Action brought on 17 June 2011 - Republic of Hungary v European Commission

(Case T-320/11)

Language of the case: Hungarian

Parties

Applicant: Republic of Hungary (represented by: M. Fehér, K Szíjjártó and K. Veres, Agents)

Defendant: European Commission

Form of order sought

Annulment of 2011/192/EU: Commission Decision of 28 March 2011 excluding from EU financing certain expenditure incurred by Hungary under the programme for the support for pre-accession measures for agriculture and rural development (Sapard) in 2004.

An order that the Commission pay the costs.

Pleas in law and main arguments

In support of the action, the applicant relies on three plea(s) in law.

In the grounds of its application the applicant alleges, as its first plea in law, the infringement of the law of the European Union by the Commission. It states that the financial reduction applied by the Commission because of the failure to observe the period of three months laid down is unlawful given that, in its view and contrary to the contention of the Commission, the period of three months for making the Sapard payment laid down by the law of the European Union - specifically, by Article 9(6) of Commission Regulation No 2222/2000/EC ¹ and by Article 8(6) of Annex A to the multiannual financial agreement signed by the European Community and the Republic of Hungary on 15 June 2001 - begins to run when the authority has all the supporting documents necessary to make the payments. Consequently, in the event that, for certain reasons, additional supporting documents are necessary, the period does not begin to run until the last of the additional documents has been sent. In addition, according to the applicant, the Commission also breached the principles of cooperation in good faith and protection of legitimate expectations in applying a financial reduction in a situation in which the Hungarian authorities had good reason to believe that their payment procedure complied with European Union law.

As its second plea in law the applicant alleges that the Commission made a manifest error of assessment in adopting the contested decision since it did not take into account exceptional circumstances and sound reasons which would have justified not applying the financial reduction or its limitation as the case may be. It pointed to the 'educational' nature of the Sapard programme and the fact that the prime objective of the Hungarian authorities was to protect the economic interests of the EU, as specific examples of such circumstances. The applicant pointed out that the Commission did not suffer any loss as a result of the failure to comply with the time-limit.

According to the third plea, which alleges a failure to state reasons, the grounds for the contested decision do not give an adequate account of the reasons why the Commission decided to apply the reduction, nor of how its extent in practice should be quantified, nor, in particular, as regards why the Commission departed from the opinion drawn up in that regard by the conciliation body, according to which there are exceptional circumstances in the present case which should be taken into account for the purposes of applying the reduction.

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¹ - Commission Regulation (EC) No 2222/2000 of 7 June 2000 laying down financial rules for the application of Council Regulation (EC) No 1268/1999 on Community support for pre-accession measures for agriculture and rural development in the applicant countries of central and eastern Europe in the pre-accession period (OJ 2000 L 253, p. 5).