Case T‑437/14

United Kingdom of Great Britain and Northern Ireland

v

European Commission

(EAGGF, Guarantee Section — EAGF and EAFRD — Expenditure excluded from financing — Integrated administration and control system — Reductions and exclusions where the rules on cross-compliance are not observed — Flat-rate financial correction imposed by the Commission in accordance with internal guidelines — Burden of proof — Interpretation of Annex II to Regulation (EC) No 73/2009)

Summary — Judgment of the General Court (Fourth Chamber), 28 September 2016

1.      EU law — Interpretation — Methods — Literal, systematic and teleological interpretation

2.      Agriculture — Common agricultural policy — Direct support schemes — Common rules –– Statutory management requirements — Requirements on the identification and registration of animals — Scope

(Council Regulations No 21/2004, Arts 3 to 8, and No 73/2009, Art. 4 and Annex II)

3.      Actions for annulment — Subject-matter — Decision based on several pillars of reasoning, each sufficient to justify the operative part — Annulment of such a decision — Conditions

(Art. 263 TFEU)

1.      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 of the rules of which it is part. Where the textual and historical interpretations of a regulation, in particular of one of its provisions, do not permit its precise scope to be assessed, the legislation in question must be interpreted by reference to both its purpose and general structure.

(see paras 59, 60)

2.      With regard to the statutory management requirements which farmers receiving direct payments are required to comply with under Article 4 of Regulation No 73/2009 establishing common rules for direct support schemes for farmers under the common agricultural policy and establishing certain support schemes for farmers, requirement no 8, set out in Annex II to the said regulation, refers, for the identification and registration of animals, to Articles 3, 4 and 5 of Regulation No 21/2004 establishing a system for the identification and registration of sheep and goats.

With regard to the meaning to be attributed to the reference made by that requirement to Articles 3 to 5 of Regulation No 21/2004, only the elements mentioned in Articles 4 and 5 and referred to in Article 3(a) and (b) of that regulation are to be regarded as having the status of cross-compliance requirements. The logic of that interpretation is confirmed by the difference in nature between, on the one hand, the elements set out in Article 3(a) and (b) of Regulation No 21/2004 and repeated in Articles 4 and 5 of that regulation and, on the other, the elements mentioned in Article 3(c) and (d) of Regulation No 21/2004 and repeated in Article 6 to 8 of the regulation. Unlike the elements in Articles 4 and 5 of Regulation No 21/2004, the elements set out in Articles 6 to 8 of the regulation concern obligations that are essentially incumbent on the Member States alone, which may explain the legislature’s intention not to make compliance with those obligations a condition for payment to farmers. Consequently, if a Member State is bound by Regulation No 21/2004 in its entirety, including Articles 5 to 8 thereof, compliance with those articles cannot be regarded as a condition for payments being made to farmers, notwithstanding the reference made by statutory management requirement no 8 to Article 3 of that regulation.

(see paras 63, 66, 67, 70)

3.      See the text of the decision.

(see para. 73)