De Ruiter vof v Minister van Landbouw, Natuur en Voedselkwaliteit.
Date: 2021-01-27
That court expresses doubts as to the validity of those two provisions in the light of the judgment of 25 July 2018, Teglgaard and Fløjstrupgård (C‑239/17, EU:C:2018:597, paragraphs 34 to 59), concerning the legislation which preceded the regulations applicable in the present case, while noting that the language versions of those regulations are different from those of that legislation.
As a preliminary point, it should be borne in mind that, in the procedure laid down in Article 267 TFEU for cooperation between national courts and the Court of Justice, it is for the latter to provide the referring court with an answer which will be of use to it and enable it to determine the case before it, and, with this in mind, the Court may have to reformulate the questions referred to it or to examine whether a question relating to the validity of a provision of EU law is based on a correct reading of the provision in question (judgment of 17 July 1997, Krüger, C‑334/95, EU:C:1997:378, paragraphs 22 and 23).
Furthermore, in order to provide such a useful answer, the Court may decide to take into consideration rules of EU law to which the national court has made no reference in the wording of its question (judgment of 14 May 2020, T-Systems Magyarország, C‑263/19, EU:C:2020:373, paragraph 45 and the case-law cited).
In that regard, the Court held, first, that Regulation No 73/2009 required farmers to comply, during each year of operation, with the statutory management requirements and good agricultural and environmental conditions, which form the cross-compliance rules (judgment of 25 July 2018, Teglgaard and Fløjstrupgård, C‑239/17, EU:C:2018:597, paragraph 42).
According to the Court, the full significance of compliance with those rules was clear only if the penalty for their infringement, whether due to negligence or an intentional act, led to a reduction in or cancellation of direct payments granted or to be granted in that calendar year of that infringement, only such a correspondence being likely to maintain the link between the farmer’s behaviour which gave rise to the penalty and that penalty (judgment of 25 July 2018, Teglgaard and Fløjstrupgård, C‑239/17, EU:C:2018:597, paragraph 43).
Secondly, in order to interpret Article 23(1) of Regulation No 73/2009, which stated that, where the cross-compliance rules were not complied with at any time in a given calendar year, referred to as the ‘calendar year concerned’, and that non-compliance was the result of an act or omission directly attributable to the farmer who had submitted the aid application in the calendar year concerned, the total amount of direct payments granted or to be granted to that farmer was to be reduced, the Court refused to rely on the wording of Article 70(8)(a) of Regulation No 1122/2009, since an implementing regulation, such as that latter 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 (see, to that effect, judgment of 25 July 2018, Teglgaard and Fløjstrupgård, C‑239/17, EU:C:2018:597, paragraphs 45, 56 and 57).
The Court specified that the latter provision related 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 (judgment of 25 July 2018, Teglgaard and Fløjstrupgård, C‑239/17, EU:C:2018:597, paragraphs 46 and 58).
Thirdly, the Court held that such an interpretation of the legal framework before it was borne out by the principles of equal treatment, proportionality and legal certainty (judgment of 25 July 2018, Teglgaard and Fløjstrupgård, C‑239/17, EU:C:2018:597, paragraph 47).
As regards the first of those principles, the Court held that using as the basis for the calculation of the reduction of direct payments those granted or to be granted in the year in which non-compliance with the cross-compliance rules occurred enabled removal of the risk that the amount of payments to which the reduction was applied was significantly higher than that of that year or, on the contrary, that the reduction applied was 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, which was thus such as to guarantee equal treatment among farmers (see, to that effect, judgment of 25 July 2018, Teglgaard and Fløjstrupgård, C‑239/17, EU:C:2018:597, paragraph 48).
As regards the principle of proportionality, the Court held that observance of that principle was still ensured where the reduction or cancellation of the direct payments was 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 the link between the farmer’s behaviour which led to such a reduction or cancellation and that reduction or cancellation itself was maintained, a reduction or cancellation calculated in that manner being appropriate for ensuring the achievement of the objective of the relevant EU legislation, which is to penalise instances of non-compliance with the cross-compliance rules, and not going beyond what is necessary to achieve that objective (see judgment of 25 July 2018, Teglgaard and Fløjstrupgård, C‑239/17, EU:C:2018:597, paragraph 51).
Lastly, as regards the principle of legal certainty, the Court found that, when the reduction or cancellation of the direct payments was calculated on the basis of the amount of those ? payments granted or to be granted in the calendar year in which the non-compliance with the cross-compliance rules occurred, there was no risk that it would be difficult to predict the financial consequences for the farmer concerned, since any change in the factual circumstances, on the basis of which those payments are granted, subsequent to the occurrence of that non-compliance had no impact on the financial consequences which he would have to bear (see judgment of 25 July 2018, Teglgaard and Fløjstrupgård,  C‑239/17, EU:C:2018:597, paragraph 53).
In the second place, according to the Court’s settled case-law, in 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 (judgment of 25 July 2018, Teglgaard and Fløjstrupgård, C‑239/17, EU:C:2018:597, paragraph 35 and the case-law cited).
First, as regards their respective wording, both the first subparagraph of Article 97(1) and the first subparagraph of Article 99(1) of Regulation No 1306/2013 use the term ‘applied’ or, in certain language versions, the term ‘imposed’, as regards the administrative penalty provided for in Article 91 of that regulation. As the Advocate General observed in point 61 of his Opinion, those are terms with a broad meaning, which may just as much mean ‘calculate’ the penalty as ‘impute’ it, according to the distinction made by the Court in the judgment of 25 July 2018, Teglgaard and Fløjstrupgård (C‑239/17, EU:C:2018:597, paragraph 46).
It should be noted that the first subparagraph of Article 97(1) of Regulation No 1306/2013 refers to the fact that the cross-compliance rules are not complied with at any time in a given calendar year, referred to as ‘the calendar year concerned’, as the event giving rise to the reduction or exclusion of direct payments and that it is thus drafted in terms very similar to those of Article 23(1) of Regulation No 73/2009, which was interpreted as providing that 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 (judgment of 25 July 2018, Teglgaard and Fløjstrupgård, C‑239/17, EU:C:2018:597, paragraphs 54 to 56).
As regards the latter provision, the Court specified that it related 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 (see, to that effect, judgment of 25 July 2018, Teglgaard and Fløjstrupgård, C‑239/17, EU:C:2018:597, paragraphs 46 and 58).
Thirdly, the purpose of Regulation No 1306/2013 is to ensure a link between direct payments and compliance with the cross-compliance rules, by requiring, as stated in recital 53 of that regulation, a reduction or exclusion of that support in whole or in part in the event of non‑compliance. The existence of such a link in the earlier legislation led the Court to hold that the full significance of compliance with those rules was clear only if the penalty for their infringement led to a reduction in or cancellation of direct payments granted or to be granted in that calendar year of that infringement (judgment of 25 July 2018, Teglgaard and Fløjstrupgård, C‑239/17, EU:C:2018:597, paragraph 43).
Such a consideration must also prevail in the interpretation of the first subparagraph of Article 97(1) and of the first subparagraph of Article 99(1) of Regulation No 1306/2013 and of Article 73(4), first subparagraph, point (a) of Implementing Regulation No 809/2014, in order to best ensure the link between direct payments and cross-compliance rules, and also compliance with the principles of equal treatment, proportionality and legal certainty (see, to that effect, judgment of 25 July 2018, Teglgaard and Fløjstrupgård, C‑239/17, EU:C:2018:597, paragraphs 47 to 52).
A Member State cannot rely on practical difficulties to justify an interpretation of provisions providing for a system of penalties for non-compliance with the cross-compliance rules which would run counter to the very wording of those provisions (see, by analogy, judgments of 21 February 1991, Germany v Commission, C‑28/89, EU:C:1991:67, paragraph 18, and of 14 April 2005, Spain v Commission, C‑468/02, not published, EU:C:2005:221, paragraph 44).