1 This reference for a preliminary ruling concerns the interpretation of Articles 15 and 19a of Commission Delegated Regulation (EU) No 640/2014 of 11 March 2014 supplementing Regulation (EU) No 1306/2013 of the European Parliament and of the Council with regard to the integrated administration and control system and conditions for refusal or withdrawal of payments and administrative penalties applicable to direct payments, rural development support and cross compliance (OJ 2014 L 181, p. 48, and Corrigendum OJ 2015 L 209, p. 48), as amended by Commission Delegated Regulation (EU) 2016/1393 of 4 May 2016 (OJ 2016 L 225, p. 41) (‘Delegated Regulation No 640/2014’), and of Article 49(1) of the Charter of Fundamental Rights of the European Union (‘the Charter’).
2 The request has been made in proceedings between Kanevi Komers DS EOOD, a company incorporated under Bulgarian law, and Zamestnik izpalnitelen direktor na Darzhaven fond ‘Zemedelie’ (Deputy Executive Director of the National ‘Agriculture’ Fund, Bulgaria) (‘the DFZ’) concerning the latter’s decision to reduce the amount of financial aid applied for by Kanevi Komers DS for the 2019 marketing year, under several aid schemes and measures for area-related direct payments, and to impose penalties for over-declaration of areas.
3 Regulation (EU) No 1306/2013 of the European Parliament and of the Council of 17 December 2013 on the financing, management and monitoring of the common agricultural policy and repealing Council Regulations (EEC) No 352/78, (EC) No 165/94, (EC) No 2799/98, (EC) No 814/2000, (EC) No 1290/2005 and (EC) No 485/2008 (OJ 2013 L 347, p. 549, and Corrigendum OJ 2016 L 130, p. 13) was repealed with effect from 1 January 2023 by Regulation (EU) 2021/2116 of the European Parliament and of the Council of 2 December 2021 on the financing, management and monitoring of the common agricultural policy and repealing Regulation (EU) No 1306/2013 (OJ 2021 L 435, p. 187). However, pursuant to Article 104 of Regulation 2021/2116, Articles 59, 63, 64, 67, 68, 74 and 77 of Regulation No 1306/2013 continue to apply in relation to expenditure incurred and payments made for support schemes under Regulation (EU) No 1307/2013 of the European Parliament and of the Council of 17 December 2013 establishing rules for direct payments to farmers under support schemes within the framework of the common agricultural policy and repealing Council Regulation (EC) No 637/2008 and Council Regulation (EC) No 73/2009 (OJ 2013 L 347, p. 608), in respect of the calendar year 2022 and before. Given that the aid application at issue in the main proceedings concerns the 2019 marketing year, Regulation No 1306/2013 is applicable in the present case.
4 Article 59 of Regulation No 1306/2013, entitled ‘General principles of checks’, provides, in paragraphs 1 and 3 thereof: ‘1. Except where otherwise provided, the system set up by the Member States … shall include systematic administrative checking of all aid applications and payment claims. That system shall be supplemented by on-the-spot checks. … 3. The authority responsible shall draw up a report on each on-the-spot check.’
5 Article 63 of that regulation, entitled ‘Undue payments and administrative penalties’, provides, in paragraphs 1 and 2 thereof: ‘1. Where it is found that a beneficiary does not comply with the eligibility criteria, commitments or other obligations relating to the conditions for the granting of the aid or support, as provided for in the sectoral agricultural legislation, the aid shall not be paid or shall be withdrawn in full or in part and, where relevant, the corresponding payment entitlements as referred to in Article 21 of Regulation (EU) No 1307/2013 shall not be allocated or shall be withdrawn. 2. Moreover, where sectoral agricultural legislation so provides, Member States shall also impose administrative penalties, in accordance with the rules laid down in Article 64 and Article 77 …’
6 Under Article 64(4) of Regulation No 1306/2013, entitled ‘Application of administrative penalties’: ‘The administrative penalties may take one of the following forms:
7 Chapter 2, entitled ‘Integrated Administration and Control System’, of Title V of that regulation, contains Article 67 thereof, which is worded as follows: ‘1. Each Member State shall set up and operate an integrated administration and control system (the “integrated system”). … 4. For the purpose of this Chapter: …
8 Article 68(1) of Regulation No 1306/2013 provides: ‘The integrated system shall comprise the following elements:
9 Article 74(1) of that regulation provides: ‘In accordance with Article 59, Member States, through the paying agencies or the bodies delegated by them, shall carry out administrative checks on the aid application to verify the eligibility conditions for the aid. Those checks shall be supplemented by on-the-spot checks.’
10 Under Article 77 of that regulation, entitled ‘Application of administrative penalties’: ‘1. As regards the administrative penalties referred to in Article 63(2), this Article shall apply in the case of non-compliance with relation to eligibility criteria, commitments or other obligations resulting from the application of the rules on support referred to in Article 67(2). … 4. The administrative penalties may take the following forms: …’
11 Regulation (EU) No 1307/2013 was repealed with effect from 1 January 2023 by Regulation (EU) 2021/2115 of the European Parliament and of the Council of 2 December 2021 establishing rules on support for strategic plans to be drawn up by Member States under the common agricultural policy (CAP Strategic Plans) and financed by the European Agricultural Guarantee Fund (EAGF) and by the European Agricultural Fund for Rural Development (EAFRD) and repealing Regulations (EU) No 1305/2013 and (EU) No 1307/2013 (OJ 2021 L 435, p. 1). However, pursuant to Article 154(2) of Regulation 2021/2115, Regulation No 1307/2013 continues to apply in respect of aid applications relating to claim years starting before 1 January 2023. Given that the aid application at issue in the main proceedings concerns the 2019 marketing year, Regulation No 1307/2013 is applicable in the present case.
12 Recital 4 of Regulation No 1307/2013 states: ‘It is necessary to clarify that Regulation [No 1306/2013] and the provisions adopted pursuant to it are to apply in relation to the measures set out in this Regulation. …’
13 Article 1 of Regulation No 1307/2013 provides: ‘This Regulation establishes:
14 Delegated Regulation No 640/2014 was repealed with effect from 1 January 2023 by Commission Delegated Regulation (EU) 2022/1172 of 4 May 2022 supplementing Regulation (EU) 2021/2116 of the European Parliament and of the Council with regard to the integrated administration and control system in the common agricultural policy and the application and calculation of administrative penalties for conditionality (OJ 2022 L 183, p. 12). However, in accordance with Article 13 of Delegated Regulation 2022/1172, Delegated Regulation No 640/2014 continues to apply to aid applications for direct payments lodged before 1 January 2023. In view of the date of the facts in the main proceedings, Delegated Regulation No 640/2014 is applicable in the present case.
15 Recitals 2, 8 and 17 of Delegated Regulation No 640/2014 state: … …
16 Article 2 of Delegated Regulation No 640/2014, entitled ‘Definitions’, provides, in paragraph 1 thereof: ‘… The following definitions shall … apply: … …’
17 Article 15 of Delegated Regulation No 640/2014, entitled ‘Exceptions from the application of administrative penalties’, provides: ‘1. The administrative penalties provided for in this Chapter shall not apply with regard to the part of the aid application or payment claim as to which the beneficiary informs the competent authority in writing that the aid application or payment claim is incorrect or has become incorrect since it was lodged, provided that the beneficiary has not been informed of the competent authority’s intention to carry out an on-the-spot check and that the authority has not already informed the beneficiary of any non-compliances in the aid application or payment claim. 2. The information given by the beneficiary as referred to in paragraph 1 shall have the effect that the aid application or payment claim is adjusted to the actual situation.’
18 Article 19a of that delegated regulation, entitled ‘Administrative penalties in cases of over-declaration of areas for the basic payment scheme, the single area payment scheme, the re-distributive payment, the young farmers scheme, the payment for areas with natural constraints, the small farmers scheme, Natura 2000 and Water Framework Directive payments and payments to areas facing natural or other specific constraints’, provides as follows, in paragraphs 1 to 3 thereof: ‘1. If, in respect of a crop group as referred to in Article 17(1), the area declared for the aid schemes provided for in Chapters 1, 2, 4 and 5 of Title III and in Title V of Regulation (EU) No 1307/2013 and the support measures referred to in Articles 30 and 31 of Regulation (EU) No 1305/2013 [of the European Parliament and of the Council of 17 December 2013 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) and repealing Council Regulation (EC) No 1698/2005 (OJ 2013 L 347, p. 487)] exceeds the area determined in accordance with Article 18 of this Regulation, the aid or support shall be calculated on the basis of the area determined reduced by 1,5 times the difference found if that difference is more than either 3% of the area determined or 2 hectares. The administrative penalty shall not exceed 100% of the amounts based on the area declared. 2. Where no administrative penalty has been imposed on the beneficiary under paragraph 1 for over-declaration of areas for the aid scheme or support measure concerned, the administrative penalty referred to in that paragraph shall be reduced by 50% if the difference between the area declared and the area determined does not exceed 10% of the area determined. 3. Where a beneficiary had his administrative penalty reduced in accordance with paragraph 2 and another administrative penalty as referred to in this Article and in Article 21 is to be imposed on that beneficiary for the aid scheme or support measure concerned in respect of the following claim year, he shall pay the full administrative penalty in respect of that following claim year and shall pay the amount by which the administrative penalty calculated in accordance with paragraph 1 had been reduced in accordance with paragraph 2.’
19 Commission Implementing Regulation (EU) No 809/2014 of 17 July 2014 laying down rules for the application of Regulation (EU) No 1306/2013 of the European Parliament and of the Council with regard to the integrated administration and control system, rural development measures and cross compliance (OJ 2014 L 227, p. 69) was repealed with effect from 1 January 2023 by Commission Implementing Regulation (EU) 2022/1173 of 31 May 2022 laying down rules for the application of Regulation (EU) 2021/2116 of the European Parliament and of the Council with regard to the integrated administration and control system in the common agricultural policy (OJ 2022 L 183, p. 23). However, in accordance with Article 14 of Implementing Regulation 2022/1173, Implementing Regulation No 809/2014 continues to apply to aid applications for direct payments lodged before 1 January 2023. In view of the date of the facts in the main proceedings, Implementing Regulation No 809/2014 is applicable in the present case.
20 Article 25 of Implementing Regulation 809/2014 provides: ‘On-the-spot checks may be announced provided that it does not interfere with their purpose or effectiveness. Any announcement shall be strictly limited to the minimum time period necessary and shall not exceed 14 days. …’
21 Article 41 of that implementing regulation, entitled ‘Control report’, is worded as follows: ‘1. Every on-the-spot check under this Section shall be the subject of a control report which makes it possible to review the details of the checks carried out and to draw conclusions on the compliance with the eligibility criteria, commitments and other obligations. … 2. The beneficiary shall be given the opportunity to sign the report during the check to attest his presence at the check and to add observations. Where Member States make use of a control report established by electronic means during the check, the competent authority shall provide for the possibility of an electronic signature by the beneficiary or the control report shall be sent without delay to the beneficiary giving him the opportunity to sign the report and to add any observations. Where any non-compliance is found the beneficiary shall receive a copy of the control report. …’
22 Article 41 of the Zakon za podpomagane na zemedelskite proizvoditeli (Law on Support for Farmers) (DV No 58 of 22 May 1998), in the version applicable to the dispute in the main proceedings (‘the ZPZP’), provides: ‘(1) Farmers registered in accordance with Article 7 may apply for aid under the schemes referred to in paragraph 1 of Article 38a by submitting an aid application in accordance with Article 32(1) for the calendar year concerned. … (3) The agricultural land referred to in the aid application must be available to farmers on 31 May of the calendar year concerned, in accordance with Article 36(5) of Regulation (EU) No 1307/2013, which is certified by a legal basis for use registered under the [Zakon za sobstvenostta i polzvaneto na zemedelskite zemi (Law on the ownership and use of agricultural land)]. (4) The legal basis for the use of agricultural land shall be registered with the municipal agricultural services of the place where the properties are located, using dedicated software managed by the Ministry of Agriculture, Food and Forestry. Registration shall be effected before expiry of the periods laid down in the decree referred to in Article 32(5) for the submission of the aid application and for changes thereto. (5) The Ministry of Agriculture, Food and Forestry shall classify, summarise and transmit to the paying agency, in one or several steps, the data on the legal bases registered for the use of agricultural land. … (6) When submitting an aid application via the integrated administration and control system, the paying agency shall verify the data in the application, which shall be compared with the data referred to in paragraph 5. If the farmer has included in his application agricultural land outside the areas for which there is a legal basis or to an extent exceeding the registered legal basis of use, the system generates an error signal. The error signal shall be submitted to the farmer for signature. (7) On expiry of the time limits for submitting and making changes to the aid application, laid down in the decree referred to in Article 32(5), the paying agency shall carry out an administrative check on all aid applications submitted in respect of which the system has issued an error signal. During the check, the information contained in aid applications shall be compared with the data referred to in paragraph 5 concerning compliance with the conditions referred to in paragraphs 3 and 4. … (9) If the verification carried out pursuant to paragraphs 7 and 8 reveals no registered legal basis within the meaning of paragraph 4, the paying agency shall apply the provisions of Article 43(3).’
23 Article 43 of the ZPZP provides: ‘(1) The paying agency shall make direct payments in respect of applications submitted where it finds that: … (2) The paying agency shall monitor aid applications under direct payment schemes in accordance with Article 37. (3) The paying agency shall reduce the amount of the payment or refuse payment under direct payment schemes where: 3. the applicant prevents a visit for an on-the-spot check; … (4) The paying agency shall reduce the amount of the payment or refuse the payment referred to in paragraph 3 in accordance with the criteria laid down in EU legislation.’
24 Article 2 of the naredba no 5 za usloviyata i reda za podavane na zayavlenia po shemi i merki za direktni plashtania (Decree No 5 on the conditions and procedures for submitting applications under direct payment schemes and measures) of 27 February 2009 (DV No 22 of 2009), in the version applicable to the dispute in the main proceedings (‘Decree No 5’), provides: ‘(1) Support under the schemes and measures referred to in Article 1 shall be open to farmers who farm agricultural land and/or raise livestock and who satisfy the requirements of Article 41 of the [ZPZP]. (2) The persons referred to in paragraph 1 shall submit an application for support under the schemes and measures referred to in Article 1 using a form to be approved annually by the [DFZ] - Paying Agency (Razplashtatelna agentsia - RA). In the first aid application, the persons referred to in paragraph 1 must also complete an application for registration.’
25 Under Article 11 of that decree: ‘(1) By 31 May, applicants for support may make changes to their applications and to the attached documents, including by adding additional schemes and measures, as well as agricultural parcels and/or animals under the requested schemes and/or measures. Where 31 May is a non-working day, the time limit for making changes to applications shall expire on the first working day thereafter. … (3) Applicants for support may not make the changes referred to in paragraph 1 where: 2. they have been informed that they will be subject to an on-the-spot check; (4) The changes referred to in paragraph 1 must be made by submitting a copy of the application for support, with the “modifications” box duly ticked, completed and signed by the applicant. That copy is to be filed, for entry of the data contained therein, with the System for the registration of applicants, applications for support and payment claims (SRKZPZP) of the corresponding municipal agricultural service (OSZ), where the data relating to the applicant’s application for support were entered. The data shall be entered in accordance with Article 10(1). … (6) Applicants for support may correct obvious factual errors in applications submitted at any time until payment is approved (in whole or in part) or refused.’
26 Article 14 of Decree No 5 provides: ‘(1) The aid applicant may withdraw the application submitted or one or more schemes, with the exception of the small farmers support scheme, up to the moment of payment under the scheme concerned, but no later than 1 December of the year in which the application is made. No part of an agricultural parcel may be withdrawn. Withdrawals shall be made by written request addressed to the DFZ Regional Directorate of the region of: 1. the permanent address of the applicant - natural person; (2) Applications, or one or more schemes that form part thereof, can be withdrawn upon request by filling in a request for change form with the changes indicated in the boxes. … (6) An aid applicant may not withdraw his application or one or more of the schemes therein if: (7) Applications for the withdrawal of aid applications shall not be accepted during the period of cross-checks on such applications. The period for cross-checks shall be published on the website of the National Agricultural Fund. …’
27 Kanevi Komers DS submitted an application for financial aid for the 2019 marketing year, under several aid schemes and measures for area-related direct payments financed by the European Agricultural Guarantee Fund (EAGF), the European Agricultural Fund for Rural Development (EAFRD) and the national budget of the Republic of Bulgaria.
28 That application was the subject of administrative and on-the-spot checks; a first one was carried out between 8 and 28 August 2019 and a second one between 22 and 25 October 2019.
29 By letter of 4 November 2019 addressed to the DFZ Regional Directorate of the City of Targovishte (Bulgaria), Kanevi Komers DS, pursuant to Article 14(1) of Decree No 5, withdrew its aid application for certain agricultural parcels. On 5 November 2019, the same letter was lodged with the head office of the DFZ.
30 By letter of 18 December 2019, the DFZ informed Kanevi Komers DS, first, that the withdrawal of the aid application was not valid, since it had not been carried out by means of the integrated administration and control system (‘the IACS’) and, second, that the refusal to withdraw the aid application was justified by the fact that it had already planned and decided to carry out a check. However, the DFZ did not provide any document attesting to the decision to carry out that check.
31 By letter of 5 December 2022, the DFZ informed Kanevi Komers DS that support had been authorised and was to be paid on the basis of the area declared for the 2019 marketing year. That letter stated that the total amount of aid authorised had been calculated by means of the IACS, after compulsory administrative checks and on-the-spot checks had been carried out in respect of the data contained in the application for support submitted by that company, that the amounts claimed by Kanevi Komers DS had been reduced and that the amounts of the penalties applicable to Kanevi Komers DS on account of overlapping areas had been calculated in accordance with Article 19a of Delegated Regulation No 640/2014.
32 Kanevi Komers DS brought before the Administrativen sad - Varna (Administrative Court, Varna, Bulgaria), which is the referring court, an action against that letter.
33 Before that court, Kanevi Komers DS claims, in essence, that it was entitled to withdraw from its aid application parcels for which it had applied for support, not by means of the IACS, but in accordance with the substantive and procedural conditions laid down in Article 15 of Delegated Regulation No 640/2014 and Article 14 of Decree No 5, namely by notification in writing addressed to the DFZ Regional Directorate where the beneficiary has not been informed of the competent authority’s intention to carry out an on-the-spot check and that authority has not already informed the beneficiary of any non-compliance in the aid application or payment claim.
34 Kanevi Komers DS states, in that regard, that it notified the DFZ of the request for the withdrawal of certain areas from its aid application within the time limits prescribed by national law and that it complied with the written form requirement laid down in Article 15 of Delegated Regulation No 640/2014. It also claims that the decision ordering the on-the-spot check carried out between 8 and 28 August 2019 did not mention any parcels and that, consequently, the administrative authority had no evidence that the areas concerned by the request for withdrawal were precisely those that were designated to be checked. Accordingly, it claims that the DFZ infringed Article 15 of Delegated Regulation No 640/2014, first, by including in the calculation of the aid the areas covered by the request for withdrawal and, second, by imposing penalties without taking into account the correction made to the aid application.
35 The DFZ submits that, in order for a withdrawal of parcels from the aid application to be valid, it must be carried out by means of the IACS in accordance with procedures which allow that application to be processed appropriately. It states that a feature has been developed in the IACS making it possible, when a request for the total or partial withdrawal of areas is submitted, to check the eligibility of that application with a view to the approval or not of such a withdrawal. The DFZ specifies that no other method of withdrawal, which does not offer an objective possibility of checking the eligibility of the request for withdrawal, can be treated as such a request.
36 According to the referring court, the question arises whether, in the light of Article 15 of Delegated Regulation No 640/2014, it is sufficient for the notification of the request for withdrawal to be made in writing and for it to have reached the competent authority, or whether it is necessary for that notification to be made in a specific format and by means of a dedicated IT platform. In that regard, the referring court states that Delegated Regulation No 640/2014 does not provide that the request for withdrawal of areas must be made by means of such a platform or that the Member States are competent to establish additional rules for the implementation of that delegated regulation.
37 In addition, in view of the wording of Article 15 of that delegated regulation, the question arises as to whether that article must be interpreted as meaning that, where the beneficiary has not been informed of the competent authority’s intention to carry out a check and has not been informed of any non-compliance in the aid application, the beneficiary may notify the competent authority in writing that the aid application or payment claim is incorrect or has become incorrect since it was lodged, and may do so until the day on which the beneficiary is informed of the existence of the conditions preventing that notification from being made.
38 Lastly, as regards Article 19a of Delegated Regulation No 640/2014, on the basis of which the DFZ imposed penalties on Kanevi Komers DS, the referring court notes that that delegated regulation, even if repealed with effect from 1 January 2023, continues to apply to aid applications relating to direct payments submitted before that date, as is the case in the main proceedings. However, it notes that the consolidated version of that delegated regulation no longer contains that Article 19a. Therefore, the referring court asks whether that article must be regarded as having been in force on the date on which the penalties were imposed on Kanevi Komers DS, namely on 5 December 2022.
39 In those circumstances, the Administrativen sad - Varna (Administrative Court, Varna) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:
40 By its first and second questions, which it is appropriate to examine together, the referring court asks, in essence, whether Article 15(1) of Delegated Regulation No 640/2014 must be interpreted as precluding national legislation which requires aid applicants to inform the competent national authority of any error in or amendment to the aid application or payment claim solely by means of a dedicated IT platform.
41 In that respect, it should be recalled that, if, by virtue of the very nature of regulations and of their function in the system of sources of EU law, the provisions of regulations generally have immediate effect in the national legal systems without it being necessary for the national authorities to adopt measures of application, however, some of their provisions may necessitate, for their implementation, the adoption of measures of application by the Member States (see, to that effect, judgment of 25 October 2012, Ketelä, C‑592/11, EU:C:2012:673, paragraph 35 and the case-law cited).
42 It follows from settled case-law that Member States may adopt rules for the application of a regulation if they do not obstruct its direct applicability and do not conceal its EU nature, and if they specify that a discretion granted to them by that regulation is being exercised, provided that they adhere to the parameters laid down under it (judgment of 25 October 2012, Ketelä, C‑592/11, EU:C:2012:673, paragraph 36 and the case-law cited).
43 It is by referring to the relevant provisions of the regulation concerned, interpreted in the light of the objectives of that regulation, that it may be determined whether they prohibit, require or allow Member States to adopt certain measures of application and, particularly in the latter case, whether the measure concerned comes within the scope of the discretion that each Member State is recognised as having (judgment of 25 October 2012, Ketelä, C‑592/11, EU:C:2012:673, paragraph 37 and the case-law cited).
44 Furthermore, in interpreting provisions of EU law, it is necessary to consider not only their wording but also the context in which they occur and the objectives pursued by the rules of which they are part (see, to that effect, judgment of 19 September 2024, Agrarmarkt Austria, C‑350/23, EU:C:2024:771, paragraph 57 and the case-law cited).
45 In that regard, it must be noted, first, that Article 15(1) of Delegated Regulation No 640/2014 provides that the administrative penalties are not to apply with regard to the part of the aid application or payment claim which the beneficiary informs the competent authority in writing is incorrect or has become incorrect since the application or claim was lodged, provided that the beneficiary has not been informed of the competent authority’s intention to carry out an on-the-spot check and that the competent authority has not already informed the beneficiary of any non-compliance in the aid application or payment claim.
46 Consequently, it follows from the wording of that provision that that provision does not expressly allow or prohibit Member States from laying down additional rules concerning the obligation, for the beneficiary, to inform the competent authority in writing of the part of the aid application or payment claim considered to be incorrect or to have become incorrect since the application or claim was lodged.
47 As regards, second, the context in which that provision occurs, the provision is in Chapter IV of Title II of Delegated Regulation No 640/2014, which concerns the detailed rules for the calculation of aid and administrative penalties, in case of non-compliance, concerning direct payment schemes and rural development measures under the IACS.
48 The expression ‘non-compliance’ is itself defined by point 2(a) of Article 2(1) of that delegated regulation as being, ‘for eligibility criteria, commitments or other obligations relating to the conditions for the granting of the aid or support …, any non-respect of those eligibility criteria, commitments or other obligations’.
49 Since Article 15(1) of Delegated Regulation No 640/2014 occurs in the context of the framework on the calculation of aid and administrative penalties in case of non-compliance and provides that the possibility of correcting the aid application or payment claim presupposes that the competent authority has not yet communicated to the beneficiary its intention to carry out an on-the-spot check or informed the beneficiary of any non-compliance in the aid application or payment claim, it must be held that that provision is intended to ensure that any correction made subsequently by the beneficiary occurs for reasons that are independent and of the beneficiary’s own accord, characterised by the beneficiary’s good faith.
50 Third, as regards the objectives pursued more generally by Delegated Regulation No 640/2014, they must be determined in the light of the tasks of shared management of EU funds with the Member States, in the context of the common agricultural policy (CAP), as governed by Regulation No 1306/2013, which is supplemented by that delegated regulation on non-essential matters.
51 In that regard, it follows clearly from the EU legislation concerning the protection of the financial interests of the European Union, the financing of the CAP and the IACS that Member States must adopt measures to ensure the proper implementation of the IACS and that they are especially required to take the necessary measures to ensure the reality and the regularity of the aid schemes financed by the European Union as well as to prevent and deal with irregularities (see, to that effect, judgment of 24 June 2010, Pontini and Others, C‑375/08, EU:C:2010:365, paragraph 75). Those obligations were laid down by the EU legislature in Article 59 of Regulation 2021/2116, corresponding to Article 58 of Regulation No 1306/2013, which was repealed with effect from 1 January 2023.
52 To that end, first, in accordance with Articles 63, 64 and 77 of Regulation No 1306/2013, Member States are to impose administrative penalties, which are proportionate and graduated according to the severity, extent, duration and reoccurrence of the non-compliance found, and which may take the form of a reduction in the amount of aid or support, payment of an amount calculated on the basis of the quantity and/or period concerned by the non-compliance, the suspension or withdrawal of an authorisation, recognition or approval, or the exclusion from the right to participate in, or benefit from, the aid scheme, support measure or other measure concerned.
53 Second, under Articles 67 to 73 of that regulation, Member States are to establish and manage an IACS, in particular in order to check the genuineness and compliance of operations financed by the EU budget under the CAP and improve the effectiveness and monitoring of EU support, by facilitating the prevention of irregularities and fraud and the application of the necessary penalties.
54 Consequently, there is nothing in Delegated Regulation No 640/2014 to suggest that the Member States cannot adopt implementing measures providing that the written communication under Article 15 must be made by means of a specific IT platform.
55 In that regard, the Court has already held that Member States have a measure of discretion for the purposes of implementing aid schemes and when choosing the national measures which they consider necessary in order to prevent and penalise irregularities and fraud effectively (see, to that effect, judgment of 24 June 2010, Pontini and Others, C‑375/08, EU:C:2010:365, paragraph 76).
56 Nevertheless, the exercise by Member States of their discretion in respect of the evidence to be provided in support of an aid application and the national legislation which implements that discretion must be consistent with the objectives pursued by the EU legislation concerned and the general principles of EU law, such as the principle of proportionality and of legal certainty (see, to that effect, judgments of 27 June 2019, Azienda Agricola Barausse Antonio e Gabriele, C‑348/18, EU:C:2019:545, paragraph 57, and of 7 April 2022, Avio Lucos, C‑116/20, EU:C:2022:273, paragraph 63).
57 While it is for the national court to verify, in each individual case, whether those principles have been complied with (see, to that effect, judgment of 24 June 2010, Pontini and Others, C‑375/08, EU:C:2010:365, paragraph 89), the Court, in accordance with settled case-law, has jurisdiction to give the national court full guidance on the interpretation of EU law in order to enable it to determine the issue of compatibility for the purposes of the case before it (judgment of 11 June 2020, Subdelegación del Gobierno en Guadalajara, C‑448/19, EU:C:2020:467, paragraph 17 and the case-law cited).
58 As regards the principle of legal certainty, which the Court takes into account in the area of aid to farmers, in particular as regards the provisions on administrative penalties (see, to that effect, judgment of 18 April 2024, Kaszamás, C‑79/23, EU:C:2024:329, paragraph 59 and the case-law cited), it must be borne in mind that it requires not only that EU rules enable those concerned to know precisely the extent of the obligations which are imposed on them, but also that those persons must be able to ascertain unequivocally what their rights and obligations are and take steps accordingly (see, to that effect, judgment of 25 July 2018, Teglgaard and Fløjstrupgård, C‑239/17, EU:C:2018:597, paragraph 52 and the case-law cited).
59 It is apparent from the documents before the Court that, under Article 14 of Decree No 5, aid applications are to be withdrawn by written communication addressed to the relevant DFZ Regional Directorate. However, first, it is not apparent from that file that, at the material time, a provision of Bulgarian law imposed an obligation to submit the notification of that withdrawal by means of a dedicated IT platform. Second, according to the information provided by the referring court, the requirement that that withdrawal be made by means of that platform is based solely on the practice of the national authorities.
60 While it is ultimately for the referring court to determine whether national law observes the principle of legal certainty, it should made clear that, in the event that the obligation to submit the withdrawal of an aid application by means of a specific IT platform is based not on a statutory provision, but on a mere practice of the national authorities, that practice does not appear to be consistent with the requirement of foreseeability in the application of legal provisions required by that principle, in so far as it is liable to have an effect on the obligations of the aid beneficiary.
61 As regards the principle of proportionality, which, according to the Court, requires that measures implemented through provisions be appropriate for attaining the objective pursued and must not go beyond what is necessary to achieve it, it must be borne in mind that that principle must be complied with by the EU legislature as well as by the national legislative authorities and the national courts which apply EU law (see, to that effect, judgment of 24 June 2010, Pontini and Others, C‑375/08, EU:C:2010:365, paragraph 87). That principle must therefore be observed by the competent national authorities when applying the provisions of Delegated Regulation No 640/2014.
62 Thus, the Member States must ensure that aid beneficiaries, whatever their proficiency in using the IT tool, have rapid and easy access to infrastructure which enables them, without any difficulty and within a reasonable period, to send to the competent authority the notifications referred to in Article 15 of that delegated regulation. If that possibility is not guaranteed in the Member State concerned, the obligation imposed by that Member State to make such a notification by means of a dedicated IT platform should be regarded as disproportionate in so far as the failure to comply with that obligation is, under national administrative law, liable to render a notification null and void under Article 15(1) of Delegated Regulation No 640/2014.
63 In the light of all of the foregoing considerations, the answer to the first and second questions is that Article 15(1) of Delegated Regulation No 640/2014 must be interpreted as not precluding national legislation which requires aid applicants to inform the competent national authority of any error in or amendment to the aid application or payment claim solely by means of a dedicated IT platform, provided that the objectives pursued by the EU legislation concerned and the general principles of EU law, in particular the principles of proportionality and of legal certainty, are observed.
64 By its third question, the referring court asks, in essence, whether Article 15(1) of Delegated Regulation No 640/2014 must be interpreted as meaning that, first, the application of administrative penalties in the event of an incorrect aid application or payment claim requires the competent national authority to show that the two conditions set out therein are not satisfied and, second, that that provision allows a beneficiary to amend or withdraw the aid application or payment claim so long as that beneficiary has not been informed that the competent authority has carried out a check or found any non-compliance in the application or claim.
65 As regards, first of all, the first limb of the third question, relating to evidence as to the conditions set out in Article 15(1) of Delegated Regulation No 640/2014, namely that the beneficiary has not been informed of the competent authority’s intention to carry out an on-the-spot check and that the competent authority has not already informed the beneficiary of any non-compliance in the aid application or payment claim, it must be noted that the production of evidence is not governed by either that provision or other more specific provisions of that delegated regulation.
66 It is settled case-law that, in so far as a regulation does not contain more specific provisions relating, in particular, to the production of evidence, under the principle of procedural autonomy and subject to the principles of equivalence and effectiveness, it is for the national legal order of each Member State to establish the ways in which evidence is to be elicited, what evidence is to be admissible, or the principles governing the assessment of the probative value of the evidence adduced and also the level of proof required (see, to that effect, judgment of 28 April 2022, Vinařství U Kapličky, C‑86/20, EU:C:2022:320, paragraph 75 and the case-law cited).
67 Consequently, in the present case, it will be for the referring court to assess the evidence, its probative value and the requisite standard of proof, on the basis of the applicable national law and in compliance with the principles of equivalence and effectiveness.
68 In that regard, it should be noted that, in accordance with the principle of good administration and the adversarial principle, Article 59(3) of Regulation No 1306/2013 and Article 41 of Implementing Regulation No 809/2014 lay down an obligation for the competent authority to draw up reports concerning on-the-spot checks. It is apparent in particular from the wording of Article 41 that the control report must give an accurate account of the various elements of the check, that the beneficiary is to be given the opportunity to sign the report during the check to attest his presence at the check and to add observations and, where irregularities are found, that the beneficiary is to receive a copy of that report. It is thus apparent that the competent administrative authority has the evidence necessary for the purposes of assessing compliance with the two negative conditions laid down in Article 15 of Delegated Regulation No 640/2014.
69 As regards, next, the second limb of the third question, it should be recalled that, under Article 15 of that delegated regulation, the aid beneficiary may withdraw or amend the aid application or payment claim without any administrative penalties, provided that the beneficiary has not been informed of the competent authority’s intention to carry out an on-the-spot check and that that authority has not already informed the beneficiary of any non-compliance in the aid application or payment claim. Thus, that article makes the application of the exception to the imposition of administrative penalties subject to two conditions, formulated in the negative, both of which must be satisfied at the time when the beneficiary requests the amendment or withdrawal of the application or claim.
70 In the light of paragraphs 46 to 56 above and, in particular, paragraphs 48 to 51, concerning the logic underlying Article 15, if the first of the two negative conditions is not satisfied, that is to say, if the beneficiary has been informed of the competent authority’s intention to carry out an on-the-spot check, the beneficiary cannot be caught by the exception to the application of administrative penalties.
71 It follows that, so long as the beneficiary has not been informed of the competent authority’s intention to carry out an on-the-spot check and so long as, following an on-the-spot check, the beneficiary has not received any information from that authority concerning any non-compliance in the aid application or payment claim, there is nothing to prevent the beneficiary from notifying that authority in writing of the changes to be made to the aid application or payment claim, in accordance with Article 15 of Delegated Regulation No 640/2014, without incurring administrative penalties.
72 In the light of the foregoing, the answer to the third question is that Article 15(1) of Delegated Regulation No 640/2014 must be interpreted as meaning that, first, the application of administrative penalties in the event of an incorrect aid application or payment claim requires the competent national authority to show that the two conditions set out therein are not satisfied, which is to be done, subject to the principles of equivalence and effectiveness, in compliance with the ways in which evidence is to be elicited, the conditions governing the admissibility of evidence, the principles governing the assessment of the probative value of the evidence adduced and also the requisite standard of proof laid down by national law, and, second, that provision allows a beneficiary to amend or withdraw the aid application or payment claim so long as the beneficiary has not been informed that the competent authority has carried out a check or found any non-compliance in the application or claim.
73 By its fourth question, the referring court asks, in essence, whether Article 15(1) of Delegated Regulation No 640/2014 must be interpreted as precluding, first, a national provision under which applicants for support may not withdraw their application if they have been informed of overlaps found between the parcels referred to in the application or if they have been informed that they have been selected for an on-the-spot check or if they have been the subject of an on-the-spot check and informed of any non-compliance found in respect of the areas and/or animals concerned by the application and, second, a practice of the competent national authority whereby the aid beneficiary is not informed of the on-the-spot check or of the outcome thereof.
74 As regards the first limb of the fourth question, which concerns the consistency with EU law of the cases set out in national law in which the withdrawal of the aid application or payment claim is authorised, it is apparent from the order for reference that Article 14(6) of Decree No 5 provides that an applicant for support may not withdraw the application or one or more schemes or measures referred to therein if he has been informed that the parcels referred to in the aid application overlapped or has been informed of the fact that he has been selected for an on-the-spot check, or if he has been the subject of an on-the-spot check and informed of any non-compliance found in respect of the areas and/or animals.
75 Having regard to the considerations set out in paragraphs 69 to 72 above, the consistency of that national provision with EU law requires that the three cases set out in that provision, which do not allow the aid applicant to withdraw the application, correspond to the requirements of Article 15(1) of Delegated Regulation No 640/2014.
76 As regards the first situation to which Bulgarian law refers, namely that the aid applicant may withdraw the application if he has not been informed of overlaps found in the aid application in respect of the parcels referred to in that application, it must be held, in view of the objective pursued by Article 15 of Delegated Regulation No 640/2014, as referred to in paragraph 51 above, that that situation concerns instances of non-compliance covered by the second condition laid down in Article 15 of Delegated Regulation No 640/2014, namely that the aid applicant has not already been informed by the competent authority of any non-compliance in the aid application, which condition concerns any case of non-compliance, without distinction.
77 As regards the second situation referred to in Article 14(6) of Decree No 5, namely where the aid applicant has not been informed that he has been selected for an on-the-spot check, it satisfies the first condition laid down in Article 15 of Delegated Regulation No 640/2014, namely that the aid applicant has not been informed of the competent authority’s intention to carry out an on-the-spot check.
78 While the first two situations provided for in Article 14(6) of Decree No 5 appear to be consistent with the wording and objective of Article 15 of Delegated Regulation No 640/2014, the same cannot be said of the third situation referred to in that national provision, which appears to depart from the second condition laid down in Article 15.
79 That is so in so far as the third situation provided for in Article 14(6) of Decree No 5 appears to be capable of being interpreted, which it is for the referring court to ascertain, as meaning that corrections to the aid application would be authorised where the administration finds any non-compliance, within the meaning of point 2(a) of Article 2(1) of Delegated Regulation No 640/2014, provided, however, that that finding is not the result of an on-the-spot check, or where, following on-the-spot checks, the aid applicant is informed of any non-compliance in the application which are unrelated to the areas and/or animals.
80 It must be borne in mind that national legislation is not sufficiently clear and precise to ensure its application in compliance with EU law where that legislation may be the subject of different constructions, some leading to the application of that legislation in compliance with EU law, others leading to the opposite application (see, to that effect, judgment of 15 July 2021, Commission v Poland (Disciplinary regime for judges), C‑791/19, EU:C:2021:596, paragraph 153 and the case-law cited).
81 As regards the second limb of the fourth question, which relates to the consistency with EU law of the practice of the competent national authority whereby the aid beneficiary is not informed of the on-the-spot check or of the outcome thereof, it must be held, in the first place, that although, under Article 25(1) of Implementing Regulation No 809/2014, the competent administrative authorities are under no obligation to announce on-the-spot checks, they are, however, required under Article 41 of Implementing Regulation No 809/2014 to provide the beneficiary with a copy of the control report in case of non-compliance.
82 Consequently, a practice of the competent national authority whereby the beneficiary is not informed of the outcome of the on-the-spot check in case of non-compliance is contrary to Article 41(2) and to the principle of good administration.
83 In the second place, such a practice may undermine the objective pursued by Article 15 of Delegated Regulation No 640/2014, which is to encourage the reporting of incorrect aid applications or payment claims to the competent authority in order to protect the financial interests of the European Union. As the Commission notes, a general practice consisting in not announcing the outcome of an on-the-spot check in case of non-compliance would increase the possibility for beneficiaries of making changes subsequently, without administrative penalties being imposed on them.
84 In the light of all the foregoing, the answer to the fourth question is that Article 15(1) of Delegated Regulation No 640/2014 must be interpreted as precluding, first, a national provision under which applicants for support may not withdraw their application if they have been the subject of an on-the-spot check and informed of any non-compliance, limited solely to the areas and/or animals concerned by the application, and, second, a practice of the competent national authority whereby aid beneficiaries are not informed of on-the-spot checks or of the outcome thereof.
85 By its fifth question, the referring court asks, in essence, whether the third sentence of Article 49(1) of the Charter is applicable to a penalty such as that imposed on a farmer under Article 19a of Delegated Regulation No 640/2014, in a situation in which that latter provision was in force on the date on which the application for support was lodged and on the date on which that penalty was imposed, but which, at the date of the examination of the action brought against that penalty, was removed from the consolidated version of that delegated regulation, which, although it was repealed with effect from 1 January 2023, continues to apply to applications lodged before that date in accordance with Article 13 of Delegated Regulation 2022/1172.
86 In that regard, in the context of the cooperation between the Court of Justice and the national courts provided for in Article 267 TFEU, it is solely for the national court, before which a 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 EU law, the Court is, in principle, bound to give a ruling (judgment of 17 October 2024, FA.RO. di YK & C., C‑16/23, EU:C:2024:886, paragraph 33).
87 It follows that questions concerning EU law enjoy a presumption of relevance. The Court may refuse to rule on a question referred by a national court only where it is quite obvious that the interpretation of a rule of EU law 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 17 October 2024, FA.RO. di YK & C., C‑16/23, EU:C:2024:886, paragraph 34).
88 First of all, it is important to remember that, in the present case, Delegated Regulation 2022/1172 repealed Delegated Regulation No 640/2014 and that it is apparent from Article 13 of that first delegated regulation that that second delegated regulation continues to apply to aid applications for direct payments lodged before 1 January 2023. It follows that, since the aid application at issue in the main proceedings was lodged in 2019, Article 19a of Delegated Regulation No 640/2014 continues to apply ratione temporis to the dispute in the main proceedings, even though the latter regulation was repealed with effect from 1 January 2023. The fact that the penalty was imposed after Delegated Regulation No 640/2014 was repealed is irrelevant in that regard.
89 Next, it should be noted that, contrary to what the referring court asserts, Article 19a was still part of both the version of Delegated Regulation No 640/2014 applicable ratione temporis to the case in the main proceedings and the latest consolidated version of that regulation before it was repealed.
90 In those circumstances, since it rests on an incorrect premiss, the fifth question raises a problem that is hypothetical, within the meaning of the case-law referred to in paragraph 87 above, and must therefore be declared inadmissible (see, by analogy, judgment of 16 January 2025, Stangalov, C‑644/23, EU:C:2025:16, paragraph 60 and the case-law cited).
91 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. 1. Article 15(1) of Commission Delegated Regulation (EU) No 640/2014 of 11 March 2014 supplementing Regulation (EU) No 1306/2013 of the European Parliament and of the Council with regard to the integrated administration and control system and conditions for refusal or withdrawal of payments and administrative penalties applicable to direct payments, rural development support and cross compliance, as amended by Commission Delegated Regulation (EU) 2016/1393 of 4 May 2016, 2. Article 15(1) of Delegated Regulation No 640/2014, as amended by Delegated Regulation 2016/1393, 3. Article 15(1) of Delegated Regulation No 640/2014, as amended by Delegated Regulation 2016/1393,