CELEX: 62019CC0404
Language: en
Date: 2020-09-03 00:00:00
Title: Opinion of Advocate General Saugmandsgaard Øe delivered on 3 September 2020.#French Republic v European Commission.#Appeal – European Agricultural Guarantee Fund (EAGF) and European Agricultural Fund for Rural Development (EAFRD) – Implementing Decision (EU) 2017/2014 – Expenditure excluded from EU financing – Expenditure incurred by the French Republic – 100% flat-rate correction – Proportionality – European Commission Guidelines on the calculation of the financial corrections in the framework of the conformity and financial clearance of accounts procedures.#Case C-404/19 P.

OPINION OF ADVOCATE GENERAL
   SAUGMANDSGAARD ØE
   delivered on 3 September 2020 (
         1
      )
   
      Case C‑404/19 P
   
   French Republic
   v
   European Commission
   (Appeal – EAGF and EAFRD – Expenditure excluded from EU financing – Area-related direct aid paid in Upper Corsica – Gravely deficient control system – Conditions for the application of a 100% flat-rate financial correction – 100% rate – Regulation (EU) No 1306/2013 – Article 52(2) – Delegated Regulation (EU) No 907/2014 – Article 12(7)(c) – Guidelines on the calculation of the financial corrections in the framework of the conformity and financial clearance of accounts procedures – Point 3.2.5)
   
      I. Introduction
   
   
            1.
         
         
            By the present appeal, the French Republic seeks the partial setting-aside of the judgment of the General Court of the European Union of 12 March 2019, France v Commission, (
                  2
               ) by which the General Court dismissed the action brought by that Member State against Commission Implementing Decision (EU) 2017/2014. (
                  3
               ) By that decision, the Commission, inter alia, imposed on the French Republic a 100% flat-rate financial correction in respect of the area-related direct aid paid in Upper Corsica for the claim years 2013 and 2014, on account of grave deficiencies identified in the system for control of the aid. The rate of 100% corresponds to the entirety of the aid paid.
         
      
            2.
         
         
            The conditions for application of a 100% flat-rate correction are set out in point 3.2.5 of the Commission’s Guidelines on the calculation of financial corrections. (
                  4
               ) That point states that such a rate may be applied where the deficiencies in a Member State’s control system are so serious as to constitute a complete failure to comply with EU rules, such as to render all the payments irregular.
         
      
            3.
         
         
            In support of its appeal, the French Republic submits that the General Court erred in law in the judgment under appeal in holding that the Commission’s imposition of a 100% flat-rate correction was justified. That Member State does not dispute that the control system in Upper Corsica was deficient, such that the Commission was entitled to impose a flat-rate correction. However, it claims that the General Court misinterpreted and misapplied point 3.2.5 of the Guidelines by holding that the conditions mentioned therein for the application of a 100% rate were fulfilled. By the present appeal, the Court is therefore called upon to consider, for the first time I believe, the conditions governing the imposition of a 100% flat-rate financial correction, as laid down in point 3.2.5 of the Guidelines.
         
      
            4.
         
         
            On concluding my analysis, I shall propose that the Court uphold the appeal.
         
      
      II. Legal context
   
   
      
         A.
       
         Regulation (EU) No 1306/2013
      
   
   
            5.
         
         
            Article 52 of Regulation (EU) No 1306/2013, (
                  5
               ) entitled ‘Conformity clearance’, provides, in paragraph 1 thereof, that the Commission is to adopt implementing acts determining the amounts to be excluded from EU financing where it finds that EAGF and EAFRD expenditure has not been effected in conformity with EU law. In accordance with Article 52(2) of that regulation, the Commission is required to assess the amounts to be excluded on the basis of, inter alia, the gravity of the non-conformity recorded, taking due account of the nature of the infringement and of the financial damage caused to the European Union.
         
      
      
         B.
       
         Implementing Regulation (EU) No 907/2014
      
   
   
            6.
         
         
            The criteria and methodology for applying corrections in accordance with Article 52(1) of Regulation No 1306/2013 are laid down in Article 12 of Implementing Regulation (EU) No 907/2014. (
                  6
               ) It is apparent from Article 12(6) of that regulation that, where the amounts to be excluded from EU financing cannot be determined using the calculation or the extrapolation described in paragraphs 2 and 3 of that article, (
                  7
               ) the Commission is to apply appropriate flat-rate corrections, taking into account the nature and gravity of the infringement and its own estimation of the risk of financial damage caused to the European Union.
         
      
            7.
         
         
            Article 12(7)(c) of Regulation (EU) No 907/2014 provides:
            ‘When establishing the level of flat-rate corrections, the Commission shall specifically take into account the following circumstances demonstrating a higher gravity of the deficiencies revealing a greater risk of loss for the Union’s budget:
            …
            (c) the Member State’s application of a control system is found to be absent or gravely deficient, and there is evidence of widespread irregularity and negligence in countering irregular or fraudulent practices;
            …’
         
      
      
         C.
       
         The Guidelines
      
   
   
            8.
         
         
            In its Guidelines, the Commission set out the general principles and the levels of flat-rate correction that it may propose in accordance with Article 52(1) of Regulation No 1306/2013 and Article 12(6) and (7) of Implementing Regulation No 907/2014. (
                  8
               )
         
      
            9.
         
         
            In so far as the general principles are concerned, it is apparent from the Guidelines that, in the case of flat-rate corrections, the probable financial damage caused to the European Union is to be determined by evaluating the risk created by the control deficiencies, which may relate to the nature, quality or quantity of checks carried out. The underlying principle, which is the principle of proportionality, alluded to in Article 52(2) of Regulation No 1306/2013, requires that the rate of correction must be clearly linked to the financial damage caused to the European Union. (
                  9
               )
         
      
            10.
         
         
            As regards the level of flat-rate correction, the Guidelines provide for the application, in accordance with the circumstances mentioned, of a correction of 2%, 3%, 5%, 7% or 10%. (
                  10
               ) In addition, the Guidelines make it clear that, in exceptional cases, higher rates of correction, of up to 100%, may be applied. (
                  11
               ) A higher rate is prescribed for the cases referred to in Article 12(7)(c) of Implementing Regulation No 907/2014. Thus, point 3.2.5 of the Guidelines, which relates to that provision, states:
            ‘“[If] the Member State’s application of a control system is found to be absent or gravely deficient, and there is evidence of widespread irregularity and negligence in countering irregular or fraudulent practices” [ (
                  12
               )], then a correction of 25% is justified, as it can reasonably be assumed that the freedom to submit irregular claims with impunity will occasion exceptionally high financial damages to the Union’s budget.
            The rate of correction may be fixed at an even higher rate where appropriate. This could be the case when, as a result of information provided by the Member State, the population at risk has been (heavily) confined. Or the entire expenditure may be disallowed when the deficiencies are so serious as to constitute a complete failure to comply with Union rules, so rendering all the payments irregular.’
         
      
      III. The background to the dispute, the action before the General Court and the judgment under appeal
   
   
      
         A.
       
         The background to the dispute
      
   
   
            11.
         
         
            For the purposes of this Opinion, the background to the dispute, set out by the General Court in paragraphs 1 to 37 of the judgment under appeal, may be summarised as follows.
         
      
            12.
         
         
            From 24 to 28 November 2014, the Commission carried out an investigation in France into the area-related aid requested for the claim years 2013 and 2014. On the conclusion of that investigation, the Commission informed the French Republic of the outcome thereof, and there then followed an exchange of correspondence between that institution and that Member State relating to the investigation.
         
      
            13.
         
         
            By letter of 20 May 2016 (‘the communication of 20 May 2016’), the Commission informed the French Republic of its proposal to exclude a total amount of EUR 117439 017.55 from EU financing on the ground that the area-related aid scheme in France had been implemented in the claim years 2013 and 2014 in a manner that was not compliant with the EU rules. The amount in question comprised four groups of proposed corrections, one of which concerned the area-related direct aid paid in Upper Corsica. That particular correction was a 100% flat-rate correction corresponding to an amount of EUR 28973 945.46.
         
      
            14.
         
         
            That 100% flat-rate correction was based on numerous findings of deficiencies relating to, inter alia, problems with the definition of the eligible areas.
         
      
            15.
         
         
            First of all, the French rules permitted the use of pre-defined ratios for the taking into account of landscape features in the agricultural area, in a manner inconsistent with EU legislation on ‘good agricultural and environmental conditions’. As a result, the French authorities had not always excluded ineligible areas. More specifically, the French rules did not ensure that the ‘maintenance’ of the agricultural land in good agricultural and environmental conditions would be checked, in accordance with Article 6 of Regulation (EC) No 73/2009. (
                  13
               )
         
      
            16.
         
         
            Secondly, the proposed correction was based on problems linked to the definition of the eligible areas resulting from an incorrect interpretation, on the part of the French authorities, of Article 34 of Regulation (EC) No 1122/2009. (
                  14
               ) Essentially, the French authorities had treated as eligible areas that were mainly wooded, with very low-grade grazing resources, or areas inaccessible to animals, all of which they had declared as ‘grazeable heathland’, even though the areas in question did not meet the conditions laid down in the EU legislation.
         
      
            17.
         
         
            Furthermore, the Commission noted in the communication of 20 May 2016 that the same deficiencies had already been observed during the conformity assessment procedures for the claim years 2008 to 2012, and yet the French authorities had not altered the approach they had previously taken in that regard. Given that the approach adopted to date had not been altered in such a way as to have a real impact on the ground, the corrections applied to the département concerned following previous investigations – at a flat rate of 100% – would continue to be applied for the claim years 2013 and 2014.
         
      
            18.
         
         
            By letter of 22 June 2016, the French authorities referred the financial correction decided on by the Commission for the département of Upper Corsica to the Conciliation Body. They argued, in substance, that the Commission’s reasons for rejecting the figures which they had put forward in this connection were not sufficient in the light of EU legislation and that the proposed 100% flat-rate correction for Upper Corsica was inconsistent with the procedures for quantifying the damage laid down in EU legislation.
         
      
            19.
         
         
            On 19 December 2016, the Conciliation Body delivered its opinion. It found, essentially, that conciliation was not possible at that stage and took the view that a 100% correction would probably be disproportionate to the actual risk to the EAGF. Consequently, it invited the Commission to consider a lower correction.
         
      
            20.
         
         
            On 21 February 2017, the Commission adopted its final position. It maintained its initial position, explained in the communication of 20 May 2016, and stated that a 100% flat-rate correction was justified since the information available showed that the deficiencies in the monitoring of aid in Upper Corsica were so serious as to constitute a complete failure to comply with EU rules and created a very substantial risk for the EAGF.
         
      
            21.
         
         
            On 8 November 2017, pursuant to Article 52(1) of Regulation No 1306/2013, the Commission adopted the decision at issue, by which it imposed four groups of corrections, including a 100% flat-rate correction of EUR 28973 945.46 relating to the expenditure for the direct area-related aid for Corsica for the 2013 and 2014 claim years, on account of the serious deficiencies found in the control system for that aid (under the heading ‘Control system gravely deficient [Corsica]’). In the summary report annexed to the decision at issue, the Commission justified the imposition of that correction on the same grounds as those which it had set out in its communication of 20 May 2016.
         
      
      
         B.
       
         The action before the General Court
      
   
   
            22.
         
         
            By application lodged at the Registry of the General Court on 19 January 2018, the French Republic brought an action seeking partial annulment of the decision at issue. It put forward a number of pleas directed against the four groups of financial corrections, including the 100% correction concerning Upper Corsica. By the judgment under appeal, the General Court dismissed the action.
         
      
      
         C.
       
         The procedure before the Court of Justice and the forms of order sought
      
   
   
            23.
         
         
            By document of 23 May 2019, the French Republic brought the present appeal against the judgment of the General Court. In its appeal, that Member State challenges solely the merits of one of the four groups of financial corrections addressed by the General Court in the judgment under appeal, namely the 100% flat-rate correction relating to the area-related direct aid paid in Upper Corsica for the 2013 and 2014 claim years.
         
      
            24.
         
         
            Thus, by its appeal, the French Republic claims that the Court should:
            
                     –
                  
                  
                     set aside the judgment under appeal in part, in so far as the General Court rejected the French Republic’s claim seeking annulment of the decision at issue on the ground of infringement of the principle of proportionality, in that it imposes on the French Republic a 100% flat-rate correction on account of deficiencies in the control system for the area-related aid in Upper Corsica for the 2013 and 2014 claim years;
                  
               
                     –
                  
                  
                     give final judgment in the dispute, annulling the decision at issue in so far as it imposes on the French Republic 100% flat-rate corrections on account of deficiencies in the control system for the area-related aid in Upper Corsica for the 2013 and 2014 claim years; and
                  
               
                     –
                  
                  
                     order the Commission to pay the costs.
                  
               
      
            25.
         
         
            By its response, the Commission contends that the Court should:
            
                     –
                  
                  
                     dismiss the appeal; and
                  
               
                     –
                  
                  
                     order the French Republic to pay the costs.
                  
               
      
            26.
         
         
            At the hearing held on 27 February 2020, the French Republic and the Commission presented oral argument.
         
      
      IV. Analysis
   
   
            27.
         
         
            By its single ground of appeal, the French Republic submits that the General Court erred in law in the judgment under appeal in holding that the Commission was entitled to impose the 100% flat-rate correction with respect to the area-related direct aid paid in Upper Corsica for the 2013 and 2014 claim years.
         
      
            28.
         
         
            In the decision at issue, that correction was justified by reference to the particular situation in the département of Upper Corsica, where the Commission had found deficiencies consisting, in particular, in problems with the definition of the eligible areas. (
                  15
               ) The Commission also stated that those deficiencies had already been observed during the conformity assessment procedures for the claim years 2008 to 2012 and that, as there had been no change in the approach taken by the French authorities, a flat-rate correction of 100% had to be applied also for the 2013 and 2014 claim years. (
                  16
               )
         
      
            29.
         
         
            Before the General Court, the French Republic disputed the soundness of the decision at issue, arguing in particular that the conditions for the application of a 100% flat-rate correction, laid down in point 3.2.5 of the Guidelines, were not fulfilled and that the correction at issue was therefore disproportionate.
         
      
            30.
         
         
            In the judgment under appeal, the General Court rejected that plea as unfounded. (
                  17
               ) More specifically, the General Court, essentially, first, interpreted, in paragraphs 117 and 118 of the judgment under appeal, the conditions for the application of a 100% correction laid down in point 3.2.5 of the Guidelines, and then, in paragraphs 134 to 136 of the judgment under appeal, applied that interpretation to the facts of the case. In that regard it held, first, that the control system in Upper Corsica was based on an incorrect definition of the eligible areas, which constituted a breach of one of the substantive conditions of the area-related aid scheme, and, secondly, that that breach was so serious as to constitute, in accordance with point 3.2.5 of the Guidelines, a complete failure to comply with EU rules that was of such a kind as to render all the payments irregular. The General Court concluded that the Commission was therefore entitled to impose the correction at issue.
         
      
            31.
         
         
            In support of its appeal, the French Republic submits that the General Court erred in law, in paragraph 118 of the judgment under appeal, in its interpretation of point 3.2.5 of the Guidelines, which had then led to an incorrect application of the Guidelines in paragraphs 134 to 136 of the judgment under appeal. That Member State claims, in particular, that the fact that the control system breached a substantive condition of the area-related aid scheme was not in itself sufficient to justify the application of a 100% correction. In other words, the French Republic does not dispute, as such, the deficiencies which the Commission identified in the control system in Upper Corsica; it merely claims that those deficiencies cannot result in the application of a flat-rate correction of 100%.
         
      
            32.
         
         
            The Commission, for its part, refutes the French Republic’s arguments and contends that the ground of appeal should be rejected as unfounded.
         
      
            33.
         
         
            In order to assess the French Republic’s ground of appeal, it is appropriate to begin by determining the Commission’s justification for imposing the correction at issue, given that this point is disputed by the parties before the Court (section A), then to examine the General Court’s interpretation of point 3.2.5 of the Guidelines, as set out in paragraphs 117 and 118 of the judgment under appeal (section B), and finally, in the light of that analysis, to determine whether the General Court acted correctly in law in approving the Commission’s imposition of the correction at issue in paragraphs 134 to 136 of the judgment under appeal (section C).
         
      
      
         A.
       
         The Commission’s justification for imposing the correction at issue
      
   
   
            34.
         
         
            I would emphasise at the outset that the imposition of a financial correction of 100% may be justified in two distinct situations: either where the entirety of the expenditure has been granted without any legal basis in EU law (‘the first situation’) or where a legal basis for the financing does exist in EU law but the Member State’s control system is seriously deficient, such as to render all the payments irregular (‘the second situation’). (
                  18
               ) It is this second situation that is addressed by point 3.2.5 of the Guidelines.
         
      
            35.
         
         
            The Commission has confirmed before the Court that its imposition of the correction at issue was based on the second situation. However, it has argued that it imposed the correction also on the basis of the first situation. Thus, in its reply, the Commission alleged that ‘there were both payments of aid without any legal basis and serious defects in the control system in Upper Corsica’, and it confirmed that position at the hearing. (
                  19
               )
         
      
            36.
         
         
            On this point, I would observe that it is important to ascertain whether the imposition of the correction at issue was based solely on the second situation, as the French Republic claims, or whether it was based on both the second and the first situations, as the Commission maintains. For one thing, the justification, and therefore, the Court’s review, will differ depending on the case, and for another, the French Republic complains that, in the judgment under appeal, the General Court conflated the conditions which apply in the first and second situations respectively for the imposition of a financial correction of 100%.
         
      
            37.
         
         
            In order to assess the French Republic’s claim, it is therefore necessary to establish at the outset which situation or situations provided the basis for the Commission’s imposition of the correction at issue. In order to do that, I think it helpful to bear in mind the differences between the two situations.
         
      
      1. The differences between the two situations
   
   
            38.
         
         
            As regards, first of all, the justification for imposing a 100% correction, it should be noted that, in the first situation, that justification is to be found in the legislation.
         
      
            39.
         
         
            Indeed, it is clear from the Court’s settled case-law that only interventions made in accordance with the EU rules in the framework of the common organisation of agricultural markets are to be financed by the EAGF. Thus, only sums that are paid in accordance with the rules laid down in the context of the common organisation of the agricultural markets may be charged to the EAGF. All other sums are thus to be borne by the Member States, in particular sums which national authorities have wrongly considered themselves authorised to pay in the context of that common organisation. (
                  20
               )
         
      
            40.
         
         
            In that situation, aid paid pursuant to a non-existent legal basis must be excluded from EU financing whether or not there has been irregularity or negligence on the part of the national authorities. In such cases the Commission has no discretion as to whether or not to allow expenditure to be financed by the European Union. (
                  21
               ) A correction imposed in such a situation is therefore a one-off correction, which means that the loss suffered by the European Union – and thus the amount to be excluded – can be determined precisely.
         
      
            41.
         
         
            
               In the second situation, the justification for applying a rate of 100% lies in the application by the Member State of a gravely deficient control system, as referred to in Article 12(7)(c) of Regulation No 907/2014. Accordingly, in point 3.2.5 of the Guidelines, which relates to that provision, the Commission clarified that, when the deficiencies in the control system are so serious as to constitute a complete failure to comply with EU rules such as to render all the payments irregular, it is appropriate to apply a 100% correction. (
                  22
               )
         
      
            42.
         
         
            I must emphasise that, unlike the situation in which aid is paid without any legal basis (the first situation), the 100% rate referred to in point 3.2.5 of the Guidelines is a flat rate, meaning that the loss to the EU budget cannot be determined precisely. Thus, according to Article 12(6) of Regulation No 907/2014, the flat-rate corrections provided for in Article 12(7) are to be applied where the amounts to be excluded cannot be determined by means of the calculation or the extrapolation referred to in paragraphs 2 and 3 of Article 12. (
                  23
               )
         
      
            43.
         
         
            In other words, in accordance with Article 12(6) of Regulation No 907/2014, when the Commission applies flat-rate corrections, it must determine the amount to be excluded by reference to the scale of the risk of loss to the EU budget, taking into account the nature and gravity of the infringement. (
                  24
               )
         
      
            44.
         
         
            Secondly, as regards judicial review, it follows from the foregoing that, in the case of the first situation, the General Court must ascertain whether the national authorities granted aid without any legal basis in EU law. That assessment consists in evaluating whether the aid was paid in breach of the substantive conditions governing the aid scheme in question, which are essential conditions for determining the eligibility of aid applications, and thus outside the scope of the aid scheme in question. (
                  25
               )
         
      
            45.
         
         
            By contrast, in the case of the second situation, the General Court must ascertain whether the Commission was entitled to take the view that the deficiencies in the control system were so serious as to constitute a complete failure to comply with EU rules, such as to render all payments irregular, in accordance with point 3.2.5 of the Guidelines. In other words, the General Court must review the merits of the Commission’s estimation of the actual loss to the EU budget. (
                  26
               )
         
      
      2. The justification for the correction at issue
   
   
            46.
         
         
            As regards the correction at issue, it seems to me that the Commission’s argument that that correction was also based on the first situation is inadmissible. Indeed, I note that this argument was not raised before the General Court and that, in the judgment under appeal, the General Court confined itself to verifying whether the correction at issue was justified in the light of point 3.2.5 of the Guidelines, (
                  27
               ) which, I would reiterate, relates to the second situation.
         
      
            47.
         
         
            That said, even if this argument had been raised before the General Court, the latter would, in my view, still have been right to confine itself to examining, in the judgment under appeal, whether the imposition of the correction at issue was justified on the basis of the second situation. Indeed, I note that the documents in the case file indicate that the Commission based the imposition of the correction at issue on the deficiencies identified in the control system, (
                  28
               ) which it would have been pointless to do if all of the aid paid had already been unlawful for having no legal basis in EU law. (
                  29
               ) Furthermore, it is common ground that the correction at issue, of 100%, was imposed by the Commission as a flat-rate correction. (
                  30
               )
         
      
            48.
         
         
            It follows from the foregoing that, in the context of the present appeal, it is only necessary to determine whether the General Court erred in law in finding the imposition, pursuant to point 3.2.5 of the Guidelines, of a 100% correction on account of a deficient control system to be justified. (
                  31
               )
         
      
      
         B.
       
         The General Court’s interpretation of point 3.2.5 of the Guidelines
      
   
   
            49.
         
         
            The General Court’s interpretation of point 3.2.5 of the Guidelines is set out in paragraphs 117 and 118 of the judgment under appeal. In those paragraphs, the General Court refers to an interpretation of that point of the Guidelines already established in its own case-law. (
                  32
               )
         
      
            50.
         
         
            I note that the French Republic has taken issue solely with the interpretation given by the General Court in paragraph 118 of the judgment under appeal. However, paragraph 118 refers to the preceding paragraph 117. In order to verify the soundness of paragraph 118, it is therefore first necessary to examine paragraph 117. As I shall explain, I consider that the case-law referred to in paragraph 117 of the judgment under appeal constitutes a reasonable interpretation of point 3.2.5 of the Guidelines (section 1), whereas it seems to me that the General Court erred in law in paragraph 118 (section 2).
         
      
      1. The case-law referred to in paragraph 117 of the judgment under appeal
   
   
            51.
         
         
            According to the case-law referred to in paragraph 117 of the judgment under appeal, a rate of correction of 100% will apply, on the basis of point 3.2.5 of the Guidelines, ‘where an existing control system bears no relation to the relevant EU rules, ignores the substantive elements of the aid scheme in question and its objectives and, by its nature, does not make it possible to detect practices on the part of the operators concerned which circumvent or manipulate the substantive elements. Such control deficiencies create a risk that all payments made under the aid scheme in question will be irregular. Given their financial consequences for fund resources, such deficiencies may be treated in the same way as intervention outside the scope of an aid scheme.’
         
      
            52.
         
         
            In my view, that case-law constitutes a reasonable interpretation of point 3.2.5 of the Guidelines, inasmuch as the three cumulative indicators mentioned in paragraph 117, taken together, make it possible to determine whether deficiencies in a control system are so serious as to constitute a complete failure to comply with EU rules, such as to render all the payments irregular, as provided for in the Guidelines.
         
      
            53.
         
         
            Indeed, the first indicator (the control system bears no relation to the relevant EU rules) first of all ensures compliance with the essential condition for applying a 100% correction stated in point 3.2.5 of the Guidelines, namely that the deficiencies in the control system are so serious as to constitute a complete failure to comply with the EU rules. I would emphasise in this regard that, where a control system is found to be absent or gravely deficient, within the terms of Article 12(7)(c) of Regulation No 907/2014, yet does not constitute a complete failure to comply with EU rules, it will, as a general rule, be appropriate, in accordance with the Guidelines, that a correction of 25% should be applied.
         
      
            54.
         
         
            Next, the second indicator (the control system ignores the substantive elements of the aid scheme in question and its objectives) defines the type of deficiency liable to render all the payments irregular. I would reiterate that the substantive elements of an aid scheme are essential conditions for the grant of aid (
                  33
               ) and the fact that the control system ignores one or several of them is thus capable of rendering all the payments irregular. (
                  34
               ) The same is true with regard to the objectives of an aid scheme. Indeed, even if the substantive conditions are formally met, it is possible that the underlying objectives of the common organisation of the markets will not be met, with the result that all the payments will be irregular. (
                  35
               )
         
      
            55.
         
         
            Lastly, the third indicator (the control system, by its nature, does not make it possible to detect practices on the part of the operators concerned which circumvent or manipulate the substantive elements) is based on the hypothesis referred to in Article 12(7)(c) of Regulation No 907/2014, which is that there is evidence of widespread irregularity and negligence in countering irregular or fraudulent practices.
         
      
            56.
         
         
            As these three cumulative indicators make clear, the application of a flat rate of 100% is strictly circumscribed, and rightly so, in my opinion.
         
      
            57.
         
         
            I would point out, first, that the application of a 100% correction is confined to exceptional cases where the deficiencies in the control system are, by reason of their financial consequences for the funds, comparable to interventions outside the scope of an aid scheme (the first situation). (
                  36
               ) However, because of the nature of the deficiencies in the control system, which do not make it possible to check whether the aid has been properly paid, (
                  37
               ) the Commission is not in a position to establish whether all of the disputed aid has in fact been paid in breach of EU law, as is the case where aid is paid without any legal basis. The three indicators mentioned in paragraph 117 of the judgment under appeal make it possible in this regard to ascertain whether there are deficiencies in the control system that are so serious as to make it possible to regard all of the payments as irregular.
         
      
            58.
         
         
            Second, it must be borne in mind that, in accordance with point 3.2.5 of the Guidelines, it is generally appropriate to apply a correction of 25% where a Member State’s application of a control system is found to be absent or gravely deficient and there is evidence of widespread irregularity and negligence in countering irregular or fraudulent practices. In other words, in order for a correction of more than 25% – a fortiori a 100% correction – to be applied, there must be evidence of the existence of circumstances of even greater gravity than the situation which justifies the application of a correction of 25% and, in the case of a 100% correction, evidence of circumstances of extreme gravity. (
                  38
               ) Only a comprehensive body of evidence is sufficient to establish such additional gravity.
         
      
      2. The case-law referred to in paragraph 118 of the judgment under appeal
   
   
            59.
         
         
            Paragraph 118 of the judgment under appeal goes on to state ‘[t]hus, it is clear from [the] case-law [referred to in paragraph 117 of the judgment under appeal] that it is not the deficiencies in the application of certain key controls so much as the non-compliance with the substantive elements of the aid scheme in question and its objectives that justifies the application of a financial correction of 100%. The failure to fulfil one or more of the substantive conditions for the grant of the aid justifies the exclusion of the expenditure in its entirety (judgment of 10 July 2014, Greece v Commission, T‑376/12, EU:T:2014:623, paragraph 123 (not published))’.
         
      
            60.
         
         
            To my mind, how that paragraph is to be understood, and in particular how it interacts with the three indicators mentioned in paragraph 117 of the judgment under appeal, is unclear. The meaning of this paragraph was thus the subject of debate at the hearing, and rightly so in my opinion. Indeed, paragraph 118 lacks clarity in two respects.
         
      
            61.
         
         
            First of all, I note that paragraph 118 refers to paragraph 123 of the judgment in Greece v Commission, (
                  39
               ) but cites it only in part. Secondly, the meaning of paragraph 123 of the judgment cited is itself unclear and does not, in my view, clarify the scope of paragraph 118 of the judgment under appeal.
         
      
            62.
         
         
            That said, I would however observe that, in paragraph 135 of the judgment under appeal, the General Court again refers to paragraph 118 and states that ‘in accordance with the case-law cited in paragraphs 117 and 118 [of the judgment under appeal], the non-compliance with the substantive conditions of the aid scheme in question justifies the exclusion of the expenditure in its entirety’.
         
      
            63.
         
         
            Having regard to that finding, it seems to me that, as the French Republic pointed out at the hearing, the General Court, in paragraph 118 of the judgment under appeal, mistakenly conflated the justification for imposing a flat-rate correction of 100%, which it very correctly explained in paragraph 117 of the judgment under appeal with reference to the three cumulative indicators, with the justification for imposing a financial correction of 100% in the case of aid granted without any legal basis. I would reiterate that it is only in the latter case that non-compliance with the substantive conditions can of itself justify a correction of 100%.
         
      
            64.
         
         
            On this point, the Commission stated at the hearing that point 3.2.5 of the Guidelines concerns the situation in which the national rules conform to the substantive conditions resulting from EU law and in which the Member State’s only infringement lies in the control system, which fails to ensure that the substantive conditions are actually met. However, in the present case, the infringement lay both in the national rules, which were inconsistent with EU law, and in the control system. It was thus the incorrect definition laid down in the national rules that led to the errors in the control system. (
                  40
               )
         
      
            65.
         
         
            According to the Commission, it is in this context that paragraphs 117 and 118 must be understood. It submits that those paragraphs – taken together – mean that where, in the context of flat-rate corrections, an infringement lies both in the national rules and in deficiencies in the control system, and those deficiencies make it impossible to determine who was entitled to aid and to what amount of aid, a 100% flat-rate correction is justified. In such a situation there is, according to the Commission, a risk that the entirety of the expenditure may be incorrect.
         
      
            66.
         
         
            In addition to the fact that the Commission’s proposed reading departs somewhat from the judgment under appeal, given what I have said, it seems to me that it is any event contrary to the regulatory framework and to the Guidelines.
         
      
            67.
         
         
            As regards the regulatory framework, it must be borne in mind, first, that the imposition of a flat-rate correction – at whatever rate – by its nature implies that the actual loss cannot be determined precisely. The uncertainty regarding the loss suffered by the European Union thus justifies the imposition of a flat-rate correction. However, it cannot of itself justify a 100% flat-rate correction.
         
      
            68.
         
         
            Secondly, while it is reasonable to assume that, generally, the fact that national rules – separately from the control system – fail to comply with the substantive conditions increases the risk of loss to the European Union, that fact alone in no way implies that the actual risk will be as high as 100%. I would point out in this regard that not every breach of the substantive conditions is capable of rendering all the payments irregular, (
                  41
               ) and that it is therefore not permissible to conclude that the actual risk is as high as 100% without at least carrying out an analysis of that matter first.
         
      
            69.
         
         
            As regards the Guidelines, I take the view that the Commission’s interpretation of them is based on a confusion between the conditions for application of a 25% rate of correction and the conditions for application of a 100% rate of correction. Thus, the inability to check whether the aid is benefitting the individuals who are entitled to it is also a consequence of a complete failure on the part of a Member State to implement a control system which justifies the application of a correction of 25%. In reality, any shortcoming in the checks relating to a substantive element which determines the legality of the grant of aid will introduce an element of uncertainty as to whether the aid is benefitting the individuals who are entitled to it. Such circumstances cannot therefore of themselves justify the application of a rate of correction of 100% on the basis of the Guidelines. (
                  42
               ) In short, the fact that there is uncertainty about the regularity of each aid payment made, taken individually, does not mean that all the payments of aid are irregular as provided for in point 3.2.5 of the Guidelines.
         
      
            70.
         
         
            It follows from all of the foregoing that paragraph 117 of the judgment under appeal constitutes a reasonable interpretation of point 3.2.5 of the Guidelines and I suggest that the Court apply that interpretation in the present appeal. As regards paragraph 118 of the judgment under appeal, it seems that the General Court misinterpreted point 3.2.5 of the Guidelines and, as I shall explain, it appears that it was that error that resulted in the incorrect application of that point of the Guidelines.
         
      
      
         C.
       
         The General Court’s application of point 3.2.5 of the Guidelines in the present case
      
   
   
            71.
         
         
            The General Court’s application of point 3.2.5 of the Guidelines to the facts of the present case (in paragraphs 134 to 136 of the judgment under appeal) is based, essentially, on three matters which it had set out earlier in the judgment under appeal and which concern the deficiencies found to exist in the control system in Upper Corsica. Even though these matters are not disputed by the French Republic, they are nevertheless relevant in order to assess what matters are disputed.
         
      
            72.
         
         
            The General Court first of all established that the determination of the agricultural area of a holding is a substantive condition for the grant of area-related aid. If that area is determined incorrectly, on the basis of a definition or one or more of the elements which comprise it (arable land, permanent pasture and permanent crops) that is inconsistent with EU law, then that is an error affecting one of the substantive conditions of the area-related aid scheme, namely the determination of the size of the agricultural area which forms the basis for the calculation of payment entitlements. (
                  43
               )
         
      
            73.
         
         
            Next, the General Court held that the aid scheme in Upper Corsica was based on incorrect definitions concerning the determination of the agricultural area of holdings. There were two such errors and they related to the French authorities’ inclusion of landscape features such as ponds, rocky outcrops and groves and their definition of ‘grazeable heathland’ in a manner inconsistent with the rules laid down by EU law. (
                  44
               )
         
      
            74.
         
         
            Lastly, the General Court found that the errors in the definition of the areas eligible under the area-related aid scheme in Upper Corsica vitiated the integrated administration and control system (IACS) implemented in Upper Corsica, which had been designed on the basis of those errors, such that that control system was incapable of detecting errors relating to the determination of the agricultural areas, which had made it possible for farmers to declare ineligible areas in a number of instances. (
                  45
               )
         
      
            75.
         
         
            In paragraphs 134 to 136 of the judgment under appeal, the General Court held that, on the basis of those errors of definition, ineligible areas had been included almost systematically, which pointed to the existence of a sufficiently serious defect in the control system. According to the General Court, that incorrect definition constituted a failure to comply with a substantive condition. The General Court inferred from this that, in accordance with the case-law cited in paragraphs 117 and 118 of the judgment under appeal, the non-compliance with the substantive conditions of the aid scheme in question justified the exclusion of the expenditure in its entirety and concluded that the deficiencies in question were so serious as to constitute a complete failure to comply with EU rules, such as to render all the payments irregular.
         
      
            76.
         
         
            Like the French Republic, I take the view that the General Court erred in law in paragraphs 134 to 136 of the judgment under appeal in holding that the non-compliance with the substantive conditions of the aid scheme in question justified the exclusion of the expenditure in its entirety, in accordance with point 3.2.5 of the Guidelines. That error comprises, essentially, two elements.
         
      
            77.
         
         
            
               First of all, as I have already made clear in point 63 of this Opinion, the fact that a control system fails to comply with the substantive conditions of an aid scheme is not – in itself – sufficient to justify the imposition of a flat-rate correction of 100% under point 3.2.5 of the Guidelines. (
                  46
               ) The General Court therefore erred in holding, in paragraph 136 of the judgment under appeal, that the ‘deficiencies [in the control system] in question constituted non-compliance with [the substantive conditions of the aid scheme] and were therefore so serious as to constitute a complete failure to comply with EU rules, such as to render all the payments irregular’. (
                  47
               )
         
      
            78.
         
         
            That said, I would observe, next, that the failure to comply with the substantive condition in question was, by its nature, not even capable of rendering all the payments irregular.
         
      
            79.
         
         
            Indeed, the mistaken definition in the present case concerns only some types of surface area (forage areas with very low-grade grazing resources and landscape features such as rocky outcrops, ponds and groves), which does not mean that all the surface areas declared as eligible should not have been so declared. As the General Court itself essentially found in paragraph 127 of the judgment under appeal, quite rightly, the only consequence of the incorrect definition was that the amount of area-related aid was greater than the amount to which the farmers concerned would have been entitled if the agricultural areas of their holdings had been assessed correctly. In other words, the French Republic adopted too broad an understanding of eligible areas, but its misconception of the definition of agricultural area is not such as to render all the payments irregular. The fact that the national rules – separately from the control system – failed to comply with that condition, which led to farmers declaring ineligible areas in numerous instances, does not in any way alter that conclusion.
         
      
            80.
         
         
            It follows from all of the foregoing considerations that the French Republic’s ground of appeal on this point should be upheld and that the judgment under appeal should consequently be set aside in part.
         
      
      
         D.
       
         The action before the General Court
      
   
   
            81.
         
         
            In accordance with the second sentence of the first paragraph of Article 61 of the Statute of the Court of Justice of the European Union, if the decision of the General Court is set aside, the Court of Justice may itself give final judgment in the matter where the state of the proceedings so permits.
         
      
            82.
         
         
            I believe that that is the situation in the present case. Indeed, the Commission’s imposition of the correction at issue was based, essentially, on the very two deficiencies in the control system that the General Court described. (
                  48
               ) It is, however, clear from the analysis in the present Opinion that those deficiencies cannot justify a flat-rate correction of 100%. The decision at issue should therefore be annulled in so far as this point is concerned.
         
      
      
         E.
       
         Costs
      
   
   
            83.
         
         
            Under Article 184(2) of its Rules of Procedure, where the appeal is well founded and the Court itself gives final judgment in the case, the Court is to make a decision as to costs.
         
      
            84.
         
         
            In accordance with Article 138(1) of those rules, which applies to appeal proceedings by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.
         
      
            85.
         
         
            Since the Commission has been unsuccessful, it must be ordered to bear its own costs and to pay those incurred by the French Republic.
         
      
      V. Conclusion
   
   
            86.
         
         
            In light of the foregoing considerations, I propose that the Court:
            
                     –
                  
                  
                     set aside in part the judgment of the General Court of the European Union of 12 March 2019, France v Commission, T‑26/18, not published, EU:T:2019:153, in so far as it rejected the French Republic’s claim for annulment, on the ground of infringement of the principle of proportionality, of Commission Implementing Decision (EU) 2017/2014 of 8 November 2017 excluding from European Union financing certain expenditure incurred by the Member States under the European Agricultural Guarantee Fund (EAGF) and under the European Agricultural Fund for Rural Development (EAFRD), in so far as it imposes on the French Republic a 100% flat-rate correction on account of deficiencies in the system for the control of the area-related aid in Upper Corsica for the 2013 and 2014 claim years;
                  
               
                     –
                  
                  
                     annul Commission Implementing Decision (EU) 2017/2014 of 8 November 2017 excluding from European Union financing certain expenditure incurred by the Member States under the European Agricultural Guarantee Fund (EAGF) and under the European Agricultural Fund for Rural Development (EAFRD), in so far as it imposes on the French Republic 100% flat-rate corrections on account of deficiencies in the system for the control of the area-related aid in Upper Corsica for the 2013 and 2014 claim years;
                  
               
                     –
                  
                  
                     order the European Commission to bear its own costs and to pay those incurred by the French Republic.
                  
               
      (
         1
      )	Original language: French.
   (
         2
      )	T‑26/18, not published, ‘the judgment under appeal’, EU:T:2019:153.
   (
         3
      )	Decision of 8 November 2017 excluding from European Union financing certain expenditure incurred by the Member States under the European Agricultural Guarantee Fund (EAGF) and under the European Agricultural Fund for Rural Development (EAFRD) (OJ 2017 L 292, p. 61) (‘the decision at issue’).
   (
         4
      )	Guidelines of 8 June 2015 on the calculation of the financial corrections in the framework of the conformity and financial clearance of accounts procedures (Communication C(2015) 3675 final; ‘the Guidelines’).
   (
         5
      )	Regulation of the European Parliament and of the Council of 17 December 2013 on the financing, management and monitoring of the common agricultural policy and repealing Council Regulations (EEC) No 352/78, (EC) No 165/94, (EC) No 2799/98, (EC) No 814/2000, (EC) No 1290/2005 and (EC) No 485/2008 (OJ 2013 L 347, p. 549).
   (
         6
      )	Commission Delegated Regulation of 11 March 2014 supplementing Regulation (EU) No 1306/2013 of the European Parliament and of the Council with regard to paying agencies and other bodies, financial management, clearance of accounts, securities and use of euro (OJ 2014 L 255, p. 18).
   (
         7
      )	For a correction calculated in accordance with Article 12(2) of Regulation No 907/2014, the Commission bases the exclusion on the identification of the amounts unduly spent. For an extrapolated correction in accordance with Article 12(3) of Regulation No 907/2014, the amount to be excluded from EU financing, following an extrapolation, through statistical means, is the result of checks carried out on a representative sample of the entire population from which the sample was taken, limited to the area for which the same non-conformity may reasonably be expected to occur (point 1.2 of the Guidelines).
   (
         8
      )	See point 11.3.2, in Chapter 11 of the Guidelines, which refers to Chapter 3 thereof.
   (
         9
      )	Points 1.3.2 and 3.1 of the Guidelines.
   (
         10
      )	Point 3.2 of the Guidelines.
   (
         11
      )	Point 3 of the Guidelines.
   (
         12
      )	The wording within the quotes corresponds essentially to that of Article 12(7)(c) of Implementing Regulation No 907/2014.
   (
         13
      )	Council Regulation 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, (EC) No 378/2007 and repealing Regulation (EC) No 1782/2003 (OJ 2009 L 30, p. 16).
   (
         14
      )	Commission Regulation of 30 November 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 by 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).
   (
         15
      )	See, in this regard, points 14 to 16 of this Opinion.
   (
         16
      )	On this issue, see point 17 of this Opinion. In the case which gave rise to the judgment of 12 March 2019, France v Commission (T‑156/15, not published, EU:T:2019:157), the French Republic challenged the soundness of that imposition of a 100% correction for the 2011 and 2012 claim years on grounds similar to those invoked in the judgment under appeal. In the judgment in Case T‑156/15, the General Court annulled that correction on grounds of infringement of the rights of the defence, and thus did not have occasion to consider whether the correction also infringed the principle of proportionality (paragraphs 120 to 138 of the judgment).
   (
         17
      )	See paragraphs 111 to 139 of the judgment under appeal.
   (
         18
      )	See, to that effect, the Opinion of Advocate General Stix-Hackl in Belgium v Commission (C‑332/00, EU:C:2001:653, points 68 to 71 and the case-law cited).
   (
         19
      )	The French Republic has pointed out in this connection that it is only in the context of the appeal that the Commission has claimed that the correction at issue was based both on the payment of aid without any legal basis and on serious defects in the control system.
   (
         20
      )	See, to that effect, judgment of 18 April 2002, Belgium v Commission (C‑332/00, EU:C:2002:235, paragraph 44).
   (
         21
      )	See, to that effect, judgment of 18 April 2002, Belgium v Commission (C‑332/00, EU:C:2002:235, paragraphs 36 and 45 and the case-law cited).
   (
         22
      )	In the exercise of its power to decide on the expenditure to be excluded from EU financing by reason of deficiencies in the checks carried out by the Member States, the Commission is bound by those Guidelines and cannot therefore depart from them (see, to that effect, judgment of 10 July 2014, Greece v Commission (T‑376/12, EU:T:2014:623, paragraph 108 and the case-law cited).
   (
         23
      )	For a definition of these types of calculation, see footnote 7 to this Opinion.
   (
         24
      )	Generally speaking, the fact that the amounts to be excluded in the case where a control system is gravely deficient cannot be determined precisely is the result of the very nature of such a deficiency. For example, if there is a failure to carry out several key controls, the control system will, by its very nature, be of little use in determining whether an aid application is permissible.
   (
         25
      )	See, inter alia, judgment of 18 April 2002, Belgium v Commission (C‑332/00, EU:C:2002:235, paragraph 36). In that case, aid had been paid on an essentially non-existent legal basis, which entailed the exclusion of the entire amount from EU financing, irrespective of any finding of irregularity or negligence on the part of the competent authorities. See also judgment of 6 July 2000, Spain v Commission (C‑45/97, EU:C:2000:362, paragraphs 40 to 43), in which the Court found the infringement of EU legislation on the purity of olive oil to be established, in that the presence of a chemical substance was incompatible with the definition of olive oil, and accordingly held that the correction of 100% of the expenditure was justified. Similarly, in its judgment of 9 April 2008, Greece v Commission (T‑364/04, not published, EU:T:2008:97, paragraph 39), the General Court found that a refusal to finance any of the expenditure was justified, since all of the deliveries of peaches in question had taken place outside the Community scheme on account of non-compliance with minimum price requirements.
   (
         26
      )	As will become clear in section IV.B of this Opinion, the General Court has, for this purpose, developed in its case-law an interpretation by reference to which it may review the merits of such an estimation.
   (
         27
      )	See, in this regard, sections IV.B and IV.C of this Opinion. I would point out that, according to its settled case-law, the Court’s jurisdiction in appeals is limited to assessing the findings of law on the pleas and arguments raised before the General Court: see, inter alia, judgment of 24 March 2011, ISD Polska and Others v Commission (C‑369/09 P, EU:C:2011:175, paragraph 83 and the case-law cited).
   (
         28
      )	Inter alia, the reason for the flat-rate correction is worded ‘Control system gravely deficient’ in the table annexed to the decision at issue. In addition, the Commission stated, in its final position of 21 February 2017, that, ‘[s]ince the information available shows that the deficiencies in the control of aid in Upper Corsica are so serious as to constitute a complete failure to comply with EU rules … and create a very substantial risk to the EAGF, a 100% correction is justified.’
   (
         29
      )	See, to that effect, judgment of 18 April 2002, Belgium v Commission (C‑332/00, EU:C:2002:235, paragraph 36).
   (
         30
      )	It is apparent from a table annexed to the decision at issue that the type of expenditure excluded is a ‘flat-rate correction’.
   (
         31
      )	That said, in the context of the present appeal and in the context of flat-rate corrections, another question, separate but nevertheless associated, arises, namely the question whether, and if so to what extent, the payment of aid on an incorrect (but not non-existent) legal basis may justify the imposition of a flat-rate correction of 100% where that incorrect legal basis creates a deficiency in the control system which makes it impossible to determine who was entitled to the aid and who was not (see points 64 to 69 of this Opinion).
   (
         32
      )	That case-law interprets Commission Document No VI/5330/97 of 23 December 1997, entitled ‘Guidelines for the calculation of financial consequences when preparing the decision regarding the clearance of the accounts of the EAGGF Guarantee Section’, which was replaced in 2015 by the Guidelines. Point 3.2.5 of the Guidelines is formulated in terms similar to those used in Document No VI/5330/97, Annex 2 to which stated that ‘expenditure may even be disallowed entirely where the deficiencies are so serious as to constitute a complete failure to comply with [EU] rules, so rendering all payments irregular’. The General Court’s interpretation of that document therefore applies equally to point 3.2.5 of the Guidelines, as it also stated in paragraph 116 of the judgment under appeal.
   (
         33
      )	See, in this regard, point 44 of and footnote 25 to this Opinion.
   (
         34
      )	This second indicator thus corresponds, in substance, to the condition prescribed by the first situation, albeit now in the sphere of checks and monitoring: in the case of the first situation, all the aid payments are unlawful because the national rules fail to comply with the substantive conditions of the aid scheme laid down by EU law. The second situation, by contrast, rests on the premiss that the national rules comply with the conditions laid down by EU law but that the control system nevertheless ignores them. Accordingly, the question whether non-compliance with the substantive conditions of an aid scheme (whether it is non-compliance with one substantive condition or with several) in the case of the second situation is liable to render all the payments irregular depends on the nature of the breach of the condition or conditions concerned, as in the case of the first situation. See, inter alia, judgment of 18 April 2002, Belgium v Commission (C‑332/00, EU:C:2002:235), cited in footnote 25 to this Opinion, and judgment of 1 July 2009, Spain v Commission (T‑259/05, not published, EU:T:2009:232), cited in footnote 35 below, for cases in which non-compliance with a substantive condition was capable of rendering all the payments irregular. See, a contrario, points 78 and 79 of this Opinion for an illustration of a situation in which non-compliance with a substantive condition is not capable of rendering all the payments irregular.
   (
         35
      )	See, in this regard, judgment of 1 July 2009, Spain v Commission (T‑259/05, not published, EU:T:2009:232, paragraphs 90 to 114), in which all the conditions for the grant of the aid in question were found to have been formally met. However, the essential purpose of the operations at issue (the production of fibre flax) was without economic purpose, which was contrary to one of the objectives of the common organisation of the markets in the sector concerned, and therefore rendered all the payments irregular.
   (
         36
      )	See, to that effect, points 3 and 3.2.5 of the Guidelines, as set out in point 10 of this Opinion.
   (
         37
      )	See, in this connection, footnote 24 to this Opinion.
   (
         38
      )	See, to that effect, judgments of 10 July 2014, Greece v Commission (T‑376/12, EU:T:2014:623, paragraph 111) and of 9 September 2011, Greece v Commission (T‑344/05, not published, EU:T:2011:440, paragraph 197).
   (
         39
      )	Judgment of 10 July 2014 (T‑376/12, EU:T:2014:623). Paragraph 123 of that judgment is worded as follows: ‘Thus, it is clear from that case-law that it is not the deficiencies in the application of certain key controls so much as the non-compliance with the substantive elements of the aid scheme in question and its objectives that justifies the application of a financial correction of 100%. That was the situation in the case which gave rise to the judgment of the Court of 1 July 2009, Spain v Commission (T‑259/05, not published in the ECR, paragraphs 181 to 185), in which the Court found that the Spanish authorities had failed in their implementation of the system for the control of the production aid for fibre flax in a context of large-scale fraud consisting mainly in the systematic over-declaration of the quantities of fibre flax processed and in the abusive practice of producing flax with no commercial purpose. It was also the situation in the case which gave rise to the judgment of the Court of 9 April 2008, Greece v Commission (T‑364/04, not published in the ECR, paragraphs 31 to 39), in which the Court found that the peach producers were circumventing the obligation to supply at a minimum price in that, although delivering quantities to processors at that minimum price, they were also effecting supplies outside the scope of the rules, at a lower price or even free of charge. The failure to fulfil one or more of the substantive conditions for the grant of the aid justifies the exclusion of the expenditure in its entirety (judgment of 9 September 2011, Greece v Commission, paragraph 105 above, paragraph 203).’
   (
         40
      )	See, in this connection, points 72 to 74 of this Opinion.
   (
         41
      )	See point 54 of and footnote 34 to this Opinion.
   (
         42
      )	See, to that effect, judgment of 9 September 2011, Greece v Commission (T‑344/05, not published, EU:T:2011:440, paragraph 202).
   (
         43
      )	Paragraphs 111 to 133 of the judgment under appeal.
   (
         44
      )	Paragraphs 120 and 121 of the judgment under appeal, which relate to the General Court’s assessments in paragraphs 50 to 74 and in paragraphs 75 to 106 thereof. These are the errors of definition mentioned in points 15 and 16 of this Opinion.
   (
         45
      )	Paragraphs 130 to 132 of the judgment under appeal.
   (
         46
      )	See, in this regard, points 52 to 58 of this Opinion.
   (
         47
      )	Emphasis added.
   (
         48
      )	See, in this regard, point 28 of this Opinion.