Case T‑661/11

Italian Republic

v

European Commission

(EAGGF — Guarantee Section — EAGF and EAFRD — Expenditure excluded from financing — Milk products — Assigned revenue — Key controls — Lateness — Flat-rate financial correction — Legal basis — Article 53 of Regulation (EC) No 1605/2002 — Recurrence)

Summary — Judgment of the General Court (Second Chamber), 2 December 2014

1.      Judicial proceedings — Application initiating proceedings — Formal requirements — Brief summary of the pleas in law on which the application is based — Similar requirements for claims invoked in support of a plea — Grounds not set out in the application — Reference to annexes as a whole — Inadmissibility

(Rules of Procedure of the General Court, Art. 44(1)(c))

2.      Agriculture — Common organisation of the markets — Milk and milk products — Additional levy on milk — Controls by the Member States — Time-limits for controls — Imperative time-limit — Completion of the control

(Commission Regulation No 595/2004)

3.      Agriculture — EAGGF — Clearance of accounts — Disallowance of expenses arising from irregularities in applying EU rules — Irregularities concerning receipts affected — Flat-rate correction issued by the Commission in accordance with internal guidelines — Controls not giving the expected level of regularity of claims — Whether permissible to apply a flat rate of 5 or 10% where on-the-spot checks carried out outside the time-limits in the milk and milk products sector

(Council Regulation No 1605, Art. 53(5))

4.      Judicial proceedings — Introduction of new pleas during the proceedings — Conditions — Plea based on matters revealed during the proceedings

(Rules of Procedure of the General Court, Art. 48(2))

5.      Agriculture — Common organisation of the markets — Milk and milk products — Receipts affected — Additional levy on milk — Control of detailed rules for recovery by the Commission

(Council Regulation No 1605/2002, Art. 53(5))

6.      Acts of the institutions — Statement of reasons — Obligation — Scope — Decision relating to the clearance of accounts in respect of expenditure financed by the EAGGF

(Art. 296 TFEU)

1.      See the text of the decision.

(see paras 50, 60)

2.      See the text of the decision.

(see paras 64, 65, 135)

3.      Where the Commission is no longer able objectively to assess milk quantities produced and thus to determine precisely the losses sustained by the Fund, it is entitled, in accordance with the guidelines adopted, to apply a flat-rate financial correction in relation to irregularities concerning the recovery of the supplemental levy, namely a receipt affected. In the first place, irregularities concerning the completion of on-the-spot checks after the time-limit laid down relate to key controls. Furthermore, given the category of controls affected, the Commission is entitled, in accordance with the guidelines, to apply a flat-rate financial correction of 5 or 10%.

(see paras 67, 68, 108)

4.      See the text of the decision.

(see para. 89)

5.      The supplemental levy is regarded as forming part of the interventions under the Guarantee Section of the EAGGF and is applied to financing expenditure in the milk and milk products sector forming the subject-matter of a common organisation of the market under the Common Agricultural Policy. It is in the nature of the supplemental levy that it constitutes a receipt applied to financing expenditure in the milk and milk products sector. Member States are under a duty to raise that levy on behalf of the Guarantee Section of the EAGGF, under the control of the Commission, which allows it to assume its final responsibility in the implementation of the budget. Therefore, the Commission must be regarded as having a legal basis for controlling the detailed rules for recovery of the supplemental levy and applying financial corrections in the event of irregularities.

(see paras 101, 103, 104, 118)

6.      See the text of the decision.

(see paras 145, 146)