Judgment of the General Court (Third Chamber) of 10 September 2015 —
Greece v Commission

(Case T‑346/13)

EAGGF — ‘Guarantee’ Section — EAGGF and EAFRD — Expenditure excluded from financing — Rural development measures — Agri-environment — Adequate checks — Lump-sum financial corrections

1.                     Agriculture — Common agricultural policy — EAGGF, EAGF and EAFRD financing — Grant of aid and premiums — Obligation on the Member States to organise an effective system of administrative and on-site inspections — Scope (Commission Regulations No 796/2004, Art. 29, and No 1975/2006, Arts 12(1), 14(2), and 15) (see paras 32-34)

2.                     Acts of the institutions — Statement of reasons — Obligation — Scope — Decision on the clearance of accounts in respect of expenditure financed by EAGGF, EAGF and EAFRD — Obligation on the Commission to demonstrate, in a decision excluding certain expenses from EU financing, the obligations allegedly infringed by the Member State (Art. 296 TFEU; Commission Regulations No 796/2004 and No 1975/2006) (see paras 37, 38, 79, 90, 91)

3.                     Agriculture — Common agricultural policy — EAGGF, EAGF and EAFRD financing — Grant of aid and premiums — Obligation on the Member States to organise an effective system of administrative and on-site inspections — Establishment of a report for each on-site inspection — Necessary content (Commission Regulation No 796/2004, Art. 28(1)) (see paras 51, 52)

4.                     Agriculture — Common agricultural policy — EAGGF, EAGF and 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 (Commission Regulations No 1974/2006, Art. 27(3), and No 1975/2006, Art. 10) (see paras 101-105, 110, 118)

5.                     EU law — Principles — Proportionality — Scope (Art. 5(4) TEU) (see para. 113)

6.                     Agriculture — Common agricultural policy — EAGGF, EAGF and EAFRD financing — Clearance of accounts — Disallowance of expenses arising from irregularities in applying EU rules — Flat-rate correction of 5% for insufficient checks by a Member State that environmental measures connected with the criterion relating to the use of fertilisers complied with — Lawfulness — Conditions (Council Regulation No 1290/2005, Art. 31(2)) (see paras 114, 115, 120, 121)

Re:

APPLICATION for annulment of Commission Implementing Decision 2013/214/EU of 2 May 2013 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) (OJ 2013 L 123, p. 11).

Operative part

The Court:

1. Annuls Commission Implementing Decision 2013/214/EU of 2 May 2013 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 it imposes a financial correction of 2% on the Hellenic Republic) in respect of the ‘Organic farming’ and ‘Organic livestock’ agri-environment sub-measures;

2. Dismisses the remainder of the action;

3. Orders the Hellenic Republic and the European Commission to bear their own costs.