Judgment of the General Court (Fourth Chamber) of 25 February 2015 — Poland v Commission

(Case T‑257/13)

‛EAGGF — Guarantee Section — EAGF and EAFRD — Expenditure excluded from the financing — Rural Development — Expenditure effected by Poland — Article 7 of Regulation (EC) No 1258/1999 — Article 31 of Regulation (EC) No 1290/2005 — Effectiveness of checks — Obligation to state reasons — Principle of subsidiarity’

1. EU law — Interpretation — Methods — Literal, systematic, historic and teleological interpretation — Account to be taken of the purpose and general system of the measure in question (see paras 37-39)

2. Agriculture — Common agricultural policy — EAGGF and EAFRD financing — Support for rural development — Mechanism granting aid for early retirement — Regulations No 1257/1999 and No 1698/2005 — Conditions for granting — Exercise of an agricultural activity for commercial purposes before the surrender of the holding — Obligation of Member States to verify (Council Regulations No 1257/1999, Arts 10(1), and 11(1), and No 1698/2005, Art. 23(2)) (see paras 48-50, 59-62, 67, 69)

3. Agriculture — Common agricultural policy — EAGGF financing — Grant of aids and premiums — Obligation of Member States to organise an effective system of controls and on-the-spot checks — Scope — Control of the knowledge and competence of persons taking over a holding surrendered by a farmer benefiting from an early retirement measure — No infringement of the principles of proportionality and procedural autonomy (Art. 5, second para., TEU; Council Regulations No 1257/1999, Art. 11(2), No 1258/1999, fifth recital and Art. 7(4), and No 1290/2005, Art. 31(1)) (see paras 77-79, 89, 175, 177-179)

4. Agriculture — Common agricultural policy — EAGGF financing — Clearance of accounts — Disallowance of expenses arising from irregularities in applying EU rules — Challenge by the Member State concerned — Burden of proof — Allocation between the Commission and the Member State (Council Regulations No 1258/1999, Art. 7(4), and No 1290/2005, Art. 31(1)) (see paras 93-98, 123)

5. Agriculture — Common agricultural policy — EAGGF financing — Grant of aids and premiums — Obligation of Member States to organise an effective system of administrative controls and on-the-spot checks — Non-performance — Failure to fulfil obligations — National system pleaded as justification — Not permissible (Art. 258 TFEU; Council Regulation No 1257/1999, Art. 11(2)) (see para. 105)

6. Agriculture — Common agricultural policy — AGGF and EAFRD financing — Support for rural development — Mechanism granting aid for early retirement — Regulations No 1257/1999 and No 1698/2005 — Conditions for granting — Exercise of an agricultural activity for commercial purposes before the surrender of the holding — Criteria for assessment (Council Regulations No 1257/1999, Arts 10(1), and 11(1), and No 1698/2005, Art. 23(2)) (see paras 128-130)

7. Acts of the institutions — Statement of reasons — Obligation — Scope — Decision concerning the clearance of EAGGF and EAFRD accounts (Art. 296 TFEU; Council Regulations No 1257/1999 and No 1698/2005) (see paras 149, 150)

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), so far as concerns the ‘Early retirement’ action implemented by the Republic of Poland.

Operative part

The Court:

1. Dismisses the action;