Action brought on 15 July 2013 – Republic of Poland v European Commission

(Case T-367/13)

Language of the case: Polish

Parties

Applicant: Republic of Poland (represented by: B. Majczyna, Agent)

Defendant: European Commission

Form of order sought

The applicant claims that the General Court should:

annul Commission Implementing Decision 2013/214/EU of 2 May 2013 (notified under document C(2013) 2436) 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), ¹ in so far as it excludes from European Union financing the amounts of EUR 8 292 783.94 and EUR 71 610 559.39 in expenditure incurred by the payment agency accredited by the Republic of Poland;

order the European Commission to pay the costs of the proceedings.

Pleas in law and main arguments

In support of its action the applicant raises three pleas in law.

The first plea in law concerns a breach of the first subparagraph of Article 7(4) of Regulation (EC) No 1258/1999 and of Article 31(1) of Regulation (EC) No 1290/2005 by reason of the application of a financial correction based on erroneous determinations of fact and a misinterpretation of law, notwithstanding the fact that the expenditure was effected by the Polish authorities in compliance with the provisions of European Union law

In the context of this plea in law, the applicant expresses the view that the correction applied was, in the light of the position taken by the Commission, attributable to five alleged failings in the completion of the measure relating to ‘Support for semi-subsistence farms’. The first failing concerned a breach of the alleged requirement that the beneficiary should provide at least 50% of the funds for supporting restructuring activities. The second failing related to non-performance of cross-control of farm animals in the context of the administrative monitoring of the initial request in regard to the correctness of the economic size unit (ESU) indicated by the farmer. The third failing related to a breach of an alleged requirement that an on-site inspection be effected in the first year in which the programme is carried out. The fourth failing, in the view of the Commission, lay in the absence of an appropriate connection between intermediate objectives and agricultural requirements. By contrast, the fifth failing concerned a breach of the alleged requirement that a quantitative definition of intermediate objectives be provided. The applicant takes issue with the Commission’s interpretation of the law and its determination of the facts in relation to each of the alleged failings mentioned above.

The second plea in law concerns a breach of essential procedural requirements by reason of the application of a financial correction method which was flagrantly at variance with the fourth subparagraph of Article 7(4) of Regulation (EC) No 1258/1999 and Article 31(2) of Regulation (EC) No 1290/2005, together with Guidelines No VI/5330/97

The applicant submits in this regard that the Commission adopted a correction method that is contrary to European Union law and also at variance with Guidelines No VI/5330/97. Furthermore, the applicant believes that the bilateral procedure did not make it possible for the Polish authorities to carry out any kind of verification of the appraisal of the established incompatibilities, as it was only after the bilateral procedure had been completed that the Commission took steps to conclude the appraisal. On that basis, the applicant submits that the financial correction was applied by the Commission in a manner which seriously breached the procedure for clearing the accounts.

The third plea in law concerns a breach of the second paragraph of Article 296 TFEU on the ground that the contested decision is inadequately reasoned

The applicant criticises the Commission on the ground that, under the contested decision, the Polish authorities were not closely involved in the decision-making process as the Commission presented its position of principle only after bilateral consultation. The Commission did not adduce any evidence and failed to provide grounds for its findings of law and fact, which it adopted as the basis for the financial correction applied.

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¹ OJ 2013 L 123, 4.5.2013, p. 11.