Keywords

Summary



Keywords

1. 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

2. Economic and social cohesion — Structural assistance — Community funding — The submission of altered information relating to the ordering and delivery of materials benefiting from assistance constitutes an irregularity within the meaning of Article 24(2) of Regulation No 4253/88 — Breach of the obligation on applicants for, and beneficiaries of, EAGGF financial assistance to provide information and to act in good faith — (Council Regulation No 4253/88, Art. 24(2) and (3))

3. Economic and social cohesion — Structural assistance — Community funding — EAGGF financial assistance discontinued because of irregularities — Whether permissible — Legal basis — (Council Regulation no 4253/88, Art. 24(2) and (3))

4. Acts of the institutions — Withdrawal — Unlawful acts — Conditions — Compliance with the principles of legal certainty and protection of legitimate expectations

5. Agriculture — Common agricultural policy — Structural reform — Common measures — Improvement of the conditions under which agricultural products are processed and marketed — EAGGF financial assistance discontinued for breach of fundamental obligations — Breach of the principle of proportionality — None — (Art. 5, third para., EC; Council Regulation No 355/77)

Summary

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

see para. 50

2. The fact of deliberately sending the Commission altered documents concerning the implementation of the project for which EAGGF financial assistance has been granted is sufficient to establish infringement of the obligation to provide information and act in good faith, since those alterations are intended to conceal from the Commission the fact that the ordering and delivery of the materials benefiting from the aid took place before the date on which the Commission received the application for the aid and are likely to mislead the Commission concerning the date on which work started, which is a significant element of the system set up by the EAGGF. Consequently, the submission of altered information relating to the ordering and delivery of materials benefiting from aid constitutes an irregularity within the meaning of Article 24(2) of Regulation No 4253/88, laying down provisions for implementing Regulation (EEC) 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 other existing financial instruments.

see paras 53-54

3. Under Article 24(2) of Regulation No 4253/88, laying down provisions for implementing 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 other existing financial instruments, the Commission may discontinue EAGGF financial aid. However, Article 24(3), which relates to recovery from the aid beneficiary of the sums unduly paid, cannot constitute a legal basis for a decision to discontinue assistance.

see paras 74, 78

4. The administration may withdraw with retroactive effect an advantageous administrative act vitiated by illegality, provided that it does not infringe either the principle of legal certainty or that of the protection of legitimate expectations. That possibility, which is acknowledged where the beneficiary of the act did not contribute to its illegality, applies a fortiori where the illegality is attributable to him.

see para. 77

5. In discontinuing EAGGF assistance granted under Regulation No 355/77 on common measures to improve the conditions under which agricultural products are processed and marketed, the Commission does not exceed the limits of what is appropriate and necessary in order to attain the objective pursued and, therefore, does not infringe the principle of proportionality laid down in the third paragraph of Article 5 EC where the beneficiary of the aid has not only misled the Commission as regards when the work began but also started the work before the date on which the application for aid was received by the Commission.

A breach of obligations whose observance is of fundamental importance to the proper functioning of a Community system may be penalised by forfeiture of a right conferred by Community legislation, such as entitlement to aid. First, it is essential for the proper functioning of the system for verifying proper use of Community funds that applicants for aid provide the Commission with information which is reliable and not liable to mislead it. Secondly, the condition that work should not start before the date on which the Commission receives the application for aid is fundamental, since it is designed to ensure certainty in legal relationships and equality of treatment as between applicants for aid by ensuring that aid is not granted to undertakings which have already carried out, in whole or in part, the improvements which are the subject of the project to be subsidised.

see paras 83-86, 88-89