Keywords

Summary



Keywords

1. Economic and social cohesion — Structural assistance — Community funding — Decision to grant EAGGF financial assistance — Several parties responsible for implementation of the project — No express provision in the decision identifying the party responsible for repayment of the assistance in the event of irregularities — Demand for repayment of the assistance in full addressed to the party described as the beneficiary — Breach of the principle of proportionality — (Council Regulation No 4256/88)

2. Economic and social cohesion — Structural assistance — Community funding for national projects — Applicants for, and beneficiaries of, EAGGF financial assistance required to provide information and to act in good faith

3. Community law — Principles — Proportionality — Financial assistance granted by the EAGGF withdrawn owing to the recipients ' non-compliance with the financial conditions for the investment laid down in the decisions granting the assistance — Infringement — None — (Council Regulation No 4253/88, Art. 24(2))

Summary

1. Where, in the case of financial assistance granted under Regulation No 4256/88 laying down provisions for implementing Regulation No 2052/88 as regards the EAGGF Guidance Section for a project which several parties are responsible for carrying out, the legislation applicable to the grant of assistance does not state from which of those parties the Commission should demand repayment of the assistance in the event of irregularities being committed in the implementation of the project by one or more of those parties, and where the award decision and its annexes do not expressly provide that, in the event of irregularities being found in the implementation of the project, the party described as the beneficiary is financially liable to the Community for the project as a whole, the Commission, by addressing the award decision not only to the beneficiary of the assistance but also to an association responsible for implementation of part of the project, creates a direct legal relationship not only with the beneficiary of the assistance but also with that association. It follows that the beneficiary may, at least at first sight, legitimately assume that in the event of irregularities committed by the other party in the implementation of the project, the Commission will address its demand for repayment of the assistance relating to measures that were due to be carried out by that party to the latter.

Thus, given the serious consequences which repayment of assistance entails for the parties concerned, the Commission, by requiring the beneficiary to repay in full the assistance already paid to it and not limiting that demand to the part of the project that was to be carried out by it, infringed the principle of proportionality.

see paras 52, 56, 62-63, 65-66

2. Applicants for, and beneficiaries of, Community assistance are required to satisfy themselves that they are submitting to the Commission reliable information which is sufficiently accurate, since otherwise the system of controls and evidence set up to determine whether the conditions for granting assistance are fulfilled cannot function properly. In the absence of sufficiently accurate information projects which do not fulfil the conditions required could become the subject of assistance. It follows that the obligation on applicants for, and beneficiaries of, assistance to provide information and act in good faith is inherent in the EAGGF assistance system and essential for its effective functioning.

see para. 97

3. In view of the very nature of the assistance awarded by the Community, the obligation to comply with the financial conditions set out in the award decision constitutes, in the same way as the substantive obligation to carry out the project concerned, one of the beneficiary ' s essential commitments and is therefore a precondition for the grant of Community assistance. The provision of sufficiently specific information by applicants for, and beneficiaries of, Community assistance is essential for the proper operation of the system of inspection and evidence introduced in order to verify whether the conditions for granting such assistance are met.

In a case in which the benficiary of assistance committed irregularities for the purposes of co-financing of the project by charging unjustified expenditure to it, it was reasonable for the Commission to consider that the only penalty apart from total withdrawal of the assistance and recovery of the sums paid from the EAGGF was liable to constitute an invitation to fraud in that potential beneficiaries would be tempted either to inflate artificially the amount of expenditure charged to the project in order to escape their obligation to provide co-financing and obtain the maximum EAGGF intervention provided for in the award decision, or to supply false information or conceal certain data in order to obtain assistance or to increase the amount of assistance being sought, with the prospect of the sole penalty being that the assistance would be reduced to the level it would have been if the expenditure actually incurred by the beneficiary and/or the correctness of the information provided by the beneficiary to the Commission had been taken into account.

see paras 145-146, 149