Keywords

Summary



Keywords

1. Agriculture — Common agricultural policy — EAGGF financing — Principles — Conformity of expenditure with the Community rules — Obligation to supervise incumbent on the Member States — (EC Treaty, Art. 5 (now Art. 10 EC); Council Regulation No 729/70, Art. 8(1))

2. Agriculture — EAGGF — Clearance of accounts — Period to which a financial correction may relate — Period after the date of the written communication of the results of checks — Whether permissible where irregularities persist — (Council Regulation No 729/70, Arts 2, 3 and 5(2)(c); Commission Regulation No 1663/95, Art. 8(1))

3. Agriculture — Common agricultural policy — EAGGF financing — Premium for the grubbing-up of orchards — Recourse by growers to short-term leases in order to achieve the minimum area required for the grant of the premium — Whether permissible — Abnormally high number of such leases — Obligation of the Member State concerned to exercise particular vigilance — (Council Regulation No 2505/95, Arts 1 and 2; Commission Regulation No 2684/95, Art. 1(2))

Summary

1. Article 8(1) of Regulation No 729/70 on the financing of the common agricultural policy imposes on Member States the general obligation to take the measures necessary to satisfy themselves that transactions financed by the EAGGF are actually carried out and are executed correctly, to prevent and deal with irregularities and to recover sums lost as a result of irregularities or negligence, even if the specific Community act does not expressly provide for the adoption of particular supervisory measures. It follows from that provision, considered in the light of the duty of faithful cooperation with the Commission laid down by Article 5 of the EC Treaty (now Article 10 EC), with particular regard to the correct utilisation of Community resources, that Member States are required to set up comprehensive administrative checks and on-the-spot inspections, thus guaranteeing the proper observance of the substantive and formal conditions for the grant of Community subsidies.

see para. 11

2. Although it is true that neither Article 8(1) of Regulation No 1663/95 laying down detailed rules for the application of Council Regulation No 729/70 regarding the procedure for the clearance of the accounts of the EAGGF Guarantee Section nor Article 5(2)(c) of Regulation No 729/70, both of which make reference to the written communication of the results of the Commission's checks to the Member States, precludes the period to which a financial correction relates from extending beyond the date of that communication, the fact nevertheless remains that, since those provisions do not explicitly authorise the Commission to take into account a period going beyond that date, they do not provide a sufficient legal basis to justify such a choice by the Commission.

However, that legal basis is provided by the combined provisions of Article 5(2)(c) of Regulation No 729/70 and Articles 2 and 3 of the same regulation, under the terms of which refunds granted and intervention undertaken "in accordance with the Community rules" within the framework of the common organisation of agricultural markets are to be financed by the EAGGF. By allowing the Commission to charge to the EAGGF only intervention carried out in accordance with Community provisions, those articles oblige the Commission to refuse financing of expenditure when it finds that irregularities have occurred.

It follows that, where irregularities justifying the application of a financial correction persist after the date of the written communication of the results of the checks, the Commission is entitled and even obliged to take account of that situation when it determines the period to which the financial correction in question is to relate.

see paras 43-45

3. Although it is true that Articles 1 and 2 of Regulation No 2505/95 on improving the Community production of peaches and nectarines and Article 1(2) of Regulation No 2684/95 laying down detailed rules for the application of Regulation (EC) No 2505/95 do not prohibit the conclusion of short-term leases during the period immediately preceding the date by which applications for the grubbing-up premium must be submitted, the fact nevertheless remains that, in so far as those provisions are not to be considered in isolation but must be read in the light of the obligations of the Member States to take the measures necessary to satisfy themselves that transactions financed by the EAGGF are actually carried out and are executed correctly, to prevent and deal with irregularities and to recover sums lost as a result of irregularities or negligence, it is for the national authorities to take whatever measures and carry out whatever checks are necessary to ensure their proper application.

It follows that those authorities must display particular vigilance when they find that an abnormally high number of short-term leases are being concluded in respect of parcels which, in the absence of those leases, would not satisfy the conditions laid down for the grant of the premiums at issue. In such cases they must carry out additional checks to satisfy themselves, on the one hand, that the leases actually exist and, on the other hand, that the same parcel is not the subject of several leases.

see paras 11, 84-85