In the matter of the clearance of the accounts of funds financing the common agricultural policy, in order for a financial correction to be applied, it is not necessary for there to be a serious deficiency in the application of explicit EU rules. Whilst it is true that, according to the guidelines on flat-rate financial corrections set out in Annex 2 to Commission Document No VI/5330/97, a flat-rate financial correction requires there to be a serious deficiency in the application of explicit EU rules, the definition of the burden of proof given in case-law, concerning the existence of an infringement of the rules on the common organisation of the agricultural markets, is not affected by that condition laid down in Document VI/5330/97, first because the condition should be read within its context and, secondly, because that definition under case-law has been maintained since the adoption of Document VI/5330/97.

The definition of the terms ‘agricultural area’ and ‘agricultural parcel’ in EU law do not require an area or a parcel to have a particular shape. Under Article 2(h) of Regulation No 73/2009, establishing common rules for direct support schemes for farmers under the common agricultural policy and establishing certain support schemes for farmers, the term ‘agricultural area’ is defined as any area taken up by arable land, permanent pasture or permanent crops. Under Article 2(1a) of Regulation No 796/2004, laying down detailed rules for the implementation of cross-compliance, modulation and the integrated administration and control system provided for in Council Regulation (EC) No 1782/2003, as amended by Regulation (EC) No 972/2007 of 20 August 2007, and under Article 2(1) of Regulation No 1122/2009, laying down detailed rules for the implementation of Council Regulation (EC) No 73/2009 as regards cross-compliance, modulation and the integrated administration and control system, under the direct support schemes for farmers provided for that Regulation, as well as for the implementation of Council Regulation (EC) No 1234/2007 as regards cross-compliance under the support scheme provided for the wine sector, an agricultural parcel is defined, in principle, as a continuous area of land.

In the matter of the clearance of the accounts of funds financing the common agricultural policy, whilst it is true that the possibility of extrapolating the results of an on-the-spot check is not provided for either in Article 29 of Regulation No 796/2004 or in Article 33 of Regulation No 1122/2009, it is nevertheless apparent from Article 23(1) of Regulation No 796/2004 and from Article 26(1) of Regulation No 1122/2009 that on-the-spot checks must be made in such a way as to ensure effective verification of compliance with the terms under which aids are granted and of the requirements and standards relevant for cross-compliance. The Commission is therefore entitled to take the view that a reliable and representative result from on-the-spot checks can be achieved by extrapolating the results of the sample to the rest of the population. Indeed, by making that extrapolation, it is possible to obtain a reliable and representative result from on-the-spot checks for all the parcels at issue and not only those parcels actually checked. Extrapolation is the corollary of simplifying on-the-spot checks by limiting them to a sample of 50% of agricultural parcels.

Moreover, the extrapolation of an error found cannot infringe the principle of audi alteram partem and the right of the farmer concerned to be heard. The final and conclusive decision on the clearance of accounts is taken at the conclusion of a specific procedure giving effect to the audi alteram partem rule, during which the Member States concerned must be provided with all the guarantees necessary for them to present their point of view. The procedure for the clearance of accounts is therefore a procedure against the Member State and not against the farmer in question, who does not have the right to be heard during that procedure. In addition, it must be noted that, by extrapolating the results of the sample to the rest of the population, no particular agricultural parcel is identified as ineligible. What is more, such an extrapolation reduces administrative costs and expenses since a reliable result of the on-the-spot checks can be ensured whilst bearing in mind the aim to simplify those checks as stated in recital 44 of Regulation No 1122/2009.

(see paras 41-43)