Case C‑599/13

Somalische Vereniging Amsterdam en Omgeving (Somvao)

v

Staatssecretaris van Veiligheid en Justitie

(Request for a preliminary ruling from the Raad van State (Netherlands))

‛Reference for a preliminary ruling — Protection of the European Union’s financial interests — Regulation (EC, Euratom) No 2988/95 — Article 4 — General budget of the European Union — Regulation (EC, Euratom) No 1605/2002 — Article 53b(2) — Decision 2004/904/EC — European Refugee Fund for the period 2005-2010 — Article 25(2) — Legal basis of the obligation to recover funds in the event of an irregularity’

Summary — Judgment of the Court (Third Chamber), 18 December 2014

Budget of the European Union — Financial regulation — Implementation of the budget — Implementation by shared management — Obligation for Member States to take the necessary measures to protect the financial interests of the European Union — Article 53b(2) of Regulation No 1605/2002 — Legal basis for a decision by national authorities to reduce the amount of a grant paid out of the European Refugee Fund — Observance of the principles of legal certainty and legitimate expectations — Assessment by the national court

(Council Regulation No 1605/2002, Art. 53b(2) and (c))

Article 53(2)(c) of Regulation No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities must be interpreted as meaning that, failing a legal basis in national law, that provision provides a legal basis for a decision of the national authorities to alter, to the detriment of the beneficiary, the amount of the grant paid out of the European Refugee Fund, where management is shared between the Commission and the Member States, and to order the recovery from the beneficiary of part of that amount. It is for the national court to determine whether, taking into account the conduct of both the beneficiary of the funds and of the national administrative authorities, the principles of legal certainty and legitimate expectations, as understood in EU law, have been observed as regards the demand for repayment.

Article 53b of Regulation No 1605/2002 enacts a method of implementation of the general budget of the European Union where management is shared. According to Article 53b(1), where the Commission co-operates with the Member States in order to implement the budget by shared management within the meaning of Article 53(1)(b) of that regulation, the implementation tasks of the budget are delegated to the Member States.

Article 53b(2)(c) of Regulation No 1605/2002 provides that the Member States are to take all the legislative, regulatory and administrative or other measures necessary for protecting the financial interests of the European Union, in particular by recovering funds wrongly paid or incorrectly used or funds lost as a result of irregularities or errors.

The unequivocal, unconditional terms of Article 53b(2)(c) of Regulation No 1605/2002 cannot be interpreted as leaving to the Member States discretion as to whether or not it would be expedient or not to make financial corrections in relation to the irregularities found.

Having chosen to adopt Article 53b of Regulation No 1605/2002, the EU legislature intended to create, in the general rules, an obligation for the Member States, to carry out, when they implement the budget by shared management, financial corrections, in particular recovering the amounts lost as a result of irregularity or negligence, not only without a basis provided for in national law being necessary, but also without a sector-specific regulation being indispensable.

It follows that the introductory sentence of Article 53b(2) of Regulation 1605/2002 constitutes a legal basis for the alteration of a grant to the detriment of the beneficiary, where that alteration is made in order to protect the financial interests of the European Union. Similarly, point (c) under Article 53b(2) constitutes a legal basis for the adoption of measures in connection with the recovery of funds wrongly paid or incorrectly used as a result of irregularities or errors.

(see paras 41, 42, 45, 46, 49, 55 and operative part)

Case C‑599/13

Somalische Vereniging Amsterdam en Omgeving (Somvao)

v

Staatssecretaris van Veiligheid en Justitie

(Request for a preliminary ruling from the Raad van State (Netherlands))

‛Reference for a preliminary ruling — Protection of the European Union’s financial interests — Regulation (EC, Euratom) No 2988/95 — Article 4 — General budget of the European Union — Regulation (EC, Euratom) No 1605/2002 — Article 53b(2) — Decision 2004/904/EC — European Refugee Fund for the period 2005-2010 — Article 25(2) — Legal basis of the obligation to recover funds in the event of an irregularity’

Summary — Judgment of the Court (Third Chamber), 18 December 2014

Budget of the European Union — Financial regulation — Implementation of the budget — Implementation by shared management — Obligation for Member States to take the necessary measures to protect the financial interests of the European Union — Article 53b(2) of Regulation No 1605/2002 — Legal basis for a decision by national authorities to reduce the amount of a grant paid out of the European Refugee Fund — Observance of the principles of legal certainty and legitimate expectations — Assessment by the national court

(Council Regulation No 1605/2002, Art. 53b(2) and (c))

Article 53(2)(c) of Regulation No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities must be interpreted as meaning that, failing a legal basis in national law, that provision provides a legal basis for a decision of the national authorities to alter, to the detriment of the beneficiary, the amount of the grant paid out of the European Refugee Fund, where management is shared between the Commission and the Member States, and to order the recovery from the beneficiary of part of that amount. It is for the national court to determine whether, taking into account the conduct of both the beneficiary of the funds and of the national administrative authorities, the principles of legal certainty and legitimate expectations, as understood in EU law, have been observed as regards the demand for repayment.

Article 53b of Regulation No 1605/2002 enacts a method of implementation of the general budget of the European Union where management is shared. According to Article 53b(1), where the Commission co-operates with the Member States in order to implement the budget by shared management within the meaning of Article 53(1)(b) of that regulation, the implementation tasks of the budget are delegated to the Member States.

Article 53b(2)(c) of Regulation No 1605/2002 provides that the Member States are to take all the legislative, regulatory and administrative or other measures necessary for protecting the financial interests of the European Union, in particular by recovering funds wrongly paid or incorrectly used or funds lost as a result of irregularities or errors.

The unequivocal, unconditional terms of Article 53b(2)(c) of Regulation No 1605/2002 cannot be interpreted as leaving to the Member States discretion as to whether or not it would be expedient or not to make financial corrections in relation to the irregularities found.

Having chosen to adopt Article 53b of Regulation No 1605/2002, the EU legislature intended to create, in the general rules, an obligation for the Member States, to carry out, when they implement the budget by shared management, financial corrections, in particular recovering the amounts lost as a result of irregularity or negligence, not only without a basis provided for in national law being necessary, but also without a sector-specific regulation being indispensable.

It follows that the introductory sentence of Article 53b(2) of Regulation 1605/2002 constitutes a legal basis for the alteration of a grant to the detriment of the beneficiary, where that alteration is made in order to protect the financial interests of the European Union. Similarly, point (c) under Article 53b(2) constitutes a legal basis for the adoption of measures in connection with the recovery of funds wrongly paid or incorrectly used as a result of irregularities or errors.

(see paras 41, 42, 45, 46, 49, 55 and operative part)