Gert Teglgaard and Fløjstrupgård I/S v Fødevareministeriets Klagecenter.
Date: 2018-07-25
34


By its first and second questions, which it is appropriate to answer together, the referring court asks, in essence, whether, firstly, Article 6(1) of Regulation No 1782/2003, Article 6(1) of that regulation, as amended by Regulation No 146/2008, and Article 66(1) of Regulation No 796/2004 and, secondly, Article 23(1) of Regulation No 73/2009 and Article 70(4) and (8)(a) of Regulation No 1122/2009 must be interpreted as meaning that reductions of direct payments because of non-compliance with the cross-compliance rules must be calculated on the basis of the payments granted or to be granted in the calendar year in which that non-compliance occurred or those in the year in which such non-compliance was found.
35


In accordance with the Court’s settled case-law, for the purpose of interpreting a provision of EU law it is necessary to consider not only its wording but also the context in which it occurs and the objectives pursued by the rules of which it is part (judgments of 6 November 2014, Feakins, C‑335/13, EU:C:2014:2343, paragraph 35, and of 12 November 2015, Jakutis and Kretingalės kooperatinė ŽŪB, C‑103/14, EU:C:2015:752, paragraph 93).
36


Although in its French-language version, Article 6(1) of Regulation No 1782/2003 states that ‘the total amount of direct payments to be granted in the calendar year in which the non-compliance is found, shall be reduced or cancelled’, in almost all other language versions available at the time of adoption of this Regulation, that article provides, in essence, that the total amount of direct payments to be granted in the calendar year in which the non-compliance occurs is to be reduced or cancelled.
37


In that regard, it must be pointed out that the wording used in one language version of a provision of EU law cannot serve as the sole basis for the interpretation of that provision, or be made to override the other language versions (judgment of 17 March 2016, Kødbranchens Fællesråd, C‑112/15, EU:C:2016:185, paragraph 36).
38


The provisions of EU law must be interpreted and applied uniformly in the light of the versions existing in all the languages of the European Union and, in the case of divergence between those versions, the provision in question must be interpreted by reference to the purpose and general scheme of the rules of which it forms part (judgments of 5 May 2011, Kurt und Thomas Etling and Others, C‑230/09 and C‑231/09, EU:C:2011:271, paragraph 60, and of 17 March 2016, Kødbranchens Fællesråd, C‑112/15, EU:C:2016:185, paragraph 36).
39


It follows therefrom that, having regard to the differences noted in paragraph 36 of the present judgment between the different language versions of Article 6(1) of Regulation No 1782/2003, that provision must be interpreted, in particular, in the light of the purpose and general scheme of the rules of which it forms part.
40


The general scheme and purpose of Regulation No 1782/2003 as regards compliance with the cross-compliance rules are set out in recital 2 of that regulation, which links the full payment of direct aid to compliance with rules relating to agricultural land, agricultural production and activity, which serve to incorporate in the common market organisations basic standards for the environment, food safety, animal health and welfare and good agricultural and environmental condition. If those basic standards are not met, Member States should withdraw direct aid in whole or in part on the basis of criteria which are proportionate, objective and graduated.
41


For its part, Article 6(1) of the regulation states that the reduction or cancellation of such aid is to occur where non-compliance with the cross-compliance rules is due to an act or omission directly attributable to the farmer concerned.
42


Thus, Regulation No 1782/2003 requires farmers to comply, during each year of operation, with the statutory management requirements and good agricultural and environmental condition, which form the cross-compliance rules.
43


However, the full significance of compliance with those rules is clear only if the penalty for their infringement, whether due to negligence or an intentional act, leads to a reduction in or cancellation of direct payments granted or to be granted in that calendar year of that infringement. Indeed, only such a correspondence is likely to maintain the link between the farmer’s behaviour which gave rise to the penalty and that penalty.
44


Admittedly, Article 66 of Regulation No 796/2004 provides, in all the language versions available at the date of adoption of that regulation, that a reduction is to be applied on the overall amount of direct payments that has been, or has to be, granted to the farmer following aid applications he has submitted or will still submit in the course of the calendar year of the finding of non-compliance with the cross-compliance rules.
45


However, it cannot be deduced from the wording of Article 66, as the Commission points out, that the reduction should be calculated on the amount of direct payments that has been, or will be, received in the calendar year of that finding. In that regard, it must be recalled that an implementing regulation adopted on the basis of an enabling provision in the basic regulation may not derogate from the provisions of that regulation, to which it is subordinate (judgment of 2 March 1999, Spain v Commission, C‑179/97, EU:C:1999:109, paragraph 20). Thus, the wording of Article 66(1) cannot be interpreted as meaning that it calls into question the link between the farmer’s behaviour which gave rise to the penalty and that penalty, in derogation from the basic rule laid down in Article 6(1) of Regulation No 1782/2003 that non-compliance with cross-compliance rules leads to a reduction or cancellation of direct payments granted or to be granted in the calendar year in which the non-compliance occurred.
46


Indeed, interpreted in the light of Regulation No 1782/2003, Regulation No 796/2004 lays down, in Article 66, detailed rules for the reductions of direct payments for non-compliance with cross-compliance rules, as provided for in Article 7(1) of Regulation No 1782/2003. That Article 66 relates in reality to the methods of reducing direct payments for non-compliance with cross-compliance rules and not to the rules for calculation of such a reduction. By reducing the amounts of direct payments that have been or are to be received by the farmer in the calendar year of the finding of the non-compliance, Article 66 of Regulation No 796/2004 guarantees that recovery of the sum corresponding to that reduction will actually be made, by deduction from the payments due to the farmer. By so doing, that article is such as to ensure both the effectiveness of reductions made for non-compliance with cross-compliance rules and the proper use of payments made under the EU agricultural funds.
47


Moreover, such an interpretation is borne out by the principles of equal treatment, proportionality and legal certainty.
48


First of all, whether non-compliance with the rules on cross-compliance is found in the same year as it occurs or it is identified during a year after that in which it occurred, the basis for the calculation of the reduction is the same. In both cases, it is based on direct payments in the year in which the non-compliance with cross-compliance rules occurred That solution thus also enables removal of the risk that the amount of payments to which the reduction is applied is significantly higher than that of the year in which the non-compliance with cross-compliance rules occurred or, on the contrary, that the reduction applied is significantly lower in the event of a reduction in the amount of direct payments between the year in which the non-compliance occurred and the year of its finding. It is thus such as to guarantee equal treatment among farmers.
49


Next, it must be recalled that the principle of proportionality requires that acts of the EU institutions be appropriate for attaining the legitimate objectives pursued by the legislation at issue and do not exceed the limits of what is necessary in order to achieve those objectives, it being understood that, when there is a choice between several appropriate measures, recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued (judgment of 14 June 2017, TofuTown.com, C‑422/16, EU:C:2017:458, paragraph 45).
50


However, it must be noted that the Commission itself acknowledged in its written observations that, in the circumstances described by the Advocate General in point 96 of his Opinion, the taking into account of the year of a finding of non-compliance with the cross-compliance rules to calculate the reduction or cancellation of direct payments cannot ensure a link between the farmer’s behaviour leading to that reduction or cancellation and the reduction or cancellation itself.
51


However, observance of the principle of proportionality is still ensured where the reduction or cancellation of the direct payments is calculated on the amount of direct payments granted or to be granted in the calendar year in which the non-compliance with the cross-compliance rules occurred, since such a link is maintained. A reduction or cancellation calculated in that manner is appropriate for ensuring the achievement of the objective of Article 6(1) of Regulation No 1782/2003, which is to penalise instances of non-compliance with the cross-compliance rules, and does not go beyond what is necessary to achieve that objective.
52


Finally, the principle of legal certainty requires that EU rules enable those concerned to know precisely the extent of the obligations which are imposed on them and that those persons must be able to ascertain unequivocally what their rights and obligations are and take steps accordingly (judgments of 9 March 2017, Doux, C‑141/15, EU:C:2017:188, paragraph 22, and of 20 December 2017, Erzeugerorganisation Tiefkühlgemüse, C‑516/16, EU:C:2017:1011, paragraph 98).
53


As pointed out by the applicants in the main proceedings, the taking into account of the year of a finding of non-compliance with the cross-compliance rules to calculate the reduction in direct payments is likely to make it difficult for the farmer concerned to predict the financial consequences he will have to bear because the factual circumstances, such as the number of hectares on the basis of which those payments are granted, can vary greatly from one year to the next and the check under the cross-compliance rules takes place at random times. However, such a risk is not present when the reduction or cancellation of the direct payments is calculated on the basis of the amount of direct payments granted or to be granted in the calendar year in which the non-compliance with the cross-compliance rules occurred, since any change in such factual circumstances subsequent to the occurrence of that non-compliance will have no impact on the financial consequences which he will have to bear.
54


Consequently, by application of Article 6(1) of Regulation No 1782/2003, the reductions in direct payments due to non-compliance with the cross-compliance rules must be calculated on the basis of the payments granted or to be granted in the calendar year in which the non-compliance occurred. Under Article 66(1) of Regulation No 796/2004, the reductions calculated in that way are to be counted against the payments received or receivable in the year during which the non-compliance is found.
55


Article 6(1) of Regulation No 1782/2003, as amended by Regulation No 146/2008, must be interpreted in the same way. Identical in all language versions, Article 6(1), as amended, no longer refers to the year in which the non-compliance with the cross-compliance rules is found. On the contrary, by referring to ‘in a given calendar year’ or ‘calendar year’ for both the occurrence of non-compliance with the cross-compliance rules and the aid application made by the farmer to whom an act or omission is directly attributable, Article 6(1), as amended, places particular emphasis on the year in which the non-compliance occurred to determine the reduction or cancellation of the direct payments. The indirect reference to Regulation No 796/2004, by the part of the sentence ‘the total amount of direct payments to be granted... to that farmer shall be reduced or cancelled in accordance with the detailed rules laid down in Article 7’, merely refers, as has been found in paragraph 46 of this judgment, to the methods of attributing the reduction or cancellation to direct payment amounts received or receivable in the year in which that non-compliance is found.
56


Those findings also apply to the interpretation of Article 23(1) of Regulation No 73/2009, which, in essence, reproduces Article 6(1) of Regulation No 1782/2003, as amended by Regulation No 146/2008.
57


As regards Article 70(4) and (8)(a) of Regulation No 1122/2009, it must be noted, on the one hand, that only Article 70(8)(a) is directly relevant, since it provides that ‘for the application of reductions, the percentage of the reduction shall be applied to the total amount of … the overall amount of direct payments that has been, or has to be, granted to the farmer concerned following aid applications he has submitted or will submit in the course of the calendar year of the finding’.
58


On the other hand, the findings made in paragraph 46 of this judgment for the interpretation of Article 66(1) of Regulation No 796/2004 are also applicable to Article 70(8)(a) of Regulation No 1122/2009, which concerns the detailed rules for application of a reduction in direct payments for non-compliance with the cross-compliance rules and not the rules for calculating such a reduction.
59


Having regard to all the foregoing considerations, the answer to the first and second questions is:





–


Article 6(1) of Regulation No 1782/2003, Article 6(1) of that regulation, as amended by Regulation No 146/2008, and Article 23(1) of Regulation No 73/2009 must be interpreted as meaning that reductions of direct payments due to non-compliance with the cross-compliance rules are to be calculated on the basis of the payments granted or to be granted in the year during which that non-compliance occurred.








–


Article 66(1) of Regulation No 796/2004 and Article 70(8)(a) of Regulation No 1122/2009 must be interpreted as meaning that reductions in the direct payments thus calculated are to be counted against the payments received or receivable in the calendar year in which the non-compliance with the cross-compliance rules was found.
61


Firstly, the principle of legal certainty requires that any factual situation should normally, in the absence of any express contrary provision, be examined in the light of the legal rules existing at the time when the situation obtained (judgment of 14 February 2012, Toshiba Corporation and Others, C‑17/10, EU:C:2012:72, paragraph 50 and the case-law cited). However, neither the wording, nor the purpose, nor the general scheme of Article 23(1) of Regulation No 73/2009 contains clear indications that that provision may be applied retroactively.