Judgment of the General Court (Third Chamber) of 13 December 2012 — Greece v Commission

(Case T-588/10)

‛EAGGF — Guarantee Section — Expenditure excluded from financing — Arable crops — Dried grapes — Raw tobacco — Specific measures for the smaller Aegean islands concerning certain agricultural products — Sheepmeat and goatmeat — Conditionality — Proportionality’

1. 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 72-75, 175, 262, 267, 328, 332, 333, 341-344, 398, 410, 415, 441, 459, 465-467, 511-515, 577-581, 585, 602, 611-613, 619)

2. Agriculture — EAGGF — Clearance of accounts — Disallowance of expenditure arising from irregularities in the application of the Community rules — Discretion of the Commission — Internal guidelines concerning financial corrections — Objectives — Judicial review (Council Regulations No 729/70, as amended by Regulation No 1287/95, Art. 5(2)(c), No 1258/1999, Art. 7(4), first para., and No 1290/2005, Art. 31(1)) (see paras 96-98, 283)

3. European Union law — Principles — Proportionality — Scope — Decision relating to the clearance of accounts in respect of expenditure financed by the EAGGF — No infringement (see paras 105, 203-207)

4. Agriculture — EAGGF — Clearance of accounts — Disallowance of expenditure arising from irregularities in the application of the Community rules — Flat-rate correction issued by the Commission in accordance with internal guidelines — Lawfulness (see paras 106-112)

5. Acts of the institutions — Statement of reasons — Obligation — Scope — Decision relating to the clearance of accounts in respect of expenditure financed by the EAGGF (Art. 296 TFEU; Charter of Fundamental Rights of the European Union, Art. 41(2)(c)) (see paras 120, 516-519)

6. Agriculture — Common agricultural policy — EAGGF financing — Grant of aids and premiums — Obligation of Member States to organise an effective system of controls — Failure to fulfil obligations — Justification on the basis of practical difficulties — Not permissible (see paras 122-124)

7. Acts of the institutions — Regulations — Regulation prescribing specific control measures — No Member State discretion — Non-implementation — Justification — Other control system more efficient — Not permissible (see para. 126)

8. European Union law — Principles — Protection of legitimate expectations — Conditions — Specific assurances given by the authorities — Decision relating to the clearance of accounts in respect of expenditure financed by the EAGGF — No infringement (see paras 130-136, 246, 247)

9. Agriculture — Common agricultural policy — EAGGF financing — Principles — Disallowance of expenditure arising from irregularities in the application of the Community rules — Right of the Commission to disallow from attribution to the EAGGF all sums paid in case of non-verification of the conditions for their payment laid down by the relevant legislation (Council Regulation No 1290/2005, Art. 31(1) and (2)) (see paras 181-183, 280)

10. Plea of illegality — Incidental nature — Challenge to the legality of a regulation by a Member State which did not bring an annulment action against that regulation within the prescribed period — Lawfulness (Arts 263, fifth para., TFEU and 277 TFEU) (see para. 188)

11. Commission — Powers — Implementing powers conferred by the Council — Broad interpretation — Delegation of the Commission’s implementing power in agricultural matters implying a broad discretion of the latter — Limits of that discretion (Art. 211 EC) (see paras 190, 191)

12. Judicial proceedings — Obligation on the court to respect the framework of the dispute defined by the parties — No obligation on the court to rule solely on the basis of the arguments raised by the parties (see paras 211-214)

13. European Union law — Principles — Force majeure — Concept — Decision relating to the clearance of accounts in respect of expenditure financed by the EAGGF — No special circumstances justifying a finding of force majeure (see paras 218-226)

14. Agriculture — Common agricultural policy — EAGGF financing — Principles — Disallowance of expenditure arising from irregularities in the application of the Community rules — Discretion of the Commission — None (see paras 294-297)

15. Actions for annulment — Judgment annulling a measure — Effects — Obligation to implement — Scope — Both the operative part and the grounds of the judgment to be taken into account — Obligation limited to what is strictly necessary to ensure implementation of the annulling judgment — Adoption of a new measure on the basis of valid previous preparatory measures — Lawfulness — Decision relating to the clearance of accounts in respect of expenditure financed by the EAGGF — Imposition of a financial correction analogous to that imposed by a previous decision annulled by a judgment of the Court — Conformity with the annulling judgment (Art. 266(1) TFEU) (see paras 476-482, 486-488)

16. European Union law — Principles — Duty to act within a reasonable time — Scope — Decision relating to the clearance of accounts in respect of expenditure financed by the EAGGF — Infringement — None (see paras 489-495)

17. Actions for annulment — Judgment annulling a measure — Effects — Adoption of measures of compliance — Reasonable time — Criteria for assessment (cf. paras 496-499)

18. Agriculture — Common agricultural policy — EAGGF financing — Accounts clearance procedure — Obligations of the Commission — Duty to act within a reasonable time — Criteria for assessment — Infringement — Consequences — Infringement of defence rights not demonstrated — Irrelevant that reasonable period not complied with (see paras 500-503, 527-531)

19. Agriculture — EAGGF — Clearance of accounts — Disallowance of expenditure arising from irregularities in the application of the Community rules — Extrapolation of findings of deficiencies in a Member State’s control system from one region to other regions — Lawfulness — Conditions (see paras 520-523)

20. Agriculture — EAGGF — Grant of aids and premiums — Obligation of Member States to organise an effective system of administrative controls and on-the-spot checks — Scope — Control system for the granting of animal premiums in the sheepmeat and goatmeat sector — Registers not properly kept — Structural deficiency not capable of remedy by a high level of on-the-spot checks (see paras 561, 562, 614-617)

21. Agriculture — EAGGF — Grant of aids and premiums — Obligation of Member States to organise an effective system of administrative controls and on-the-spot checks — Scope — Control system for the granting of animal premiums in the sheepmeat and goatmeat sector — Registers not properly kept — Obligation to carry out the minimum number of on-the-spot checks prescribed by EU legislation during the retention period (Commission Regulation No 2419/2001, Arts 15 and 24(2); Council Directive 92/102, Art. 4) (see paras 572-576)

Re:

ACTION for annulment of Commission Decision 2010/668/EU of 4 November 2010 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 2010 L 288, p. 24), in so far as that decision excludes certain expenditure incurred by the Hellenic Republic.

Operative part

The Court:

1. Dismisses the action;