CELEX: 62010CC0115
Language: en
Date: 2011-02-10
Title: Opinion of Mr Advocate General Mazák delivered on 10 February 2011. # Bábolna Mezőgazdasági Termelő, Fejlesztő és Kereskedelmi Zrt. v Mezőgazdasági és Vidékfejlesztési Hivatal Központi Szerve. # Reference for a preliminary ruling: Fővárosi Bíróság - Hungary. # Common agricultural policy - Regulation (EC) No 1782/2003 - Complementary direct national aid - Conditions for grant. # Case C-115/10.

OPINION OF ADVOCATE GENERAL
      MAZÁK
      delivered on 10 February 2011 (1)
      
      Case C‑115/10
      Bábolna Mezőgazdasági Termelő, Fejlesztő és Kereskedelmi Zrt.
      v
      Mezőgazdasági és Vidékfejlesztési Hivatal Központi Szerve
      (Reference for a preliminary ruling from the Fővárosi Bíróság (Hungary))
      (Common agricultural policy – Regulation (EEC) No 3508/92 – Regulation (EC) No 1259/1999 – Regulation (EC) No 1782/2003 – National legislation excluding producers engaged in a liquidation procedure from complementary national aid linked to the
         single area payment scheme – Whether Member States may lay down conditions for eligibility for complementary national aid which do not apply to the grant
         of EU aid in question)
      1.        In this reference for a preliminary ruling, the Fővárosi Bíróság (Budapest Municipal Court) (Hungary) has referred questions
         concerning the interpretation of Council Regulations No 3508/92 and No 1259/1999. (2) It has done so in the context of proceedings for judicial review of an administrative decision, which were brought by Bábolna
         Mezőgazdasági Termelő és Fejlesztő Kereskedelmi Zrt. (‘Bábolna’) against Mezőgazdasági és Fejlesztő és Vidékfejlesztési Hivatal
         Központi Szerve (Office of agriculture and rural development, ‘the Hivatal’) in relation to complementary national agricultural
         aid granted to Bábolna for the year 2004.
      
      I –  Legal framework
      2.        The Act of Accession (3) provides in Article 23: ‘the Council, acting unanimously on a proposal from the Commission and after consulting the European
         Parliament, may make the adaptations to the provisions of this Act relating to the common agricultural policy [CAP] which
         may prove necessary as a result of a modification in Community [now European Union, “EU”] rules. Such adaptations may be made
         before the date of accession.’
      
      3.        Article 20 of that act states that ‘the acts listed in Annex II to this Act shall be adapted as specified in that Annex’.
         In that annex, in Chapter 6A, entitled ‘Agricultural legislation’, point 27(b) provides for an insertion in Regulation No 1259/1999
         of Articles 1a to 1c. Article 1a provides for the introduction (by stages) of direct payments granted under the support schemes
         referred to in Article 1. Article 1b allows the new Member States to replace the payments granted under the support schemes
         referred to in Article 1 by a single payment, or ‘a single area payment’. Finally, Article 1c allows them the possibility,
         subject to authorisation by the Commission, of supplementing direct aid with national complementary aid.
      
      4.        Council Regulation (EC) No 1782/2003 (4) repealed Regulations No 3508/92 (5) and No 1259/1999 (6) as of 1 May 2004. Article 1 thereof provides that Regulation No 1782/2003 establishes inter alia: ‘[i] common rules on direct
         payments under income support schemes in the framework of the [CAP] which are financed by the “Guarantee” Section of the European
         Agricultural Guidance and Guarantee Fund (EAGGF) listed in Annex I, except those provided for under Regulation (EC) No 1257/1999;
         [and ii] an income support for farmers … “Single Payment Scheme”’.
      
      5.        According to Article 2(a) of Regulation No 1782/2003: ‘“farmer” means a natural or legal person, or a group of natural or
         legal persons, whatever legal status is granted to the group and its members by national law, whose holding is situated within
         Community territory, as referred to in Article 299 [EC], and who exercises an agricultural activity.’
      
      6.        Council Decision 2004/281/EC (7) was adopted under Article 2(3) of the Treaty of Accession and Article 23 of the Act of Accession. In its Article 1(5)(a)
         that decision provides for the insertion in Article 1, after the second indent, of Regulation No 1782/2003 of the following
         indent: ‘a transitional simplified income support for farmers in the new Member States (“single area payment scheme” [SAPS])’.
      
      7.        Article 1(5)(c) of that decision provides in particular for the insertion in Regulation No 1782/2003 of an Article 143a in
         the following terms ‘Introduction of support schemes … In the new Member States direct payments shall be introduced in accordance
         with the following schedule of increments expressed as a percentage of the then applicable level of such payments in the [Union]
         as constituted on 30 April 2004: [i] 25% in 2004, [ii] 30% in 2005, [iii] 35% in 2006, [iv] 40% in 2007, [v] 50% in 2008,
         [vi] 60% in 2009, [vii] 70% in 2010, [viii] 80% in 2011, [ix] 90% in 2012, [and x] 100% as from 2013.’
      
      8.        That provision also inserted Article 143b, entitled ‘single area payment scheme’, which provides in paragraph 1: ‘the new
         Member States may decide not later than the date of accession to replace the direct payments during the period of application
         referred to in paragraph 9 with a single area payment which shall be calculated according to paragraph 2.’
      
      9.        Likewise, it inserted Article 143c, entitled ‘Complementary national direct payments [CNDPs] and direct payments’, whose paragraphs
         2, 4, 6 and 7 provide inter alia: 
      
      ‘2. The new Member States shall have the possibility, subject to authorisation by the Commission, of complementing any direct
         payments up to: 
      
      The total direct support the farmer may be granted in the new Member States after accession under the relevant direct payment
         including all [CNDPs] shall not exceed the level of direct support the farmer would be entitled to receive under the corresponding
         direct payment then applicable to the Member States in the Community as constituted on 30 April 2004.
      
      4. If a new Member State decides to apply the single area payment scheme, that new Member State may grant complementary national
         direct aid under the conditions referred to in paragraphs 5 and 8.
      
      6. The new Member State may decide on the basis of objective criteria and after authorisation by the Commission, on the amounts
         of complementary national aid to be granted.
      
      7. The authorisation by the Commission shall: [i] where point (b) of paragraph 2 applies, specify the relevant CAP-like national
         direct payment schemes, [ii] define the level up to which the complementary national aid may be paid, the rate of the complementary
         national aid and, where appropriate, the conditions for the granting thereof, [and iii] be granted subject to any adjustments
         which may be rendered necessary by developments in the [CAP].’
      
      II –  Facts and the questions referred
      10.      On 28 May 2004 Bábolna lodged with the Hungarian authorities an application for a single area payment and complementary national
         aid linked to that payment (the CNDP). (8)
      
      11.      Subsequently, Bábolna commenced voluntary dissolution proceedings as of 1 September 2004 pursuant to Government Resolution
         (Kormányhatározat) 2186/2004 (VII.22.), with the aim of realignment and restructuring in preparation for a successful privatisation. (9)
      
      12.      On 17 May 2005 the Hivatal granted Bábolna’s application in part and agreed to pay a single area payment of HUF 174 410 400
         (now approximately EUR 626 133) and CNDP aid of HUF 70 677 810 (now approximately EUR 253 733).
      
      13.      Later, when the Hivatal acting as the first instance administrative authority became aware that Bábolna had commenced voluntary
         dissolution proceedings on 1 September 2004, it amended its previous decision by decision No 1026133367 of 11 April 2006,
         and, at the same time, granted a single area payment of HUF 174 406 363 (now approximately EUR 626 119) and rejected the application
         for the CNDP aid for arable land, – ordering Bábolna to repay the sum of HUF 15 829 789 (now approximately EUR 56 829) which
         it had paid by way of such aid.
      
      14.      The administrative authority relied on Article 3(1)(a) of Government Decree (Kormányrendelet) 6/2004 of 22 January 2004 according
         to which the legal persons or companies without legal personality which may receive aid are those which are not engaged in
         proceedings for bankruptcy, liquidation, arrangement with creditors or voluntary dissolution.
      
      15.      Bábolna brought an action against that decision, seeking judicial review of the decision, an order that the decision be set
         aside in so far as it orders repayment and the maintenance in force of the original decision granting the application.
      
      16.      Before the referring court, Bábolna claims that the EU legislation applicable to the present case does not exclude from aid
         persons or economic operators who have commenced voluntary dissolution proceedings. The only requirement for aid is that the
         farm of the group of farmers must be in the territory of the EU, regardless of the legal position conferred on the applicant
         for aid by national law. The Hivatal disputes that interpretation.
      
      17.      According to the referring court, a preliminary ruling is necessary in order to determine whether a company operating legally
         in a Member State and engaged in agricultural production, but which has commenced voluntary dissolution proceedings – that
         is to say, wishing to cease activity in the future – has the right to receive CNDP provided it meets the requirements laid
         down for the EU single area payment, taking into account the fundamental principles and objectives of the CAP.
      
      18.      Consequently, given the circumstances, the referring court considers that the need has arisen to clarify whether, taking account
         of the objectives, nature and approach of the CAP, it is possible to regulate complementary national aid such as the CNDP
         in a completely autonomous way, independently of EU principles and standards. In other words, it asks whether the Member State
         may lay down additional requirements for the CNDPs which are narrower and more restrictive than those laid down for EU area
         aid.
      
      19.      Against that background, the referring court decided to stay the proceedings and to refer the following questions to the Court:
      
      ‘(1)      May the conditions for [EU] aid under the CAP (EAGGF) differ from the conditions for national complementary aid, that is to
         say, may other, stricter rules than are applied to aid financed by the EAGGF apply to the conditions for national complementary
         aid?
      
      (2)      May the scope ratione personae, as regards the recipients of aid, of Article 1(4) of [Regulation No 3508/92] and Article 10(a) of [Regulation No 1259/1999]
         be interpreted as meaning that there are only two conditions for the recipients of aid: (a) the (individual) group of farmers
         (b) whose farm is situated in the territory of the [EU] will be entitled to receive aid?
      
      (3)      May the above regulations be interpreted as meaning that a farmer whose farm is in the territory of the [EU] but who wishes
         to cease activity in the future (after using the aid) is not entitled to aid?
      
      (4)      In the light of the above two regulations, how is the status of such a producer under national law to be interpreted?
      (5)      Does that status under national law extend to the legal status of a farmer (group) undergoing any form of cessation of activity?
         Hungarian law provides for separate legal positions (statuses) in cases of cessation of activity (bankruptcy, liquidation
         or voluntary dissolution).
      
      (6)      May the conditions for applications for [EU] single area payments and for complementary national aid be subject to separate
         rules entirely independent of one another? What is the relationship between the principles, system and objectives of both
         types of aid?
      
      (7)      May a group (person) be excluded from complementary national aid where they otherwise meet the requirements for area aid?
      (8)      Does the scope of [Regulation No 1259/1999] extend, under Article 1 thereof, to complementary national aid, bearing in mind
         that where the EAGGF provides finance only in part, complementary national aid provides finance as appropriate?
      
      (9)      Does a farmer whose farm, which functions legally and effectively, is in the territory of the [EU], have a right to receive
         complementary national aid?
      
      (10)      If national law contains specific regulations for procedures for terminating the activity of commercial companies, do those
         regulations have any relevance from the point of view of [EU] aid (and national aid linked to it)?
      
      (11)      Should [EU] legislation and national legislation on the functioning of the CAP be interpreted as meaning that they have to
         create a complex legal system which can be interpreted uniformly and which functions on the basis of a single set of principles
         and requirements?
      
      (12)      Should the scope of Article 1(4) of [Regulation No 3508/92] and Article 10(a) of [Regulation No 1259/1999] be interpreted
         as meaning that, from the point of view of aid, both the intention of the farmer to cease activity in the future and the appropriate
         legal regime for that intention are wholly irrelevant?’
      
      III –  Appraisal
      20.      As both the Hungarian Government and the Commission proposed in their observations, the questions referred should be dealt
         with together, not only because of their number but also because the questions overlap and are logically interconnected. However,
         in order to assist the reader of this Opinion I have decided to divide the questions roughly into three groups (as to the
         actual wording of each of the many questions I refer to point 19 above).
      
      21.      Essentially, the main question raised in the present case and the subject on which the referring court has doubts is whether
         CNDPs may be regulated autonomously and whether Member States may impose particular conditions for CNDPs (especially in relation
         to the recipients of aid) which are narrower and more stringent than those laid down for the single area payment scheme.
      
       Questions 1, 6, 7, 9 and 11
      22.      First of all, the definition provided in the relevant EU rules cited above clearly states that ‘farmer’ means ‘a natural or
         legal person, or a group of natural or legal persons, whatever legal status is granted to the group and its members by national
         law, whose holding is situated within [EU] territory and who exercises an agricultural activity’. Indeed, as the Commission
         pointed out, it is no accident that the definition under EU law is so broad: it seeks to cover a range as broad as possible
         of actors in the agricultural domain, in order for the relevant EU rules to apply, for the purposes of the provisions in question,
         to the totality of the sector.
      
      23.      Regulation No 1782/2003 was amended, in view of the 2004 accession of the 10 new Member States, by the Council decision (10) – which introduced in that regulation a new Title IVa, consisting of three new articles: 143a, 143b and 143c, which regulate
         the introduction of support schemes in the new Member States. 
      
      24.      Article 143a governs the system of introduction by increments (‘the phasing-in system’) to all direct payments in the new
         Member States. (11)
      
      25.      It follows from Article 143c(2) of Regulation No 1782/2003 that the new Member States were to have the possibility, subject
         to authorisation by the Commission, of complementing any direct payments under certain conditions. (12)
      
      26.      Hungary decided to replace EU direct payments with a single area payment, as referred to in Article 1(5) of the Council decision.
         
      
      27.      On 18 May 2004 Hungary presented its programme in relation to the CNDPs, which would complement or ‘top-up’ the area-based
         aid provided under the single area payment scheme. The CNDPs are financed fully from the national budget.
      
      28.      On 29 June 2004 by Decision C(2004) 2295 the Commission authorised CNDPs in Hungary in respect of the year 2004. The CNDP
         regime thus put in place specified the amount of the CNDPs, their rate and the conditions for their granting.
      
      29.      It should be pointed out at the outset that the relevant EU rules, and Regulation No 1782/2003 in particular, do not regulate
         the conditions for granting CNDPs.
      
      30.      That regulation merely states in Article 143c(6) that the new Member States may decide on the basis of objective criteria
         and after authorisation by the Commission, on the amounts of CNDPs to be granted. Furthermore, according to Article 143c(7),
         the authorisation by the Commission shall define the level up to which the CNDP may be paid, the rate of the CNDP and, where
         appropriate, the conditions for the granting thereof.
      
      31.      In that regard it should be recalled that the Court has held that where there is common organisation of the market in a given
         sector, the Member States can in principle no longer take action through national provisions adopted unilaterally. (13) Their legislative competence can only be residual and is limited to situations which are not governed by the EU rules and
         to cases where those rules expressly give them power to act. (14)
      
      32.      In addition, the Court ruled that ‘where there is a regulation on the common organisation of the market in a given sector,
         Member States are under an obligation to refrain from taking any measures which might undermine or create exceptions to it.
         Rules which interfere with the proper functioning of a common organisation of the market are also incompatible with such common
         organisation, even if the matter in question has not been exhaustively regulated by it’. (15)
      
      33.      According to the Hungarian Government, in the absence of EU rules on the conditions of eligibility for the CNDP aid, the Member
         States remain free to lay down conditions, taking into account the Commission’s authorisation and subject to the fundamental
         principles of EU law. (16) The Hungarian Government contends that that also follows from Article 143c(7) of Regulation No 1782/2003, which provides
         that the authorisation by the Commission shall define the conditions for the granting of aid ‘where appropriate’. Therefore,
         it submits that a contrario it follows that in principle it is the Member States who define those conditions.
      
      34.      In any event, I would point out here, as did both the Hungarian Government and the Commission, that the CNDPs are not paid
         from EU resources (EAGGF) (17) – they are paid from the national purse of the Member States. Thus, I consider that the new Member States should be accorded
         a degree of discretion with regard to the definition of CNDP-eligibility conditions.
      
      35.      In that connection, the Hungarian Government submits that it follows that a Member State should be able to impose special
         (more stringent) conditions, restricting the circle of recipients of aid, as long as it complies with general principles of
         EU law. (18) In addition, the Hungarian Government submits that the criteria of eligibility for aid are not regulated in a uniform manner:
         some are established by EU law and others, where applicable, by national law. Therefore, it is not contrary to EU law if the
         conditions of eligibility for CNDP aid are not the same as those for the single area payment – with the result that a person
         eligible for the single area payment may not be eligible for the CNDPs.
      
      36.      In my view, one should not forget – as was recognised by both the Hungarian Government and the Commission – that the CNDPs
         serve essentially to compensate on an optional basis the potential negative effects of the flat-rate support in certain sectors
         and to mitigate to a certain extent the phasing-in mechanism. 
      
      37.      Indeed, the conditions relating to the CNDPs should not lead to arbitrary discrimination between candidates already meeting
         the conditions for the granting of aid. Therefore, the Commission is correct when it argues that once it has authorised a
         national programme, the Member State may not decide to apply other additional, divergent conditions.
      
      38.      It follows that, as regards the CNDPs, the Member States may specify conditions such as the deadlines for submitting applications,
         amount levels, other sanctions and supplementary obligations. However, it follows from the provisions in question that the
         application of those conditions depends on the authorisation given by the Commission under Article 143c of Regulation No 1782/2003
         and the fact remains that those conditions must be compatible with the fundamental principles of the aid regime.
      
      39.      The Commission added in that regard that the above conditions may be defined for all the CNDPs, dividing them up either by
         sector (milk, sheep-meat, beef and goat-meat, rice, arable crops, tobacco) or in a general manner (natural person or legal
         person).
      
      40.      It follows from the documents before the Court that Hungary’s national programme, as authorised by the Commission, did not
         contain any condition according to which aid could only be granted to legal persons or companies without legal personality
         which are not engaged in proceedings for bankruptcy, liquidation, arrangement with creditors or voluntary dissolution.
      
      41.      It follows from the order for reference that the national court harbours doubts whether it is compatible with EU law that
         a farmer receives a single area payment in accordance with rules under EU law – that is, regardless of his current legal status
         – but is refused the corresponding CNDPs because he is the subject of voluntary dissolution proceedings.
      
      42.      It would appear to me that the farmer in question is effectively required to comply with two different sets of rules, depending
         on the source of funds for agricultural support.
      
      43.      I consider that, contrary to the submissions of the Hungarian Government, CNDPs should not be treated wholly independently
         and should, instead, be considered as forming an integral part of the EU agricultural-aid regime.
      
      44.      In that connection, it should be pointed out that the definition of the concept ‘farmer’ in Regulations No 1259/1999, No 3508/92
         and No 1782/2003 is applicable to all the legal rules in question, including those relating to the conditions for CNDPs.
      
      45.      Indeed, the EU aid and the corresponding national aid constitute in fact a single programme, characterised by common objectives
         and fundamental principles which are mutually compatible. 
      
      46.      In that regard, it was the Hungarian Government itself which recognised that the CAP is a complex legal system which functions
         on the basis of a single set of fundamental principles.
      
      47.      Therefore, even though they are entitled to impose certain conditions in relation to the CNDPs, the fact remains that: (i)
         the Member States should respect the concept ‘farmer’; (ii) the conditions relating to the CNDPs depend on the authorisation
         by the Commission, (19) and finally, (iii) those conditions must, in any event, be compatible with the fundamental principles of the aid regime.
      
       Questions 2, 4, 5 and 10
      48.      It is clear that some of the questions referred relate specifically to the concept ‘farmer’ in Article 1(4) of Regulation
         No 3508/92 and Article 10 of Regulation No 1259/1999 (and Article 2(a) of Regulation No 1782/2003, which replaced it).
      
      49.      On the one hand, the Hungarian Government admits that it follows from those provisions that the Member States may not restrict
         the scope of that concept by imposing a determined legal form. However, on the other hand, that government argues that ‘legal
         status under national law’ should not be interpreted in the sense that it includes the situation of a group of farmers and
         its members who are undergoing a form of cessation of activity. In that connection, the Hungarian Government also submits
         that the condition imposed by the national law – according to which only persons who are not undergoing any form of cessation
         of activity are eligible – complies with the principles of non-discrimination and proportionality. 
      
      50.      In my view, with regard to the ‘legal status under national law’, ‘legal status’ is per definitionem a ‘legal identity of a person or body such as company or partnership’. The legal status of being a farmer is, however, expressly
         excluded from the defining characteristics of the term ‘farmer’, provided for in the regulations cited above. As a matter
         of fact, a reading of the relevant provisions shows that those provisions underline the substantive features of the definition
         of the concept ‘farmer’ to be the fact (i) that the farmer’s ‘holding is situated within [EU] territory’ and (ii) that the
         farmer ‘exercises an agricultural activity’.
      
      51.      Despite the above exclusion the question remains whether ‘a method of dissolution of a farmer’ (or a group of farmers) – or
         his (or its) intention to cease activity in the future – is legally relevant for the purposes of granting EU aid and the corresponding
         national aid. That question needs to be approached by recognising that dissolving a commercial company (for instance), returning
         one’s licence or any other method of ceasing activity under national law are nothing more than mere methods of bringing to
         an end (or possibly under national rules changing) the legal identity of a farmer.
      
      52.      I am of the opinion that while such a method has not been legally completed and therefore none of the legal events bringing
         about the farmer’s dissolution has taken place, the farmer continues to legally exist and his legal identity is substantively
         untouched. Moreover, his subjective view of his business (for instance, his intention to cease activity) cannot alter anything
         in this regard. That is because such an intention in this context is not a circumstance provided for by law which entails
         a farmer’s dissolution or affects his legal status and therefore causes him to forfeit his entitlement to apply for agricultural
         aid.
      
      53.      In addition, if we take into account the definition of the concept ‘farmer’ in Article 1(4) of Regulation No 3508/92 and Article
         10 of Regulation No 1259/1999 (and Article 2(a) of Regulation No 1782/2003, which replaced it), it cannot be deduced from
         the wording of that definition that the concept ‘farmer’ does not cover natural or legal persons who are legally identifiable
         as farmers who have initiated legal procedures designed to bring about their dissolution but who otherwise meet the defining
         characteristics of the aforementioned concept. Before such persons could be excluded from that concept it would be necessary
         expressly to designate farmers who were engaged in proceedings for bankruptcy, liquidation, arrangement with creditors or
         voluntary dissolution as ineligible to obtain agricultural aid such as that in the main proceedings. Such a formulation is
         lacking in the provisions in question and I consider that it is not possible to read that formulation into those provisions
         by adopting a broad interpretation of the provisions.
      
      54.      Furthermore, as follows from points 43 to 47 above (and from the considerations preceding those points), the Member States
         are required, in the context of the implementation of CNDPs, to take account of the definition of ‘farmer’.
      
      55.      Moreover, it follows from the fundamental principles of the aid programme that the Member States have to ensure coherence
         in the granting of direct payments and that they may not discriminate on the basis of the farmers’ legal status. (20)
      
      56.      I agree with the Commission that, having regard to the aim of the CNDPs (compensation for potential negative effects of the
         flat-rate support in certain sectors), those payments should be awarded to all farmers who are eligible for single area payments,
         in accordance with Regulations No 3508/92, No 1259/1999 and No 1782/2003. Any other interpretation would result in certain
         farmers being deprived of the advantages of the compensation regime (the CNDPs), which would lead in practice to discriminatory
         application. As I stated above, even though the Member States are entitled to impose certain conditions in relation to CNDPs,
         the fact remains that they must respect the concept ‘farmer’.
      
       Questions 3, 8 and 12
      57.      In connection with what has been stated above, it is clear that the EU rules on agricultural aid do not contain any provision
         excluding a farmer from eligibility to receive aid on the ground that he intends to cease activity. Therefore, a farmer who
         had ceased activity before he received aid is still entitled to receive direct payments as long as he fulfilled, at the time
         of the submission of his application, the relevant conditions (21) (having said that, even the Hungarian Government recognised that the applications for aid must be assessed on the basis of
         legal and factual circumstances existing when the application is made).
      
      58.      I consider that a national rule according to which a company in voluntary dissolution proceedings may under no circumstances
         receive CNDPs is liable to have a substantial impact on the principles underlying EU agricultural support. Indeed, its practical
         application may in fact be accompanied by an additional restriction of eligibility for aid and may potentially impose conditions
         which are incompatible with EU law.
      
      59.      The Commission rightly points out that the definition in EU law – by which the EU legislature explicitly took pains to define
         a broad scope of application by using the expression ‘natural or legal person’ – shows that that definition applies regardless
         of the legal status conferred on the group or its members by the national law. With regard to the agricultural support regime,
         the EU legislature is calling the attention of the Member States to an essential point, because it underlines that they may
         not restrict the range of potentially eligible farmers by invoking their legal status under national law. Indeed, it will
         be for the national court to verify whether or not in the case in the main proceedings Bábolna had effectively ceased its
         activities before it submitted its application for support.
      
      60.      To conclude, it follows from all the foregoing considerations that the CNDPs should be considered to constitute an integral
         part of the EU agricultural-aid regime, which is founded upon a single set of fundamental principles and has the characteristics
         of a particular programme.
      
      61.      Therefore, EU legislation and national legislation on the functioning of the CAP create a complex legal system which is to
         be interpreted uniformly and which functions on the basis of a single set of principles (that is, one which applies to all
         the aspects of the CAP) and requirements. The granting of EU support in the context of the CAP (the single area payments)
         and of the corresponding CNDPs may not be subject to different conditions, unless those conditions were authorised by a Commission
         decision beforehand. In its decision, the Commission authorises the principles, aims and structure of the national aid programme.
         A group (person) which meets the conditions for the EU single area payment may not be excluded from CNDPs, if the national
         programme authorised by the Commission did not contain a rule in that sense. Any farmer whose farm functions legally and effectively
         in the territory of the EU has a right to receive CNDPs compatible with the relevant EU law rules.
      
      62.      The concept of legal status conferred under national law, in the context of Article 1(4) of Regulation No 3508/92 and Article
         10(a) of Regulation No 1259/1999, should be interpreted in a broad sense, so that the scope ratione personae is as broad as possible, without account being taken of the legal status which a given farmer possesses under the national
         rules. A method of dissolution of a farmer (or a group of farmers) cannot affect, in the case in the main proceedings, his
         legal status (for the purposes of the above articles) if the farmer operates legally and effectively when the application
         for aid is made, regardless of the legal procedures initiated by him to bring about his dissolution.
      
      63.      The intention of a given farmer to cease activity in the future is not relevant at the time when his eligibility for aid is
         to be assessed. Neither the intention of a given farmer to cease activity in the future, nor the resulting legal status are
         relevant for the application of Regulations No 3508/92, No 1259/1999 and No 1782/2003. Finally, Regulation No 1259/1999 is
         also applicable to CNDPs.
      
      IV –  Conclusion
      64.      Therefore, I am of the opinion that the questions referred by the Fővárosi Bíróság should be answered as follows:
      
      –        Questions 1, 6, 7, 9 and 11: European Union legislation and national legislation on the functioning of the common agricultural
         policy (CAP) create a complex legal system which is to be interpreted uniformly and which functions on the basis of a single
         set of principles (that is one which applies to all the aspects of the CAP) and requirements. The granting of EU support in
         the context of the CAP (single area payments) and of the corresponding complementary national direct payments (CNDPs) may
         not be subject to different conditions, unless those conditions were authorised by a Commission decision beforehand. In its
         decision, the Commission authorises the principles, aims and structure of the national aid programme. A group (person) which
         meets the conditions for the EU single area payment may not be excluded from CNDPs, if the national programme authorised by
         the Commission did not contain a rule in that sense. Any farmer whose farm operates legally and effectively in the territory
         of the EU has a right to receive CNDPs compatible with the relevant EU law rules. 
      
      –        Questions 2, 4, 5 and 10: The concept of legal status conferred under national law, in the context of Article 1(4) of Council
         Regulation (EEC) No 3508/92 of 27 November 1992 establishing an integrated administration and control system for certain Community
         aid schemes and Article 10(a) of Council Regulation (EC) No 1259/1999 of 17 May 1999 establishing common rules for direct
         support schemes under the common agricultural policy, should be interpreted in a broad sense, so that the scope ratione personae is as broad as possible, without account being taken of the legal status which a given farmer possesses under the national
         rules. A method of dissolution of a farmer (or a group of farmers) cannot affect, in the case in the main proceedings, his
         legal status (for the purposes of the above articles), if the farmer operates legally and effectively when the application
         for aid is made, regardless of the legal procedures initiated by him to bring about his dissolution.
      
      –        Questions 3, 8 and 12: The intention of a given farmer to cease activity in the future is not relevant at the time when his
         eligibility for aid is to be assessed. Neither the intention of a given farmer to cease activity in the future, nor the resulting
         legal status are relevant for the application of Regulations No 3508/92, No 1259/1999 and 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 various other Regulations. Finally, Regulation No 1259/1999 is also applicable
         to CNDPs.
      
      1 –	Original language: English.
      
      2 –	Respectively, Regulation (EEC) of 27 November 1992 establishing an integrated administration and control system for certain
         Community aid schemes (OJ 1992 L 355, p. 1) and Regulation (EC) of 17 May 1999 establishing common rules for direct support
         schemes under the [CAP] (OJ 1999 L 160, p. 113).
      
      3 –	Act concerning the conditions of accession of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the
         Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, the
         Republic of Slovenia and the Slovak Republic and the adjustments to the Treaties on which the European Union is founded (OJ
         2003 L 236, p. 33).
      
      4 –	Regulation of 29 September 2003 establishing common rules for direct support schemes under the [CAP] 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, as corrected in OJ 2004 L 94, p. 70).
      
      5 –	However, Regulation No 1782/2003 specified that Regulation No 3508/92 is to continue to apply to applications for direct
         payments in respect of the calendar years preceding 2005 and that references made to the repealed regulations are to be construed
         as being made to the new regulation.
      
      6 –	Regulation No 1782/2003 repealed this regulation. However, it made clear that ‘Articles 2a and 11 of Regulation (EC) No
         1259/1999 as well as, for the purpose of applying those Articles, the Annex of that Regulation shall continue to apply until
         31 December 2005. Furthermore Articles 3, 4, 5 and, for the purpose of applying those Articles, the Annex of that Regulation
         (EC) No 1259/1999 shall continue to apply until 31 December 2004.’
      
      7 –	Decision of 22 March 2004 adapting the Act concerning the conditions of accession of the Czech Republic, the Republic of
         Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic
         of Malta, the Republic of Poland, the Republic of Slovenia and the Slovak Republic and the adjustments to the Treaties on
         which the European Union is founded, following the reform of the [CAP] (OJ 2004 L 93, p. 1) (‘the Council decision’).
      
      8 –	The Hungarian Government explained that Bábolna is a limited liability company, whose capital is majority-owned by the
         State; the rest of the capital is owned by a local authority.
      
      9 –	Government Resolution 2295/2005 (XII.23.) and the subsequent decision of the general assembly of Bábolna ended the voluntary
         dissolution proceedings as of 31 January 2006.
      
      10 –	In relation to that decision, see Case C‑273/04 Poland v Council [2007] ECR I‑8925. The Court dismissed the action brought by Poland (which was supported by Latvia, Lithuania and Hungary)
         contesting the extension of the phasing-in system for direct payments to farmers of the new Member States, considering that
         the decision in question was a necessary adaptation of the Act of Accession following reform of the CAP and did not infringe
         the principles of equal treatment and good faith.
      
      11 –	The phasing-in mechanism was introduced inter alia because the agricultural situation in the new Member States was radically
         different from that existing in the old Member States. Thus it justified a gradual application of EU aid, in particular aid
         under direct support schemes, in order not to disrupt the necessary on-going restructuring in the agricultural sector of the
         new Member States.
      
      12 –	The new Member States keep that possibility under Regulation No 73/2009 as well. Regulation No 1782/2003 was repealed and
         replaced by Council Regulation (EC) No 73/2009 of 19 January 2009 (OJ 2009 L 30, p. 16).
      
      13 –	See Case 154/77 Dechmann [1978] ECR 1573, paragraph 16.
      
      14 –	See Case 48/85 Commission v Germany [1986] ECR 2549, paragraph 12, and Case C‑118/02 Industrias de Deshidratación Agrícola [2004] ECR I‑3073, paragraph 19.
      
      15 –	See Case C‑507/99 Denkavit [2002] ECR I‑169, paragraph 32; Case C‑332/00 Belgium v Commission [2002] ECR I‑3609, paragraph 29; and Industrias de Deshidratación Agrícola, cited in footnote 14, paragraph 20.
      
      16 –	The Hungarian Government refers to the same case-law as that cited in footnote 13 above.
      
      17 –	With the exception perhaps of the rural-development programmes which are implemented by way of co-financing.
      
      18 –	The Hungarian Government refers here to Case C‑241/07 JK Otsa Talu [2009] ECR I‑4323, paragraph 48.
      
      19 –	In accordance with Article 143c of Regulation No 1782/2003.
      
      20 – 	That follows in particular from Article 143c(2) of Regulation No 1782/2003.
      
      21 –	Indeed, in the case of single area payments (as opposed to agricultural support which requires the exercise of a given
         activity over a certain period of time, for instance, livestock farming during at least six months) the fact whether the required
         conditions are met is verified at the time of submission of the application.