Land Baden-Württemberg v Günther Schilling and Bezirksregierung Lüneburg v Hans-Otto Nehring.
Date: 2002-05-16
11 Two sets of proceedings are at the origin of this request for a preliminary ruling. The first dispute is between the Land Baden-Württemberg and Mr Schilling regarding his application of 14 May 1993 for a special premium for male bovine animals in respect of 23 animals which had already been slaughtered in January 1993 and four bulls exported to Italy on 14 April 1993. The competent authority rejected the application with regard to the latter animals on the ground that the application had not been lodged three days before their export. It also reduced the total premium granted in respect of the other animals by 40%, relying on Article 10(2) of Regulation No 3887/92.
24 Since the wording of the first sentence of the first subparagraph of Article 10(2) of Regulation No 3887/92 presents difficulties of interpretation regarding the question whether [animals] found during checks refers to animals counted during a check or to animals which the competent authorities found, during that check, to be eligible under the Community aid scheme, it is necessary to examine that provision in the light of the purpose of the regulation and, since it is open to several interpretations, preference should be given to the interpretation which ensures that the provision retains its effectiveness (see, in particular, Case C-434/97 Commission v France [2000] ECR I-1129, paragraph 21, and Case C-403/99 Italy v Commission [2001] ECR I-6883, paragraph 28).
25 According to the first, seventh and ninth recitals in the preamble to Regulation No 3887/92, the objectives of the regulation are to enable the reform of the common agricultural policy to be implemented efficiently, to monitor compliance with the provisions on Community aid effectively, and to adopt provisions to prevent and penalise irregularities and fraud effectively.
26 In view of the special features of the various aid schemes, the Community institutions provided for graduated penalties according to the gravity of the irregularity committed. With regard to the penalties relating to livestock aid applications, Article 10(2) of Regulation No 3887/92 provides for penalties ranging from reduction of the unit amount of the aid to total exclusion from the aid scheme for the calendar year concerned and the following calendar year.
27 Article 10(2) of Regulation No 3887/92 is therefore designed to penalise, effectively and as a deterrent, not merely fraudulent declarations or those amounting to serious negligence, but also any irregularity committed by a farmer in his aid application.
33 When submitting an application for livestock aid, a farmer is required to declare the animals which satisfy the various conditions laid down by the Community rules on the grant of such aid.
34 The integrated system established by Regulation No 3508/92 and Regulation No 3887/92 is designed to make administrative and control mechanisms more effective. An effective procedure presupposes that the information to be provided by an applicant for aid is complete and accurate from the outset in order that he may make a proper application for the grant of compensatory payments and avoid the imposition of penalties (see, to that effect, Case C-369/98 Fisher [2000] ECR I-6751, paragraphs 27 and 28).
37 Moreover, it is apparent from the provisions of Regulation No 3508/92 and Regulation No 3887/92 that the national authorities are not required, or even able, to carry out checks to verify the truthfulness of all statements made in aid applications submitted to them. With regard, in particular, to the on-the-spot checks provided for in Article 6(3) of Regulation No 3887/92, those checks are to relate to a significant percentage of applications, but that percentage may be only 10% of livestock aid applications submitted by farmers. It is therefore necessarily the case that under the integrated system it is for the farmers, who state pursuant to Article 5(1) of that regulation that they are aware of the requirements pertaining to the aids in question, to submit aid applications for animals which satisfy those requirements. The second sentence of the first subparagraph of Article 10(2) of that regulation is designed to penalise applicants who do not fulfil that obligation, even if they do so without negligence or fraudulent intent.
39 First, the Community institutions have a wide measure of discretion in agricultural matters and, second, Regulation No 3887/92 provides for penalties graduated according to the seriousness and magnitude of the irregularity committed (see, to that effect, Case C-354/95 National Farmers' Union and Others [1997] ECR I-4559, paragraph 53 and 54).
40 In those circumstances, it cannot be considered unjustified or disproportionate to impose a dissuasive and effective penalty such as that laid down in the above provision on a farmer who has committed an error, even in good faith and without fraudulent intent (see National Farmers' Union and Others, paragraphs 53 and 54).
42 In the light of all the foregoing, the answer to the question must therefore be that on a proper construction of the first and second sentences of the first subparagraph of Article 10(2) of Regulation No 3887/92 the unit amount of the aid must be reduced even where the discrepancy between the number of animals declared and the number of animals found during checks is not attributable to incorrect information given by the applicant but to the fact that the necessary conditions for the grant of the premiums are not satisfied in regard to certain animals.