1 This request for a preliminary ruling concerns the interpretation of Council Regulation (EEC) No 2080/92 of 30 June 1992 instituting a Community aid scheme for forestry measures in agriculture (OJ 1992 L 215, p. 96), and of Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European Communities financial interests (OJ 1995 L 312, p. 1).
2 The request has been made in proceedings between IB, on the one hand, and the Regione Lombardia (Lombardy Region, Italy) and the Provincia di Pavia (Province of Pavia, Italy), on the other, concerning the legality of a decision declaring total disqualification from receiving aid intended for the afforestation of agricultural land and ordering the repayment of that aid in its entirety.
3 Regulation No 2080/92 was repealed by Council Regulation (EC) No 1257/1999 of 17 May 1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF) and amending and repealing certain Regulations (OJ 1999 L 160, p. 80) with effect from 2 July 1999. However, in view of Article 55(3) of Regulation No 1257/1999, Regulation No 2080/92 continued to apply to actions approved by the European Commission under that regulation before 1 January 2000, with the result that the dispute in the main proceedings continues to be governed by its provisions.
4 The first, second, third and fifth recitals of Regulation No 2080/92 state: ‘Whereas the afforestation of agricultural land is especially important both from the point of view of soil use and the environment and as a contribution to reducing the shortage of forestry products in the Community and as an accompaniment to the Community’s policy for controlling agricultural production; Whereas experience in matters of afforestation of agricultural land by farmers shows that existing aid schemes for promoting afforestation are insufficient; whereas afforestation of agricultural land withdrawn from agricultural production in recent years has proved unsatisfactory; Whereas, therefore, the measures provided for in Title VIII of Council Regulation (EEC) No 2328/91 of 15 July 1991 on improving the efficiency of agricultural structures [(OJ 1991 L 218, p. 1)] should be replaced by measures which provide more effective encouragement for afforestation of agricultural land; … Whereas a degressive premium for the first five years to alleviate the cost of maintenance of new woodlands may contribute significantly towards the encouragement of afforestation’.
5 Article 1 of that regulation, entitled ‘Purpose of the aid scheme’, provides: ‘A Community aid scheme part-financed by the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF) is hereby instituted in order to: - accompany the changes to be introduced under the market organisation rules, - contribute towards an eventual improvement in forest resources, - contribute towards forms of countryside management more compatible with environmental balance, - combat the greenhouse effect and absorb carbon dioxide. This Community aid scheme shall promote: (a) afforestation as an alternative use of agricultural land; (b) the development of forestry activities on farms.’
6 Article 2 of Regulation No 2080/92, entitled ‘Aid scheme’, provides, in paragraph 1 thereof: ‘The aid scheme may comprise: (a) aid for afforestation costs; (b) an annual premium per hectare afforested to cover maintenance cost in the first five years; (c) an annual premium per hectare to cover losses of income resulting from afforestation of agricultural land; …’
7 Article 3 of that regulation, entitled ‘Amount of aid’, states, in points (a), (b) and (c) of the first paragraph thereof: ‘The maximum eligible amounts of aid as referred to in Article 2 shall be as follows: (a) in the case of afforestation costs: - [EUR] 2000 per hectare for eucalyptus plantations, - … (b) in the case of maintenance costs: - [EUR] 250 per hectare per year for the first two years and [EUR] 150 per hectare per year for the following years in the case of the planting of conifers, - [EUR] 500 per hectare per year for the first two years and [EUR] 300 per hectare per year for the following years in the case of the planting of broadleaves or mixed planting comprising not less than 75% of broadleaves. … (c) in the case of the premium to compensate for income losses: - [EUR] 600 per hectare per year if the afforestation is undertaken by a farmer or a group of farmers who worked the land before its afforestation, - [EUR] 150 per hectare per year if the afforestation is undertaken by another party as referred to in Article 2(2)(b), for a maximum period of 20 years from the date of first afforestation’.
8 Article 4 of Regulation No 2080/92, entitled ‘Aid programmes’, provides, in paragraph 1 thereof: ‘Member States shall implement the aid scheme referred to in Article 2 by means of national or regional multiannual programmes covering the objectives laid down in Article 1 and which set out in particular: - the amounts and duration of the aid referred to in Article 2 on the basis of actual expenditure on afforestation and the maintenance of species or types of trees used for afforestation or on the basis of loss of income, - the conditions for granting aid, in particular for afforestation, - …’
9 Commission Regulation (EEC) No 3887/92 of 23 December 1992 laying down detailed rules for applying the integrated administration and control system for certain Community aid schemes (OJ 1992 L 391, p. 36) was repealed by Commission Regulation (EC) No 2419/2001 of 11 December 2001 laying down detailed rules for applying the integrated administration and control system for certain Community aid schemes established by Council Regulation (EEC) No 3508/92 (OJ 2001 L 327, p. 11) with effect from 13 December 2001. However, in view of Article 53(1) of Regulation No 2419/2001, Regulation No 3887/92 continued to apply in respect of aid applications relating to marketing years or premium periods expiring before 1 January 2002, such as the aid application at issue in the main proceedings.
10 Article 9(2) of that regulation provides: ‘If the area actually determined is found to be less than that declared in an “area” aid application, the area actually determined on inspection shall be used for calculation of the aid. However, except in cases of force majeure, the area actually determined on inspection shall be reduced: - by twice the difference found if this is more than 2% or two hectares but not more than 10% of the determined area. - by 30% if the difference found is more than 10% but not more than 20% of the determined area[.] If the difference is more than 20% of the determined area no area-linked aid shall be granted. …’
11 The third and tenth recitals of Regulation No 2988/95 state: ‘Whereas detailed rules governing … decentralised administration and the monitoring of their use are the subject of differing detailed provisions according to the Community policies concerned; whereas acts detrimental to the Communities’ financial interests must, however, be countered in all areas; … Whereas not only under the general principle of equity and the principle of proportionality but also in the light of the principle of ne bis in idem, appropriate provisions must be adopted while respecting the acquis communautaire and the provisions laid down in specific Community rules existing at the time of entry into force of this Regulation, to prevent any overlap of Community financial penalties and national criminal penalties imposed on the same persons for the same reasons’.
12 Under Article 1 of that regulation: ‘1. For the purposes of protecting the European Communities’ financial interests, general rules are hereby adopted relating to homogenous checks and to administrative measures and penalties concerning irregularities with regard to Community law. 2. “Irregularity” shall mean any infringement of a provision of Community law resulting from an act or omission by an economic operator, which has, or would have, the effect of prejudicing the general budget of the Communities or budgets managed by them, … by an unjustified item of expenditure.’
13 Article 2 of Regulation No 2988/95 is worded as follows: ‘1. Administrative checks, measures and penalties shall be introduced in so far as they are necessary to ensure the proper application of Community law. They shall be effective, proportionate and dissuasive so that they provide adequate protection for the Communities’ financial interests. 2. No administrative penalty may be imposed unless a Community act prior to the irregularity has made provision for it. In the event of a subsequent amendment of the provisions which impose administrative penalties and are contained in Community rules, the less severe provisions shall apply retroactively. … 4. Subject to the Community law applicable, the procedures for the application of Community checks, measures and penalties shall be governed by the laws of the Member States.’
14 Article 4 of that regulation provides: ‘1. As a general rule, any irregularity shall involve withdrawal of the wrongly obtained advantage: - by an obligation to pay or repay the amounts due or wrongly received, - by the total or partial loss of the security provided in support of the request for an advantage granted or at the time of the receipt of an advance. 2. Application of the measures referred to in paragraph 1 shall be limited to the withdrawal of the advantage obtained plus, where so provided for, interest which may be determined on a flat-rate basis. 3. Acts which are established to have as their purpose the obtaining of an advantage contrary to the objectives of the Community law applicable in the case by artificially creating the conditions required for obtaining that advantage shall result, as the case shall be, either in failure to obtain the advantage or in its withdrawal. 4. The measures provided for in this Article shall not be regarded as penalties.’
15 Article 5(1) of Regulation No 2988/95 provides: ‘Intentional irregularities or those caused by negligence may lead to the following administrative penalties: … (c) total or partial removal of an advantage granted by Community rules, even if the operator wrongly benefited from only a part of that advantage; (d) exclusion from, or withdrawal of, the advantage for a period subsequent to that of the irregularity; …’
16 Article 13 of decreto ministeriale n. 494 - Regolamento recante norme di attuazione del regolamento (CEE) n. 2080/92 in materia di gestione, pagamenti, controlli e decadenze dell’erogazione di contributi per l’esecuzione di rimboschimenti o miglioramenti boschivi (Ministerial Decree No 494 - Regulation laying down rules for implementing Regulation (EEC) No 2080/92 with regard to management, payments, checks and disqualification from the disbursement of aid for reforestation and woodland improvements) of 18 December 1998 (GURI no 16 of 21 January 1999) (‘Decree No 494/98’), entitled ‘Outcome of checks following the payment of the aid’, provides: ‘1. If, during the checks referred to in Article 12 above, irregularities entailing disqualification from receiving aid are found, the competent regional body shall declare total or partial disqualification, the consequences of which shall be those set out in Article 14 below, in accordance with Article 4 of [Regulation No 2988/95]. 2. The fact that the application indicates an area smaller than the area found shall not constitute an irregularity. However, for the purpose of calculating the amount of annual aid, the area that has been declared shall continue to be taken into account.’
17 Article 14 of that decree, entitled ‘Other instances of disqualification’, provides: ‘1. Total disqualification shall be declared in the cases of failure to fulfil obligations set out in paragraphs 2 and 3 below and/or in cases where the necessary conditions and requirements for membership of the programme are no longer satisfied. … 3. Total disqualification shall also be declared in cases where, following a final check and without prejudice to the cases of force majeure set out in Article 8 above, the area reforested or improved or the number of kilometres of forest roads found are 20% smaller than those that qualified for the aid and for which the premium was received. 4. Discrepancies below the threshold referred to in the preceding paragraph shall entail partial disqualification from receiving aid.’
18 Article 15 of Decree No 494/98, entitled ‘Effects of disqualification’, states, in paragraph 1 thereof: ‘Total disqualification shall entail repayment of all aid wrongly received and total exclusion from receiving aid in respect of the remaining years of the commitment.’
19 On 16 June 1997, IB, a farmer, applied to the Province of Pavia to benefit from the aid scheme for promoting the reforestation of agricultural land under Regulation No 2080/92. In connection with that application, IB undertook to afforest an area of agricultural land covering 104 hectares which had, until that point, been dedicated to rice and maize cultivation, and to maintain that afforestation in respect of the entirety of that area for a 20-year period, namely from 1997 to 2017.
20 Having been permitted to benefit from that scheme, IB received, between 1997 and 2008, the total sum of EUR 1324 246.35 by way of the aid concerned, which comprised, pursuant to Article 2(1) of Regulation No 2080/92, the initial aid for afforestation costs, annual premiums to cover maintenance costs, and annual premiums to cover losses of income.
21 An on-the-spot check carried out in September 2009 by the Province of Pavia, empowered to that end by the Lombardy Region, revealed that the area afforested using Union funds was not 104 hectares but 70 hectares, owing to premature felling of vegetation carried out by IB. Finding that that discrepancy of 38% between the declared area and the actual area of afforestation was above the threshold of 20% provided for in Article 14(3) of Decree No 494/98, the Province of Pavia disqualified IB from all the aid which had been paid to him, ordered him to repay that aid in its entirety in accordance with Article 15(1) of that decree, and excluded him from receiving aid in respect of the remaining years of the commitment.
22 IB disputed the disqualification and the order for repayment before the Tribunale di Pavia (District Court, Pavia, Italy), which held that his action was well founded.
23 Hearing the appeal, the Corte d’appello di Milano (Court of Appeal, Milan, Italy) varied the judgment at first instance, finding, in essence, that the failure to fulfil obligations attributed to IB was a serious irregularity which was contrary to the purposes pursued by the EU aid scheme. That irregularity, which entailed the unjust enrichment of that beneficiary, who was receiving both EU aid and income from the sale of the wood, justified repayment of the aid received in its entirety, without prejudice to cases of force majeure and other possible causes beyond the beneficiary’s control.
24 IB has brought an appeal on a point of law before the referring court, the Corte suprema di cassazione (Supreme Court of Cassation, Italy), against that judgment.
25 That court questions whether Regulations No 2080/92 and No 2988/95 preclude the system of total disqualification from receiving aid established by Articles 14 and 15 of Decree No 494/98.
26 More specifically, it has, first of all, doubts as to whether it should be held that that system of total disqualification constitutes a ‘measure’ for the purposes of Article 4 of Regulation No 2988/95. While Article 4(1) of that regulation provides that, as a general rule, any irregularity is to involve withdrawal of the wrongly obtained advantage by an obligation to repay the amounts wrongly received, the result of the total disqualification provided for in Articles 14 and 15 of Decree No 494/98 is not only repayment of all the aid wrongly received but also total exclusion from receiving aid in respect of the remaining years of the commitment.
27 Next, that court questions whether that piece of national legislation goes beyond the limits laid down in Article 4 of Regulation No 2988/95 inasmuch as it requires repayment of the aid received in its entirety as soon as the area reforested is 20% smaller than the area declared for the aid.
28 Lastly, it questions whether that piece of national legislation is proportionate inasmuch as it provides, in the event of total disqualification, for repayment of all the aid received, and not only repayment of the aid relating to the year in respect of which the irregularity has been found.
29 In those circumstances, the Corte suprema di cassazione (Supreme Court of Cassation) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling: ‘(1) Do the provisions of [Regulation No 2080/92] instituting a Community aid scheme for forestry measures in agriculture, without however providing for a system of disqualification and penalties, preclude, taking into account the provisions of [Regulation No 2988/95], the application of a provision of national law that, in implementing the provisions of [Regulation No 2080/92], provides, in the event of irregularities found in the granting of aid, for the disqualification from receiving that aid and the repayment of amounts received on that basis? (2) If the answer to the first question is in the negative, do the provisions of [Regulation No 2080/92] preclude, taking into account the provisions of [Regulation No 2988/95] and the principles of equity and proportionality referred to in the [tenth] recital thereof, the application of a provision of national law that, in implementing the provisions of Regulation No 2080/92, provides, in the event of an irregularity found in the granting of the aid, for the disqualification from receiving that aid and the repayment of amounts received on that basis when the area reforested or improved is 20% less than the area that qualified for the aid and for which the premium was received? (3) If the answer to the first question is in the negative, do the provisions of [Regulation No 2080/92] preclude, taking into account the provisions of [Regulation No 2988/95], the retroactive application of a provision of national law that, in implementing the provisions of Regulation No 2080/92, provides, in the event of an irregularity found in the granting of the aid, for the disqualification from receiving that aid and the repayment of amounts received on that basis? (4) If the answer to the first question is in the negative, do the provisions of [Regulation No 2080/92] preclude, taking into account the provisions of [Regulation No 2988/95], an interpretation of a provision of national law that, in implementing the provisions of Regulation No 2080/92, provides, in the event of an irregularity found in the granting of the aid, for the disqualification from receiving that aid and the repayment of amounts received on that basis, in the sense that the beneficiary is required to repay the entire amount received on that basis and not merely to repay the amounts for the year in respect of which the irregularity in the granting of the aid was found?’
30 The Lombardy Region contends, in essence, that the questions referred are inadmissible on two grounds. First, those questions are irrelevant given that the Italian legislation is merely implementing Article 9 of Regulation No 3887/92, which is a directly applicable provision. Second, an answer to those questions would have no effect on the outcome of the dispute in the main proceedings, because IB felled the entirety of the afforested area in 2011, so that the question relating to the impact of a reduction in area of over 20% has become hypothetical.
31 In that regard, according to settled case-law, it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine, in the light of the particular circumstances of the case, both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. Consequently, where the questions submitted concern the interpretation of a rule of EU law, the Court is in principle bound to give a ruling (judgment of 6 October 2021, Sumal, C‑882/19, EU:C:2021:800, paragraph 27 and the case-law cited).
32 It follows that questions relating to EU law enjoy a presumption of relevance. The Court may refuse to rule on a question referred for a preliminary ruling by a national court only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (judgment of 6 October 2021, Sumal, C‑882/19, EU:C:2021:800, paragraph 28 and the case-law cited).
33 In this instance, it is apparent from the request for a preliminary ruling that the outcome of the dispute in the main proceedings is dependent on the Court’s response to that request, as that response will enable the referring court to rule on the extent to which the afforesting aid received by IB is to be repaid in a context where it has been found that the area reforested was more than 20% smaller than the area that qualified for aid under a multiannual aid commitment.
34 In those circumstances, as it is not quite obvious that the interpretation of EU law that is sought by the referring court bears no relation to the purpose of the main action, the request for a preliminary ruling is admissible.
35 By its four questions, which it is appropriate to examine together, the referring court asks, in essence, whether Articles 2 and 4 of Regulation No 2988/95, Articles 2 and 4 of Regulation No 2080/92, and the principle of proportionality are to be interpreted as precluding a piece of national legislation which, in a situation where it is found, while a multiannual commitment is being implemented, that the area reforested is 20% smaller than the area that qualified for aid under that commitment, provides for total disqualification from receiving afforestation aid and, accordingly, lays down an obligation to repay that aid in full and provides for total exclusion from receiving the aid which should have been paid in respect of the remaining years of the commitment.
36 In the first place, it should first of all be pointed out that, as is apparent from Article 1 of Regulation No 2080/92, read in the light of the first three recitals thereof, that regulation instituted an aid scheme for the afforestation of agricultural land intended, inter alia, to promote afforestation as an alternative use of agricultural land while permitting the development of forestry activities on farms, to contribute towards forms of countryside management more compatible with environmental balance, to combat the greenhouse effect, to absorb carbon dioxide, and to contribute towards an eventual improvement in forest resources.
37 Thus, that regulation pursues agricultural policy objectives intended to support the forestry sector, as well as an objective of protecting the environment; objectives which are, by nature, multiannual and call for actual and sustainable afforestation of agricultural land.
38 Next, it is apparent from Article 2(1)(a), (b) and (c) of Regulation No 2080/92 that the aid scheme for the afforestation of agricultural land instituted by that regulation may comprise aid for afforestation costs, an annual premium to cover maintenance costs in the first five years, and an annual premium to cover losses of income resulting from afforestation of agricultural land, with those premiums being paid ‘per hectare afforested’.
39 In addition, points (a), (b) and (c) of the first paragraph of Article 3 of Regulation No 2080/92 merely set the maximum eligible amounts of aid on the basis of the area of afforestation (in hectares) and the maximum period during which that aid may be paid. In that regard, while point (b) of that paragraph of that article, read in the light of the fifth recital of that regulation, provides that the payment of maintenance premiums may be aggregated over a five-year period, point (c) thereof states that the premium for losses of income may be granted for a maximum period of 20 years from the date of first afforestation.
40 As regards Article 4(1) of that regulation, it entrusts the Member States with the task of implementing that aid scheme by means of national or regional multiannual programmes, the rules of which are to be laid down by those States. In that context, the Member States are to determine, inter alia, the amounts and duration of the aid on the basis of actual expenditure on afforestation and the maintenance of species or types of trees used for afforestation or on the basis of losses of income, as well as the conditions for granting aid for afforestation.
41 It follows from a combined reading of those provisions that, although Regulation No 2080/92 does not directly determine the conditions to which the payment of the various types of afforestation aid is subject, it links the grant of such aid to the actual afforestation of the areas covered by the multiannual commitment for the entire duration of that commitment.
42 In addition, it must be pointed out that that regulation does not establish either the control procedures or the system of penalties for ensuring that the conditions for the grant of aid are satisfied. Accordingly, those control procedures and that system of penalties continue to be governed by the laws of the Member States.
43 However, it should be borne in mind, in the second place, that, for the purpose of protecting the Union’s financial interests, Regulation No 2988/95 has adopted, pursuant to Article 1 thereof, general rules relating to homogenous checks and to administrative measures and penalties concerning irregularities with regard to EU law, in order, as is apparent from the third recital of that regulation, to counter in all areas acts detrimental to the Union’s financial interests (see, to that effect, judgment of 17 September 2014, Cruz & Companhia, C‑341/13, EU:C:2014:2230, paragraph 43 and the case-law cited).
44 In adopting that regulation, the legislature sought to lay down a series of general principles while requiring that all sector-specific regulations, such as Regulation No 2080/92, observe those principles (see, to that effect, judgments of 28 October 2010, SGS Belgium and Others, C‑367/09, EU:C:2010:648, paragraph 37, and of 18 December 2014, Somvao, C‑599/13, EU:C:2014:2462, paragraph 33 and the case-law cited).
45 Thus, Article 2(1) of Regulation No 2988/95 specifies that the control procedures, administrative measures and administrative penalties provided for by that provision must be effective, proportionate and dissuasive.
46 The Court has interpreted the concept of ‘irregularity’, as referred to in Article 1(2) of that regulation, as covering not only any infringement of a provision of EU law resulting from an act or an omission by an economic operator which has, or would have, the effect of prejudicing the general budget of the Union by attributing an unjustified item of expenditure thereto, but also infringements of provisions of national law which are applicable to operations supported by a fund, such as provisions determining the conditions for eligibility for the grant of aid (see, by analogy, judgments of 26 May 2016, Județul Neamț and Județul Bacău, C‑260/14 and C‑261/14, EU:C:2016:360, paragraphs 36, 37 and 43, and of 1 October 2020, Elme Messer Metalurgs, C‑743/18, EU:C:2020:767, paragraphs 52, 53 and 63).
47 According to Article 4(1) of Regulation No 2988/95, as a general rule, any ‘irregularity’ within the meaning of Article 1(2) of that regulation is to involve withdrawal of the wrongly obtained advantage by an obligation to repay the amounts wrongly received.
48 In this instance, as is apparent from the order for reference, Article 14(1) and (3) of Decree No 494/98 calls for total disqualification from receiving aid (i) where, following a final check and without prejudice to cases of force majeure, the reforested area found is 20% smaller than the area that qualified for the aid and for which the premium was received, and (ii) where the necessary conditions and requirements for membership of the programme are no longer satisfied. In addition, Article 14(4) thereof calls for partial disqualification from receiving aid where a discrepancy of less than 20% is found between the area reforested and the area that qualified for the aid. Lastly, Article 15(1) of that decree specifies that total disqualification is to entail repayment of all the aid wrongly received, as well as total exclusion from receiving aid in respect of the remaining years of the commitment.
49 It follows that a provision such as Article 14(1) and (3) of Decree No 494/98, relating to maintaining afforestation over at least 80% of the area covered by the multiannual commitment entered into, constitutes a provision of national law applicable to an operation supported by a fund, the infringement of which is such as to constitute an ‘irregularity’ within the meaning of Article 1(2) of Regulation No 2988/95 and, accordingly, to entail repayment of the amounts wrongly received, in accordance with Article 4(1) of that regulation.
50 The referring court questions, however, whether the principle of proportionality precludes a piece of national legislation, such as that at issue in the main proceedings, which, in a situation where the area reforested is 20% smaller than the area that qualified for the aid, provides for (i) total disqualification from receiving the EU aid concerned and (ii) repayment of that aid in its entirety, and not only repayment of the aid corresponding to the area vitiated by irregularity or repayment only of the amounts relating to the year in respect of which the irregularity has been found.
51 In that regard, the principle of proportionality requires that measures implemented through a national provision be appropriate for attaining the objective pursued and that they not go beyond what is necessary to achieve it (judgment of 7 April 2022, Avio Lucos, C‑176/20, EU:C:2022:274, paragraph 42).
52 It should be pointed out, first, that the national system of disqualification at issue in the main proceedings pursues a legitimate objective. It implements Article 2(4) and Article 4 of Regulation No 2988/95 - as is apparent from Article 13(1) of Decree No 494/98 - and is intended to protect the Union’s interests and, in particular, the afforestation aid financed by the Union under Regulation No 2080/92.
53 Secondly, regarding the appropriateness of that piece of national legislation for attaining the objective pursued, it must be held that the total disqualification from receiving EU aid provided for in Article 14(1) and (3) of Decree No 494/98 is an appropriate means of effectively allocating afforestation aid and, accordingly, of effectively pursuing the objectives pursued by Regulation No 2080/92, as recalled in paragraph 37 of the present judgment. Total disqualification and the effects associated therewith pursuant to Article 15(1) of that decree are such as to prevent Union funds being allocated to an afforestation operation which would not be in line with the objectives of actual and sustainable afforestation pursued by that regulation.
54 Furthermore, the piece of national legislation at issue in the main proceedings, inasmuch as it links that total disqualification to total exclusion from receiving the aid which should have been paid in respect of the remaining years of the commitment, also enables the Union’s financial interests to be protected, by reason of its dissuasive effect.
55 Thirdly, regarding whether total disqualification and the effects associated therewith, provided for in Article 14(1) and (3) of Decree No 494/98, as well as Article 15(1) thereof, are necessary and proportionate, it must be held that that system does not go beyond what is necessary. Indeed, in so far as it is for the Member States, as is apparent from paragraph 40 of the present judgment, to determine the conditions under which afforestation aid is to be granted, it is permissible for those States to consider that failure to satisfy a condition for eligibility - such as the condition relating to the threshold of 20% of the area to be afforested - is likely seriously to prejudice the attainment of the objectives pursued by Regulation No 2080/92, and to infer from this that the initial commitment has been vitiated to the point that this must be penalised by total disqualification.
56 Furthermore, it should also be pointed out that the system of disqualification at issue in the main proceedings is characterised by its progressive nature because, while a discrepancy of less than 20% between the reforested area found and the area that qualified for the aid leads to partial disqualification, a discrepancy equal to or above that threshold leads to total disqualification and to repayment in full of the aid received, as well as total exclusion from receiving aid in respect of the remaining years of the commitment.
57 In addition, it should also be emphasised that that system of total disqualification from receiving aid observes the principle of proportionality, as it covers only limited cases, namely those where it is found that the area reforested is 20% smaller than the area that qualified for the aid, and it reserves the possibility for a beneficiary to rely on a case of force majeure.
58 Lastly, inasmuch as it provides, in a case where it is found that the area reforested is 20% smaller than the area that qualified for the aid, for repayment of all the afforestation aid received under the multiannual commitment, and not repayment only of the amounts relating to the year in respect of which the irregularity has been found, the piece of national legislation at issue in the main proceedings is also proportionate. Only the repayment of that aid in full is such as to address the risk of fraud against the budget of the Union and to guarantee the actual and sustainable afforestation of agricultural land.
59 In view of the reasoning set out above, the answer to the questions referred is that Articles 2 and 4 of Regulation No 2988/95, Articles 2 and 4 of Regulation No 2080/92, and the principle of proportionality must be interpreted as not precluding a piece of national legislation which, in a situation where it is found, while a multiannual commitment is being implemented, that the area reforested is 20% smaller than the area that qualified for aid under that commitment, provides for total disqualification from receiving afforestation aid and, accordingly, lays down an obligation to repay that aid in full and provides for total exclusion from receiving the aid which should have been paid in respect of the remaining years of the commitment.
60 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.