Action brought on 11 September 2014 — Republic of Latvia v European Commission

(Case T-661/14)

(2014/C 395/69)

Language of the case: Latvian

Parties

Applicant: Republic of Latvia (represented by: Inguss Kalniņš and Dace Pelše)

Defendant: European Commission

Form of order sought

The applicant claims that the General Court should:

— annul Commission Implementing Decision C(2014) 4479 (1) of 9 July 2014 in so far as it affects the Republic of Latvia and in so far as it excludes from Union financing expenditure in the amount of EUR 739 393,95, incurred by the accredited paying agency of Latvia in the financial years 2009 to 2012, in relation to the establishment of cross compliance requirements;

— order the Commission to pay the costs of the Republic of Latvia.

Pleas in law and main arguments

In support of its action, the applicant relies on two pleas in law.

1. By its first plea in law, the applicant claims that the Commission erred in the interpretation of Article 5(1) of Regulation No 1782/2003 (1) and of Article 6(1) of Regulation No 73/2009, (2) in that: — It follows from Article 5 of Regulation No 1782/2003 and from the case-law of the Court of Justice that Member States, when taking into account the specific characteristics of the areas concerned, have a measure of discretion in establishing the requirements relating to good agricultural and environmental condition. — The problems referred to in the annex to Regulation No 1782/2003 can be resolved by examining each problem and imposing the most appropriate (effective) standards from amongst those established in that regulation on the basis of the national context. — Taking into account the principle of proportionality, that is to say, if the introduction of a requirement affects small agricultural holdings only and thereby creates administrative burdens and costs significantly greater than the benefits, Member States may introduce essential requirements, provided that these are such as to enable the objectives laid down in Regulation No 1782/2003 to be achieved. — The Commission did not adopt a consistent approach with regard to the mandatory and essential nature of the requirements listed in Annex III to Regulation No 1782/2003; in addition, there was a breach of the principle of the protection of legitimate expectations because of the Commission’s failure to act until the autumn of 2009.

2. By its second plea in law, the applicant claims that the Commission erred in its application of Regulation No 1290/2005 (2) and Guidelines No VI/5330/97 (Guidelines for the calculation of financial consequences within the framework of the clearance of the accounts of the EAGGF Guarantee) when it calculated the financial correction for the Republic of Latvia because: — It failed to apply the principle of proportionality, in that it did not indicate what was the risk occasioned to the funds and did not take into account the calculations submitted by the Republic of Latvia, on the basis of which the risk occasioned was smaller. — It infringed the Guidelines, under which the criterion of the flat-rate correction is only to be used when it is not possible, on the basis of the information available, to calculate the losses, despite the fact that the Republic of Latvia sent the Commission precise information which made it possible to calculate the risk occasioned to the funds.

(1) Commission Implementing Decision 2014/458/EU of 9 July 2014 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 2014 L 205, p. 62).

(1) Council Regulation (EC) No 1782/2003 of 29 September 2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers and amending Regulations (EEC) No 2019/93, (EC) No 1452/2001, (EC) No 1453/2001, (EC) No 1454/2001, (EC) No 1868/94, (EC) No 1251/1999, (EC) No 1254/1999, (EC) No 1673/2000, (EEC) No 2358/71 and (EC) No 2529/2001 (OJ 2003 L 270, p. 1).

(2) Council Regulation (EC) No 73/2009 of 19 January 2009 establishing common rules for direct support schemes for farmers under the common agricultural policy and establishing certain support schemes for farmers, amending Regulations (EC) No 1290/2005, (EC) No 247/2006, (EC) No 378/2007 and repealing Regulation (EC) No 1782/2003 (OJ 2009 L 30, p. 16).

(2) Council Regulation (EC) No 1290/2005 of 21 June 2005 on the financing of the common agricultural policy (OJ 2005 L 209, p. 1).