Action brought on 12 December 2011 - Hellenic Republic v Commission
(Case T-632/11)
Language of the case: Greek
Parties
Applicant: Hellenic Republic (represented by: I. Khalkias and S. Papaioannou)
Defendant: European Commission
Form of order sought
The applicant claims that the General Court should:
uphold the action;
annul in whole or in part the Commission implementing decision of 14 October 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), notified under document C(2011) 7105 and published at OJ L 270, p. 33, on 15 October 2011, or in the alternative modify it in accordance with the matters that have been more specifically set out;
order the Commission to pay the costs.
Pleas in law and main arguments
By its action, the Hellenic Republic seeks the annulment of the Commission implementing decision of 14 October 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), notified under document C(2011) 7105 and published at OJ L 270, p. 33, on 15 October 2011, in so far as it concerns financial corrections imposed on the Hellenic Republic in the context of the single payment scheme and in the context of the schemes for the restructuring and conversion of vineyards, distillation and assistance for particular uses of must.
In relation to the correction in the context of the single payment scheme, the applicant asserts, first, that the application of flat-rate corrections in the context of the single payment scheme is unlawful because (a) the imposition of flat-rate corrections in the first year of application of the CAP infringes the general principle of equity and of cooperation and (b) there is no valid legal basis for the application of the old guidelines in Document VI/5530/1997 to the new CAP and to the single payment scheme or, in the alternative, the application of the old guidelines to the new CAP seriously infringes the principle of proportionality.
Second, the applicant states that the Commission's assessment that the criteria for allocation of the national reserve were not consistent with the provisions of Article 42 of Regulation No 1782/2003
2 and Article 21 of Regulation No 795/2004 is based on an erroneous interpretation of those provisions and on an erroneous assessment of the facts.
Third, the applicant submits in connection with the flat-rate 10% correction imposed that the matters found by the Commission in relation to the national criteria for allocating a national reserve, to the non-inclusion of all the forage areas in the calculation of the reference areas/amounts and to the calculation of the regional average do not constitute infringements of Regulation No 1290/2005 and the Commission is imposing financial corrections pursuant to that regulation unlawfully. In any event, the applicant submits that the Commission interpreted and applied incorrectly Article 31 of Regulation No 1290/2005 and the guidelines in Document VI/5530/1997 because (a) the criticisms which the Commission relies upon in relation to the criteria for allocation of the national reserve, even if assumed to be correct, did not lead to the payment of sums to persons not entitled and did not create the risk of loss for the EAGF and (b) the criticisms in questions are not linked to the failure to apply a key control and therefore do not justify the imposition of a flat-rate correction of 10%.
In relation to the correction in the wine sector, the applicant submits that the Commission assessed the facts incorrectly in relation to the following specific points: the vineyard register, distillation and assistance for the use of must, the mandatory distillation of by-products and vineyard restructuring and conversion. Those points clearly do not justify a 10% correction under the guiding principles for financial corrections in the clearance procedure, a correction which is clearly disproportionate in relation to the deficiencies which were recorded in the accounting system.
____________1 - Council Regulation (EC) No 1782/2003 of 29 September 2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers and amending Regulations (EEC) No 2019/93, (EC) No 1452/2001, (EC) No 1453/2001, (EC) No 1454/2001, (EC) 1868/94, (EC) No 1251/1999, (EC) No 1254/1999, (EC) No 1673/2000, (EEC) No 2358/71 and (EC) No 2529/2001.2 - Commission Regulation (EC) No 795/2004 of 21 April 2004 laying down detailed rules for the implementation of the single payment scheme provided for in Council Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers.3 - Council Regulation (EC) No 1290/2005 of 21 June 2005 on the financing of the common agricultural policy.