismissed by a decision dated 5 January 2023.
15.      JD then brought an action challenging that decision of the APIA before the Tribunalul Bistrița-Năsăud (Regional Court, Bistrița-Năsăud).
16.      On 15 June 2023, that court dismissed JD’s action. (10) It held that, under Romanian law, the lease agreement that gave rise to the granting of the financial aid was deemed never to have been concluded. At the same time, to be eligible for financial aid, farmers must meet certain eligibility criteria, which include being in possession of a document proving that the agricultural land in question is at their disposal. That court therefore confirmed that JD had to repay the sums unduly received and considered that such repayment did not constitute an administrative penalty, so the absence of fault on the part of JD was not relevant.
17.      JD lodged an appeal against that judgment before the Curtea de Apel Cluj (Court of Appeal, Cluj), which is the referring court in the present case.
18.      That court harbours doubts whether the situation in the present case is one in which the beneficiary of financial aid does not comply with the eligibility criteria for the purposes of Article 63(1) of Regulation No 1306/2013. It points out that, in the case of the cancellation of a contract with retroactive effect, a beneficiary has complied with the eligibility criterion relating to the legal possession of land at the time of filing the application and subsequently until the time of the cancellation of the contract. Nevertheless, irrespective of the beneficiary’s fault, the cancellation of the contract produces retroactive effects, including with regard to the time of filing of the application.
19.      In the referring court’s view, Article 63(1) of Regulation No 1306/2013 should be interpreted as taking into account compliance with the eligibility criteria when they are assessed, with the cancellation of the contract with retroactive effect not being relevant. Rather, the retroactive cancellation of the contract should be taken into account from the moment of cancellation when assessing the title to the land in dispute. Otherwise, a beneficiary is required to repay the sums received when it has not committed any fault and, indeed, until the time of the cancellation, all the eligibility criteria had been complied with.
20.      Should the Court interpret Article 63(1) of Regulation No 1306/2013 as requiring the repayment of aid in the situation of retroactive cancellation of the lease agreement, the referring court asks whether the principle of proportionality applies. It notes, inter alia, that Article 64 of that regulation on the application of administrative penalties – which provides that such penalties should not be imposed if there is no fault on the part of the beneficiary, and, if they are imposed, that they should be proportionate – does not mention Article 63(1) thereof and is therefore not relevant for the application of that latter provision.
21.      The referring court further notes that Article 63(1) of Regulation No 1306/2013 does not provide any details on the circumstances in which the withdrawal of aid is to be total or partial. It considers that the principle of proportionality also applies to the application of that provision, and suggests taking into account the time at which the cancellation of the contract with retroactive effect occurred and the degree of fault on the part of the beneficiary with regard to the cause of that cancellation.
22.      In those circumstances, the Curtea de Apel Cluj (Court of Appeal, Cluj) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:
‘(1)      In the interpretation of Article 63(1) of [Regulation No 1306/2013], does a situation in which a beneficiary does not satisfy the conditions for eligibility include a situation in which a contract which was valid at the time of the assessment of the conditions for eligibility is cancelled with retroactive effect in accordance with national legislation, regardless of the time at which that cancellation occurs, or does it not include such a situation?
(2)      If the answer to the preceding question is in the affirmative, can the principle of proportionality apply with regard to the withdrawal of payment under Article 63(1) of [Regulation No 1306/2013] or not?’
23.      Written observations were submitted to the Court by the Romanian Government and the European Commission.
24.      The Court decided, pursuant to Article 76(2) of its Rules of Procedure, to give a ruling without a hearing. By letter sent on 4 April 2025, the Court put questions for a written response to the Romanian Government and the Commission, to which responses were received within the time limit specified.
IV.    Analysis
25.      It is apparent from the order for reference that the present case arises from a situation in which a farmer was granted financial aid under EU agricultural funds for land covered by a lease agreement. That agreement was cancelled with retroactive effect under the applicable national law, meaning that it was deemed never to have existed. As a consequence, while the farmer satisfied the eligibility conditions for the aid, including proof of lawful use of the land, at the time of submitting the application, that is no longer the case.
26.      In those circumstances, by its first question, the referring court essentially asks whether retroactive cancellation of the lease agreement constitutes non-compliance with the eligibility criteria necessitating withdrawal of the aid under Article 63(1) of Regulation No 1306/2013 if, at the time of the application for aid, that agreement was in existence.
27.      If so, by its second question, the referring court, in substance, wonders whether the entire aid that was granted should be repaid, or whether the decision on the withdrawal of aid depends on the application of the principle of proportionality in the particular circumstances of the present case.
28.      The referring court essentially seems to be concerned with the negative consequences of withdrawal of the aid due to the retroactive cancellation of the lease agreement in a situation in which there is no fault on the part of the farmer, who satisfied the eligibility criteria for the aid until that cancellation.
29.      Before I turn to the analysis of the first (B) and the second (C) questions referred, I find it useful to provide some preliminary observations on the eligibility criteria for the aid in question (A).
A.      Eligibility criteria for single area payments
30.      An important objective of the CAP, one of the first common policies created by the Treaties, is ‘to ensure a fair standard of living for the agricultural community, in particular by increasing the individual earnings of persons engaged in agriculture’. (11)
31.      One of the ways to achieve that objective is through direct payments which provide for income support.
32.      The CAP is managed and funded at EU level by the European Union’s budget. (12) However, the implementation of that policy and the payments under it are managed directly by Member States. That means that national authorities are responsible for the administration and control of direct payments to farmers in their country. (13)
33.      The CAP framework has undergone several reforms over the years. (14) It is common ground that the EU legislation applicable to the present case relates to the CAP financing period 2014-2020. (15) Of relevance for the present case are Regulation (EU) No 1307/2013 (16) on direct payments to farmers and Regulation No 1306/2013, which establishes common rules on the financing, management and monitoring of the CAP.
34.      The aid scheme at issue in the present case, the SAPS, was introduced within the CAP framework in 2003 as a transitional scheme for some Member States which joined the European Union in 2004 and 2007. It is an income support scheme for farmers, independent of production, which is implemented through direct payments to farmers paid on the basis of the eligible hectares which they declare. (17)
35.      Regulation No 1307/2013 allowed, under the first subparagraph of Article 36(1), Member States which acceded to the European Union in 2004 and 2007 and which were applying the SAPS in 2014 to continue to apply that scheme until 31 December 2020. (18) Ten Member States including Romania continued to apply the SAPS after 2014.
36.      According to Article 36(2) of Regulation No 1307/2013, the single area payment is granted on an annual basis for each eligible hectare declared by the farmer. (19)
37.      The concept of ‘eligible hectare’ is defined in Article 32(2)(a) of Regulation No 1307/2013 as ‘any agricultural area of the holding … that is used for an agricultural activity …’.
38.      The case-law (20) further explains that, in order to be considered an ‘eligible hectare’ pursuant to Article 32(2) of Regulation No 1307/2013, the land must satisfy three conditions, namely (i) it must constitute agricultural area; (ii) an agricultural activity must be carried out on that area; and (iii) that area must be allocated to a holding. (21)
39.      In other words, a farmer who applies for the SAPS must have the agricultural land at his or her disposal to use it for agricultural activities. In that respect, the Court has held that ‘the fact that an area is at the farmer’s disposal means, in principle, that the farmer is in a position to use it at his [or her] convenience, so as to enable him [or her], in practice, to carry out an agricultural activity on it.’ (22)
40.      For the purposes of determining whether the areas concerned are at the disposal of the farmer, EU legislation does not require the farmer to produce a formal legal document; the demonstration of the actual use of the areas and of sufficient autonomy on the part of that farmer for carrying out his or her agricultural activity are sufficient. (23)
41.      Nevertheless, the Court has ruled that Member States enjoy a measure of discretion as regards the supporting documents and the evidence to be required from an aid applicant in relation to the areas covered by the application. (24)
42.      In the present case, the Romanian legislation requires that, at the time of the application, the farmer submit the necessary documents to prove that the eligible hectares are lawfully at his or her disposal, failing which payment is excluded from EU financing.
43.      On the basis of the existing case-law, it does not appear that such a requirement is, in principle, contrary to EU law. Requiring proof of the existence of the legal title allowing the use of the land covered by the single payment application is, according to the Court, acceptable as it ensures the objectives of the CAP by preventing an applicant from unlawfully making use of land belonging to others. (25)
44.      Therefore, if, according to national law, the title for the use of the land is cancelled, EU law does not preclude a national rule according to which it is considered that an eligibility criterion for aid is not fulfilled.
45.      However, the Court has not yet been faced with a situation in which the legal title to use the land, as one of the eligibility criteria under national law, existed at the time of the application, but was subsequently cancelled with retroactive effect. That brings me to the first question of the referring court.
B.      The first question
46.      Where it is found that one of the eligibility criteria for the granting of aid is not fulfilled, Article 63(1) of Regulation No 1306/2013 requires that the aid is not paid or, if already paid, is withdrawn, in full or in part.
47.      At the same time, according to Article 36(5) of Regulation No 1307/2013, except in the case of force majeure or exceptional circumstances, the eligible hectares must be at the farmer’s disposal on the relevant date fixed by the Member State. For Romania, this is 15 May 2019 as regards the relevant payment period in the present case.
48.      Thus, by its first question, the referring court asks whether Article 63(1) of Regulation No 1306/2013 should apply even if, at the time of the application for the aid, all the eligibility criteria were satisfied and the legal title for the use of the land was cancelled with retroactive effect only later, without there being fault on the part of the farmer who received such aid.
49.      Even if that question refers only to Article 63(1) of Regulation No 1306/2013, it also necessitates, in my view, the interpretation of Article 36(5) of Regulation No 1307/2013, read in conjunction with Article 32(4) thereof.
50.      Both participants in the procedure before this Court, that is, the Romanian Government and the Commission, agree that Article 63(1) of Regulation No 1306/2013 applies in the circumstances of the present case.
51.      Indeed, as both participants indicate, Article 32(4) of Regulation No 1307/2013 states that ‘areas shall be considered to be eligible hectares only if they comply with the definition of eligible hectare throughout the calendar year, except in the case of force majeure or exceptional circumstances.’
52.      Therefore, I am of the view that the requirement under Article 36(5) of Regulation No 1307/2013 that the eligible hectares be at the farmer’s disposal at the time of submission of the application does not mean that they should not remain at the farmer’s disposal throughout the year for which the aid is granted. That provision merely states that, at that date, which is chosen as the check date, that land must logically be at the farmer’s disposal.
53.      However, the aid under the SAPS is granted on an annual basis to support the famer’s income from that land during that year. That supposes that the farmer engages in the agricultural activity on that land throughout the year covered by the aid. It would be contrary to such an aim if it were sufficient that the land is legally at the disposal of the farmer only on the date of the application.
54.      In that sense, even if a lease agreement were cancelled prospectively, thus preventing the farmer from using the land from a certain point in time during the year for which the aid was granted, the eligibility criterion determined by Article 32(4) of Regulation No 1307/2013 would not be satisfied. That would result in the requirement to withdraw the aid granted.
55.      The Romanian law that provides for the retroactive, and not prospective, cancellation of a lease agreement leads to the same result – that the farmer could not legally dispose of the land during the year for which he or she applies for the aid.
56.      When that is the case, the eligibility criteria are not fulfilled, and Article 63(1) of Regulation No 1306/2013 requires that the aid that was granted be withdrawn.
57.      The purpose of such recovery of undue payments is to protect the European Union’s financial interests and to prevent unjust enrichment. (26)
58.      The European Union’s financial interests are, in principle, protected if aid is granted only where all of the eligibility criteria are fulfilled.
59.      In accordance with Article 58(1) of Regulation No 1306/2013, it is for Member States, which implement the CAP, to look after the European Union’s financial interests. Member States have no discretion in that regard. (27) They must ask for the repayment of the aid that was granted where the eligibility criteria were not fulfilled.
60.      The obligation to repay the aid received is not a sanction. As the Court has consistently held, (28) and as emphasised by the Romanian Government and the Commission, under the CAP, the withdrawal of aid due to non-compliance with eligibility conditions for aid is merely the consequence of failing to fulfil those conditions. (29)
61.      Thus, repayment is required simply because the aid should not have been granted. In that sense, as stated by the Commission, it is irrelevant whether the lease agreement was cancelled retroactively without any fault on the part of the farmer who received the aid. (30) The aid is to be repaid simply because the farmer was never entitled to receive it.
62.      For the sake of completeness, it should be pointed out that the retroactive cancellation of the lease agreement in the circumstances of the present case does not appear to constitute a case of force majeure or exceptional circumstances for the purposes of Regulation No 1306/2013 (31) or the provisions of Article 32(4) and Article 36(5) of Regulation No 1307/2013.
63.      In the context of the CAP, the Court has consistently held that the concept of force majeure or exceptional circumstances denotes an event resulting from abnormal and unforeseeable circumstances outside the control of the beneficiary, the consequences of which, in spite of the exercise of all due care, could not have been avoided. (32)
64.      In the present case, it should be recalled (see point 11 of this Opinion) that the date of the judgment which retroactively cancelled the lease agreement coincided with the date of the payment application. Indeed, when JD submitted that application, there had been pending litigation involving JD and the land subject to the lease agreement.
65.      Therefore, subject to verification by the referring court, it seems doubtful, to my mind, that the retroactive cancellation of the lease agreement in the circumstances of the present case constitutes such an abnormal and unforeseeable event, such that it could not have been anticipated on the day of lodging the application.
66.      In the light of the foregoing, I am of the view that the first question should be answered as follows: Article 63(1) of Regulation No 1306/2013, read in the light of Article 32(4) and Article 36(5) of Regulation No 1307/2013, must be interpreted as applying to a situation in which, at the time of the application for the aid, all the eligibility criteria were satisfied, but the legal title for the use of the land was subsequently cancelled with retroactive effect, even if such cancellation does not result from the fault of the farmer who received such aid.
C.      The second question
67.      The second question, as presented in point 27 of this Opinion, essentially concerns whether Article 63(1) of Regulation No 1306/2013 always requires the withdrawal of the aid when one of the eligibility criteria is no longer complied with as a result of the cancellation of a lease agreement with retroactive effect, or whether it leaves a certain margin of discretion to the deciding authority or court based on the application of the principle of proportionality.
68.      In relation to this question, the participants to these proceedings take different positions. The Romanian Government considers that the principle of proportionality does not apply and that a Member State must therefore always order the repayment of aid in a situation such as the one in the present case. On the contrary, the Commission considers that the principle of proportionality does apply. However, it concludes that this does not change the outcome in the present case and that the aid in question must be repaid.
69.      Article 63(1) of Regulation No 1306/2013 mentions the principle of proportionality only in the second subparagraph, and not in the first subparagraph. The Romanian Government contends that the second subparagraph is not applicable to the present case, whereas the Commission submits that that subparagraph is applicable, but that considerations relating to proportionality do not prevent the aid from being withdrawn in full. (33)
70.      The referring court did not mention the second subparagraph of Article 63(1) of Regulation 1306/2013 in the order for reference, so it seems that, by its second question, it wishes to ascertain whether considerations relating to proportionality might change the outcome in the present case because that principle is implied in the first subparagraph of that provision.
71.      I am inclined to agree with the Romanian Government that the second subparagraph of Article 63(1) of Regulation No 1306/2013 does not apply to the situation in the present case. According to the Romanian Government, that provision was introduced to ensure that, when farmers apply for funding in the context of public procurement procedures (in particular, in the context of rural development measures financed by the EAFRD), any withdrawal of aid is proportionate to the seriousness of the infringement committed during those procedures. However, the SAPS, financed by the EAGF, does not involve public procurement procedures for farmers; aid is granted directly on the basis of the declared eligible area. In this case, eligibility depends solely on compliance with specific conditions, such as the existence of a legal right to use the land. That provision is thus not directly applicable to that scheme.
72.      That interpretation seems acceptable. The second question about the applicability of the principle of proportionality should therefore be understood as relating to the first subparagraph of Article 63(1) of Regulation No 1306/2013.
73.      In that respect, it should be recalled that the principle of proportionality is a general principle of EU law. It requires that acts of the EU institutions be appropriate for attaining the legitimate objectives pursued by the EU legislation at issue and do not go beyond what is necessary in order to achieve those objectives; when there is a choice between several appropriate measures, recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued. (34)
74.      The same principle also applies to Member States when they implement EU law. Thus, when the Court recognised discretion of Member States to introduce additional requirements for the eligibility of aid, it explained that the exercise of such discretion must be consistent with the objectives pursued by the EU legislation concerned, as well as the general principles of EU law and in particular the principle of proportionality. (35)
75.      National legislation that provides that eligibility criteria are not fulfilled if a lease agreement is retroactively cancelled and results in the obligation to repay the aid received is, in principle, consistent with the objectives of the CAP. That is so because it is, on the one hand, in line with the objective of direct payments under the CAP, which is to ensure a fair standard of living for farmers by increasing their income, and, on the other hand, in line with the European Union’s financial interests that its budget not be used contrary to such objectives.
76.      But what if, given such national legislation and due to the circumstances of a particular case, the application of Article 63(1) of Regulation No 1306/2013 would create an outcome that is contrary to those objectives? That is, in my understanding, the concern of the referring court.
77.      Article 63(1) of Regulation No 1306/2013 does allow for the partial withdrawal of aid, even if it does not specify under which circumstances only partial withdrawal is sufficient. It is true that Article 35(1) of Regulation (EU) No 640/2014, (36) which supplements that regulation, states: ‘The support claimed shall be refused or withdrawn in full where the eligibility criteria are not complied with.’ (37)
78.      However, Regulation (EU) No 809/2014, (38) which lays down rules for the application of Regulation No 1306/2013, provides in its Article 7(3) that the obligation on the part of a beneficiary to repay the amount in question does not apply ‘if the payment was made by error of the competent authority or of another authority and if the error could not reasonably have been detected by the beneficiary’. (39)
79.      Even if that provision does not seem to apply to the present case, (40) it nonetheless demonstrates that the requirement to ask for the repayment of wrongly paid aid is not unconditional. It is also indicative that the EU legislator wanted to protect farmers in a situation in which the aid was erroneously granted to them without any fault on their part.
80.      As explained by the Court, support for farmers under the SAPS is ‘intended to ensure a fair standard of living for farmers who genuinely carry out an agricultural activity and, accordingly, actually have at their disposal an agricultural area on which that activity is carried out’. (41)
81.      In the present case, which is for the referring court to verify, the farmer at issue might have bona fide considered that the eligibility criteria were fulfilled during the entire period in which she had genuinely used the land at issue for agricultural activities. Would not the requirement to reimburse aid in such circumstances be in fact contrary to the objective to ensure a fair standard of living to someone who makes that living from agricultural activities? Requiring such a farmer to reimburse the aid would in fact adversely influence her standard of living. At the same time, if the land at issue was really used for agricultural activities, would the European Union’s financial interests really be harmed if such aid is not repaid?
82.      To my mind, the referring court should be able to assess whether the application of Article 63(1) of Regulation No 1306/2013 in the circumstances of the particular case would be in conformity with the objective of the CAP to ensure a fair standard of living for farmers and would be appropriate and necessary for the protection of the European Union’s financial interests.
83.      In making such an assessment, the referring court should take into consideration all the circumstances of the particular case, including whether the farmer used the land at issue, believing bona fide that she was legally entitled to do so, or, on the contrary, was aware that the legal title for the use of the land could be cancelled. (42)
84.      In the light of the foregoing, I am of the view that the second question should be answered as follows: The principle of proportionality applies with regard to the withdrawal of aid under Article 63(1) of Regulation No 1306/2013. The national court can therefore assess, taking into consideration all the circumstances of the case at hand, whether the application of that provision would be contrary to the objective of the CAP to ensure a fair standard of living for farmers and whether its application is appropriate and necessary in order to safeguard the European Union’s financial interests in those circumstances.
V.      Conclusion
85.      In the light of all of the foregoing considerations, I propose that the Court answer the questions referred for a preliminary ruling by the Curtea de Apel Cluj (Court of Appeal, Cluj, Romania) as follows:
(1)      Article 63(1) of Regulation (EU) No 1306/2013 of the European Parliament and of the Council of 17 December 2013 on the financing, management and monitoring of the common agricultural policy and repealing Council Regulations (EEC) No 352/78, (EC) No 165/94, (EC) No 2799/98, (EC) No 814/2000, (EC) No 1290/2005 and (EC) No 485/2008, read in the light of Article 32(4) and Article 36(5) of Regulation (EU) No 1307/2013 of the European Parliament and of the Council of 17 December 2013 establishing rules for direct payments to farmers under support schemes within the framework of the common agricultural policy and repealing Council Regulation (EC) No 637/2008 and Council Regulation (EC) No 73/2009,
must be interpreted as applying to a situation in which, at the time of the application for the aid, all the eligibility criteria were satisfied, but the legal title for the use of the land was subsequently cancelled with retroactive effect, even if such cancellation does not result from the fault of the farmer who received such aid.
(2)      The principle of proportionality applies with regard to the withdrawal of aid under Article 63(1) of Regulation No 1306/2013. The national court can therefore assess, taking into consideration all the circumstances of the case at hand, whether the application of that provision would be contrary to the objective of the CAP to ensure a fair standard of living for farmers and whether its application is appropriate and necessary in order to safeguard the European Union’s financial interests in those circumstances.
1      Original language: English.
2      Regulation of the European Parliament and of the Council of 17 December 2013 on the financing, management and monitoring of the common agricultural policy and repealing Council Regulations (EEC) No 352/78, (EC) No 165/94, (EC) No 2799/98, (EC) No 814/2000, (EC) No 1290/2005 and (EC) No 485/2008 (OJ 2013 L 347, p. 549), as amended. It has been replaced by Regulation (EU) 2021/2116 of the European Parliament and of the Council of 2 December 2021 on the financing, management and monitoring of the common agricultural policy and repealing Regulation No 1306/2013 (OJ 2021 L 435, p. 187).
3      Ordonanța de urgență a Guvernului nr. 66/2011 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 66/2011 concerning the prevention and detection of, and penalties for, irregularities encountered in the allocation and use of European funds and/or national public funds relating thereto; ‘OUG No 66/2011’), in the version applicable to the dispute in the main proceedings.
4      Ordonanța de urgență a Guvernului nr. 3/2015 pentru aprobarea schemelor de plăți care se aplică în agricultură în perioada 2015-2020 și pentru modificarea articolului 2 din Legea nr. 36/1991 privind societățile agricole și alte forme de asociere în agricultură (Government Emergency Order No 3/2015 for the approval of the payment schemes to be applied in agriculture in the period 2015-2020 and for the amendment of Article 2 of Law No 36/1991 on agricultural companies and other types of agricultural association; ‘OUG No 3/2015’), in the version applicable to the dispute in the main proceedings as cited in the order for reference.
5      Ordinul ministrului agriculturii si dezvoltării rurale nr. 619/2015 pentru aprobarea criteriilor de eligibilitate, condițiilor specifice și a modului de implementare a schemelor de plăți prevăzute la articolul 1 alineatele (2) și (3) din Ordonanța de urgență a Guvernului nr. 3/2015 pentru aprobarea schemelor de plăți care se aplică în agricultură în perioada 2015-2020 și pentru modificarea articolului 2 din Legea nr. 36/1991 privind societățile agricole și alte forme de asociere în agricultură, precum și a condițiilor specifice de implementare pentru măsurile compensatorii de dezvoltare rurală aplicabile pe terenurile agricole, prevăzute în Programul Național de Dezvoltare Rurală 2014-2020 (Order No 619/2015 of the Minister for Agriculture and Rural Development for the approval of the eligibility criteria, specific conditions and detailed rules for the implementation of the payment schemes provided for in Article 1(2) and (3) of [OUG No 3/2015], as well as the specific implementing conditions for the rural development compensatory measures applicable on agricultural land, provided for in the National Rural Development Program 2014-2020; ‘Order No 619/2015’), in the version applicable to the dispute in the main proceedings.
6      Civil Judgment No 151/2019, RO:TBBNS:2019:006.000151 (read with the aid of machine translation). As indicated in that judgment, those proceedings had been initiated by a person who had been unsuccessful in the procedure for the lease of the pasture land in question against the municipality of Chiochiș, the mayor of that municipality and the local council; JD was also a party to those proceedings.
7      Civil Judgment No 286/2020, RO:CACLJ:2020:050.000286 (read with the aid of machine translation).
8      Ministerul Agriculturii și Dezvoltării Rurale – Agenția de Plăți și Intervenție pentru Agricultură – Centrul Județean Bistrița-Năsăud (Ministry of Agriculture and Rural Development – Agency for payments and measures for agriculture – Bistrița-Năsăud District Centre, Romania; ‘the APIA’).
9      The aid amounted to 83 334.01 Romanian lei (approximately EUR 16 743). According to the statement issued by the APIA, the financial aid at issue had been granted to JD by payment notices dated 25 May 2019, 15 January 2020, 24 March 2020, 17 August 2020 and 8 June 2021.
10      Civil Judgment No 197/2023, RO:TBBNS:2023:006.000197 (read with the aid of machine translation).
11      Article 39(1)(b) TFEU.
12      The allocation for the CAP in the EU budget is divided between two funds: the European Agricultural Guarantee Fund (EAGF), the bulk of which concerns income support schemes, and the European Agricultural Fund for Rural Development (EAFRD), which concerns rural development. See the Commission’s website, available at: https://agriculture.ec.europa.eu/common-agricultural-policy/financing-cap/cap-funds_en#eagf. According to reports, in the European Union’s 2021-2027 financial framework, the total allocation for the CAP is EUR 386.6 billion: the EAGF is allocated EUR 291.1 billion – with up to EUR 270 billion provided for income support schemes and the remainder dedicated to supporting agricultural markets – while the EAFRD is allocated EUR 95.5 billion.
13      See, for example, European Commission Directorate-General for Agriculture and Rural Development, CAP explained – Direct payments for farmers 2015-2020, Publications Office of the European Union, Luxembourg, 2017, available at: https://data.europa.eu/doi/10.2762/572019.
14      See, for example, European Parliament, The Common Agricultural Policy – Instruments and reforms, available at: https://www.europarl.europa.eu/factsheets/en/sheet/107/the-common-agricultural-policy-instruments-and-reforms. For a general discussion, see, for example, Barents, R., The Agricultural Law of the EU, Second edition, Wolters Kluwer, Alphen aan den Rijn, 2022, Chapter 2, in particular pp. 27-49; Phoa, P., ‘Unity and diversity in the Common Agricultural Policy’, in van den Brink, T. and Passalacqua, V. (eds), Balancing Unity and Diversity in EU Legislation, Edward Elgar, Cheltenham, 2024, pp. 231-254.
15      Following transitional provisions for 2021 and 2022, there is a new set of EU legislation for the CAP financing period 2023-2027.
16      Regulation of the European Parliament and of the Council of 17 December 2013 establishing rules for direct payments to farmers under support schemes within the framework of the common agricultural policy and repealing Council Regulation (EC) No 637/2008 and Council Regulation (EC) No 73/2009 (OJ 2013 L 347, p. 608). It has been replaced by Regulation (EU) 2021/2115 of the European Parliament and of the Council of 2 December 2021 establishing rules on support for strategic plans to be drawn up by Member States under the common agricultural policy (CAP Strategic Plans) and financed by the European Agricultural Guarantee Fund (EAGF) and by the European Agricultural Fund for Rural Development (EAFRD) and repealing Regulations (EU) No 1305/2013 and (EU) No 1307/2013 (OJ 2021 L 435, p. 1).
17      See, for example, European Court of Auditors, The effectiveness of the Single Area Payment Scheme as a transitional system for supporting farmers in the new Member States. Special Report No 16/2012, Publications Office of the European Union, Luxembourg, 2012, available at: https://data.europa.eu/doi/10.2865/27543; McMahon, J.A., EU Agricultural Law and Policy, Edward Elgar, Cheltenham, 2019, in particular pp. 46-48.
18      See also recital 32 of Regulation No 1307/2013.
19      That provision further refers to point (a) of the first subparagraph of Article 72(1) of Regulation No 1306/2013, according to which, each year, a beneficiary of, among others, the SAPS is to submit an application for direct payments, indicating, where applicable, all the agricultural parcels on the holding, as well as the non-agricultural area for which support referred to in Article 67(2) is claimed.
20      See, for example, judgments of 29 April 2021, Piscicola Tulcea and Ira Invest (C‑294/19 and C‑304/19, EU:C:2021:340, paragraph 64), and of 4 July 2024, Asoprovac (C‑708/22, EU:C:2024:573, paragraph 18).
21      An agricultural area is part of the holding of a farmer where he or she has the power to manage that holding for the purpose of carrying out an agricultural activity, that is to say, where the farmer enjoys a degree of autonomy with regard to that area sufficient for the carrying out of his or her agricultural activity. See, for example, judgment of 16 December 2021, Euro Delta Danube (C‑225/20, EU:C:2021:1021, paragraph 41). It is not necessary for the farmer to have unlimited power over the area when using it for agricultural purposes; however, the farmer must enjoy a certain degree of decision-making power in the conduct of his or her agricultural activity in those areas. See, for example, judgments of 16 December 2021, Euro Delta Danube (C‑225/20, EU:C:2021:1021, paragraph 43), and of 7 April 2022, Avio Lucos (C‑116/20, EU:C:2022:273, paragraphs 49 and 50).
22      Judgment of 7 April 2022, Avio Lucos (C‑116/20, EU:C:2022:273, paragraph 46).
23      See, for example, judgments of 14 October 2010, Landkreis Bad Dürkheim (C‑61/09, EU:C:2010:606, paragraph 54), and of 7 April 2022, Avio Lucos (C‑116/20, EU:C:2022:273, paragraph 53).
24      See, for example, judgments of 24 June 2010, Pontini and Others (C‑375/08, EU:C:2010:365, paragraphs 82 and 86); of 17 December 2020, Land Berlin (Payment entitlements linked to the CAP) (C‑216/19, EU:C:2020:1046, paragraph 35); and of 7 April 2022, Avio Lucos (C‑116/20, EU:C:2022:273, paragraphs 61 and 63).
25      See judgment of 7 April 2022, Avio Lucos (C‑116/20, EU:C:2022:273, paragraph 65).
26      See, in that regard, Opinion of Advocate General Wahl in Demmer (C‑684/13, EU:C:2015:131, point 69).
27      See, in that regard, judgment of 17 November 2022, Avicarvil Farms (C‑443/21, EU:C:2022:899, paragraph 36), in which the Court held that ‘any exercise by a Member State of a discretion as to whether or not it would be expedient to demand repayment of EU funds unduly or irregularly granted would be incompatible with the obligation imposed, in the context of the CAP, on national administrations to recover funds unduly or irregularly paid’.
28      See, for example, judgments of 24 May 2007, Maatschap Schonewille-Prins (C‑45/05, EU:C:2007:296, paragraph 47); of 24 May 2012, Hehenberger (C‑188/11, EU:C:2012:312, paragraph 37); and of 29 February 2024, Eesti Vabariik (Põllumajanduse Registrite ja Informatsiooni Amet) (C‑437/22, EU:C:2024:176, paragraph 56).
29      Thus, the provisions of Article 64 of Regulation No 1306/2013 on the application of administrative penalties are not applicable to the present case.
30      See, for example, judgment of 23 November 2023, Instituto de Financiamento da Agricultura e Pescas (Reforestation measures) (C‑213/22, EU:C:2023:904, paragraphs 26 to 51), which found that the beneficiary was obliged to repay the aid received because a condition laid down by national legislation was not satisfied due to the occurrence of adverse weather conditions and thus for reasons not attributable to that beneficiary.
31      See, in that respect, Article 2(2) and recital 5 of Regulation No 1306/2013.
32      See, for example, judgments of 7 September 2023, Groenland Poultry (C‑169/22, EU:C:2023:638, paragraph 39), and of 18 January 2024, Askos Properties (C‑656/22, EU:C:2024:56, paragraphs 47 and 49).
33      The Commission contends that the non-compliance with national public procurement rules must have been considered serious, since it was sanctioned by the cancellation of the lease agreement as a whole. Therefore, the condition that the eligible hectares must be at the disposal of the farmer has not been met, not just partially, but in full. It follows that, in accordance with the principle of proportionality, the aid must be withdrawn in full.
34      See, for example, judgments of 24 May 2007, Maatschap Schonewille-Prins (C‑45/05, EU:C:2007:296, paragraph 45), and of 7 September 2023, Groenland Poultry (C‑169/22, EU:C:2023:638, paragraph 65).
35      See, for example, judgments of 24 June 2010, Pontini and Others (C‑375/08, EU:C:2010:365, paragraphs 82 and 86); of 17 December 2020, Land Berlin (Payment entitlements linked to the CAP) (C‑216/19, EU:C:2020:1046, paragraph 35); and of 7 April 2022, Avio Lucos (C‑116/20, EU:C:2022:273, paragraphs 61 and 63).
36      Commission Delegated Regulation of 11 March 2014 supplementing Regulation No 1306/2013 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 (OJ 2014 L 181, p. 48). It has been replaced by Commission Delegated Regulation (EU) 2022/1172 of 4 May 2022 supplementing Regulation 2021/2116 with regard to the integrated administration and control system in the common agricultural policy and the application and calculation of administrative penalties for conditionality (OJ 2022 L 183, p. 12).
37      Emphasis added.
38      Commission Implementing Regulation of 17 July 2014 laying down rules for the application of Regulation No 1306/2013 with regard to the integrated administration and control system, rural development measures and cross compliance (OJ 2014 L 227, p. 69). It has been replaced by Commission Implementing Regulation (EU) 2022/1173 of 31 May 2022 laying down rules for the application of Regulation 2021/2116 with regard to the integrated administration and control system in the common agricultural policy (OJ 2022 L 183, p. 23).
39      See, in that regard, judgment of 2 July 2015, Demmer (C‑684/13, EU:C:2015:439, in particular paragraph 85), in which the Court considered that, as such a provision sets out an exception to the obligation to repay aid unduly paid, it ‘must be interpreted narrowly, especially since such an obligation is aimed at protecting the European Union’s financial interests’.
40      Given that the date of the application coincided with that of the judgment cancelling the lease agreement and that the aid payments were made after the date of that judgment, it appears that JD could have reasonably detected that the lease agreement was void.
41      Judgment of 7 April 2022, Avio Lucos (C‑116/20, EU:C:2022:273, paragraph 52) (emphasis added).
42      In that respect, it would seem relevant in the circumstances of the present case that litigation which ended with the retroactive cancellation of the lease agreement involved JD, that that procedure had ensued before the submission of the application, as well as that certain portions of the aid were paid after the judgment resulting in the cancellation of the lease agreement became final.