Kingdom of Belgium v Commission of the European Communities.
Date: 2008-04-24
52. In the absence of on-the-spot checks or any other additional checks, neither the areas declared nor those extracted from the GIS could be confirmed as accurate. Therefore, a contradiction between those two sources of information was likely to constitute an anomaly (see, to that effect, Case C‑377/99 Germany  v Commission  [2002] ECR I‑7421, paragraph 48, and Case C‑183/03 Germany  v Commission  [2006] ECR I‑2, paragraphs 61 and 62).
70. First of all, as the Court of First Instance noted in paragraph 52 of the judgment under appeal, even if the Community rules on the granting of aid and premiums do not expressly require Member States to introduce supervisory measures and inspection procedures, such as those mentioned by the Commission during the clearance of the EAGGF accounts, nevertheless that obligation may follow, in some cases implicitly, from the fact that under the rules in question it is for the Member States to organise an effective system of inspection and supervision (see to that effect Case C‑8/88 Germany  v Commission , paragraph 16, and Case C‑468/02 Spain  v Commission , paragraph 35).
72. It must be stated in that connection, on the one hand, that administrative checks and on-the-spot checks were designed by the Community legislature as two means of verification which, although separate, complement each other (see Case C-41/94 Germany  v Commission , paragraph 43, and Case C‑468/02 Spain  v Commission , paragraph 39). On the other hand, such administrative checks preceding on-the-spot checks must be carried out in such a way as to enable the national authorities to draw all the possible conclusions, be they matters of certainty or of doubt, regarding compliance with the conditions for granting aid and premiums (see Case C-41/94 Germany  v Commission , paragraph 17 and Case C‑468/02 Spain  v Commission , paragraph 40).
85. In any event, it must be pointed out that the aims of Regulation No 3887/92 are, as set out in the seventh and ninth recitals in its preamble, to monitor effectively compliance with the provisions on Community aid and to adopt provisions which prevent and penalise irregularities and fraud effectively (see, to that effect, Agrargenossenschaft Pretzsch , paragraph 33).
91. As regards alleged infringement of the principle of equal treatment, it must be observed, first of all, that each case must in principle be assessed individually to determine whether, as regards operations financed by the EAGGF, the Member State in question, acted in accordance with the requirements of Community law and, if it failed to do so, to what extent (Case C‑242/97 Belgium  v Commission  [2000] ECR I‑3421, paragraph 129, and Case C‑263/98 Belgium  v Commission  [2001] ECR I‑6063, paragraph 132).
92. This does not mean that a Member State is not entitled to plead breach of the principle of equal treatment. However, it may do so only if the cases it cites are at least comparable as regards all the elements which characterise them, including, in particular, the period during which the expenditure was incurred, the sectors concerned and the nature of the irregularities complained of (see Case C-242/97 Belgium v Commission , paragraph 130, and Case C‑263/98 Belgium v Commission , paragraph 133).
93. Next it should be borne in mind that the Court has consistently held that prohibited discrimination can arise where comparable situations are treated differently, unless such treatment is objectively justified (see, to that effect, Case C‑309/89 Codorniu  v Council  [1994] ECR I‑1853, paragraph 26, and Case C‑375/99 Spain  v Commission  [2001] ECR I‑5983, paragraph 28).
94. Since the Kingdom of Belgium had, as a result of a system set up voluntarily, relevant information which other Member States did not have because they were not using that system, which was not compulsory at the relevant time, the situations of the Kingdom of Belgium and the other Member States were not comparable (see, to that effect, Case C-263/98 Belgium  v Commission , paragraphs 135 and 136, and Case C‑375/99 Spain  v Commission , paragraph 29).
109. As regards the validity of the findings of the Court of First Instance in this respect, the Court of Justice has already had occasion to state that, in accordance with the objective and the scheme of Regulation No 3887/92, it is appropriate to interpret the second subparagraph of Article 6(3) of that regulation as meaning that both the initial and the additional checks must be carried out whilst there is still evidence of arable crops or of set-aside on the areas which have been the subject of payments and, at any event, during the current year (see Case C‑153/01 Spain  v Commission  [2004] ECR I‑9009, paragraph 152).
110. The Court of Justice went on to state that for the sake of efficiency it is appropriate to carry out checks on the areas down to arable crops before the harvest and on the areas subject to set-aside before that requirement ends, which is 31 August of the current year. At any event, the later the checks the more likely it is that the Commission may reasonably conclude that those checks do not offer the expected level of assurance that the applications are in order and the risk of losses for the EAGGF is significant (Case C‑153/01 Spain  v Commission , paragraph 153).
124. Concerning first of all the alleged contradiction in and/or inadequacy of the statement of reasons given in paragraph 33 of the judgment under appeal, it should be noted that the fact that a procedure is open to improvement does not in itself justify a financial correction. There must be a serious failing in the application of express Community rules and such a failing must expose the EAGGF to a genuine risk of loss or irregularity (see Case C‑318/02 Netherlands  v Commission , paragraph 34, and Case C‑5/03 Greece  v Commission  [2005] ECR I‑5925, paragraph 51).
126. In that regard, it should be pointed out that the Court of First Instance justified a joint reading of the provisions of the Guidelines on the basis in particular of the rules concerning the burden of proof in disputes connected with the clearance of EAGGF accounts. Such justification was adequate. Despite the scope prima facie of the rule set out in paragraph 124 of the present judgment, a flat-rate correction may be applied even where deficiencies are found in the application of implicit rules, provided compliance with those implicit rules is required in order to comply with an explicit rule (see, as regards a flat-rate correction in conjunction with infringement of implicit obligations, Case C-157/00 Greece  v Commission , paragraphs 28 and 37).
135. The Court has consistently held that, although it is for the Commission to prove that Community rules have been infringed, once it has established such an infringement it is for the Member State to demonstrate, if appropriate, that the Commission made an error as to the financial consequences to be attached to that infringement (Case C‑5/03 Greece  v Commission , paragraph 38, and case-law cited therein).
136. As regards the type of correction applied, it should be noted, in the light of the Guidelines, that a flat-rate correction may be considered by the Commission where it is not possible to determine precisely the losses suffered by the Community (see Case C‑346/00 United Kingdom  v Commission  [2003] ECR I‑9293, paragraph 53).
137. In the present case, that was precisely so and the correction rate of 2% applied by the Commission in the contested decision is the lowest of the applicable rates (see, to that effect, United Kingdom  v Commission , paragraph 56).
138. In that regard, where, instead of disallowing all the expenditure affected by the infringement, the Commission has endeavoured to establish rules for treating irregularities differently depending on the extent of the shortcomings in the checks and the degree of risk to the EAGGF, it is for the Member State to show that those criteria are arbitrary and unfair (see, to that effect, Case C‑242/96 Italy  v Commission  [1998] ECR I‑5863, paragraph 75; and see also Case C‑28/94 Netherlands  v Commission  [1999] ECR I‑1973, paragraph 56; and Case C‑130/99 Spain  v Commission  [2002] ECR I‑3005, paragraph 44).
145. According to settled case-law, it follows from Article 225 EC, the first paragraph of Article 58 of the Statute of the Court of Justice and Article 112(1)(c) of the Court’s Rules of Procedure that an appeal must indicate precisely the contested elements of the judgment which the appellant seeks to have set aside and also the legal arguments specifically advanced in support of the appeal (see Case C‑131/03 P Reynolds Tobacco and Others  v Commission  [2006] ECR I‑7795, paragraph 49, and Case C‑227/04 P Lindorfer v Council  [2007] ECR I‑6767, paragraph 45).
154. As regards the argument alleging that financial corrections imposed by the Commission under the Guidelines it has adopted in this matter are coercive, it should be pointed out that such a financial correction is designed to avoid the EAGGF being burdened with amounts that have not served to finance an objective pursued by the Community legislation in question and therefore does not constitute a penalty (see Case C‑247/98 Greece  v Commission  [2001] ECR I‑1, paragraphs 13 and 14, and Case C‑332/01 Greece  v Commission  [2004] ECR I‑7699, paragraph 63).