Action brought on 28 June 2011 - Netherlands v Commission
(Case T-343/11)
Language of the case: Dutch
Parties
Applicant: Kingdom of the Netherlands (represented by: C. Wissels, M. de Ree, B. Koopman and C. Schillemans, acting as Agents)
Defendant: European Commission
Form of order sought
Annul Article 1 of Commission Decision 2011/244/EU of 15 April 2011, notified on 18 April 2011, on excluding from European Union financing certain expenditure incurred by the Member States under the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF), under the European Agricultural Guarantee Fund (EAGF) and under the European Agricultural Fund for Rural Development (EAFRD) in so far as Article 1 of that decision concerns the Netherlands and in so far as it concerns the exclusion of the sum of EUR 22 691 407.79 from the financing applicable to the expenditure declared in 2006 to 2008 in connection with operational programmes and the recognition of producer organisations;
Order the Commission to pay the costs.
Pleas in law and main arguments
In Decision 2011/244/EU the Commission treated all costs relating to printing on packages, regardless of the nature and purpose of such printing, as general production costs within the meaning of Annex II to Commission Regulation No 1433/2003,
1 and accordingly deemed those costs to be ineligible for Community financing. The Netherlands Government takes the view that the printing on packages of a brand or trade mark of producer organisations which also has a promotional intent must be treated as generic promotion and/or promotion of quality labels and promotion of producer organisations' brands/trade marks. The costs of such operations are in fact eligible under Annex I to Regulation No 1433/2003.
Further, in Decision 2011/244/EU the Commission excluded altogether from financing expenditure in the context of the operational programmes of the producer organisation FresQ for marketing years 2004 to 2007 on the basis that FresQ did not satisfy the terms and conditions for recognition under Regulations No 2200/96
2 and No 1432/2003. The Commission bases that assessment on the finding that some of FresQ's subsidiary sellers were exclusively marketing the products of one producer, and that as a result of the presumed influence of that producer on the subsidiary, FresQ was no longer fulfilling its central management role in relation to marketing and price setting. The Netherlands Government challenges that assessment and also the related finding that the Netherlands authorities should have withdrawn recognition of producer organisation FresQ.
In support of the action, the applicant relies on four pleas in law.
First plea in law, alleging infringement of Article 7(4) of Regulation No 1258/1999
3 and Article 31 of Regulation No 1290/2005
4 in conjunction with Article 15 of Regulation No 2200/96 and Article 8, in conjunction with Annex I, points 8 and 9, of Regulation No 1433/2003, in so far as expenditure on printing on packages was treated as general production costs and accordingly excluded from financing.
Second plea in law, alleging infringement of Article 7(4) of Regulation No 1258/1999 and Article 31 of Regulation No 1290/2005 in conjunction with Article 11 of Regulation No 2200/96 and Articles 6 and 7 of Regulation No 1432/2003, in so far as it was concluded that producer organisation FresQ did not fulfil the terms and conditions for recognition.
In the alternative, third plea in law, alleging infringement of Article 7(4) of Regulation No 1258/1999 and Article 31 of Regulation No 1290/2005 in conjunction with Article 21 of Regulation No 1432/2003, in so far as all of the aid received by FresQ for the marketing years 2004 to 2007 was considered ineligible for Community co-financing.
In the further alternative, fourth plea in law, alleging infringement of Article 7(4) of Regulation No 1258/1999 and Article 31 of Regulation No 1290/2005, as well as of the principle of proportionality, since the amount of financial correction is disproportionate to the actual financial risk to the Agricultural Fund.
____________1 - Commission Regulation (EC) No 1433/2003 of 11 August 2003 laying down detailed rules for the application of Council Regulation (EC) No 2200/96 as regards operational funds, operational programmes and financial assistance (OJ 2003 L 203, p. 25).2 - Council Regulation (EC) No 2200/96 of 28 October 1996 on the common organisation of the market in fruit and vegetables (OJ 1996 L 297, p. 1).3 - Council Regulation (EC) No 1258/1999 of 17 May 1999 on the financing of the common agricultural policy (OJ 1999 L 160, p. 103).4 - Council Regulation (EC) No 1290/2005 of 21 June 2005 on the financing of the common agricultural policy (OJ 2005 L 209, p. 1).