Judgments nº T-275/08 of The General Court, April 22, 2010

• Resolution Date: April 22, 2010
• Issuing Organization: The General Court
• Decision Number: T-275/08

In Cases T‑274/08 and T‑275/08,

Italian Republic, represented by S. Fiorentino, avvocato dello Stato,

applicant,

v

European Commission, represented by F. Jimeno Fernández and P. Rossi, acting as Agents,

defendant,

APPLICATION, in Case T-274/08, for partial annulment of Commission Decision 2008/396/EC of 30 April 2008 on the clearance of the accounts of the paying agencies of Member States concerning expenditure financed by the European Agricultural Guarantee Fund (EAGF) for the 2007 financial year (OJ 2008 L 139, p. 33) in so far as it includes interest on the sums charged to the budget of the Italian State under Article 32(5) 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, in Case T-275/08, for partial annulment of Commission Decision 2008/394/EC of 30 April 2008 on the clearance of the accounts of certain paying agencies in Germany, Italy and Slovakia concerning expenditure financed by the European Agricultural Guidance and Guarantee Fund (EAGGF), Guarantee Section, for the 2006 financial year (OJ 2008 L 139, p. 22) in so far as it includes interest on the sums charged to the budget of the Italian State under Article 32(5) of Regulation No 1290/2005,

THE GENERAL COURT (Fifth Chamber),

composed of M. Vilaras, President, M. Prek (Rapporteur) and V.M. Ciucă, Judges,

Registrar: J. Palacio González, Principal Administrator,

having regard to the written procedure and further to the hearings on 25 November 2009,

gives the following

Judgment

Legal context

Rules relating to the financing of the common agricultural policy

1 The basic rules relating to the financing of the common agricultural policy are constituted, in respect of expenses incurred from 1 January 2007, by Council Regulation (EC) No 1290/2005 of 21 June 2005 on the financing of the common agricultural policy (OJ 2005 L 209, p. 1) (‘the basic regulation’).

2 Article 49 of the basic regulation provides:

‘[The basic regulation] shall apply from 1 January 2007…

However, the following provisions shall apply from 16 October 2006:

– …

– Article 32, as regards cases notified under Article 3 of Regulation (EEC) No 595/91 and for which full recovery has not yet taken place by 16 October 2006,

– …’

3 Recital 25 in the preamble to the basic regulation is worded as follows:

‘In order to protect the financial interests of the Community budget, measures should be taken by Member States to satisfy themselves that transactions financed by the Funds are actually carried out and are executed correctly. Member States should also prevent and deal effectively with any irregularities committed by beneficiaries.’

4 Recital 26 in the preamble to the basic regulation states:

‘As regards the EAGF, sums recovered should be paid back to this Fund where the expenditure is not in conformity with Community legislation and no entitlement existed. Provision should be made for a system of financial responsibility for irregularities in the absence of total recovery. In this respect a procedure should be established permitting the Commission to safeguard the interests of the Community budget by deciding on a partial charging to the Member State concerned of sums lost as a result of irregularities and not recovered within reasonable deadlines. In certain cases of negligence on the part of the Member State, it is justified to charge the full sum to the Member State concerned. However, subject to Member States complying with obligations under their internal procedures, the financial burden should be divided fairly between the Community and the Member State.’

5 Article 30(1) of the basic regulation provides that ‘[p]rior to 30 April of the year following the budget year in question, the Commission shall take a decision concerning the clearance of the accounts of the accredited paying agencies … on the basis of the information transmitted in accordance with Article 8(1)(c)(iii).’

6 Under Article 8(1)(c)(iii) of the basic regulation, Member States are to send to the European Commission for measures relating to operations financed by the European Agricultural Guarantee Fund(EAGF) ‘the annual accounts of the accredited paying agencies with a statement of assurance signed by the person in charge of the accredited paying agency, accompanied by the requisite information for their clearance, and a certification report drawn up by the certification body…’.

7 According to Article 32(1) of the basic regulation ‘[s]ums recovered following the occurrence of irregularity or negligence and the interest on these shall be made over to the paying agency and booked by it as revenue assigned to the EAGF in the month in which the money is actually received.’

8 Under Article 32(3) of the basic regulation when the annual accounts are sent, as provided for in Article 8(1)(c)(iii), Member States are to provide the Commission with a summary report on the recovery procedures undertaken in response to irregularities. This must give a breakdown of the amounts not yet recovered, by administrative and/or judicial procedure and by year of the primary administrative or judicial finding of the irregularity.

9 Article 32(4) of the basic regulation provides:

‘[T]he Commission may decide to charge the sums to be recovered to the Member State in the following cases:

(a) if the Member State has not for recovery purposes initiated all the appropriate administrative or judicial procedures laid down in national and Community legislation within one year of the primary administrative or judicial finding;

(b) if there has been no administrative or judicial finding, or the delay in making it is such as to jeopardise recovery, or the irregularity has not been included in the summary report … for the year in which the primary administrative or judicial finding is made.’

10 Article 32(5) of the basic regulation provides:

‘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...