Judgment of the General Court (First Chamber) of 9 October 2012 — Italy v Commission

(Case T-426/08)

EAGGF — Guarantee Section — EAGF — Expenditure excluded from financing — Fruit and vegetables — Sugar — Processing of citrus fruits — Milk — Arable crops — Flat-rate financial correction — Proportionality — Duty to state reasons — No error of assessment

1. Acts of the institutions — Statement of reasons — Obligation — Scope — Plea based on lack or inadequacy of reasoning — Plea based on inaccuracy of the reasoning — Distinction (Art. 253 EC) (see paras 17, 90)

2. Proceedings — Introduction of new pleas during the proceedings — Conditions — New plea — Meaning (Rules of Procedure of the General Court, Art. 48(2)) (see para. 37)

3. European Union law — Principles — Proportionality — Scope — Pleas capable of achieving the legitimate aims pursued (Art. 5(4) TEU) (see paras 39, 157)

4. Acts of the institutions — Rules of administrative conduct of general scope — Measure designed to produce external effects — Exercise by the Commission of its discretion — Obligation to comply with higher rules of the Union (see para. 41)

5. Agriculture — Common organisation of the markets — Milk and milk products — Additional levy on milk — Controls by the Member States — Time-limits for controls — Imperative time-limit — Completion of the control — Report of the control available — Availability interpreted by reference to the purpose of the report (Council Regulation No 3950/92, Art. 1; Commission Regulation No 1392/2001, Art. 12(2)) (see paras 75, 85)

6. Agriculture — EAGGF — Clearance of accounts — Disallowance of expenditure arising from irregularities in the application of the Community rules — Challenge by the Member State concerned — Burden of proof — Allocation between the Commission and the Member State (Council Regulation No 1258/1999) (see paras 125, 126, 145)

7. Agriculture — EAGGF — Clearance of accounts — Disallowance of expenditure arising from irregularities in the application of the Community rules — Not possible precisely to assess the losses suffered by the Union — Blanket correction — Duty to comply with the principle of proportionality (see paras 131, 132, 174)

8. Agriculture — EAGGF — Clearance of accounts — Definitive refusal to accept responsibility for certain expenses — Need for prior inter partes procedure (see para. 141)

9. Agriculture — EAGGF — Clearance of accounts — Disallowance of expenditure arising from irregularities in the application of the Community rules — Introduction of an adjustment of the disallowance by reference to the risk created for the EAGGF by the seriousness of the failure to act attributable to the national control authorities — Challenge by the Member State concerned — Burden of proof (see para. 158)

10. Actions for annulment — Grounds — Misuse of powers — Concept (Art. 230 EC) (see para. 184)

Re:

APPLICATION for annulment of Commission Decision 2008/582/EC of 8 July 2008 excluding from Community financing certain expenditure incurred by the Member States under the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF) and under the European Agricultural Guarantee Fund (EAGF) (OJ 2008 L 186, p. 39), in so far as it excludes from Community financing EUR 174 704 912.66 of expenditure incurred by the Italian Republic.

Operative part

The Court:

1. Dismisses the action;