Case T‑358/13

Italian Republic

v

European Commission

(EAFRD — Clearance of the accounts of the paying agencies of Member States concerning expenditure financed by the EAFRD — Decision declaring a certain amount to be non-reusable in connection with the Basilicata Region Rural Development Plan — Article 30 of Regulation (EC) No 1290/2005 — Obligation to state reasons)

Summary — Judgment of the General Court (Sixth Chamber), 8 October 2015

1.      Judicial proceedings — Application initiating proceedings — Formal requirements — Brief summary of the pleas in law on which the application is based — Analogous requirements with regard to grounds in support of a plea — Grounds not set out in the application — Inadmissibility

(Statute of the Court of Justice, Art. 21; Rules of Procedure of the General Court (1991), Art. 44(1)(c))

2.      Judicial proceedings — Burden of proof — Documentary evidence — Probative value — Assessment by the EU judicature — Criteria

3.      Acts of the institutions — Statement of reasons — Obligation — Scope — Decision on the clearance of accounts in respect of expenses financed by EAFRD

(Art. 296 TFEU; Council Regulation No 1290/2005, Arts 30 and 31)

4.      Agriculture — Common agricultural policy — EAFRD financing — Finding of irregularities in the application by national bodies of common organisation of the market mechanisms — Power of the Commission to make financial corrections at the clearance of accounts stage

(Council Regulation No 1290/2005, Arts 26(3), 27(3) and (4), 30 and 31; Commission Regulation No 885/2006, Art. 11(1))

5.      Agriculture — Common agricultural policy — EAFRD financing — Clearance of accounts — Disallowance of expenses arising from irregularities in applying EU rules — Challenge by the Member State concerned — Burden of proof — Shared by the Commission and the Member State

(Council Regulation No 1290/2005, Arts 30 and 31)

1.      See the text of the decision.

(see para. 46)

2.      See the text of the decision.

(see para. 49)

3.      See the text of the decision.

(see paras 56, 57)

4.      The Commission is not entitled, when managing the common agricultural policy, to commit funds which fail to comply with the rules governing the common organisation of the markets in question and that the rule is of general application. Therefore, when the Commission finds that the accounts of paying agencies include expenditure effected in breach of the EU rules governing the common organisation of the market in question, it has the power to draw all the necessary consequences and thus to make financial corrections to the annual accounts of the paying agencies at the stage of its decision on clearance of the accounts pursuant to Article 30 of Regulation No 1290/2005, on the financing of the common agricultural policy.

In that regard, there can be no question of the Commission accepting a false declaration of intermediate expenditure for a rural development programme merely because it complies with formal requirements relating to the presentation of declarations laid down in Article 26(3) of Regulation No 1290/2005. The clearance of accounts decision gives the amounts that are recoverable from each Member State which are determined by deducting advances paid during the course of the financial year in question from the expenditure recognised for that year. Where the Commission finds that irregularities have occurred in the annual declaration of expenditure for any programme, it cannot recognise them as being chargeable to the EAFRD as part of the clearance of accounts and must therefore refuse financing of that expenditure pending any subsequent non-compliance decision.

Moreover, the Commission cannot be blamed for regarding expenses, in the decision to open the conformity clearance procedure, in accordance with Article 11(1) of Regulation No 885/2006 laying down detailed rules for the application of Regulation No 1290/2005, both as a problem examined in the clearance of accounts procedure and as a suspended amount. In accordance with Article 27(4) of Regulation No 1290/2005, decisions to suspend or reduce payments under paragraph 3 are to be made without prejudice to the decisions referred to in Articles 30 and 31 of that regulation. Moreover, according to Article 30(2) of that regulation, a decision adopted under Article 30 is to be without prejudice to decisions taken subsequently under Article 31 and concerning the expenditure to be excluded from EU financing where that expenditure was incurred in a way that infringed EU rules. It follows that, on adoption of the account clearance decision, the Commission may draw consequences from the deficiencies found in the quality of the accounts submitted, independently of the decision on conformity clearance.

(see paras 68, 82, 83, 89)

5.      See the text of the decision.

(see paras 69-71)