Action brought on 21 December 2011 - Italy v Commission
(Case T-661/11)
Language of the case: Italian
Parties
Applicant: Italian Republic (represented by: G. Aiello, lawyer)
Defendant: European Commission
Form of order sought
Annul Commission Decision C (2011) 7105 of 14 October 2011 in so far as it excludes from Community financing, and charges to the Italian Republic's budget, certain expenditure incurred 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.
Pleas in law and main arguments
The decision challenged in this case results from two investigations initiated by the Commission, in respect of the milks years 2003/2004, 2004/2005, 2005/2006 and 2006/2007, and proposes in that regard an overall financial correction, to be borne by Italy, amounting to EUR 85 625 455.
In support of the action, the applicant relies on the following pleas in law:
(a) Infringement and/or incorrect application of Article 11 of Regulation (EC) No 885/2006
2 and of the Guidelines for the calculation of financial consequences when preparing the decision regarding the clearance of the accounts of the EAGGF Guarantee, document VI/5330/97 adopted on 23 December 1997, as well as infringement of Article 230 EC by reason of a misuse of powers.
It is maintained in this regard that the application in the present case of a flat-rate correction should be challenged since it was possible, following the carrying out of controls, albeit in some cases belatedly, to identify possible 'under-declarations' and to impose penalties on the persons making false declarations, thereby recovering any additional levy that might be due and thus preventing financial damage being caused to Community funds as a result of a shortfall in receipts.
(b) Infringement and/or incorrect application of Articles 21 and 22(1)(b) of Regulation (EC) No 595/2004 of 30 March 2004 .
It is alleged in this regard that the legislation applicable in relation to controls on buyers establishes a correlation not on the basis of the number of buyers but on the basis of the percentage of milk which must be subject to controls and which must represent at least 40% of the milk declared before correction for the period concerned. In fact, it is clear that the risk for the EAGGF financing system is closely linked to the total quantity of milk produced in each Member State. It is precisely on the basis of that volume that it is necessary to assess the risk of prejudice which may be caused to Community funds as a result of non-payment of the additional levy.
(c) Infringement and/or incorrect application of Article 11 of Regulation (EC) No 885/2006 of 21 June 2006 and of the Guidelines for the calculation of financial consequences when preparing the decision regarding the clearance of the accounts of the EAGGF Guarantee, document VI/5330/97 adopted on 23 December 1997, as well as infringement of (i) the principle of proportionality and (ii) Article 230 EC on account of a misuse of powers.
The applicant State submits that the Commission has used the financial correction percentage to estimate the possible overrun of the quota and the consequent levy, adding it to the overrun of the national production quota and dividing it up for re-allocation to the individual regions subject to controls for the clearance of accounts. If that type of approach is taken, the concept of financial correction becomes an arbitrary one with the consequent infringement of the principle of proportionality.
(d) Finally, it is also alleged that Article 253 EC has been infringed or misapplied on the ground that no, or only inadequate, reasons have been stated.
____________1 - Commission Regulation (EC) No 885/2006 of 21 June 2006 laying down detailed rules for the application of Council Regulation (EC) No 1290/2005 as regards the accreditation of paying agencies and other bodies and the clearance of the accounts of the EAGF and of the EAFRD (OJ 2006 L 171, p. 90).2 - Commission Regulation (EC) No 595/2004 of 30 March 2004 laying down detailed rules for applying Council Regulation (EC) No 1788/2003 establishing a levy in the milk and milk products sector (OJ 2004 L 94, p. 22).