Judgment of the General Court (Sixth Chamber) of 12 November 2015 —

Italy v Commission

(Case T‑255/13)

‛EAGGF — Guarantee Section — EAGF and EAFRD — Expenditure excluded from financing — Flat rate financial corrections — Direct payments — Conditionality — Aid for the processing of citrus fruit — Conditions for accreditation of a paying agency’

1. Agriculture — Common agricultural policy — EAGGF, EAGF and EAFRD financing — Clearance of accounts — Disallowance of expenses arising from irregularities in applying EU rules — Challenge by the Member State concerned — Burden of proof — Shared by the Commission and the Member State (Council Regulation No 1290/2005) (see paras 53-56, 119)

2. Acts of the institutions — Statement of reasons — Obligation — Scope — Decision on the clearance of accounts in respect of expenditure financed by EAGGF, EAGF and EAFRD (Art. 296 TFEU; Council Regulation No 1290/2005) (see paras 58, 59)

3. Agriculture — Common agricultural policy — EAGGF, EAGF and EAFRD financing — Grant of aid and premiums — Obligation on Member States to organise an effective system of controls — Failure to fulfil obligations — Justification on the basis of practical difficulties — Not permissible (Council Regulation No 1782/2003, Art. 25 and Annex III; Commission Regulation No 796/2004, Arts 9, 23 and 25) (see paras 72-76)

4. Agriculture — Common agricultural policy — EAGGF, EAGF and EAFRD financing — Grant of aid and premiums — Obligation on the Member States to organise an effective system of administrative and on-site inspections — Implied obligation — Scope (Council Regulation No 1782/2003, Art. 25 and Annex III; Commission Regulation No 796/2004, Arts 23 and 25) (see para. 77)

5. Acts of the institutions — Regulations — Regulation prescribing specific control measures — No discretion of Member States — Non-implementation — Justification — Other control system more effective — Inadmissibility (see paras 89, 119)

6. Agriculture — Common agricultural policy — EAGGF, EAGF and EAFRD financing — Grant of aid and premiums — Obligation on the Member States to organise an effective system of administrative and on-site inspections — Scope (Council Regulation No 1782/2003, Arts 3 and 6; Commission Regulation No 796/2004, Art. 66) (see paras 97, 101, 109, 182)

7. EU law — Principles — Proportionality — Scope — Flat-rate financial corrections applied to farmers for non-compliance with conditionality requirements — No infringement — No infringement of the principles of legality, legal certainty and sincere cooperation (Art. 4(3) TEU; Council Regulation 1782/2003, Arts 3 and 6; Commission Regulation No 796/2004, Art. 66) (see paras 136-142, 146)

8. EU law — Principles — Protection of legitimate expectations — Conditions — Specific assurances given by the authorities (see para. 143)

9. Agriculture — Common agricultural policy — EAGGF, EAGF and EAFRD financing — Clearance of accounts — Power of the Commission to monitor the regularity of expenses — Assessment of the existence and effectiveness of control’s implemented by a Member State — No infringement of the principle of subsidiarity (Art. 5(3) TEU; Council Regulations No 1258/1999, recital 5, and Art. 7(4), and No 1290/2005, recitals 5 and 8, and Arts 9 and 31(1); Commission Regulation No 2111/2003) (see paras 180, 181, 183-185)

10. Agriculture — Common agricultural policy — EAGGF, EAGF and EAFRD financing — Clearance of accounts — Disallowance of expenses arising from irregularities in applying EU rules — Finding of defects in the control system established by a Member State — Flat-rate correction of 50% of expenses — Amount including sums relating to irregularities already subject to a financial correction but not yet entirely recovered — No breach of the principle of no double jeopardy (Council Regulations No 1258/1999, Art. 7(4), and No 1290/2005, Arts 31 and 32) (see paras 187, 189, 191)

11. Judicial proceedings — Application initiating proceedings — Formal requirements — Identification of the subject-matter of the dispute — Brief summary of the pleas in law on which the application is based (Rules of Procedure of the General Court (1991), Art. 44(1)(c)) (see para. 193)

Re:

APPLICATION for annulment of Commission Implementing Decision 2013/123/EU of 26 February 2013 on excluding from European Union financing certain expenditure incurred by the Member States under the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF), under the European Agricultural Guarantee Fund (EAGF) and under the European Agricultural Fund for Rural Development (EAFRD) (OJ 2013 L 67, p. 20), in so far as it contains flat rate financial corrections concerning expenditure incurred by the Republic of Italy.

Operative part

The Court:

1. Dismisses the action;