Provisional text
OPINION OF ADVOCATE GENERAL
KOKOTT
delivered on 6 June 2024 (1)
Case C‑350/23
Vorstand für den Geschäftsbereich II der Agrarmarkt Austria,
Interested party:
TF
(Request for a preliminary ruling from the Verwaltungsgerichtshof (Supreme Administrative Court, Austria))
(Reference for a preliminary ruling – Agriculture – Common agricultural policy – Regulation (EC) No 1760/2000 – Article 7 – Registration of bovine animals – Decision 2001/672/EC – Article 2(2) and (4) – Putting bovine animals out to summer grazing in mountain areas – Late notification – Regulation (EU) No 1307/2013 – Article 52 – Delegated Regulation (EU) No 639/2014 – Article 53(4) – Conditions for granting coupled support measures for bovine animals – Delegated Regulation (EU) No 640/2014 – Article 2(1), second subparagraph, points (2), (15), (16) and (18) – Article 30(4)(c) – Animal aid application – Animal determined – Reduction of coupled support – Article 15(1) – Article 31 – Article 34 – Inadmissibility of administrative penalties)
I. Introduction
1. This request for a preliminary ruling from the Verwaltungsgerichtshof (Supreme Administrative Court, Austria) concerns an action brought by a farmer against the competent authority which, because of an infringement of the applicable rules on notifications, not only reduced payment of the aid applied for, known as voluntary coupled support, (2) for the holding of bovine animals, but also imposed an administrative penalty. (3)
2. The dispute in the main proceedings concerns, in particular, whether it is lawful and proportionate to impose an additional administrative penalty where alleged late notification by the farmer – in this case about putting out 12 bovine animals to summer grazing in a mountain area – related to animals which otherwise fulfilled the conditions for the granting of that support. In addition, there is a need to clarify whether belated notification can lead to a reduction in the entitlement to aid at all.
II. Legal framework
A. EU law
3. The applicable EU legal framework in the present case is Regulation (EC) No 1760/2000 on the identification and registration of bovine animals, (4) Commission Decision 2001/672/EC, (5) adopted on the basis of Article 7 of that regulation, and Regulation (EU) No 1307/2013, (6) read in conjunction with Delegated Regulations (EU) Nos 639/2014 (7) and 640/2014. (8)
1. Regulation No 1760/2000 and Decision 2001/672
4. The first paragraph of Article 3 of Regulation No 1760/2000 (9) describes the system for the identification and registration of bovine animals as follows:
‘The system for the identification and registration of bovine animals shall comprise the following elements:
(a) means of identification to identify animals individually;
(b) computerised databases;
(c) animal passports;
(d) individual registers kept on each holding.’
5. Article 7 of Regulation No 1760/2000 sets out the obligations of keepers of animals in the context of the system for the identification and registration of bovine animals as follows:
‘1. With the exception of transporters, each keeper of animals shall:
– keep an up-to-date register,
– report to the competent authority all movements to and from the holding and all births and deaths of animals of the holding, together with the dates of those events, within a maximum period fixed by the Member State concerned; that maximum period shall be at least three days and not exceed seven days following the occurrence of one of those events; Member States may request the Commission to extend the maximum period of seven days.
To take into account practical difficulties in exceptional cases, the Commission shall be empowered to adopt delegated acts in accordance with Article 22b to determine the exceptional circumstances in which Member States may extend the maximum period of seven days provided for in the second indent of the first subparagraph, together with the maximum length of that extension, which shall not exceed 14 days following the period of seven days referred to in the second indent of the first subparagraph.
2. To ensure the adequate and effective traceability of bovine animals when put out to seasonal grazing, the Commission shall be empowered to adopt delegated acts in accordance with Article 22b concerning the Member States or part of Member States where special rules for seasonal grazing shall apply, including the time period, specific obligations of the keepers, and rules on the holding registration and registration of movements of such bovine animals, including transitional measures required for their introduction.’
6. On the basis of Article 7 of Regulation No 1760/2000, the Commission adopted Decision 2001/672 laying down special rules applicable to movements of bovine animals when put out to summer grazing.
7. Recital 3 of that decision is worded as follows:
‘The special rules must be laid down in such a way that it is possible to know the location of any bovine animal at any time.’ (10)
8. Article 2(1) and (2) of Decision 2001/672 lays down the following provisions:
‘1. Each pasture mentioned in Article 1 must be given a specific registration code which must be registered in the national database for bovine animals.
2. The person responsible for the pasture establishes a list of the bovine animals subject to the movement mentioned in Article 1. This list must contain at least:
– the registration code of the pasture,
and for each bovine animal:
– the individual identification number,
– the number of identification of the holding of origin,
– the date of arrival at pasture,
– the estimated date of departure from the pasture.’
9. Article 2(4) of Decision 2001/672, as amended by Decision 2010/300, is worded as follows:
‘The information contained in the list mentioned in paragraph 2 shall be reported to the competent authority in accordance with Article 7(1) of Regulation [No 1760/2000] at the latest 15 days after the date when the animals were moved to the pasture.’
10. According to recital 5 of Decision 2010/300, the amendment to Article 2(4) of Decision 2001/672 is based on the following consideration:
‘Under certain conditions, animals, which are moved from different holdings to the same summer grazing mountain area, arrive there over a period of more than seven days. In order to reduce unnecessary administrative burdens, time limits in Decision [2001/672] should therefore be adapted to take account of that practical fact without compromising traceability.’
2. Regulation No 1307/2013
11. The ‘General rules’ in Article 52 of Regulation No 1307/2013, in Chapter 1, headed ‘Voluntary coupled support’, of Title IV, include the following provisions:
‘1. Member States may grant coupled support to farmers under the conditions laid down in this Chapter …
…
6. Coupled support is a production-limiting scheme that shall take the form of an annual payment based on fixed areas and yields or on a fixed number of animals …
…
9. In order to ensure efficient and targeted use of Union funds and to avoid double funding under other similar support instruments, the Commission shall be empowered to adopt delegated acts in accordance with Article 70 laying down:
(a) the conditions for granting coupled support;
…’
3. Delegated Regulation No 639/2014
12. Recital 74 of Delegated Regulation No 639/2014 reads as follows:
‘More in particular as regards voluntary coupled support, it is necessary to further specify the content of the information to be notified by the Member States for the sake of ensuring the correct application of the rules on that support and in order to make such notifications efficient, so as to enable the Commission to verify that Member States respect the requirements on consistency and non-cumulation of support as well as the maximum percentages of the national ceilings referred to in Article 53 of Regulation [No 1307/2013] and related total amounts when designing the support measures.’
13. Article 53(1) and (4) of Delegated Regulation No 639/2014, entitled ‘Conditions for granting support’, include the following provisions:
‘1. Member States shall lay down eligibility criteria for coupled support measures in compliance with the framework set out in Regulation [No 1307/2013] and the conditions laid down in this Regulation.
…
4. [(11)] Where the coupled support measure concerns bovine animals …, Member States shall define as an eligibility condition for the support, the requirements to identify and register animals provided for in Regulation [No 1760/2000]. …
However, without prejudice to other eligibility conditions, an animal shall also be deemed eligible for support where the identification and registration requirements referred to in the first subparagraph are met by a date to be fixed by the Member State which shall not be later than:
(a) the first day of the retention period of the animal, where a retention period is applied;
(b) a date chosen on the basis of objective criteria and consistent with the corresponding measure notified in accordance with Annex I, where no retention period is applied.
By 15 September 2015, Member States shall notify the Commission of the dates referred to in the second subparagraph.’
4. Delegated Regulation No 640/2014
14. Recitals 27, 28, 30 and 31 of Delegated Regulation No 640/2014 state, inter alia:
‘(27) Administrative penalties should be established for animal aid schemes and animal-related support measures having regard to the principles of dissuasiveness and proportionality and the special problems linked to cases of natural circumstances. …
(28) As far as aid applications under animal aid schemes or payment claims under animal-related support measures are concerned, non-compliances lead to the ineligibility of the animal concerned. …
…
(30) The possibility to make corrections without leading to the administrative penalty provided for the aid application and payment claim should also apply in relation to incorrect data contained in the computerised database in respect of declared bovine animals for which such non-compliances constitute a breach of an eligibility criterion, unless the beneficiary has been informed of the competent authority’s intention to carry out an on-the-spot check or the authority has not already informed the beneficiary of any non-compliance in the aid application or payment claim.
(31) Refusals and withdrawals of support and administrative penalties should be established for rural development support measures having regard to the principles of dissuasiveness and proportionality. Refusals and withdrawals of support should be graded on the basis of the severity, extent, duration and reoccurrence of the non-compliance found. … In the case of serious non-compliance or in the case the beneficiary provided false evidence for the purpose of receiving the support, the support should be refused and an administrative penalty should be imposed. …’
15. The second subparagraph of Article 2(1) of Delegated Regulation No 640/2014 includes the following definitions:
‘…
(2) “non-compliance” means:
(a) for eligibility criteria, commitments or other obligations relating to the conditions for the granting of the aid or support referred to in Article 67(2) of Regulation (EU) No 1306/2013, any non-respect of those eligibility criteria, commitments or other obligations …
…
(13) “animal aid scheme” means a voluntary coupled support measure provided for in Chapter 1 of Title IV of Regulation [No 1307/2013] where the annual payment to be granted within defined quantitative limits is based on a fixed number of animals;
…
(15) “livestock aid application” means the applications for the payment of aid where the annual payment to be granted within defined quantitative limits is based on a fixed number of animals under the voluntary coupled support provided for in Chapter 1 of Title IV of Regulation [No 1307/2013];
(16) “declared animals” means animals subject to a livestock aid application under the animal aid scheme or subject to a payment claim for an animal-related support measure;
…
(18) “animal determined” means:
(a) for an animal aid scheme, an animal for which all conditions laid down in the rules for granting the aid have been met; or
(b) for an animal-related support measure, an animal identified by means of administrative or on-the-spot checks; …’
16. Article 15 of Delegated Regulation No 640/2014, headed ‘Exceptions from the application of administrative penalties’, contains the following provisions:
‘1. The administrative penalties provided for in this Chapter shall not apply with regard to the part of the aid application or payment claim as to which the beneficiary informs the competent authority in writing that the aid application or payment claim is incorrect or has become incorrect since it was lodged, provided that the beneficiary has not been informed of the competent authority’s intention to carry out an on-the-spot check and that the authority has not already informed the beneficiary of any non-compliances in the aid application or payment claim.
2. The information given by the beneficiary as referred to in paragraph 1 shall have the effect that the aid application or payment claim is adjusted to the actual situation.’
17. Article 30 of Delegated Regulation No 640/2014, headed ‘Basis of calculation’, includes the following provisions:
‘…
2. Animals present on the holding shall only be considered as determined if they are identified in the aid application or in the payment claim. …
…
4. [(12)] Where cases of non-compliances with regard to the system for the identification and registration for bovine animals are found, the following shall apply:
…
(d) where the non-compliances found relate to incorrect entries in the register, the animal passports or the computerised database for animals, but are not of relevance for the verification of the respect of the eligibility conditions other than that referred to in Article 53(4) of Delegated Regulation [No 639/2014] under the aid scheme or support measure concerned, the animal concerned shall only be considered as not determined if such incorrect entries are found during at least two checks within a period of 24 months. In all other cases the animals concerned shall be considered as not determined after the first finding.
…
The entries in, and notifications to, the system for the identification and registration of bovine animals may be adjusted at any time in cases of obvious errors recognised by the competent authority.
…’
18. Article 31 of Delegated Regulation No 640/2014 governs ‘Administrative penalties in respect of declared animals under the animal aid schemes or animal-related support measures’.
19. Article 34 of Delegated Regulation No 640/2014, headed ‘Amendments and adjustments of entries in the computerised database for animals’, reads as follows:
‘In respect of declared animals, Article 15 shall apply to errors and omissions in relation to entries in the computerised database for animals made from the moment the aid application or payment claim is submitted.’
B. National law
1. Law on Market Organisation of 2007
20. Paragraph 8(1) of the Marktordnungsgesetz 2007 (Law on Market Organisation of 2007) (‘the MOG 2007’), (13) headed ‘Direct payments’, is worded as follows:
‘The settlement of direct payments within the meaning of Article 1(a) of Regulation No 1307/2013 … shall be based on the following principles:
…
6. Coupled support shall be granted in accordance with Paragraph 8f for the grazing of mountain pastures pursuant to Article 52 of Regulation [No 1307/2013]. In accordance with Article 53(1) of Regulation [No 1307/2013], the resources available for the coupled payment are set at 2.1% of the national ceiling.
…’
21. Paragraph 8f(1) of the MOG 2007 stipulates under the heading ‘Voluntary coupled support’, inter alia:
‘The coupled support provided for in Paragraph 8(1)(6) shall be granted for bovine, ovine and caprine animals per livestock unit (LSU) put out to grazing …’
2. Direct Payments Regulation of 2015
22. Paragraph 13 of the Direktzahlungs-Verordnung 2015 (Direct Payments Regulation of 2015), (14) headed ‘Voluntary coupled support’, includes the following provisions:
‘(1) Voluntary coupled support may be granted only in respect of bovine, ovine and caprine animals moved to a mountain pasture that have been identified and registered in accordance with Regulation [No 1760/2000] … However, an animal is also deemed eligible for support if the information referred to in the second indent of Article 7(1) of Regulation [No 1760/2000] has been communicated on the first day on which the respective animal has been moved to a mountain pasture.
(2) Farmers shall apply for voluntary coupled support by submitting the “multiple application: areas” and the list of animals moved to a mountain pasture in accordance with Paragraph 22(5) of the Horizontale GAP-Verordnung [(CAP Horizontal Regulation)] and, for bovine animals, in conjunction with the information from the computerised database for bovine animals as regards the mountain-pasture/grazing notifications pursuant to Article 2 of Commission Decision [2001/672]. …
(3) The relevant number for the granting of voluntary coupled support shall be determined on the basis of the number of animals moved to a mountain pasture by the farmer concerned as at the reference date of 15 July.
(4) The animals must remain on the mountain pasture for a minimum of 60 days. The mountain-pasture period starts on the day the animals are moved to that pasture but no more than 15 days before making the mountain-pasture/grazing notification for bovine animals and/or submitting the list of animals moved to a mountain pasture …’
3. CAP Horizontal Regulation
23. Paragraph 21 of the Horizontale GAP-Verordnung (CAP Horizontal Regulation), (15) headed ‘Submission’, includes the following provisions:
‘(1) The single application (“multiple application: areas”) referred to in Article 11 of Delegated Regulation [No 640/2014] shall be submitted by 15 May of each application year and exclusively in accordance with Paragraph 3(1) of the present Regulation.
(1b) For the 2020 claim year, by way of derogation from subparagraph 1, the single application shall be submitted by 15 June 2020. Changes within the meaning of Article 15(1) of Implementing Regulation (EU) No 809/2014 [(16)] may be notified until 30 June 2020 for the 2020 claim year.’
24. Paragraph 22 of the CAP Horizontal Regulation, headed ‘Single application’, includes the following provisions:
‘(1) The single application shall be submitted by all farmers applying for direct payments or … in accordance with the rules laid down in Paragraph 21 …
…
(5) In the case of animals put out to graze on mountain and communal pastures, the mountain grazing list shall be submitted no later than 15 July of the claim year.’
4. Cattle Identification Regulation of 2008
25. Paragraph 6 of the Rinderkennzeichnungs-Verordnung 2008 (Cattle Identification Regulation of 2008) (17) includes the following provisions:
‘(1) The following shall be reported within seven days:
…
2. Movements of animals between the holdings of a keeper of animals located in different municipalities, together with the additional data required for an animal passport.
(1a) The following shall be reported within 15 days:
1. Movements of animals put out to mountain or other pastures where bovine animals of two or more farmers will mix …’
III. The facts of the dispute in the main proceedings, the questions referred for a preliminary ruling and the procedure before the Court
26. TF submitted a single application (‘multiple application: areas’) for 2020, in which he applied, inter alia, for coupled support for bovine animals moved to a mountain pasture.
27. On 28 May 2020, TF arranged for two cows and two other bovine animals to be put out to mountain pastures. He declared this in accordance with Paragraph 6(1a) of the Cattle Identification Regulation of 2008 on 1 June 2020, observing the time limit, to the defendant Agrarmarkt Austria (‘the AMA’), which is the competent authority. Still within the time limit, on 1 July 2020, he declared the birth of a calf on the mountain pasture.
28. On 9 May 2020, 12 other bovine animals had already been put out for grazing by TF, together with bovine animals of other farmers, on a mountain pasture designated by its registration code. The written notification, however, was not made until 15 June 2020. It contained the individual identification numbers of the animals put out to graze and of TF’s holding, as well as the expected date of return from pasture, namely 31 October 2020.
29. By means of a notice dated 11 January 2021, the AMA awarded TF direct payments amounting to EUR 17 086.71 for 2020. These payments comprised a basic payment of EUR 11 735.71, a greening payment of EUR 5 231.56 and coupled support of EUR 119.44. As regards the application for coupled support, the AMA stated that, although the condition of a 60-day grazing period had been met for all the bovine animals put out to pasture by TF, a declaration submitted on time in accordance with Article 7(1) of Regulation No 1760/2000 had only been received for the animals put out on 28 May 2020 and for the calf born on 1 July 2020. As for the 12 other bovine animals put out to pasture on 9 May 2020, however, the declaration had not been made until after the expiry of the 15-day time limit for declaration prescribed by Paragraph 6(1a) of the Cattle Identification Regulation of 2008. Accordingly, under Articles 30 and 31 of Delegated Regulation No 640/2014, a distinction had to be made between the 12 bovine animals in respect of which non-compliance had occurred and those for which the conditions for granting support had been met. The result was a 100% reduction for those 12 animals, which meant that no coupled support could be granted for them in 2020. In addition, under the first subparagraph of Article 31(3) of that delegated regulation, the AMA imposed a penalty amounting to EUR 235.60, to be deducted from the payments for the following three calendar years.
30. By means of an action brought before the Bundesverwaltungsgericht (Federal Administrative Court, Austria) on 9 February 2021, TF challenged the refusal to award coupled support and the imposition of a penalty. He pointed out that a third party, without his knowledge, had been late in forwarding the declaration on the movement of the bovine animals to the mountain pasture.
31. On 16 November 2021, the Bundesverwaltungsgericht (Federal Administrative Court) upheld the action. It quashed both the reduction in coupled support and the administrative penalty and ordered the AMA to undertake a recalculation and to issue a new decision on TF’s aid application. It also granted leave to appeal to the Verwaltungsgerichtshof (Supreme Administrative Court) on a point of law.
32. In its grounds, the Bundesverwaltungsgericht (Federal Administrative Court) held, in essence, that, although non-compliance with reporting requirements must lead, under Article 31 of Delegated Regulation No 640/2014 to a reduction of aid or support and to a penalty, under Article 15 of the regulation no administrative penalty was to be imposed if the beneficiary informed the competent authority in writing that the aid application or payment claim was incorrect or had become incorrect since being lodged. A late report made under the national Cattle Identification Regulation of 2008 also constituted written notification of incorrectness of the application or claim within the meaning of that provision. The principle of proportionality was a further argument in favour of that interpretation, the court stated. Given that the non-compliance had not been detected in the course of an on-the-spot check, that no non-compliance had been notified to TF and that he himself had disclosed that non-compliance in his late notification, the application of a penalty was not essential in order to ensure the proper application of EU law.
33. Hearing the AMA’s appeal on a point of law, the Verwaltungsgerichtshof (Supreme Administrative Court) is inclined to uphold the decision of the Bundesverwaltungsgericht (Federal Administrative Court), at least as regards the application of Article 15 of Delegated Regulation No 640/2014 and the inadmissibility of the imposition of an administrative penalty. (18) However, since the questions of law relevant to the resolution of the dispute have not yet been elucidated with sufficient clarity in the case-law of the Court of Justice, the Verwaltungsgerichtshof (Supreme Administrative Court) has decided, pursuant to Article 267 TFEU, to refer the following questions to the Court of Justice for a preliminary ruling:
‘(1) In the case of a livestock aid application within the meaning of point 15 of the second subparagraph of Article 2(1) of Delegated Regulation [No 640/2014], submitted for the year 2020 for the grant of coupled support, for which, for the purposes of Article 21(4) of [Implementing Regulation No 809/2014], use is made of the information in the computerised database for bovine animals, is a notification that is made only after the expiry of the period of 15 days after the animals (bovine animals) have been moved to a mountain pasture pursuant to Article 2(2) and (4) of [Decision 2001/672], in conjunction with Article 7(2) of Regulation [No 1760/2000], an incorrect entry in the computerised database for bovine animals that, pursuant to Article 30(4)(c) of Delegated Regulation [No 640/2014], is not of relevance for the verification of the compliance with the eligibility conditions other than the condition referred to in Article 53(4) of [Delegated Regulation No 639/2014] under the aid scheme or support measure concerned, with the result that the animals concerned are only to be considered not to be determined if such an incorrect entry is found during at least two checks within a period of 24 months?
(2) If the first question is answered in the negative:
For the purposes of Article 15(1) and Article 34 of Delegated Regulation [No 640/2014], do the administrative penalties provided for in Chapter IV of Delegated Regulation [No 640/2014] apply to the application for coupled support referred to in the first question where the farmer makes a notification in writing to the competent authority in accordance with Article 2(2) and (4) of [Decision 2001/672] of 20 August 2001, in conjunction with Article 7(1) and (2) of Regulation [No 1760/2000], concerning the movement of the animals to a mountain pasture, where it is evident from the notification that it is late with regard to the 15-day period laid down in those provisions, in so far as the competent authority has not previously informed the applicant of an intention to carry out an on-the-spot check and has also not already informed that applicant of any non-compliances in the aid application?’
34. In the proceedings before the Court, the AMA, the Austrian Government and the European Commission have submitted written observations on those questions. In accordance with Article 76(2) of its rules of procedure, the Court did not deem it necessary to hold a hearing.
IV. Analysis
35. By its first question, the referring court wishes to know, in essence, whether the applicant farmer’s failure to comply with the obligation to notify within the prescribed period the movement to summer grazing in mountain areas of the bovine animals covered by his application for coupled support means that those animals are not considered to be ‘determined’ within the meaning of point 18 of the second subparagraph of Article 2(1) of Regulation No 1782/2003, read in conjunction with Article 30(4)(c) of Delegated Regulation No 640/2014, and are therefore ineligible for support, even though the declaration was made retrospectively and the animals fulfil the other conditions for such a grant (see Section A below).
36. In the event that the animals are neither ‘determined’ nor eligible for aid, the referring court wishes to know, by its second question, whether the competent authority may impose an administrative (financial) penalty over and above the reduction of coupled support (see Section B below).
A. First question referred: eligibility of bovine animals whose movement to grazing in mountain areas was reported late
37. At first sight, it may seem surprising that bovine animals whose movement to mountain pastures has not been notified in due time to the competent authority but which have been the subject of a retrospective notification and otherwise fulfil the conditions for the granting of coupled support should be ineligible for aid or support. As I shall show below, however, the clear wording of the applicable aid rules dictates such a conclusion (1). That conclusion is, in my view, also justified in the light of the general scheme (2) and objectives (3) of those provisions.
1. Non-compliance with the reporting obligation
38. It is common ground that the movement of the 12 bovine animals already put out to grazing in mountain areas on 9 May 2020 was not reported until after the expiry of the 15-day period laid down in Article 2(4) of Decision 2001/672. It is also common ground that those bovine animals satisfied the other conditions for coupled support, in particular the 60-day grazing period on that pasture, in accordance with Paragraph 13(4) of the Direct Payments Regulation of 2015, without on-the-spot checks having been announced or conducted to verify the fulfilment of those conditions.
39. The referring court asks whether, despite the late declaration, those bovine animals may be regarded as ‘determined’, and hence eligible for aid or support, as defined in point 18 of the second subparagraph of Article 2(1) of Delegated Regulation No 640/2014, read in conjunction with Article 30(4)(c) of that regulation.
40. According to the clear wording of those provisions, that is not the case.
41. Under point 18 of the second subparagraph of Article 2(1) of Delegated Regulation No 640/2014, an ‘animal determined’ is only one for which all conditions laid down in the rules for granting the aid have been met.
42. In that regard, Article 53(4) of Delegated Regulation No 639/2014 requires Member States to define as an eligibility condition for support measures for bovine animals the requirements to identify and register animals provided for in Regulation No 1760/2000. Accordingly, Paragraph 13(1) of the Direct Payments Regulation of 2015 stipulates that voluntary coupled support may be granted for bovine animals put out to grazing in mountain pastures only if those animals are identified and registered in accordance with Regulation No 1760/2000. According to subparagraph 2 of that provision, however, this is only the case, in accordance with EU law, if the movement of bovine animals to summer grazing in mountain areas has been declared in the computerised database for bovine animals pursuant to Article 2(4) of Decision 2001/672, read in conjunction with Paragraph 6(1a) of the Cattle Identification Regulation of 2008.
43. In addition, under point 2(a) of the second subparagraph of Article 2(1) of Delegated Regulation No 640/2014, any non-respect of the eligibility criteria in connection with the conditions for the granting of aid or support is to be regarded as non-compliance. Failure to meet the eligibility condition (19) of proper registration – including timely notification – prescribed by Article 7(1) of Regulation No 1760/2000 constitutes such non-compliance. This is all the more so as, under Article 2(2) of Decision 2001/672, the list of bovine animals to be drawn up must include the ‘date of arrival at pasture’ for each animal.
44. That interpretation also underlies Article 30(4)(c) of Delegated Regulation No 640/2014. Under that provision, incorrect entries in the register, in animal passports or in the computerised database for bovine animals constitute non-compliance with the rules governing the system for the identification and registration of bovine animals. Recital 11 of Regulation 2016/1393, (20) which clarifies that amended provision, expressly mentions, as examples of incorrect entries, indications of the wrong gender, breed, colour or date. The classification of late notifications and incorrect entries as non-compliance within the meaning of point 2(a) of the second subparagraph of Article 2(1) of Delegated Regulation No 640/2014 does not mean, however, that they must be placed on an equal footing in terms of their legal consequences, particularly the imposition of administrative penalties, with other forms of non-compliance (see, in that regard, point 47 et seq. below).
45. Consequently, bovine animals declared late, in breach of the declaration requirement, are regarded in principle as not determined within the meaning of point 18 of the second subparagraph of Article 2(1) of Delegated Regulation No 640/2014 and are therefore ineligible for aid or support.
46. In view of the doubts expressed by the referring court concerning that interpretation, I shall now examine whether the interpretation is substantiated by the regulatory context, especially in the light of the applicable derogating provisions. To that end, particular consideration must be given to Article 30(4)(c) of Delegated Regulation No 640/2014.
2. Irrelevance or remedy of the breach of the declaration requirement?
47. In exceptional cases, animals declared late could nevertheless be regarded as ‘determined’ and therefore eligible for aid or support if a late declaration, in breach of Article 7(1) of Regulation No 1760/2000, read in conjunction with Article 2(2) and (4) of Decision 2001/672, were wholly equatable with an incorrect entry within the meaning of Article 30(4)(c) of Delegated Regulation No 640/2014.
48. Under Article 30(4)(c) of Delegated Regulation No 640/2014, entries in the register, in animal passports or in the computerised database for animals which are incorrect but not essential for verifying compliance with the eligibility conditions under the relevant aid scheme or support measure result in the animal concerned only being considered as not determined if such errors are found on at least two checks within a period of 24 months.
49. Non-compliance in the form of a substantively incorrect entry within the meaning of Article 30(4)(c) of Delegated Regulation No 640/2014 may therefore be corrected subsequently by the applicant, subject to fulfilment of the other eligibility criteria, unless that non-compliance is found on at least two checks within the abovementioned period.
50. In that context, the referring court asks whether a late declaration of a movement of bovine animals meeting the other support criteria may be remedied under the same conditions as any other incorrect entry.
51. Such an understanding could be supported by the fact that a late, but substantively correct, animal declaration is a less serious infringement than the incorrect, that is to say substantively inaccurate, entry referred to in recital 11 of Regulation 2016/1393 (21) of an animal’s gender, breed or colour. Furthermore, as stated in point 44 above, an incorrect entry may also relate to a date. Recital 11, however, does not specify whether such a date might also be the date of the movement of bovine animals to another location. As I have already mentioned in point 43, the list of information to be reported for each bovine animal under Article 2(2) of Decision 2001/672 must also include the ‘date of arrival at pasture’.
52. As the Commission also submits, however, it does not seem possible, in the context of Article 30(4)(c) of Delegated Regulation No 640/2014, to equate entirely, in legal terms, a substantively incorrect entry concerning animals with the late notification of their movement. That also follows from the spirit and purpose of the declaration requirement and the declaration time limit, which are intended to ensure complete traceability of the location of the animals concerned (for more details, see point 58 et seq. below).
53. On the one hand, a late notification, in other words an initial total failure to declare the movement of animals to another location, is not automatically comparable with an entry which is made in good time but is substantively incorrect. The same applies, in principle, to the incorrect entry of a date, for example the exact date of birth of a calf, especially as that does not necessarily concern the location of the animal or cast doubt on its effective monitoring. In so far as Article 2(2) of Decision 2001/672 prescribes the ‘date of arrival at pasture’ as the date to be declared for each bovine animal, that does not, in principle, have any other implications. Unlike the timely but incorrect entry of such a date, in the case of a late declaration of the movement of a bovine animal after the expiry of the time limit for declaration there is no entry whatsoever in the register of the date and place of arrival which would ensure the traceability required by recital 3 of the preamble to Decision 2001/672. (22)
54. On the other hand, the remedial effect of a late declaration relates only to the future, addressing a deficiency which, in temporal terms and given the requirement for the location of the animal concerned to be traceable at any time, cannot actually be corrected any more. This is because the late declaration cannot retroactively alter the fact that the competent authorities did not know and could not establish the location of the animal from the time of its movement until that declaration, when in fact that information should have been available to them on expiry of the time limit for declaration. Such a deficiency, therefore, is also liable to impact on the effective monitoring of the minimum grazing period for that animal at a given location.
55. The fact that the 12 animals concerned and TF’s holding met all the eligibility criteria except the timely notification of their movement, therefore, does not alter the fact that, from the time when the declaration requirement and time limit were breached, their location could not be established and verified by the authorities, even though that would have been necessary. In such a case, as is shown by recital 30 and Article 34 of Delegated Regulation No 640/2014, the EU legislature waives only an administrative penalty but not the reduction of coupled support; only for that purpose are an incorrect entry and non-registration treated equally (for more details, see point 69 et seq. below).
56. Non-compliance with the declaration requirement and time limit cannot therefore be treated in the same way as an ‘incorrect entry’ within the meaning of Article 30(4)(c) of Delegated Regulation No 640/2014, which could still be corrected at a later date. Consequently, the animals in question are considered not to be determined within the meaning of point 18 of the second subparagraph of Article 2(1) of that regulation.
57. The derogating provision of Article 53(4) of Delegated Regulation No 639/2014, (23) which is likewise referred to in Article 30(4)(c) of Delegated Regulation No 640/2014, is not relevant in the present case. Although that provision allows Member States, in principle, to regard an animal as eligible for aid even if the requirements for identification and registration are met from a later date to be determined by them – that is to say after expiry of the notification period – and they have communicated that date to the Commission by 15 September 2015, (24) the referring court only mentions that provision without indicating whether the Austrian legislature made any use of it at all or asking about its interpretation. Should a corresponding national provision exist, which it is for the referring court to ascertain, it could not be ruled out that the late notification might nevertheless result in the breach of the notification requirement being remedied.
3. Objectives of Regulation No 1760/2000 and Decision 2001/672 as well as of Delegated Regulations Nos 639/2014 and 640/2014
58. The objectives of the applicable rules confirm that, in principle, animals declared late cannot be considered to be determined or eligible. The strict requirements relating to the timely notification of the location of the animals are intended both to ensure a high level of protection of public health and to protect the financial interests of the European Union.
59. The aim of Regulation No 1760/2000 is to improve consumer confidence in the quality of beef, preserve a higher level of protection of public health and reinforce the lasting stability of the beef market. (25) The identification and registration system created for that purpose rests on the premiss, inter alia, that the Member States set up national bovine databases which record the identity of the animals, all the holdings in the territory of the Member State concerned and all animal movements. That system must be fully effective and reliable at all times so as to enable the competent authority to determine the location of a bovine animal at any time and, in the event of epizootic disease, to pinpoint as soon as possible the origin of an animal and immediately to take the measures necessary to protect public health. (26) To that end, under Article 7(1) of Regulation No 1760/2000, read in conjunction with Article 2(4) of Decision 2001/672, the responsibilities of each keeper of animals include an obligation to report to the competent authority the exact dates of all animal movements. (27) Paragraph 13 of the Direct Payment Regulation of 2015, Paragraphs 21 and 22 of the CAP Horizontal Regulation and Paragraph 6 of the Cattle Identification Regulation of 2008 flesh out these requirements in national law.
60. In the light of those objectives, the Court has already held that Article 7(1) of Regulation No 1760/2000 is designed as a mandatory rule, in that it describes in detail the scope of the notification obligation incumbent on animal keepers and precisely defines the period within which that obligation is to be fulfilled. It inferred from the foregoing that this period had to be complied with (unconditionally) by keepers of animals. (28) Lastly, the Court found that failure to comply with the time limit prescribed by the second indent of Article 7(1) of Regulation No 1760/2000 for reporting the movement of a bovine animal to the computerised database results in that animal not qualifying for a slaughter premium. (29)
61. The mandatory nature of the obligation to comply with the time limits for notification is therefore based on the objective of ensuring the effectiveness of the system for the identification and registration of bovine animals and, above all, of enabling the competent authorities to know the location of any bovine animal at any time. (30)
62. Furthermore, as indicated in points 12 and 42 above, Article 53(1) and (4) of Delegated Regulation No 639/2014 requires Member States to lay down eligibility criteria in compliance with the framework set out in Regulation No 1307/2013 and the conditions laid down in that delegated regulation. In the case of coupled support measures for bovine animals, those criteria include the requirements for the identification and registration of animals laid down in Regulation No 1760/2000. As is apparent from recital 74 of Delegated Regulation No 639/2014, that obligation likewise serves the purpose of ensuring – as the Commission is to verify – that Member States respect the requirements on consistency and non-cumulation of support as well as the maximum percentages of the national ceilings referred to in Article 53 of Regulation No 1307/2013 and related total amounts when designing the support measures. In other words, it is also a question of ensuring that coupled support cannot be applied for and granted more than once for the same bovine animal in the claim year. (31) For the same reason, it must be possible for the competent authorities to know the identity and location of any bovine animal at any time. This applies without prejudice to any exceptions for which the Member State may provide pursuant to Article 53(4) of Delegated Regulation No 639/2014, for the late notification of an animal-related event. (32)
63. Those objectives necessitate strict interpretation of the rules on registration and hence on the time limits for declaring animals. It follows that breaches of the obligation to report animal movements to another location within the prescribed time limit can no longer be remedied.
64. Consequently, bovine animals declared late are considered not to be determined and are, in principle, ineligible for aid. The first question referred for a preliminary ruling must therefore be answered in the negative, and so the second question must also be answered.
B. Second question referred: admissibility of an administrative penalty in respect of animals declared late but otherwise eligible
65. By means of its second question, the referring court wishes to know whether, as well as refusing to grant coupled support, the competent authority may also impose an administrative (financial) penalty.
66. Neither the conditions for the administrative penalty imposed by the AMA on the basis of Article 31 of Delegated Regulation No 640/2014 nor its calculation are at issue in the present dispute.
67. The referring court expresses doubts, however, as to whether it is permissible and proportionate to impose an administrative penalty, given TF’s subsequent notification of the movement of 12 bovine animals to mountain pastures.
68. Such inadmissibility could be inferred from a reading of Article 15(1) of Delegated Regulation No 640/2014 in conjunction with Article 34 thereof.
69. Under Article 15(1) of that regulation, administrative penalties are not to apply with regard to the part of an aid application or payment claim in respect of which the beneficiary informs the competent authority in writing that the aid application or payment claim is incorrect or has become incorrect since it was lodged, provided that the beneficiary has not been informed of the competent authority’s intention to carry out an on-the-spot check and that the authority has not already informed the beneficiary of any non-compliance in the aid application or payment claim.
70. Article 34 of Delegated Regulation No 640/2014 states that Article 15 of that regulation applies to errors and omissions in relation to entries in the computerised database for bovine animals made from the moment the aid application or payment claim is submitted, provided that the bovine animals in question are declared animals.
71. It appears from the facts set out in the order for reference that the 12 bovine animals whose movement was declared late had already been identified in the single application for coupled support, that is to say they were ‘declared animals’ (33) within the meaning of point 16 of the second subparagraph of Article 2(1) of Delegated Regulation No 640/2014. It follows that, by reason of the widening of the scope of Article 15(1) of that regulation effected by Article 34, the other legal conditions and consequences of that regulation are also applicable to omissions in relation to entries in the computerised database for animals from the date of submission of that single application. (34) The failure to report in good time, in accordance with the Article 7(1) of Regulation No 1760/2000, read in conjunction with Article 2(4) of Decision 2001/672, the movement of the bovine animals concerned to summer grazing in mountain areas undoubtedly constitutes such an omission.
72. The fact that, according to its wording, Article 15(1) of Delegated Regulation No 640/2014 refers only to ex post facto information in writing to the effect that details in the aid application or payment claim are incorrect or have become incorrect since the claim or application was lodged is therefore irrelevant. As the referring court also holds, Article 34 of that regulation extends the scope of that derogating provision to the subsequent correction of an omission to enter animal data in the computerised database for animals. This also includes the late reporting of movements of bovine animals to summer grazing in mountain areas.
73. The possibility of correction for which Article 15(1) of Delegated Regulation No 640/2014 provides also depends on the beneficiary not yet having been informed of the competent authority’s intention to carry out an on-the-spot check and on the authority not having already informed the beneficiary of any non-compliance in the aid application or payment claim. This is intended to ensure that the ex post facto correction is made for autonomous reasons and voluntarily. It is common ground that, in the present case, there had been no such notification or information from the authority which would have made the correction seem involuntary.
74. Consequently, in the present case, no administrative penalty may be imposed under Article 34 of Delegated Regulation No 640/2014, read in conjunction with Article 15(1) thereof, for the belated reporting of the movement of the bovine animals concerned to mountain pastures. The question whether such an administrative penalty would be proportionate therefore ceases to be relevant.
75. That conclusion is not inconsistent with the proposed answer to the first question referred for a preliminary ruling.
76. First, in Article 34 of Delegated Regulation No 640/2014 the EU legislature consciously decided that, for the purposes of applying the exception for which Article 15(1) of that regulation provides from the imposition of administrative penalties, omitting to enter animal data in the computerised database for animals was to be treated in the same way as making substantively incorrect entries (‘errors and omissions’) and was not to be penalised in the event of a subsequent voluntary correction by the animal keeper. Second, both cases involve forms of non-compliance with the eligibility criteria which lead, in principle, to a reduction in the coupled support requested; over and above that reduction, however, they are not subject to an administrative penalty.
77. The underlying idea is that the removal or reduction of entitlement to coupled support for bovine animals whose movement has been reported belatedly is a sufficient incentive for applicants to comply with the relevant eligibility criteria, including the notification obligation, without the need for an additional administrative penalty. That approach is all the more valid where the ex post facto notification is substantively correct (35) and the other eligibility criteria have been met.
V. Conclusion
78. In the light of the foregoing considerations, I propose that the Court answer the questions referred for a preliminary ruling by the Verwaltungsgerichtshof (Supreme Administrative Court, Austria) as follows:
(1) Point 2(a) and point 18 of the second subparagraph of Article 2(1) as well as Article 30(4)(c) of Commission Delegated Regulation No 640/2014 [of 11 March 2014 supplementing Regulation (EU) No 1306/2013 of the European Parliament and of the Council with regard to the integrated administration and control system and conditions for refusal or withdrawal of payments and administrative penalties applicable to direct payments, rural development support and cross compliance],
must be interpreted as meaning that, where the movement of bovine animals to summer grazing in mountain areas is reported late, in breach of Article 7(1) of Regulation [(EC) No 1760/2000 No 1760/2000 of the European Parliament and of the Council of 17 July 2000 establishing a system for the identification and registration of bovine animals and regarding the labelling of beef and beef products and repealing Council Regulation (EC) No 820/97], read in conjunction with Article 2(4) of [Commission Decision 2001/672/EC of 20 August 2001 laying down special rules applicable to movements of bovine animals when put out to summer grazing in mountain areas], the animals concerned are neither considered as determined nor eligible for aid.
(2) Articles 15(1) and 34 of Delegated Regulation No 640/2014
must be interpreted as meaning that an administrative penalty is inadmissible if such late notification of the movement to summer grazing in mountain areas of bovine animals declared in accordance with point 16 of the second subparagraph of Article 2(1) of that delegated regulation or identified in the aid application and otherwise eligible for aid, is subsequently corrected by the beneficiary; this applies only if the competent authority has neither informed the beneficiary of its intention to carry out an on-the-spot check nor informed the beneficiary of any non-compliance in the aid application or payment claim.