CELEX: 62017CJ0239
Language: en
Date: 2018-07-25
Title: Judgment of the Court (Third Chamber) of 25 July 2018.#Gert Teglgaard and Fløjstrupgård I/S v Fødevareministeriets Klagecenter.#Request for a preliminary ruling from the Østre Landsret.#Reference for a preliminary ruling — Common agricultural policy — Support schemes for farmers — Regulation (EC) No 1782/2003 — Article 6(1) — Regulation (EC) No 73/2009 — Article 23(1) — Regulation (EC) No 796/2004 — Article 66(1) — Regulation (EC) No 1122/2009 — Article 70(8)(a) — Cross-compliance — Reduction in direct payments due to non-compliance with the statutory management requirements or good agricultural and environmental conditions — Determination of the year to be taken into account in order to determine the percentage reduction — Year in which the non-compliance occurred.#Case C-239/17.

JUDGMENT OF THE COURT (Third Chamber)
      25 July 2018 (
            *1
         )
      (Reference for a preliminary ruling — Common agricultural policy — Support schemes for farmers — Regulation (EC) No 1782/2003 — Article 6(1) — Regulation (EC) No 73/2009 — Article 23(1) — Regulation (EC) No 796/2004 — Article 66(1) — Regulation (EC) No 1122/2009 — Article 70(8)(a) — Cross-compliance — Reduction in direct payments due to non-compliance with the statutory management requirements or good agricultural and environmental conditions — Determination of the year to be taken into account in order to determine the percentage reduction — Year in which the non-compliance occurred)
      In Case C‑239/17,
      REQUEST for a preliminary ruling under Article 267 TFEU from the Østre Landsret (Eastern Regional Court, Denmark), made by decision of 28 April 2017, received at the Court on 10 May 2017, in the proceedings
      
         Gert Teglgaard,
      
      
         Fløjstrupgård I/S
      
      v
      
         Fødevareministeriets Klagecenter,
      
      THE COURT (Third Chamber),
      composed of L. Bay Larsen, President of the Chamber, K. Lenaerts, President of the Court, acting as Judge of the Third Chamber, D. Šváby, M. Vilaras (Rapporteur) and E. Regan, Judges,
      Advocate General: E. Sharpston,
      Registrar: C. Strömholm, Administrator,
      having regard to the written procedure and further to the hearing on 15 March 2018,
      after considering the observations submitted on behalf of:
      
               –
            
            
               Mr Teglgaard and Fløjstrupgård I/S, by U. Baller, advokat,
            
         
               –
            
            
               the Danish Government, by J. Nymann-Lindegren, C. Thorning and M. Wolff, acting as Agents, and by P. Biering and J. Pinborg, advokater,
            
         
               –
            
            
               the Austrian Government, by G. Eberhard, acting as Agent,
            
         
               –
            
            
               the European Commission, by A. Sauka, D. Triantafyllou and U. Nielsen, acting as Agents,
            
         after hearing the Opinion of the Advocate General at the sitting on 17 May 2018,
      gives the following
      
         Judgment
      
      
               1
            
            
               This request for a preliminary ruling concerns the interpretation of provisions of a number of regulations which were in force at the date of the facts in the main proceedings, namely Article 6(1) of 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), Article 66(1) of Commission Regulation (EC) No 796/2004 of 21 April 2004 laying down detailed rules for the implementation of cross-compliance, modulation and the integrated administration and control system provided for in Regulation No 1782/2003 (OJ 2004 L 141, p. 18), Article 23(1) of 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 and (EC) No 378/2007 and repealing Regulation No 1782/2003 (OJ 2009 L 30, p. 16), and Article 70(4) and (8)(a) of Commission Regulation (EC) No 1122/2009 of 30 November 2009 laying down detailed rules for the implementation of Council Regulation 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 (OJ 2009 L 316, p. 65).
            
         
               2
            
            
               The request has been made in proceedings between Mr Gert Teglgaard and Fløjstrupgård I/S, on the one hand, and the Fødevareministeriets Klagecenter (Complaints Centre of the Ministry of Food, Denmark), on the other, concerning the determination of the year in which direct payments to farmers can be reduced on the ground of non-compliance with the statutory management requirements or good agricultural and environmental conditions, with regard to the cross-compliance of agricultural aid.
            
         
         Legal context
      
      
         
            European Union law
         
      
      
               3
            
            
               Recital 2 of Regulation No 1782/2003 stated:
               ‘The full payment of direct aid should be linked to compliance with rules relating to agricultural land, agricultural production and activity. Those rules should serve to incorporate in the common market organisations basic standards for the environment, food safety, animal health and welfare and good agricultural and environmental condition. If those basic standards are not met, Member States should withdraw direct aid in whole or in part on the basis of criteria which are proportionate, objective and graduated. Such withdrawal should be without prejudice to sanctions laid down now or in the future under other provisions of Community or national law.’
            
         
               4
            
            
               Article 6 of that regulation, entitled ‘Reduction or exclusion from payments’, provided, in paragraph 1, as follows:
               ‘Where the statutory management requirements or good agricultural and environmental condition are not complied with, as a result of an action or omission directly attributable to the individual farmer, the total amount of direct payments to be granted in the calendar year in which the non-compliance occurs, and after application of Articles 10 and 11, shall be reduced or cancelled in accordance with the detailed rules laid down under Article 7.’
            
         
               5
            
            
               Article 7 of Regulation No 1782/2003, entitled ‘Rules concerning reductions and exclusions’, provided in paragraph 1:
               ‘Detailed rules for the reductions and exclusions referred to in Article 6 shall be laid down in accordance with the procedure referred to in Article 144(2). ...’
            
         
               6
            
            
               Recitals 55 to 57 of Regulation No 796/2004 state:
               
                        ‘(55)
                     
                     
                        To protect the Community’s financial interests effectively adequate measures should be adopted to combat irregularities and fraud. Separate provisions should be made in cases of irregularities found with regard to eligibility criteria for the different aid schemes concerned.
                     
                  
                        (56)
                     
                     
                        The system of reductions and exclusions envisaged in [Regulation No 1782/2003] with regard to cross-compliance obligations however targets at a different aim, namely to set an incentive for farmers to respect the, already existing, legislation in the different fields of cross-compliance.
                     
                  
                        (57)
                     
                     
                        Reductions and exclusions should be established having regard to the principle of proportionality and, in the case of eligibility criteria, the special problems linked to cases of force majeure as well as exceptional and natural circumstances. In the case of cross-compliance obligations reductions and exclusions may only be applied where the farmer acted negligently or intentionally. Reductions and exclusions should be graded according to the gravity of the irregularity committed and should go as far as the total exclusion from one or several aid schemes for a specified period. They should, with regard to the eligibility criteria, take into account the particularities of the various aid schemes.’
                     
                  
         
               7
            
            
               Title IV of Part II of Regulation No 796/2004, entitled ‘Basis for the calculation of the aid, reductions and exclusions’, in which were Chapter I, entitled ‘Findings in relation to eligibility criteria’, and Chapter II, entitled ‘Findings in relation to cross-compliance’, which contained, inter alia, Articles 65 and 66.
            
         
               8
            
            
               Article 65(4) of that regulation was worded as follows:
               ‘Non-compliances shall be deemed to be ‘determined’ if they are established as a consequence of any kind of checks carried out in accordance with this regulation or after having been brought to the attention of the competent control authority in whatever other way.’
            
         
               9
            
            
               The first subparagraph of Article 66(1) of Regulation No 796/2004 provided:
               ‘Without prejudice to Article 71, where a non-compliance determined results from the negligence of the farmer, a reduction shall be applied on the overall amount of direct payments, as defined in Article 2(d) of [Regulation No 1782/2003], that has been, or has to be, granted to the farmer concerned following aid applications he has submitted or will still submit in the course of the calendar year of the finding. That reduction shall, as a general rule, be 3% of that overall amount.’
            
         
               10
            
            
               Article 1, point 1(a), of Council Regulation (EC) No 146/2008 of 14 February 2008 amending Regulation No 1782/2003 and Regulation (EC) No 1698/2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) (OJ 2008 L 46, p. 1) amended Article 6(1) of Regulation No 1782/2003 in the following terms:
               ‘Where the statutory management requirements or good agricultural and environmental conditions are not complied with at any time in a given calendar year (hereinafter “the calendar year concerned”), and the non-compliance in question is the result of an act or omission directly attributable to the farmer who submitted the aid application in the calendar year concerned, the total amount of direct payments to be granted, after application of Articles 10 and 11 to that farmer, shall be reduced or cancelled in accordance with the detailed rules laid down under Article 7.
               The first subparagraph shall also apply where, the non-compliance in question is the result of an act or omission directly attributable to the person to whom or from whom the agricultural land was transferred.
               For the purposes of application of the first and second subparagraphs for the year 2008, the calendar year shall correspond to the period of 1 April to 31 December 2008.
               …’
            
         
               11
            
            
               Article 3, second paragraph, (a), of Regulation No 146/2008 provided:
               ‘Article 1, point 1(a), shall apply as of 1 April 2008.’
            
         
               12
            
            
               Regulation No 1782/2003 was repealed and replaced by Regulation No 73/2009, the first subparagraph of Article 23(1) of which provided:
               ‘Where the statutory management requirements or good agricultural and environmental condition are not complied with at any time in a given calendar year (hereinafter referred to as ‘the calendar year concerned’), and the non-compliance in question is the result of an act or omission directly attributable to the farmer who submitted the aid application in the calendar year concerned, the total amount of direct payments granted or to be granted, following application of Articles 7, 10 and 11 to that farmer, shall be reduced or excluded in accordance with the detailed rules laid down in Article 24.’
            
         
               13
            
            
               Article 24 of Regulation No 73/2009, which is entitled ‘Detailed rules on reductions and exclusions in the event of non-compliance with cross-compliance rules’, provided in paragraph 1:
               ‘Detailed rules for the reductions and exclusions referred to in Article 23 shall be laid down in accordance with the procedure referred to in Article 141(2). ...’
            
         
               14
            
            
               The first subparagraph of Article 146(1) of Regulation No 73/2009 provided:
               ‘[Regulation No 1782/2003] is hereby repealed.’
            
         
               15
            
            
               Article 149 of Regulation No 73/2009 provided:
               ‘This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.
               It shall apply from 1 January 2009.
               …’
            
         
               16
            
            
               Regulation No 796/2004 was repealed and replaced by Regulation No 1122/2009.
            
         
               17
            
            
               Title IV of Part II of Regulation No 1122/2009, entitled ‘Basis for the calculation of the aid, reductions and exclusions’, which included Chapter II, entitled ‘Findings in relation to eligibility criteria’, and Chapter III, entitled ‘Findings in relation to cross-compliance’, of which Article 70(4) and (8) formed part, provided:
               ‘4.   Non-compliances shall be deemed to be “determined” if they are established as a consequence of any kind of controls carried out in accordance with this regulation or after having been brought to the attention of the competent control authority or, where applicable, the paying agency, in whatever other way.
               …
               8.   For the application of reductions, the percentage of the reduction shall be applied to the total amount of:
               
                        (a)
                     
                     
                        the overall amount of direct payments that has been, or has to be, granted to the farmer concerned following aid applications he has submitted or will submit in the course of the calendar year of the finding …
                     
                  …’
            
         
         
            Danish law
         
      
      
               18
            
            
               Paragraph 3 of bekendtgørelse nr. 1697 om krydsoverensstemmelse (Decree No 1697 on cross-compliance), of 15 December 2010 (‘Decree No 1697’), provided:
               ‘1.   Farmers who receive aid shall ensure on-farm compliance with the requirements set out in Annex 1 to the present regulation throughout the calendar year.
               …’
            
         
               19
            
            
               Paragraph 4 of Decree No 1697 provided:
               ‘1.   The supervisory authorities referred to in Paragraph 3(2) shall report non-compliance with the requirements set out in Annex 1 to the present regulation to the FødevareErhverv (Danish Food Industry Agency; “the FE”) …
               2.   Infringement of the requirements set out in Annex 1 to the present regulation can give rise to a percentage reduction of aid in the calendar year in which the aid application or request for payment is received and in which the non-compliance is found. The FE shall adopt a decision on the amount of the reduction in accordance with the relevant [EU] provisions.’
            
         
         The dispute in the main proceedings and the questions referred for a preliminary ruling
      
      
               20
            
            
               A police investigation has revealed that a large number of Danish farmers had bought, over the period of 2006-2009, chemical fertilisers from an importer without that importer having reported those sales in the supplier register and without the nitrogen being registered in the farmers’ fertiliser accounts.
            
         
               21
            
            
               On the basis of documents that were seized at that importer’s premises, the Plantedirektoratet (Danish Plant Agency; ‘the supervisory authority’) conducted an administrative inspection of the farmers’ fertiliser accounts and, on 4 January 2011, it sent requests for information to 125 of them, on the ground that they had exceeded the quotas of nitrogen allowed by national rules on fertilisation and had thus not satisfied the cross-compliance rules applicable to direct payments.
            
         
               22
            
            
               The results of the inspection were reported to the NaturErhvervstyrelsen (Danish Nature Protection Agency; ‘the paying agency’), which instituted proceedings against those farmers for non-compliance with the cross-compliance rules.
            
         
               23
            
            
               After taking decisions to reduce aid payments to the farmers concerned in the year or years in which cross-compliance rules had not been satisfied, the paying agency turned to the European Commission on 26 November 2012 to ask whether the reductions in aid were to be calculated on the basis of the calendar year in which the non-compliance with the cross-compliance rules had occurred or on the basis of the calendar year during which it was discovered.
            
         
               24
            
            
               According to the paying agency, the Commission appeared to take the view, in the Annual Report of the Court of Auditors on the implementation of the budget for the financial year 2011, together with the institutions’ replies (OJ 2012 C 344, p. 1), that the reductions of payments made to farmers because of non-compliance with the cross-compliance rules were to be applied to payments made in the calendar year of the finding of that non-compliance.
            
         
               25
            
            
               In its reply of 7 February 2013, the Commission essentially confirmed that the year during which the competent supervisory authority became aware of a breach must be regarded as the year of the finding of non-compliance with cross-compliance rules to which the penalty resulting therefrom must be applied.
            
         
               26
            
            
               On the basis of Decree No 1697, the paying agency has, in consequence, reduced the direct payments received by the appellants in the main proceedings in the year during which the non-compliance with the cross-compliance rules was found by the supervisory authority, namely 2011.
            
         
               27
            
            
               The claims submitted by the appellants to the Complaints Centre of the Ministry of Food were rejected.
            
         
               28
            
            
               Those appellants then brought proceedings before the Østre Landsret (Eastern Regional Court, Denmark), alleging the invalidity of those decisions.
            
         
               29
            
            
               Mr Teglgaard relies on the wording of Article 6(1) of Regulation No 1782/2003 to argue that the year of reduction of the direct payments is that of the non-compliance with the cross-compliance rules. Regulation No 796/2004 merely specifies that non-compliance with the cross-compliance rules cannot be penalised before it has been found and cannot amend Regulation No 1782/2003. He states that, in accordance with the general principles of law, the penalty for that non-compliance must be imposed having regard to the circumstances existing at the material time. In his submission, Regulation No 73/2009 cannot serve as the basis for a request to reduce aid resulting from events occurring before its entry into force. Furthermore, he points out that the alleged non-compliance with the cross-compliance rules would have unpredictable consequences for him, in that the penalty could be increased by a sum of DKK 1 908 483.08 (Danish krone; approximately EUR 256157) due to the increase of the area eligible for direct payments between the year of that non-compliance and the year of the finding thereof.
            
         
               30
            
            
               Fløjstrupgård submits that Article 23 of Regulation No 73/2009 does not indicate clearly whether the reduction in direct payments must relate to those received in the year during which the non-compliance with the cross-compliance rules occurred or to those received in the year in which the non-compliance was found. It points out that, in its case, the reduction in direct payments is greater if it relates to the year when the non-compliance was found, because of the increase in areas eligible for those payments between the year in which it took place and that of its finding. Such a situation would be contrary to the principles of legal certainty and the protection of legitimate expectations and, from the point of view of contract law, would constitute an unforeseeable consequence.
            
         
               31
            
            
               According to the Complaints Centre of the Ministry of Food, the EU regulations relating to the single payment scheme pursue the specific objective of incentivising farmers to comply with the existing legislation in the various fields of cross-compliance, since the provisions relating to this scheme are to be interpreted in the light of that objective. Consequently, it submits that the paying agency was correct to take the view that it had to apply a reduction in the direct payments received by the appellants in the main proceedings in the year during which the non-compliance with the cross-compliance rules was found.
            
         
               32
            
            
               The referring court observes that the Court has not yet ruled on the issue of to which year the reduction in direct payments due to non-compliance with cross-compliance rules should be applied if the calendar year in which the non-compliance occurred does not coincide with the calendar year in which it was found. It also points out that the wording of Article 6(1) of Regulation No 1782/2003 varies between the different language versions.
            
         
               33
            
            
               In those circumstances, the Østre Landsret (Eastern Regional Court), decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:
               
                        ‘(1)
                     
                     
                        In a situation where a farmer does not comply with the statutory management requirements and the good agricultural and environmental conditions in a calendar year, and a reduction is therefore to be applied to the farmer’s direct payments: see Article 6(1) of … Regulation No 1782/2003, read in conjunction with Article 66(1) of … Regulation No 796/2004, is the aid reduction then to be calculated on the basis of the farmer’s direct payments:
                        
                                 (a)
                              
                              
                                 in the calendar year in which the non-compliance occurs, or
                              
                           
                                 (b)
                              
                              
                                 in the (subsequent) calendar year of the determination/finding of the non-compliance?
                              
                           
                  
                        (2)
                     
                     
                        Is the result the same under the subsequent rules set out in Article 23(1) of … Regulation No 73/2009, read in conjunction with Article 70(4) and 8(a) of … Regulation No 1122/2009?
                     
                  
                        (3)
                     
                     
                        In a situation where a farmer does not comply with the statutory management requirements and the good agricultural and environmental conditions in 2007 and 2008, but the non-compliance is first determined/found in 2011, is it then … Regulation No 1782/2003, read in conjunction with … Regulation No 796/2004, that applies in the calculation of the aid reduction, or is it … Regulation No 73/2009, read in conjunction with … Regulation No 1122/2009, that applies?’
                     
                  
         
         Consideration of the questions referred
      
      
         
            The first and second questions
         
      
      
               34
            
            
               By its first and second questions, which it is appropriate to answer together, the referring court asks, in essence, whether, firstly, Article 6(1) of Regulation No 1782/2003, Article 6(1) of that regulation, as amended by Regulation No 146/2008, and Article 66(1) of Regulation No 796/2004 and, secondly, Article 23(1) of Regulation No 73/2009 and Article 70(4) and (8)(a) of Regulation No 1122/2009 must be interpreted as meaning that reductions of direct payments because of non-compliance with the cross-compliance rules must be calculated on the basis of the payments granted or to be granted in the calendar year in which that non-compliance occurred or those in the year in which such non-compliance was found.
            
         
               35
            
            
               In accordance with the Court’s settled case-law, for the purpose of interpreting a provision of EU law it is necessary to consider not only its wording but also the context in which it occurs and the objectives pursued by the rules of which it is part (judgments of 6 November 2014, Feakins, C‑335/13, EU:C:2014:2343, paragraph 35, and of 12 November 2015, Jakutis and Kretingalės kooperatinė ŽŪB, C‑103/14, EU:C:2015:752, paragraph 93).
            
         
               36
            
            
               Although in its French-language version, Article 6(1) of Regulation No 1782/2003 states that ‘the total amount of direct payments to be granted in the calendar year in which the non-compliance is found, shall be reduced or cancelled’, in almost all other language versions available at the time of adoption of this Regulation, that article provides, in essence, that the total amount of direct payments to be granted in the calendar year in which the non-compliance occurs is to be reduced or cancelled.
            
         
               37
            
            
               In that regard, it must be pointed out that the wording used in one language version of a provision of EU law cannot serve as the sole basis for the interpretation of that provision, or be made to override the other language versions (judgment of 17 March 2016, Kødbranchens Fællesråd, C‑112/15, EU:C:2016:185, paragraph 36).
            
         
               38
            
            
               The provisions of EU law must be interpreted and applied uniformly in the light of the versions existing in all the languages of the European Union and, in the case of divergence between those versions, the provision in question must be interpreted by reference to the purpose and general scheme of the rules of which it forms part (judgments of 5 May 2011, Kurt und Thomas Etling and Others, C‑230/09 and C‑231/09, EU:C:2011:271, paragraph 60, and of 17 March 2016, Kødbranchens Fællesråd, C‑112/15, EU:C:2016:185, paragraph 36).
            
         
               39
            
            
               It follows therefrom that, having regard to the differences noted in paragraph 36 of the present judgment between the different language versions of Article 6(1) of Regulation No 1782/2003, that provision must be interpreted, in particular, in the light of the purpose and general scheme of the rules of which it forms part.
            
         
               40
            
            
               The general scheme and purpose of Regulation No 1782/2003 as regards compliance with the cross-compliance rules are set out in recital 2 of that regulation, which links the full payment of direct aid to compliance with rules relating to agricultural land, agricultural production and activity, which serve to incorporate in the common market organisations basic standards for the environment, food safety, animal health and welfare and good agricultural and environmental condition. If those basic standards are not met, Member States should withdraw direct aid in whole or in part on the basis of criteria which are proportionate, objective and graduated.
            
         
               41
            
            
               For its part, Article 6(1) of the regulation states that the reduction or cancellation of such aid is to occur where non-compliance with the cross-compliance rules is due to an act or omission directly attributable to the farmer concerned.
            
         
               42
            
            
               Thus, Regulation No 1782/2003 requires farmers to comply, during each year of operation, with the statutory management requirements and good agricultural and environmental condition, which form the cross-compliance rules.
            
         
               43
            
            
               However, the full significance of compliance with those rules is clear only if the penalty for their infringement, whether due to negligence or an intentional act, leads to a reduction in or cancellation of direct payments granted or to be granted in that calendar year of that infringement. Indeed, only such a correspondence is likely to maintain the link between the farmer’s behaviour which gave rise to the penalty and that penalty.
            
         
               44
            
            
               Admittedly, Article 66 of Regulation No 796/2004 provides, in all the language versions available at the date of adoption of that regulation, that a reduction is to be applied on the overall amount of direct payments that has been, or has to be, granted to the farmer following aid applications he has submitted or will still submit in the course of the calendar year of the finding of non-compliance with the cross-compliance rules.
            
         
               45
            
            
               However, it cannot be deduced from the wording of Article 66, as the Commission points out, that the reduction should be calculated on the amount of direct payments that has been, or will be, received in the calendar year of that finding. In that regard, it must be recalled that an implementing regulation adopted on the basis of an enabling provision in the basic regulation may not derogate from the provisions of that regulation, to which it is subordinate (judgment of 2 March 1999, Spain v Commission, C‑179/97, EU:C:1999:109, paragraph 20). Thus, the wording of Article 66(1) cannot be interpreted as meaning that it calls into question the link between the farmer’s behaviour which gave rise to the penalty and that penalty, in derogation from the basic rule laid down in Article 6(1) of Regulation No 1782/2003 that non-compliance with cross-compliance rules leads to a reduction or cancellation of direct payments granted or to be granted in the calendar year in which the non-compliance occurred.
            
         
               46
            
            
               Indeed, interpreted in the light of Regulation No 1782/2003, Regulation No 796/2004 lays down, in Article 66, detailed rules for the reductions of direct payments for non-compliance with cross-compliance rules, as provided for in Article 7(1) of Regulation No 1782/2003. That Article 66 relates in reality to the methods of reducing direct payments for non-compliance with cross-compliance rules and not to the rules for calculation of such a reduction. By reducing the amounts of direct payments that have been or are to be received by the farmer in the calendar year of the finding of the non-compliance, Article 66 of Regulation No 796/2004 guarantees that recovery of the sum corresponding to that reduction will actually be made, by deduction from the payments due to the farmer. By so doing, that article is such as to ensure both the effectiveness of reductions made for non-compliance with cross-compliance rules and the proper use of payments made under the EU agricultural funds.
            
         
               47
            
            
               Moreover, such an interpretation is borne out by the principles of equal treatment, proportionality and legal certainty.
            
         
               48
            
            
               First of all, whether non-compliance with the rules on cross-compliance is found in the same year as it occurs or it is identified during a year after that in which it occurred, the basis for the calculation of the reduction is the same. In both cases, it is based on direct payments in the year in which the non-compliance with cross-compliance rules occurred That solution thus also enables removal of the risk that the amount of payments to which the reduction is applied is significantly higher than that of the year in which the non-compliance with cross-compliance rules occurred or, on the contrary, that the reduction applied is significantly lower in the event of a reduction in the amount of direct payments between the year in which the non-compliance occurred and the year of its finding. It is thus such as to guarantee equal treatment among farmers.
            
         
               49
            
            
               Next, it must be recalled that the principle of proportionality requires that acts of the EU institutions be appropriate for attaining the legitimate objectives pursued by the legislation at issue and do not exceed the limits of what is necessary in order to achieve those objectives, it being understood that, when there is a choice between several appropriate measures, recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued (judgment of 14 June 2017, TofuTown.com, C‑422/16, EU:C:2017:458, paragraph 45).
            
         
               50
            
            
               However, it must be noted that the Commission itself acknowledged in its written observations that, in the circumstances described by the Advocate General in point 96 of his Opinion, the taking into account of the year of a finding of non-compliance with the cross-compliance rules to calculate the reduction or cancellation of direct payments cannot ensure a link between the farmer’s behaviour leading to that reduction or cancellation and the reduction or cancellation itself.
            
         
               51
            
            
               However, observance of the principle of proportionality is still ensured where the reduction or cancellation of the direct payments is calculated on the amount of direct payments granted or to be granted in the calendar year in which the non-compliance with the cross-compliance rules occurred, since such a link is maintained. A reduction or cancellation calculated in that manner is appropriate for ensuring the achievement of the objective of Article 6(1) of Regulation No 1782/2003, which is to penalise instances of non-compliance with the cross-compliance rules, and does not go beyond what is necessary to achieve that objective.
            
         
               52
            
            
               Finally, the principle of legal certainty requires that EU rules enable those concerned to know precisely the extent of the obligations which are imposed on them and that those persons must be able to ascertain unequivocally what their rights and obligations are and take steps accordingly (judgments of 9 March 2017, Doux, C‑141/15, EU:C:2017:188, paragraph 22, and of 20 December 2017, Erzeugerorganisation Tiefkühlgemüse, C‑516/16, EU:C:2017:1011, paragraph 98).
            
         
               53
            
            
               As pointed out by the applicants in the main proceedings, the taking into account of the year of a finding of non-compliance with the cross-compliance rules to calculate the reduction in direct payments is likely to make it difficult for the farmer concerned to predict the financial consequences he will have to bear because the factual circumstances, such as the number of hectares on the basis of which those payments are granted, can vary greatly from one year to the next and the check under the cross-compliance rules takes place at random times. However, such a risk is not present when the reduction or cancellation of the direct payments is calculated on the basis of the amount of direct payments granted or to be granted in the calendar year in which the non-compliance with the cross-compliance rules occurred, since any change in such factual circumstances subsequent to the occurrence of that non-compliance will have no impact on the financial consequences which he will have to bear.
            
         
               54
            
            
               Consequently, by application of Article 6(1) of Regulation No 1782/2003, the reductions in direct payments due to non-compliance with the cross-compliance rules must be calculated on the basis of the payments granted or to be granted in the calendar year in which the non-compliance occurred. Under Article 66(1) of Regulation No 796/2004, the reductions calculated in that way are to be counted against the payments received or receivable in the year during which the non-compliance is found.
            
         
               55
            
            
               Article 6(1) of Regulation No 1782/2003, as amended by Regulation No 146/2008, must be interpreted in the same way. Identical in all language versions, Article 6(1), as amended, no longer refers to the year in which the non-compliance with the cross-compliance rules is found. On the contrary, by referring to ‘in a given calendar year’ or ‘calendar year’ for both the occurrence of non-compliance with the cross-compliance rules and the aid application made by the farmer to whom an act or omission is directly attributable, Article 6(1), as amended, places particular emphasis on the year in which the non-compliance occurred to determine the reduction or cancellation of the direct payments. The indirect reference to Regulation No 796/2004, by the part of the sentence ‘the total amount of direct payments to be granted... to that farmer shall be reduced or cancelled in accordance with the detailed rules laid down in Article 7’, merely refers, as has been found in paragraph 46 of this judgment, to the methods of attributing the reduction or cancellation to direct payment amounts received or receivable in the year in which that non-compliance is found.
            
         
               56
            
            
               Those findings also apply to the interpretation of Article 23(1) of Regulation No 73/2009, which, in essence, reproduces Article 6(1) of Regulation No 1782/2003, as amended by Regulation No 146/2008.
            
         
               57
            
            
               As regards Article 70(4) and (8)(a) of Regulation No 1122/2009, it must be noted, on the one hand, that only Article 70(8)(a) is directly relevant, since it provides that ‘for the application of reductions, the percentage of the reduction shall be applied to the total amount of … the overall amount of direct payments that has been, or has to be, granted to the farmer concerned following aid applications he has submitted or will submit in the course of the calendar year of the finding’.
            
         
               58
            
            
               On the other hand, the findings made in paragraph 46 of this judgment for the interpretation of Article 66(1) of Regulation No 796/2004 are also applicable to Article 70(8)(a) of Regulation No 1122/2009, which concerns the detailed rules for application of a reduction in direct payments for non-compliance with the cross-compliance rules and not the rules for calculating such a reduction.
            
         
               59
            
            
               Having regard to all the foregoing considerations, the answer to the first and second questions is:
               
                        –
                     
                     
                        Article 6(1) of Regulation No 1782/2003, Article 6(1) of that regulation, as amended by Regulation No 146/2008, and Article 23(1) of Regulation No 73/2009 must be interpreted as meaning that reductions of direct payments due to non-compliance with the cross-compliance rules are to be calculated on the basis of the payments granted or to be granted in the year during which that non-compliance occurred.
                     
                  
                        –
                     
                     
                        Article 66(1) of Regulation No 796/2004 and Article 70(8)(a) of Regulation No 1122/2009 must be interpreted as meaning that reductions in the direct payments thus calculated are to be counted against the payments received or receivable in the calendar year in which the non-compliance with the cross-compliance rules was found.
                     
                  
         
         
            The third question
         
      
      
               60
            
            
               By its third question, the referring court asks, in essence, which EU rules are applicable in order to calculate the reduction in direct payments where a farmer has not complied with the cross-compliance rules in 2007-2008, but that non-compliance was not found until 2011.
            
         
               61
            
            
               Firstly, the principle of legal certainty requires that any factual situation should normally, in the absence of any express contrary provision, be examined in the light of the legal rules existing at the time when the situation obtained (judgment of 14 February 2012, Toshiba Corporation and Others, C‑17/10, EU:C:2012:72, paragraph 50 and the case-law cited). However, neither the wording, nor the purpose, nor the general scheme of Article 23(1) of Regulation No 73/2009 contains clear indications that that provision may be applied retroactively.
            
         
               62
            
            
               Thus, as regards reductions of direct payments due to non-compliance with the cross-compliance rules, it is the EU legislation which was applicable at the date on which the non-compliance in question which must serve to determine the reductions to be applied.
            
         
               63
            
            
               Secondly, it is clear from a combined reading of Articles 146 and 149 of Regulation No 73/2009 that Regulation No 1782/2003 was repealed with effect from 1 January 2009. In addition, it is apparent from Article 3, second paragraph, (a) of Regulation No 146/2008 that the amendment of Article 6(1) of Regulation No 1782/2003, provided for in Article 1 thereof, applied as from 1 April 2008. Article 6(1) of Regulation No 1782/2003 was therefore applicable in 2007 and until 31 March 2008, Article 6(1) of that regulation, as amended by Regulation No 146/2008, being applicable from 1 April to 31 December 2008.
            
         
               64
            
            
               In that regard, Article 2(e) of Regulation No 1782/2003 defines payments in a given calendar year or payments during the reference period as the payments granted or to be granted in the year or years concerned, including all payments to be granted in other periods starting in that calendar year or years.
            
         
               65
            
            
               Consequently, Article 6(1) of Regulation No 1782/2003 was applicable to direct payments granted in 2007 and the first three months of 2008 and to payments to be granted for periods starting in 2007 or during the first three months of 2008, and Article 6(1) of that regulation, as amended by Regulation No 146/2008, was applicable to direct payments granted in the months from April to December 2008 and to payments to be granted for periods starting during those nine months.
            
         
               66
            
            
               In the light of the foregoing considerations, the answer to the third question is that the relevant EU rules applicable to the calculation of the reduction in direct payments when a farmer has not complied with the cross-compliance rules in 2007-2008, but that non-compliance was found only during 2011, are Article 6(1) of Regulation No 1782/2003 for 2007 and the first three months of 2008, and Article 6(1) of that regulation, as amended by Regulation No 146/2008, for the period from April to December 2008.
            
         
         Costs
      
      
               67
            
            
               Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.
            
          
            
               On those grounds, the Court (Third Chamber) hereby rules:
            
          
            
               
                        
                           1.
                        
                     
                     
                        
                           Article 6(1) of 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, Article 6(1) of Regulation No 1782/2003, as amended by Council Regulation (EC) No 146/2008 of 14 February 2008, and Article 23(1) of 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 and (EC) No 378/2007 and repealing Regulation No 1782/2003 must be interpreted as meaning that reductions in direct payments due to non-compliance with the cross-compliance rules must be calculated on the basis of payments granted or to be granted in the year during which that non-compliance occurred.
                        
                        
                           Article 66(1) of Commission Regulation (EC) No 796/2004 of 21 April 2004 laying down detailed rules for the implementation of cross-compliance, modulation and the integrated administration and control system provided for in Regulation No 1782/2003 and Article 70(8)(a) of Commission Regulation (EC) No 1122/2009 of 30 November 2009 laying down detailed rules for the implementation of Regulation No 73/2009 as regards cross-compliance, modulation and the integrated administration and control system, under the direct support schemes for farmers provided for in 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, must be interpreted as meaning that reductions in direct payments thus calculated are to be applied to payments received or to be received in the calendar year during which the non-compliance with the cross-compliance rules is found.
                        
                     
                  
          
            
               
                        
                           2.
                        
                     
                     
                        
                           The relevant EU rules applicable to the calculation of the reduction in direct payments when a farmer has not complied with the cross-compliance rules in 2007-2008, but that non-compliance was found only during 2011, are Article 6(1) of Regulation No 1782/2003 for 2007 and the first three months of 2008, and Article 6(1) of that regulation, as amended by Regulation No 146/2008, for the period from April to December 2008.
                        
                     
                  
          
               
                  
                     [Signatures]
                  
               
            (
            *1
         )	Language of the case: Danish.