1 This request for a preliminary ruling concerns the interpretation of Article 35 of Council Regulation (EC) No 1290/2005 of 21 June 2005 on the financing of the common agricultural policy (OJ 2005 L 209, p. 1) and the third paragraph of Article 58 of Commission Regulation (EC) No 1122/2009 of 30 November 2009 laying down detailed rules for the implementation of Council Regulation (EC) No 73/2009 as regards cross-compliance, modulation and the integrated administration and control system, under the direct support schemes for farmers provided for that Regulation, as well as for the implementation of Council Regulation (EC) No 1234/2007 as regards cross-compliance under the support scheme provided for the wine sector (OJ 2009 L 316, p. 65), as amended by Commission Implementing Regulation (EU) No 1368/2011 of 21 December 2011 (OJ 2011 L 341, p. 33) (‘Regulation No 1122/2009’).
2 The request has been made in proceedings between FJ and the Agrárminiszter (Minister for Agriculture, Hungary) concerning an advance granted to FJ under the single area payment scheme for 2020, which was withheld for the purpose of recovering a penalty imposed on FJ on account of an over-declaration of areas under that scheme for 2013.
3 Article 1 of Regulation No 1290/2005 provided: ‘This Regulation sets specific requirements and rules on the financing of expenditure falling under the common agricultural policy, including expenditure on rural development.’
4 Article 2(1) of that regulation stated: ‘In order to attain the objectives of the common agricultural policy defined by the Treaty and finance the various measures falling under it, including rural development, the following are hereby set up: (a) a European Agricultural Guarantee Fund, hereinafter referred to as the “EAGF”; (b) a European Agricultural Fund for Rural Development, hereinafter referred to as the “EAFRD”.’
5 Title IV of that regulation, entitled ‘Clearance of accounts and [European] Commission monitoring’, included Chapter 2, relating to ‘irregularities’, which contained Articles 32 to 35 of that regulation.
6 The first subparagraph of Article 32(5) of Regulation No 1290/2005, laying down provisions specific to the EAGF, stated: ‘If recovery has not taken place within four years of the primary administrative or judicial finding, or within eight years where recovery action is taken in the national courts, 50% of the financial consequences of non-recovery shall be borne by the Member State concerned and 50% by the Community budget.’
7 The first subparagraph of Article 33(8) of that regulation, laying down provisions specific to the EAFRD, provided: ‘If recovery has not taken place prior to the closure of a rural development programme, 50% of the financial consequences of non-recovery shall be borne by the Member State concerned and 50% by the Community budget and shall be taken into account either at the end of the period of four years following the first administrative or judicial finding or eight years where recovery action is taken in the national courts, or on the closure of the programme if those deadlines expire prior to such closure.’
8 Article 35 of that regulation read as follows: ‘For the purposes of this Chapter the primary administrative or judicial finding means the first written assessment of a competent authority, either administrative or judicial, concluding on the basis of actual facts that an irregularity has been committed, without prejudice to the possibility that this conclusion may subsequently have to be adjusted or withdrawn as a result of developments in the course of the administrative or judicial procedure.’
9 Regulation No 1290/2005, which is relevant ratione temporis to the facts of the dispute in the main proceedings, was repealed by 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. 6).
10 Commission Regulation (EC) No 885/2006 of 21 June 2006 laying down detailed rules for the application of Council Regulation (EC) No 1290/2005 as regards the accreditation of paying agencies and other bodies and the clearance of the accounts of the EAGF and of the EAFRD (OJ 2006 L 171, p. 90), as amended by Commission Regulation (EC) No 1034/2008 of 21 October 2008 (OJ 2008 L 279, p. 13) (‘Regulation No 885/2006’), provided in Article 5b: ‘Without prejudice to any other enforcement action provided for in national law, Member States shall off-set any still outstanding debt of a beneficiary which has been established in accordance with national law against any future payment to be made by the paying agency responsible for the recovery of the debt to the same beneficiary.’
11 That regulation, applicable ratione temporis to the facts of the dispute in the main proceedings, was repealed by Commission Delegated Regulation (EU) No 907/2014 of 11 March 2014 supplementing Regulation (EU) No 1306/2013 of the European Parliament and of the Council with regard to paying agencies and other bodies, financial management, clearance of accounts, securities and use of euro (OJ 2014 L 255, p. 18).
12 As is apparent from its title, Regulation No 1122/2009 laid down, inter alia, detailed rules for the implementation of Council Regulation (EC) No 73/2009 of 19 January 2009 establishing common rules for direct support schemes for farmers under the common agricultural policy and establishing certain support schemes for farmers, amending Regulations (EC) No 1290/2005, (EC) No 247/2006, (EC) No 378/2007 and repealing Regulation (EC) No 1782/2003 (OJ 2009 L 30, p. 16), as regards cross-compliance, modulation and the integrated administration and control system under the direct support schemes for farmers provided for by Regulation No 73/2009.
13 Recitals 73, 90, 92 and 101 of Regulation No 1122/2009 stated: ‘(73) Rules for the setting-up of detailed and specific control reports for cross-compliance have to be established. The specialised controllers in the field should indicate any findings and also the degree of seriousness of such findings in order to enable the paying agency to fix the related reductions or, as the case may be, to decide on exclusions from receiving direct payments. … (90) Information on the results of controls of cross-compliance should be made available to all paying agencies responsible for the management of the different payments subject to cross-compliance requirements so that, where the findings so justify, appropriate reductions are applied. … (92) With regard to cross-compliance obligations, apart from grading reductions or exclusions in view of the principle of proportionality, it should be provided that as of a certain moment, repeated infringements of the same cross-compliance obligation should, after a prior warning to the farmer, be treated as an intentional non-compliance. … (101) In order to ensure the uniform application of the principle of good faith throughout the Community, where amounts unduly paid are recovered, the conditions under which that principle may be invoked should be laid down without prejudice to the treatment of the expenditure concerned in the context of the clearance of accounts under Council Regulation [No 1290/2005].’
14 The second paragraph of Article 2 of Regulation No 1122/2009, entitled ‘Definitions’, provided: ‘the following definitions shall also apply: … (10) “irregularities” means any non-respect of the relevant rules for the granting of the aid in question; … (12) “area-related aid schemes” means … all aid schemes established under Titles IV and V of Regulation [No 73/2009] …; … (23) “area determined” means the area for which all conditions laid down in the rules for granting the aid have been met; … … (31) “cross-compliance” means the statutory management requirements and the good agricultural and environmental condition in accordance with Articles 5 and 6 of Regulation [No 73/2009]; …’
15 Title III of Part II of Regulation No 1122/2009, entitled ‘Controls’, included Chapter II, concerning ‘controls with regard to the eligibility criteria’. Section II of that chapter, entitled ‘On-the-spot checks’, included Article 32 of that regulation, entitled ‘Control report’, which provided: ‘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. … 2. The farmer shall be given the opportunity to sign the report to attest his presence at the check and to add observations. Where irregularities are found the farmer shall receive a copy of the control report. Where the on-the-spot check is carried out by means of remote sensing in accordance with Article 35, the Member States may decide not to give the farmer or his representative the opportunity to sign the control report if no irregularities are revealed during the check by remote-sensing. If irregularities are revealed as a consequence of such checks the opportunity to sign the report shall be given before the competent authority draws its conclusions from the findings with regard to any resulting reductions or exclusions.’
16 Title III of Part II of Regulation No 1122/2009 also included Chapter III, concerning ‘Controls relating to cross-compliance’, Section III of which, entitled ‘On-the-spot checks’, contained Article 54 of that regulation. That article, entitled ‘Control report’, provided: ‘1. Every on-the-spot check under this Chapter … shall be the subject of a control report to be established by the competent control authority or under its responsibility. The report shall be divided into the following parts: … (b) a part reflecting separately the checks carried out in respect of each of the acts and standards and containing, in particular, the following information: (i) the requirements and standards subject to the on-the-spot check; (ii) the nature and extent of checks carried out; (iii) the findings; (iv) the acts and standards in relation to which non-compliances are found; … 2. The farmer shall be informed of any determined non-compliance within three months after the date of the on-the-spot check. … 3. … Where the competent control authority is not the paying agency, the report shall be sent to the paying agency or the coordinating authority within a month of its finalisation. …’
17 Title IV of Part II of that regulation, entitled ‘Basis of the calculation of the aid, reductions and exclusions’, contained Chapter II, entitled ‘Findings in relation to eligibility criteria’, Section I of which concerned the ‘single payment scheme and other area-related aid schemes’. Article 58 of that regulation, which appeared in that section under the heading ‘Reductions and exclusions in cases of over-declaration’, stated: ‘If, in respect of a crop group, the area declared for the purposes of any area-related aid schemes exceeds the area determined in accordance with Article 57, the aid shall be calculated on the basis of the area determined reduced by twice the difference found if that difference is more than either 3% or two hectares, but no more than 20% of the area determined. If the difference is more than 20% of the area determined, no area-linked aid shall be granted for the crop group concerned. If the difference is more than 50%, the farmer shall be excluded once again from receiving aid up to an amount equal to the amount which corresponds to the difference between the area declared and the area determined in accordance with Article 57 of this Regulation. That amount shall be off-set in accordance with Article 5b of Commission Regulation [No 885/2006]. If the amount cannot be fully off-set in accordance with that article in the course of the three calendar years following the calendar year of the finding, the outstanding balance shall be cancelled.’
18 Title IV of Part II of Regulation No 1122/2009 also included a Chapter III, entitled ‘Findings in relation to cross-compliance’. In that chapter under the heading ‘General principles and definition’, Article 70(4) of that regulation provided: ‘Non-compliances shall be deemed to be “determined” if they are established as a consequence of any kind of controls carried out in accordance with this Regulation or after having been brought to the attention of the competent control authority or, where applicable, the paying agency, in whatever other way.’
19 Regulation No 1122/2009, applicable ratione temporis to the facts of the dispute in the main proceedings in so far as it concerns an application for aid for 2013, was repealed with effect from 1 January 2015 by 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).
20 Paragraph 60(1) of a mezőgazdasági, agrár-videkfejlesztési, valamint halászati támogatásokhoz és egyéb tkedésekhez kapcsolódó eljárás egyes kérdéseiről szóló 2007. évi XVII. törvény (Law No XVII of 2007 on specific aspects of the procedure for granting aid and other measures relating to agriculture, rural development and fisheries (‘the Law on Aid’) provides: ‘Except where otherwise provided in a directly applicable EU act, the body responsible for promoting agriculture and rural development shall refuse payment of the aid due to the beneficiary up to the amount owed by the beneficiary in relation to aid measures and the debt will thereby be regarded as settled. Where the amount of aid to which the beneficiary is entitled does not cover the entirety of the debts registered against him or her, those debts must be settled in order of maturity.’
21 FJ is a farmer who, on 14 May 2013, submitted an application for aid under the single area payment scheme for the year 2013 (‘the 2013 aid application’) to the Magyar Államkincstár (the Hungarian State Treasury) (‘the first-level administrative authority’).
22 Following several on-the-spot checks carried out in 2013 and 2014, the first-level administrative authority, by a decision of 30 September 2014, rejected the aid application of 2013 and excluded FJ from receiving aid in the amount of 3834105 Hungarian forint (HUF) (approximately EUR 9900).
23 By order of 23 June 2016, the Minister for Agriculture, acting as the second-level administrative authority, annulled that decision on the ground of failure to state reasons and ordered the first-level administrative authority to initiate new proceedings.
24 That authority made a fresh decision on the 2013 application for aid by decision of 9 April 2018. However, following a complaint by FJ, that decision was annulled by an order of the Minister for Agriculture of 13 May 2019, who for the second time ordered that authority to initiate new proceedings.
25 By a decision of 27 January 2020, the first-level administrative authority again rejected the 2013 aid application and excluded FJ from receiving aid in the amount of HUF 4253460 (approximately EUR 11000) on the basis of the third paragraph of Article 58 of Regulation No 1122/2009, in relation to the penalties in cases of over-declarations exceeding 50% of the area determined. FJ did not challenge that decision.
26 On 15 May 2020, FJ submitted to the first-level administrative authority an application for aid under the single area payment scheme for 2020.
27 By decision of 20 October 2020, that authority granted FJ, in respect of that aid application, an advance of HUF 235564 (approximately EUR 600).
28 However, by an order of 21 October 2020, that authority ordered, pursuant to Paragraph 60(1) of the Law on Aid, that the entire amount of that advance be withheld in order to recover the amount of the penalty imposed on FJ in its decision of 27 January 2020.
29 By order of 23 February 2021, the Minister for Agriculture upheld that order on the ground that, pursuant to the third paragraph of Article 58 of Regulation No 1122/2009 and Paragraph 60(1) of the Law on Aid, recovery of the amount of that penalty could take place within three calendar years from the date of the decision of 27 January 2020.
30 FJ brought an appeal against the order of 23 February 2021 before the Fővárosi Törvényszék (Budapest High Court, Hungary), which is the referring court. He maintains that by equating the year of the finding, referred to in the third paragraph of Article 58 of Regulation No 1122/2009, with the year in which the final decision on his application for aid was taken, the Minister for Agriculture failed to take account of Article 35 of Regulation No 1290/2005, which defines the concept of a ‘finding’ in the event of an irregularity committed in connection with the financing of the common agricultural policy.
31 FJ submits that, in the present case, the year in which the findings were made corresponds, in the light of the concept of a ‘finding’, to 2013 or, failing that, to 2014, the year in which the on-the-spot checks were carried out, the reports for those checks were established and the first decision based on those checks was adopted. Therefore, in accordance with the third paragraph of Article 58 of Regulation No 1122/2009, the amount of the penalty at issue, which was not recovered in the three calendar years following 2014, should be annulled.
32 Before the referring court, the Minister for Agriculture continues to maintain that, since that penalty was imposed by the decision of 27 January 2020, it is the year of that decision which must be regarded as the year of the finding.
33 In that regard, first of all, the referring court has doubts as to whether the concept of ‘finding’, within the meaning of the third paragraph of Article 58 of Regulation No 1122/2009, which is not defined in that regulation, must be interpreted by taking into consideration the concept of a ‘finding’ within the meaning of Article 35 of Regulation No 1290/2005. It notes that Article 35 is introduced by the expression ‘for the purposes of this Chapter’, so that it could apply only in relation to the other provisions of Chapter 2 of Title IV of that regulation, relating to irregularities. However, it does not rule out the possibility that the concept of a ‘finding’, within the meaning of Article 35, may also apply for the recovery of the penalty provided for in the third paragraph of Article 58 of Regulation No 1122/2009, since that provision refers to Article 5b of Regulation No 885/2006 and the latter regulation lays down detailed rules for the application of Regulation No 1290/2005.
34 Next, the referring court considers that, on the basis of the facts of the case in the main proceedings, there are three possible interpretations of the concept of a ‘finding’ within the meaning of Article 35 of Regulation No 1290/2005.
35 According to the first interpretation, supported by the Minister for Agriculture, the finding is the decision definitively bringing the aid application procedure to an end. That interpretation is consistent with the purpose of such a decision, by which the authority makes a finding of fact and classifies them in law. Nevertheless, the referring court is uncertain whether that interpretation is consistent with the intention of the EU legislature, expressed in recitals 92 and 101 of Regulation No 1122/2009, to ensure compliance with the principles of proportionality, appropriate grading of the penalty and good faith in the context of the reduction and exclusion of aid, in particular where, as in the present case, the authority takes its final decision on the aid application seven years after it was lodged and after two previous decisions on that application have been annulled on account of their unlawfulness.
36 According to the second interpretation, the finding is the on-the-spot check carried out by the competent authority. That check could be regarded as the first written assessment carried out by that authority in order to conclude that there was an irregularity on the basis of specific facts. The referring court observes that, if that authority were to carry out several on-the-spot checks, that interpretation would raise the question of whether the finding refers to the first or last of those checks.
37 According to the third interpretation, the finding is the first decision taken by the competent authority in the context of the aid application procedure. In the present case, it is the decision of 30 September 2014. That interpretation is supported by the very wording of Article 35 of Regulation No 1290/2005, which refers to the ‘primary … finding’ and states that it is without prejudice to any subsequent review or withdrawal of that act.
38 Finally, if the definition of the concept of ‘finding’ in Article 35 of Regulation No 1290/2005 did not apply for the purposes of interpreting the third paragraph of Article 58 of Regulation No 1122/2009, the referring court asks which year may be regarded as being the year in which the finding was made in the present case.
39 In those circumstances, the Fővárosi Törvényszék (Budapest High Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling: ‘(1) Is the concept of a finding as defined in Article 35 of [Regulation No 1290/2005], on the financing of the common agricultural policy, applicable when it comes to interpreting and applying Article 58, third paragraph, of [Regulation No 1122/2009]? (2) If the answer to the preceding question referred is yes, must the concept of a finding as defined in Article 35 of Regulation No 1290/2005 be interpreted as meaning that the calendar year of the primary administrative or judicial finding is to be regarded as the calendar year in which the authority handling the administrative procedure initiated on the basis of the claim: - carries out the first evidence-gathering action in which it establishes the existence of an irregularity, which, in the present case, is the year in which the report containing the conclusions of the on-the-spot check was written, or - takes the first decision with regard to the substance of the matter on the basis of that evidence-gathering action, or - in the context of the procedure, takes the final and definitive decision determining the exclusion? (3) Does the fact that the written assessment that constitutes the finding may subsequently be withdrawn or adjusted as a result of the interested party’s right of appeal under the regulations and not as a consequence of changes in the administrative or judicial procedure have a bearing on the answer to the preceding question referred? (4) If the calendar year of the finding is that of the first evidence-gathering action and, as is the case in this case, that action consisted of an on-the-spot check carried out on different occasions, must the concept of first evidence-gathering action in relation to Article 35 of Regulation No 1290/2005 be interpreted such that it equates to the first on-the-spot check by the authority or the final on-the-spot check, in which the observations and evidence provided by the interested party were also taken into account? (5) If the answer to the first question referred is no, is there, on that account, any change in the previously defined content of the finding which must be taken into account for the purposes of Article 58, third paragraph, of Regulation No 1122/2009?’
40 By its five questions, which it is appropriate to examine together, the referring court asks, in essence, whether the concept of ‘finding’, within the meaning of the third paragraph of Article 58 of Regulation No 1122/2009, must be interpreted - if necessary in the light of the concept of ‘finding’ within the meaning of Article 35 of Regulation No 1290/2005 - as referring, in the event that the farmer has been the subject of an on-the-spot check, to the control report established following that check and which found irregularities in the aid application concerned, or as referring to the first substantive decision adopted on the basis of that report, or as referring to the final decision excluding the aid.
41 In the first place, it should be noted, first, that the referring court’s questions concerning the possibility of taking into account Article 35 of Regulation No 1290/2005 for the purposes of interpreting the third paragraph of Article 58 of Regulation No 1122/2009 are explained, in particular, by the fact that, in the Hungarian language version of those regulations, those two provisions use one and the same term, namely ‘tenymegállapítás’. Although some language versions also use one and the same expression, such as the German (‘Feststellung’) and English (‘finding’) versions, or at least similar expressions, such as the French version (‘acte de constat’ and ‘constatation’ respectively), other language versions of those provisions use different concepts, such as the Spanish (‘acto de comprobación’ and ‘se haya descubierto la irregularidad’ respectively), Croatian (‘nalaz’ and ‘kada je utvrđen’ respectively), Italian (‘verbale’ and ‘accertamento’ respectively) or Portuguese (‘auto’ and ‘a diferença seja constatada’ respectively) versions.
42 Secondly, although those two regulations fall within the scope of the common agricultural policy, it must be observed that Regulation No 1290/2005 is of general application, in that, in accordance with Article 1 and Article 2(1) thereof, it lays down the specific conditions and rules applicable to the financing of expenditure under that policy and establishes the two financing funds for that expenditure, namely the EAGF and the EAFRD, whereas Regulation No 1122/2009 is intended, more specifically, to implement Regulation No 73/2009 with regard to certain aspects of the direct support schemes for farmers.
43 More specifically, Article 35 of Regulation No 1290/2005 appears in Chapter 2 of Title IV of that regulation, the purpose of which is, inter alia, to establish the distribution of the financial burden between the Member States and the European Union where expenditure is not recovered as a result of irregularities committed by the beneficiaries.
44 To that end, Article 35 lays down a definition of administrative or judicial findings, while expressly limiting it ‘for the purposes of this Chapter’, namely Chapter 2, which contains Articles 32 to 35 of that regulation, which means that it cannot be relevant to the interpretation of other provisions.
45 Article 58 of Regulation No 1122/2009, for its part, refers not to the financial burdens which the Member States and the European Union must bear, but to the penalties to be borne by farmers who have made an over-declaration.
46 In those circumstances, it must be held that Article 35 of Regulation No 1290/2005 is not relevant for the purposes of interpreting the third paragraph of Article 58 of Regulation No 1122/2009.
47 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 27 January 2021, De Ruiter, C‑361/19, EU:C:2021:71, paragraph 39 and the case-law cited).
48 In that regard, it must be noted, first, that Article 58 of Regulation No 1122/2009 establishes, as is apparent from its title, reductions and exclusions applicable in cases of over-declaration. The over-declarations relate to cases in which a farmer who has applied for aid under one of the area-related aid schemes for a crop group - which include, in particular, as is apparent from point 12 of the second paragraph of Article 2 of that regulation, the single area payment scheme at issue in the main proceedings, provided for in Title V of Regulation No 73/2009 - declares in his or her aid application an area greater than the ‘area determined’. That is defined in point 23 of the second paragraph of Article 2 of Regulation No 1122/2009 as the area for which all the conditions laid down in the rules for granting aid have been met.
49 Under the third paragraph of Article 58 of that regulation, where the difference between the area declared in the aid application and the area determined is more than 50% of the latter, the farmer is to be excluded from receiving aid up to an amount equal to the amount which corresponds to that difference. That amount is to be recovered in accordance with Article 5b of Regulation No 885/2006, namely by levying it on any future payment to be made to that farmer. If the amount cannot be fully off-set in accordance with that article in the course of the three calendar years following the calendar year of the finding, the outstanding balance is to be cancelled.
50 Thus, the wording of Article 58 does not, in itself, make it possible to identify clearly the meaning to be given to the concept of ‘finding’ contained therein.
51 As regards, secondly, the context of Article 58 of Regulation No 1122/2009, it should be noted that the terms ‘finding’, ‘determination’ or ‘recorded’ appear several times in that regulation.
52 In that regard, Article 32 of that regulation, which concerns on-the-spot checks in relation to eligibility criteria - namely, as is apparent from Article 21 of Regulation No 73/2009, the conditions, laid down in the latter regulation, required in order to qualify for aid - is particularly relevant for the contextual interpretation of Article 58 of Regulation No 1122/2009 in so far as that article concerns, as is apparent from paragraph 17 of the present judgment, the findings relating to those criteria.
53 Article 32 of that regulation provides, first of all, that each on-the-spot check relating to the eligibility criteria is to be the subject of a control report which makes it possible to review the details of the checks carried out. Next, the farmer is to be given the opportunity to sign the report and, where irregularities are found, to receive a copy of that report. Lastly, where the on-the-spot check is carried out by means of remote sensing and irregularities are revealed, the farmer is to be given the opportunity to sign the report before the competent authority draws its conclusions from the findings with regard to any resulting reductions or exclusions.
54 It is thus clear from Article 32, first, that irregularities are recorded in the control report and, second, that the competent authority, when deciding on any reductions or exclusions, does so on the basis of the findings made in that report.
55 It follows that the concept of ‘finding’, within the meaning of Regulation No 1122/2009 and, in particular, the third paragraph of Article 58 thereof, corresponds to the findings of irregularities revealed during an on-the-spot check, as set out in the control report established on that occasion.
56 That interpretation is supported by Article 54 of Regulation No 1122/2009 on control reports to be established by the competent authority following any on-the-spot check on cross-compliance - namely, as is apparent from point 31 of the second paragraph of Article 2 of that regulation, the statutory management requirements and the good agricultural and environmental condition in accordance with Articles 5 and 6 of Regulation No 73/2009 - read in the light of recitals 73 and 90 of Regulation No 1122/2009. Article 54 provides, inter alia, first, that those reports are to contain, inter alia, the findings made during such a check and, second, that where the competent control authority is not the paying agency, those reports are to be sent to the paying agency. As is apparent from recitals 73 and 90 of that regulation, the findings in the control reports enable that paying agency to determine the relevant reductions or exclusions.
57 Furthermore, Article 70(4) of Regulation No 1122/2009 on reductions and exclusions in relation to cross-compliance provides that non-compliances are to be deemed to be ‘determined’ if they are established as a consequence of any kind of controls carried out in accordance with that regulation or after having been brought to the attention of the competent control authority or, where applicable, the paying agency, in whatever other way. That provision thus reaffirms not only that, as a general rule, the findings result directly from the checks carried out in accordance with that regulation, but also that irregularities corresponding to non-compliances which have merely been brought to the attention of an authority - in any way whatsoever - may be regarded as having been found. It is therefore apparent that the concept of ‘finding’, within the meaning of that regulation, is informal in character and, consequently, does not necessarily have to be given concrete form in a substantive administrative decision adopted on the basis of a control report.
58 Thirdly, the interpretation set out in paragraph 55 of the present judgment is supported by the objectives pursued by the third paragraph of Article 58 of Regulation No 1122/2009.
59 In that regard, it is appropriate to refer to the principle of legal certainty, which the Court takes into account in the area of aid paid to farmers (see, to that effect, judgment of 27 January 2021, De Ruiter, C‑361/19, EU:C:2021:71, paragraph 35 and the case-law cited), in particular where the provisions concern administrative penalties, as is the case with the rules on the exclusion of aid (see, to that effect, judgment of 4 May 2006, Haug, C‑286/05, EU:C:2006:296, paragraph 22). The third paragraph of Article 58 of Regulation No 1122/2009, in so far as it sets a time limit for the application of an administrative penalty, is specifically intended to ensure legal certainty for farmers.
60 The principle of legal certainty requires that EU rules enable those concerned to know precisely the extent of the obligations which are imposed on them and that those persons must be able to ascertain unequivocally what their rights and obligations are and take steps accordingly (judgment of 25 July 2018, Teglgaard and Fløjstrupgård, C‑239/17, EU:C:2018:597, paragraph 52 and the case-law cited).
61 To make the concept of ‘finding’, within the meaning of the third paragraph of Article 58 of Regulation No 1122/2009, dependent on the uncertainties of the national administrative procedure - and, as the case may be, judicial proceedings - would be, as the facts of the dispute in the main proceedings demonstrate, such as to make it difficult for the farmer concerned to foresee the financial consequences which he or she will have to bear if he or she decides to submit a new aid application and where that aid is withheld in whole or in part on account of irregularities detected more than three calendar years previously.
62 In that regard, it should be noted that it is apparent from the order for reference that, in the dispute in the main proceedings, owing to the annulment, on two occasions, of the decisions adopted by the first-level administrative authority, more than seven years had elapsed between the time when the first on-the-spot check was carried out in relation to the aid application in question in June 2013, and the time when the national authorities recovered the penalty for over-declaration in October 2020.
63 Thus, in the present case, it must be held that the year of the finding, within the meaning of the third paragraph of Article 58 of Regulation No 1122/2009, corresponds to the calendar year in which the control report issued following an on-the-spot check was established and which found irregularities in the aid application concerned.
64 In so far as, in the main proceedings, several on-the-spot checks took place in 2013 and 2014, it must be stated that it is for the national court, which alone has jurisdiction to assess the facts, to determine which of those checks provided a definitive basis, on account of the irregularities found, for the penalty subsequently adopted by the national authorities, namely the exclusion of aid for an amount calculated in accordance with the third paragraph of Article 58 of Regulation No 1122/2009.
65 In the light of all the foregoing considerations, the answer to the questions referred is that the third paragraph of Article 58 of Regulation No 1122/2009 must be interpreted as meaning that the concept of ‘finding’, within the meaning of that provision, refers, where the farmer has been the subject of an on-the-spot check, to the control report established following that check, which found irregularities in the aid application concerned.
66 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.