Judgments nº T-236/07 of The General Court, October 26, 2010
| Resolution Date | October 26, 2010 |
| Issuing Organization | The General Court |
| Decision Number | T-236/07 |
In Case T‑236/07,
Federal Republic of Germany, represented initially by M. Lumma and J. Möller, and subsequently by Möller and N. Graf Vitzthum, acting as Agents,
applicant,
v
European Commission, represented by F. Erlbacher, acting as Agent,
defendant,
APPLICATION for the partial annulment of Commission Decision 2007/327/EC of 27 April 2007 on the clearance of the accounts of the paying agencies of Member States concerning expenditure financed by the European Agricultural Guidance and Guarantee Fund (EAGGF), Guarantee Section, for the 2006 financial year (OJ 2007 L 122, p. 51),
THE GENERAL COURT (Second Chamber),
composed of I. Pelikánová, President, K. Jürimäe and S. Soldevila Fragoso (Rapporteur), Judges,
Registrar: K. Andová, Administrator,
having regard to the written procedure and further to the hearing on 19 May 2010,
gives the following
Judgment
Legal context
Regulation (EEC) No 595/91
1 Article 3 of Council Regulation (EEC) No 595/91 of 4 March 1991 concerning irregularities and the recovery of sums wrongly paid in connection with the financing of the common agricultural policy and the organisation of an information system in this field and repealing Regulation (EEC) No 283/72 (OJ 1991 L 67, p. 11) provides:
‘1. During the two months following the end of each quarter, Member States shall communicate to the Commission a list of irregularities which have been the subject of the primary administrative or judicial findings of fact.
To this end they shall as far as possible give detailed information concerning:
– the provision which has been infringed,
– the nature and amount of the expenditure; in cases where no payment has been made, the amounts which would have been wrongly paid had the irregularity not been discovered, except where the economic operator is guilty of error or negligence detected before payment and not resulting in any administrative or judicial penalty,
– the common organisation of the market and the product or products or measure concerned;
– the period during which, or the moment at which, the irregularity was committed,
– the practices adopted in committing the irregularity,
– the manner in which the irregularity was discovered,
– the national authorities or bodies which recorded the irregularity,
– the financial consequences and possibilities of recovery,
– the date and source of the first information leading to suspicion that an irregularity existed,
– the date on which the irregularity was discovered,
– where appropriate, the Member States and third countries involved,
– the identity of the natural and legal persons involved, save in cases where such information is of no relevance in combating irregularities on account of the character of the irregularity concerned.
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Where some of this information, and in particular that concerning the practices adopted in committing the irregularity and the manner in which this was discovered, is not available, Member States shall as far as possible supply the missing information when forwarding subsequent quarterly lists of irregularities to the Commission.
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If national provisions provide for the confidentiality of investigations, communication of this information shall be subject to the authorisation of the competent court.’
2 Article 5(1) of that regulation states: ‘During the two months following the end of each quarter, Member States shall inform the Commission of the procedures instituted following the irregularities notified under Article 3 and of all important changes resulting therefrom …’. Article 5(2) thereof provides that ‘where a Member State considers that an amount cannot be totally recovered, or cannot be expected to be totally recovered, it shall inform the Commission, in a special notification, of the amount not recovered and the reasons why the amount should, in its view, be borne by the Community or by the Member State’, that ‘this information must be sufficiently detailed to enable the Commission to decide who shall bear the financial consequences, in accordance with Article 8(2) of Regulation (EEC) No 729/70’ and that ‘this decision shall be taken in accordance with the procedure laid down in Article 5 of that Regulation’.
3 Article 1(2) of Council Regulation (EC) No 1287/95 of 22 May 1995 amending Regulation (EEC) No 729/70 on the financing of the common agricultural policy (OJ 1995 L 125, p. 1), states:
‘Article 5 shall be replaced by the following:
“Article 5
…
-
…
(c) … A refusal to finance may not involve expenditure effected prior to twenty‑four months preceding the Commission’s written communication of the results of those checks to the Member State concerned. However, this provision shall not apply to the financial consequences:
– of irregularities as referred to in Article 8(2);
– …”’
Regulation (EEC) No 1258/1999
4 Regulation (EEC) No 729/70 of the Council of 21 April 1970 on the financing of the common agricultural policy (OJ 1970 L 94, p. 13), as last amended by Regulation No 1287/95, established the general rules applicable to the financing of the common agricultural policy. Council Regulation (EC) No 1258/1999 of 17 May 1999 on the financing of the common agricultural policy (OJ 1999 L 160, p. 103) has replaced Regulation No 729/70 and applies to expenditure effected as from 1 January 2000.
5 Under Article 1(2)(b) and Article 3(1) of Regulation No 729/70 and Article 1(2)(b) and Article 2(2) of Regulation No 1258/1999, the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF) finances, in the context of the common organisation of agricultural markets, intervention intended to stabilise those markets, undertaken according to Community rules.
6 Article 7(4) of Regulation No 1258/1999 provides:
‘The Commission shall decide on the expenditure to be excluded from the Community financing referred to in Articles 2 and 3 where it finds that expenditure has not been effected in compliance with Community rules.
Before a decision to refuse financing is taken, the results of the Commission’s checks and the replies of the Member State concerned shall be notified in writing, after which the two parties shall endeavour to reach agreement on the action to be taken.
If no agreement is reached, the Member State may ask for a procedure to be initiated with a view to mediating between the respective positions within a period of four months, the results of which shall be set out in a report sent to and examined by the Commission, before a decision to refuse financing is taken.
The Commission shall evaluate the amounts to be excluded having regard in particular to the degree of non-compliance found. The Commission shall take into account the nature and gravity of the infringement and the financial loss suffered by the Community.
A refusal to finance may not involve:
(a) expenditure referred to in Article 2 effected prior to 24 months preceding the Commission’s written communication of the results of those checks to the Member State concerned;
(b) expenditure for a measure or action referred to in Article 3 in respect of which the final payment was effected prior to 24 months preceding the Commission’s written communication of the results of those checks to the Member State concerned.
However, the fifth subparagraph shall not apply to the financial consequences:
(a) of irregularities as referred to in Article 8(2);
(b) concerning national aids, or infringements, for which the procedures referred to in Articles [88 EC] and [226 EC] of the Treaty have been initiated.’
7 Article 8(2) of Regulation No 1258/1999 provides:
‘In the absence of total recovery, the financial consequences of irregularities or negligence shall be borne by the Community, with the exception of the consequences of irregularities or negligence attributable to administrative authorities or other bodies of the Member States.
The sums recovered shall be paid to the accredited paying agencies and deducted by them from the expenditure financed by the Fund. The interest on sums recovered or paid late shall be paid into the Fund.’
8 Article 32(3) 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) states: ‘When the annual accounts are sent, as provided for in Article 8(1)(c)(iii), Member States shall provide the Commission with a summary report on the recovery procedures undertaken in response to irregularities. This shall 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’. It also states that ‘Member States shall make available to the Commission detailed particulars of the individual recovery procedures and of the individual sums not yet recovered’.
9 Article 32(5) of Regulation No 1290/2005 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 be borne by the Member State concerned and 50% by the Community budget.
Member States shall indicate separately in the summary report referred to in the first subparagraph of paragraph 3 the amounts not recovered within the time-limits specified in the first subparagraph of this paragraph.
The distribution of the financial burden of non-recovery in line with the first subparagraph shall be without prejudice to the requirement that the Member State concerned must pursue recovery procedures in compliance with Article 9(1) of this Regulation. Fifty percent of the amounts recovered in this way shall be credited to the [European Agricultural Guarantee Fund (EAGF)], after application of the deduction provided for in paragraph 2 of this Article.
Where, in the context of the recovery procedure, the absence of any irregularity is recorded by an...
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