EN Official Journal of the European Union C 195/23

Action brought on 11 May 2010 — Hellenic Republic v Commission

(Case T-215/10)

2010/C 195/38

Language of the case: Greek

Parties

Applicant: Hellenic Republic (represented by: I. Khalkias, G. Skiani and E. Leftheriotou)

Defendant: European Commission

Form of order sought

— uphold the action and annul the contested Commission decision in its entirety;

— order the Commission to pay the costs.

Pleas in law and main arguments

By its action, the Hellenic Republic seeks the annulment of the Commission decision of 11 March 2010 excluding from Community financing certain expenditure incurred by the Member States under the European Agricultural Guarantee Fund (EAGF), notified as C(2010) 1317 final and published on 12 March 2010 (OJ 2010 L 63, p. 7) as Decision 2001/152/EU, in so far as it concerns financial corrections imposed on the Hellenic Republic in the fields of (a) cotton, (b) rural development measures and (c) distribution of food to the most deprived.

With regard to the correction for cotton, the applicant submits, first, that the Commission assessed the facts incorrectly and the reasons stated for the contested decision are defective so far as concerns the control environment and the compatibility of the cotton aid scheme with the IACS (Integrated Administration and Control System) and so far as concerns on-the-spot checks of areas and risk analysis.

Second, the applicant states that the Commission assessed the facts wrongly and misinterpreted and misapplied Article 13(2) of Regulation (EC) No 1591/2001 (1) and Article 17 of Regulation (EC) No 1051/2001 (2) as regards environmental measures and the inadequate control system and as regards the action taken following the controls which were effected in respect of cotton crops and environmental measures. More specifically, the accusation of a lack of sanctions that the Commission levels against the Hellenic Republic is unfounded in law and in substance, is not based on the provisions of Regulations No 1051/2001 and No 1591/2001, finds no support in any provision in force in the period in question and cannot constitute a lawful factor in the reasoning for the correction imposed by the contested decision.

Third, the applicant pleads incorrect interpretation and application of the guidelines for flat-rate corrections and infringement of the principle of proportionality given that the risk run by the EAGF was non-existent; also the state of the control system was not the same in the three periods under examination, 2003-04, 2004-05 and 2005-06, in which case the correction should also be graduated.

Fourth, the applicant maintains that the Commission misinterpreted Article 7(4) of Regulation No 1051/2001 and Article 1 of each of Regulations No 1123/2004, (3) No 905/2005, (4) No 871/2006 (5) and No 1486/2002 (6) which defined the annual actual and eligible quantity of cotton in relation to the one-off corrections in the periods 2003-04, 2004-05 and 2005-06 for the alleged overshooting of the eligible quantity and for the consequent wrongful payment.

Fifth, the applicant submits that the contested decision contains contradictory reasoning for the corrections and incorrect calculations within the corrections, given the existence of discrepancies and conflicting corrections in the financial years at issue.

With regard to rural development measures, the applicant submits, first, that the procedure for clearance of the accounts is invalid because of infringement of an essential procedural requirement provided for in subparagraph (a) of the third subparagraph of Article 8(1) of Regulation (EC) No 1663/95 (7) regarding the failure to engage in bilateral discussion so far as concerns the imposition of a correction for the environmental development measures.

Second, the applicant contends that the Commission erred as to the facts, assessed the facts incorrectly, gave deficient reasoning and infringed the principle of proportionality, so far as concerns the alleged weaknesses in the IACS, in the basic controls and in the additional controls.

With regard to the field of distribution of food to the most deprived, the applicant submits, first, that the Commission’s position caused it to entertain legitimate expectations that it would not be burdened with the entire expenditure on the programme for the free distribution of rice; the change in the Commission’s position after the event constitutes an infringement of the principle of the protection of legitimate expectations and the principle of legal certainty and, in the alternative, amounts to exceeding of the limits of its discretion, if not misuse of powers.

Second, the applicant pleads that the transport costs that were ascribed to it were calculated incorrectly.

Third, the applicant maintains that the Commission interpreted and applied Community provisions incorrectly, in particular Article 3(2) of Regulation (EEC) No 3149/92, (8) infringed the principle of proportionality and exceeded the limits of its discretion.

(1) Commission Regulation (EC) No 1591/2001 of 2 August 2001 laying down detailed rules for applying the cotton aid scheme (OJ 2001 L 210, p. 10).

(2) Council Regulation (EC) No 1051/2001 of 22 May 2001 on production aid for cotton (OJ 2001 L 148, p. 3).

(3) Commission Regulation (EC) No 1123/2004 of 17 June 2004 fixing, for the 2003/04 marketing year, the actual production of unginned cotton and the amount by which the guide price is to be reduced as a result (OJ 2004 L 218, p. 3).

(4) Commission Regulation (EC) No 905/2005 of 16 June 2005 determining for the 2004/2005 marketing year actual production of unginned cotton and the ensuing guide price reduction (OJ 2005 L 154, p. 3).

(5) Commission Regulation (EC) No 871/2006 of 15 June 2006 determining for the 2005/06 marketing year actual production of unginned cotton and the ensuing guide price reduction (OJ 2006 L 164, p. 3).

(6) Commission Regulation (EC) No 1486/2002 of 19 August 2002 amending Regulation (EC) No 1591/2001 laying down detailed rules for applying the cotton aid scheme (OJ 2002 L 223, p. 3).

(7) Commission Regulation (EC) No 1663/95 of 7 July 1995 laying down detailed rules for the application of Council Regulation (EEC) No 729/70 regarding the procedure for the clearance of the accounts of the EAGGF Guarantee Section (OJ 1995 L 158, p. 6).

(8) Commission Regulation (EEC) No 3149/92 of 29 October 1992 laying down detailed rules for the supply of food from intervention stocks for the benefit of the most deprived persons in the Community (OJ 1992 L 313, p. 50).