Judgment of the General Court (Eighth Chamber) of 17 October 2012 — Spain v Commission

(Case T‑491/09)

EAGGF — ‘Guarantee’ section — Expenditure excluded from financing — Premiums in the ovine and caprine meat sector — On-the-spot inspections

1.                     Agriculture — Common agricultural policy — EAGGF financing — Grant of aids and premiums — Obligation of Member States to organise an effective system of administrative controls and on-the-spot checks — Unreliable controls — Disallowance by the Fund (Council Regulation No 3508/92; Commission Regulation No 2419/2001) (see paras 19, 20, 72-75)

2.                     Agriculture — Common agricultural policy — EAGGF financing — Clearance of accounts — Disallowance of expenditure arising from irregularities in the application of the Community rules — Challenge by the Member State concerned — Burden of proof — Allocation between the Commission and the Member State (Council Regulations No 1258/1999 and No 1290/2005) (see paras 21-25, 89)

3.                     Acts of the institutions — Statement of reasons — Obligation — Scope — Decision relating to the clearance of accounts in respect of expenditure financed by the EAGGF — Obligation complied with simply by the fact of the close association of the addressee Member State with the decision-making process (Art. 296 TFEU) (see para. 26)

4.                     Acts of the institutions — Regulations — Regulation prescribing specific control measures — No Member State discretion — Non-implementation — Justification — Other control system more efficient — Not permissible (see paras 37, 51)

5.                     Agriculture — Common agricultural policy — EAGGF financing — Grant of aids and premiums — Obligation of Member States to organise an effective system of administrative controls and on-the-spot checks — Implied obligation — Scope (Commission Regulation No 2419/2001, Art. 25(2)(c); Council Directive 92/102, Art. 4(1)(b)) (see para. 80)

Re:

APPLICATION for partial annulment of Commission Decision 2009/721/EC of 24 September 2009 excluding from Community 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 2009 L 257, p. 28).

Operative part

The Court:

1. Dismisses the action;

2. Orders the Kingdom of Spain to pay the costs.