Provisional text
JUDGMENT OF THE COURT (Ninth Chamber)
23 October 2025 (*)
( Reference for a preliminary ruling – Agriculture – Common Agricultural Policy (CAP) – Regulation (EU) 2021/2115 – Support for strategic plans – Regulation (EU) No 1307/2013 – Direct payment for farmers – Areas at the farmers’ disposal – Legal basis for use of those areas – Rules for registration of that legal basis – Areas declared under aid schemes greater than those for which a legal basis was registered – Administrative penalties in cases of over-declaration of areas – Penalties under Article 19a of Regulation (EU) No 640/2014 – Article 19a – Penalties – Applicability of that article following the repeal of Regulation No 640/2014 )
In Case C‑466/24 [Venshova], (i)
REQUEST for a preliminary ruling under Article 267 TFEU from the Administrativen sad – Varna (Administrative Court, Varna, Bulgaria), made by decision of 18 June 2024, received at the Court on 2 July 2024, in the proceedings
LQ
v
Zamestnik izpalnitelen direktor na Darzhaven fond ‘Zemedelie’
THE COURT (Ninth Chamber),
composed of M. Condinanzi (Rapporteur), President of the Chamber, N. Jääskinen and R. Frendo, Judges,
Advocate General: A. Rantos,
Registrar: A. Calot Escobar,
having regard to the written procedure,
after considering the observations submitted on behalf of:
– the European Commission, by A.C. Becker, G. Koleva and M. Salyková, acting as Agents,
having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,
gives the following
Judgment
1 This request for a preliminary ruling concerns the interpretation of:
– Article 4(4) of Regulation (EU) 2021/2115 of the European Parliament and of the Council of 2 December 2021 establishing rules on support for strategic plans to be drawn up by Member States under the common agricultural policy (CAP Strategic Plans) and financed by the European Agricultural Guarantee Fund (EAGF) and by the European Agricultural Fund for Rural Development (EAFRD) and repealing Regulations (EU) No 1305/2013 and (EU) No 1307/2013 (OJ 2021 L 435, p. 1);
– Article 28 of Commission Implementing Regulation (EU) No 908/2014 of 6 August 2014 laying down rules for the application of Regulation (EU) No 1306/2013 of the European Parliament and of the Council with regard to paying agencies and other bodies, financial management, clearance of accounts, rules on checks, securities and transparency (OJ 2014 L 255, p. 59);
– Articles 18, 19 and 19a of Commission Delegated Regulation (EU) 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 (OJ 2014 L 181, p. 48), as amended by Commission Delegated Regulation (EU) 2016/1393 of 4 May 2016 (OJ 2016 L 225, p. 41) (‘Delegated Regulation No 640/2014’),
– and Article 49(1) of the Charter of Fundamental Rights of the European Union (‘the Charter’).
2 The request has been made in proceedings between LQ, a natural person, and Zamestnik izpalnitelen direktor na Darzhaven fond ‘Zemedelie’ (Deputy Executive Director of the National ‘Agriculture’ Fund, Bulgaria) (‘the DFZ’) concerning the latter’s decision to reduce the amount of financial aid applied for by LQ for the 2021 marketing year, under several aid schemes and measures for area-related direct payments, and to impose penalties for over-declaration of areas.
Legal context
European Union law
Regulation (EU) No 1306/2013
3 Regulation (EU) No 1306/2013 of the European Parliament and of the Council of 17 December 2013 on the financing, management and monitoring of the common agricultural policy and repealing Council Regulations (EEC) No 352/78, (EC) No 165/94, (EC) No 2799/98, (EC) No 814/2000, (EC) No 1290/2005 and (EC) No 485/2008 (OJ 2013 L 347, p. 549, and Corrigendum OJ 2016 L 130, p. 13) was repealed with effect from 1 January 2023 by Regulation (EU) 2021/2116 of the European Parliament and of the Council of 2 December 2021 on the financing, management and monitoring of the common agricultural policy and repealing Regulation (EU) No 1306/2013 (OJ 2021 L 435, p. 187). However, under Article 104 of Regulation 2021/2116, Articles 59, 63, 64, 67, 68, 74 and 77 of Regulation No 1306/2013 continue to apply to expenditure incurred and payments made for support schemes under Regulation (EU) No 1307/2013 of the European Parliament and of the Council of 17 December 2013 establishing rules for direct payments to farmers under support schemes within the framework of the common agricultural policy and repealing Council Regulation (EC) No 637/2008 and Council Regulation (EC) No 73/2009 (OJ 2013 L 347, p. 608), in respect of the calendar year 2022 and before. Given that the aid application at issue in the main proceedings concerns the 2021 marketing year, Regulation No 1306/2013 is applicable in the present case.
4 Article 59 of Regulation No 1306/2013, entitled ‘General principles of checks’, provides, in paragraph 1:
‘Except where otherwise provided, the system set up by the Member States … shall include systematic administrative checking of all aid applications and payment claims. That system shall be supplemented by on-the-spot checks.’
5 Article 63 of that regulation, entitled ‘Undue payments and administrative penalties’, provides, in paragraphs 1 and 2:
‘1. Where it is found that a beneficiary does not comply with the eligibility criteria, commitments or other obligations relating to the conditions for the granting of the aid or support, as provided for in the sectoral agricultural legislation, the aid shall not be paid or shall be withdrawn in full or in part and, where relevant, the corresponding payment entitlements as referred to in Article 21 of Regulation (EU) No 1307/2013 shall not be allocated or shall be withdrawn.
2. Moreover, where sectoral agricultural legislation so provides, Member States shall also impose administrative penalties, in accordance with the rules laid down in Article 64 and Article 77 …’
6 Under Article 64(4) of Regulation No 1306/2013, entitled ‘Application of administrative penalties’:
‘The administrative penalties may take one of the following forms:
(a) a reduction in the amount of aid or support to be paid in relation to the aid application or payment claim affected by the non-compliance or further applications; however as regards rural development support, this shall be without prejudice to the possibility of suspending the support where it can be expected that the non-compliance can be addressed by the beneficiary within a reasonable time;
(b) payment of an amount calculated on the basis of the quantity and/or the period concerned by the non-compliance;
(c) suspension or withdrawal of an approval, recognition or authorisation;
(d) exclusion from the right to participate in or benefit from the aid scheme or support measure or other measure concerned’.’
7 Chapter 2, entitled ‘Integrated Administration and Control System’, of Title V of that regulation contains Article 67(1) and (2) thereof, which is worded as follows:
‘1. Each Member State shall set up and operate an integrated administration and control system (the “integrated system”).
2. The integrated system shall apply to the support schemes listed in Annex I to Regulation (EU) No 1307/2013 …’
8 Article 68(1) of Regulation No 1306/2013 provides:
‘The integrated system shall comprise the following elements:
(a) a computerised database;
(b) an identification system for agricultural parcels;
(c) a system for the identification and registration of payment entitlements;
(d) aid applications and payment claims;
(e) an integrated control system;
(f) a single system to record the identity of each beneficiary of the support referred to in Article 67(2) who submits an aid application or a payment claim.’
9 Article 72(1) of that regulation provides:
‘Each year, a beneficiary of the support referred to in Article 67(2) shall submit an application for direct payments or a payment claim for the relevant area and animal-related rural development measures respectively indicating, where applicable:
(a) all the agricultural parcels on the holding, as well as the non-agricultural area for which support referred to in Article 67(2) is claimed;
(b) the payment entitlements declared for activation;
(c) any other information provided for in this Regulation or required with a view to the implementation of the relevant sectoral agricultural legislation or by the Member State concerned.
…’
10 Under Article 74(1) of that regulation:
‘In accordance with Article 59, Member States, through the paying agencies or the bodies delegated by them, shall carry out administrative checks on the aid application to verify the eligibility conditions for the aid. Those checks shall be supplemented by on-the-spot checks.’
11 Under Article 77 of that regulation, entitled ‘Application of administrative penalties’:
‘1. As regards the administrative penalties referred to in Article 63(2), this Article shall apply in the case of non-compliance with relation to eligibility criteria, commitments or other obligations resulting from the application of the rules on support referred to in Article 67(2).
…
4. The administrative penalties may take the following forms:
(a) a reduction in the amount of aid or support paid or to be paid in relation to the aid applications or payment claims affected by the non-compliance and/or in relation to aid applications or payment claims for previous or subsequent years;
(b) payment of an amount calculated on the basis of the quantity and/or the period concerned by the non-compliance;
(c) exclusion from the right to participate in the aid scheme or support measure concerned.
…’
Regulation No 1307/2013
12 Regulation No 1307/2013 was repealed with effect from 1 January 2023 by Regulation 2021/2115. However, under Article 154(2) of that regulation, Regulation No 1307/2013 continues to apply in respect of aid applications relating to claim years starting before 1 January 2023. Given that the aid application at issue in the main proceedings concerns the 2021 marketing year, Regulation No 1307/2013 is applicable in the present case.
13 Recital 2 of Regulation No 1307/2013 states:
‘One of the core objectives, and one of the key requirements, of the [Common Agricultural Policy (CAP)] reform is the reduction of the administrative burden. …’
14 Article 5 of that regulation provides:
‘Regulation (EU) No 1306/2013 and the provisions adopted pursuant thereto shall apply to the schemes provided for in this Regulation.’
15 Under Article 32 of Regulation No 1307/2013:
‘1. Support under the basic payment scheme shall be granted to farmers, by means of declaration in accordance with Article 33(1), upon activation of a payment entitlement per eligible hectare in the Member State where it has been allocated. …
2. For the purposes of this Title, “eligible hectare” means:
(a) any agricultural area of the holding, including areas that were not in good agricultural condition on 30 June 2003 in Member States acceding to the Union on 1 May 2004 that opted upon accession to apply the single area payment scheme, that is used for an agricultural activity or, where the area is also used for non-agricultural activities, is predominantly used for agricultural activities; or
…
4. Areas shall be considered to be eligible hectares only if they comply with the definition of eligible hectare throughout the calendar year, except in the case of force majeure or exceptional circumstances.
…’
16 Article 33 of that regulation, entitled ‘Declaration of eligible hectares’, provides, in paragraph 1 thereof:
‘For the purposes of the activation of payment entitlements provided for in Article 32(1), the farmer shall declare the parcels corresponding to the eligible hectares accompanying any payment entitlement. Except in the case of force majeure or exceptional circumstances, the parcels declared shall be at the farmer’s disposal on a date fixed by the Member State, which shall be no later than the date fixed in that Member State for amending the aid application as referred to in Article 72(1) of Regulation (EU) No 1306/2013.’
17 Article 36 of Regulation No 1307/2013, governing specifically the single area payment scheme, provides in paragraphs 2 and 5 thereof:
‘2. The single area payment shall be granted on an annual basis for each eligible hectare declared by the farmer in accordance with point (a) of the first subparagraph of Article 72(1) of Regulation (EU) No 1306/2013. …
…
5. Except in the case of force majeure or exceptional circumstances, the hectares referred to in paragraph 2 shall be at the farmer’s disposal on a date fixed by the Member State, which shall be no later than the date fixed in that Member State for amendment of the aid application referred to in Article 72(1) of Regulation (EU) No 1306/2013.’
18 Under Article 48 of Regulation No 1307/2013, which lays down the general rules for payment for areas with natural constraints:
‘1. Member States may grant a payment to farmers who are entitled to a payment under the basic payment scheme or the single area payment scheme referred to in Chapter 1 and whose holdings are fully or partly situated in areas with natural constraints designated by Member States …
…
3. … the payment for areas with natural constraints shall be granted annually per eligible hectare situated in the areas for which a Member State has decided to grant a payment in accordance with paragraph 2 of this Article. It shall be paid upon activation of payment entitlements in respect of those hectares held by the farmer concerned or, in Member States applying Article 36 of this Regulation, upon declaration of those eligible hectares by the farmer concerned.
…’
Delegated Regulation No 640/2014
19 Delegated Regulation No 640/2014 was repealed by Commission Delegated Regulation (EU) 2022/1172 of 4 May 2022 supplementing Regulation (EU) 2021/2116 of the European Parliament and of the Council with regard to the integrated administration and control system in the common agricultural policy and the application and calculation of administrative penalties for conditionality (OJ 2022 L 183, p. 12). However, in accordance with Article 13 of Delegated Regulation 2022/1172, Delegated Regulation No 640/2014 continues to apply to aid applications for direct payments lodged before 1 January 2023. In view of the date of the facts of the dispute in the main proceedings, Delegated Regulation No 640/2014 is nevertheless applicable to that dispute.
20 Recitals 2 and 19 of Regulation No 640/2014 state:
‘(2) In particular, rules should be established to supplement certain non-essential elements of Regulation [No 1306/2013] in relation to the functioning of the integrated administration and control system (integrated system), the time limits for the submission of aid applications or payment claims, the conditions for the partial or total refusal of aid and the partial or total withdrawal of undue aid or support and the determination of administrative penalties to deal with non-compliances related to conditions for receiving aid under schemes established by Regulation [No 1307/2013] …
…
(19) Administrative penalties should be established having regard to the principles of dissuasiveness and proportionality and the specific problems linked to cases of force majeure as well as exceptional circumstances. Administrative penalties should be graded according to the seriousness of the non-compliance committed and should go as far as the total exclusion from one or several area-related aid schemes or area-related support measures for a specified period. They should take into account the particularities of the various aid schemes or support measures with regard to the eligibility criteria, commitments and other obligations or the possibility that a beneficiary might not declare all his areas to artificially create the condition to be exempted from the greening obligations. The administrative penalties under this Regulation should be considered dissuasive enough to discourage intentional non-compliance.’
21 Article 19a of Delegated Regulation No 640/2014, entitled ‘Administrative penalties in cases of over-declaration of areas for the basic payment scheme, the single area payment scheme, the re-distributive payment, the young farmers scheme, the payment for areas with natural constraints, the small farmers scheme, Natura 2000 and Water Framework Directive payments and payments to areas facing natural or other specific constraints’, provides:
‘1. If, in respect of a crop group as referred to in Article 17(1), the area declared for the aid schemes provided for in Chapters 1, 2, 4 and 5 of Title III and in Title V of Regulation (EU) No 1307/2013 and the support measures referred to in Articles 30 and 31 of [Regulation (EU) No 1305/2013 2013 of the European Parliament and of the Council of 17 December 2013 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) and repealing Council Regulation (EC) No 1698/2005 (OJ 2013 L 347, p. 487)] exceeds the area determined in accordance with Article 18 of this Regulation, the aid or support shall be calculated on the basis of the area determined reduced by 1,5 times the difference found if that difference is more than either 3% of the area determined or 2 hectares.
The administrative penalty shall not exceed 100% of the amounts based on the area declared.
2. Where no administrative penalty has yet been imposed on the beneficiary under paragraph 1 for over-declaration of areas for the aid scheme or support measure concerned, the administrative penalty referred to in that paragraph shall be reduced by 50% if the difference between the area declared and the area determined does not exceed 10% of the area determined.
3. Where a beneficiary had his administrative penalty reduced in accordance with paragraph 2 and another administrative penalty as referred to in this Article and in Article 21 is to be imposed on that beneficiary for the aid scheme or support measure concerned in respect of the following claim year, he shall pay the full administrative penalty in respect of that following claim year and shall pay the amount by which the administrative penalty calculated in accordance with paragraph 1 had been reduced in accordance with paragraph 2.
4. If the amount calculated in accordance with paragraphs 1, 2 and 3 cannot be fully off-set in the course of the three calendar years following the calendar year of the finding, in accordance with Article 28 of Implementing Regulation (EU) No 908/2014, the outstanding balance shall be cancelled.’
Regulation 2021/2115
22 Article 4(4)(a) of Regulation 2021/2115 provides:
‘For the purpose of types of intervention in the form of direct payments, “eligible hectare” shall be determined in such a way that it covers areas which are at the farmer’s disposal and which consist of:
(a) any agricultural area of the holding that, during the year for which support is requested, is used for an agricultural activity or, where the area is also used for non-agricultural activities, is predominantly used for agricultural activities …’
Bulgarian law
The ZPZP
23 Article 41 of the Zakon za podpomagane na zemedelskite proizvoditeli (Law on Support for Farmers) (DV No 58 of 22 May 1998), in the version applicable to the dispute in the main proceedings (‘the ZPZP’), provides:
‘(1) Farmers registered in accordance with Article 7 may apply for aid under the schemes referred to in paragraph 1 of Article 38a by submitting an aid application in accordance with Article 32(1) for the calendar year concerned.
…
(3) The agricultural land referred to in the aid application must be available to farmers on 31 May of the calendar year concerned, in accordance with Article 36(5) of Regulation (EU) No 1307/2013, which is certified by a legal basis for use registered under the [Zakon za sobstvenostta i polzvaneto na zemedelskite zemi (Law on the ownership and use of agricultural land)].
(4) The legal basis for the use of agricultural land shall be registered with the municipal agricultural services of the place where the properties are located, using dedicated software managed by the Ministry of Agriculture, Food and Forestry. Registration shall be effected before expiry of the periods laid down in the decree referred to in Article 32(5) for the submission of the aid application and for changes thereto.
(5) The Ministry of Agriculture, Food and Forestry shall classify, summarise and transmit to the paying agency, in one or several steps, the data on the legal bases registered for the use of agricultural land. …
(6) When submitting an aid application via the integrated administration and control system [(‘the IACS’)], the paying agency shall verify the data in the application, which shall be compared with the data referred to in paragraph 5. If the farmer has included in his application agricultural land outside the areas for which there is a legal basis or to an extent exceeding the registered legal basis of use, the system generates an error signal. The error signal shall be submitted to the farmer for signature.
(7) On expiry of the time limits for submitting and making changes to the aid application, laid down in the decree referred to in Article 32(5), the paying agency shall carry out an administrative check on all aid applications submitted in respect of which the system has issued an error signal. During the check, the information contained in aid applications shall be compared with the data referred to in paragraph 5 concerning compliance with the conditions referred to in paragraphs 3 and 4.
(8) If the verification referred to in paragraph 7 reveals agricultural land applied for without a legal basis for use, the paying agency shall proceed to a geographic determination of the area and of the localisation of that land. In that case, the Ministry for Agriculture, Food and Forestry shall provide further information to the paying agency.
(9) If the verification carried out pursuant to paragraphs 7 and 8 reveals no registered legal basis within the meaning of paragraph 4, the paying agency shall apply the provisions of Article 43(3).’
24 Under Article 43 of the ZPZP:
‘(1) The paying agency shall make direct payments in respect of applications submitted where it finds that:
1. the applicant uses the agricultural areas declared in the application and carries out an agricultural activity there;
…
4. the areas declared for aid are deemed eligible for aid during the checks referred to in Article 37(3) and (4).
…
(3) The paying agency shall reduce the amount of the payment or refuse payment under direct payment schemes where:
…
4. the applicant has declared areas which he does not farm or has declared areas which do not meet the eligibility criteria as defined by the order referred to in Article 40;
5. for the same area, two or more applications have been submitted and the area overlap has not been eliminated;
…
7. the aid applicant is not the user of the agricultural areas declared;
…
10. the areas declared for aid are deemed eligible for aid during the checks referred to in Article 37(3) and (4).
(4) The paying agency shall reduce the amount of the payment or refuse the payment referred to in paragraph 3 in accordance with the criteria laid down in EU legislation.’
Decree No 5 of 27 February 2009
25 Article 2 of the naredba no 5 za usloviyata i reda za podavane na zayavlenia po shemi i merki za direktni plashtania (Decree No 5 on the conditions and procedures for submitting applications under direct payment schemes and measures) of 27 February 2009 (DV No 22 of 2009), in the version applicable to the dispute in the main proceedings, provides:
‘(1) Support under the schemes and measures referred to in Article 1 shall be open to farmers who farm agricultural land and/or raise livestock and who satisfy the requirements of Article 41 of the [ZPZP].
(2) The persons referred to in paragraph 1 shall submit an application for support under the schemes and measures referred to in Article 1 using a form to be approved annually by the [DFZ] – Paying Agency (Razplashtatelna agentsia – RA). In the first aid application, the persons referred to in paragraph 1 must also complete an application for registration.’
The dispute in the main proceedings and the questions referred for a preliminary ruling
26 LQ submitted an application for financial aid for the 2021 marketing year, under several aid schemes and measures for area-related direct payments financed by the European Agricultural Guarantee Fund (EAGF), the European Agricultural Fund for Rural Development (EAFRD) and the national budget of the Republic of Bulgaria.
27 By letter of 13 January 2023, the DFZ informed LQ that support had been authorised and paid on the basis of the area declared for the 2021 marketing year. That letter stated that the aid amounts sought by LQ under the payment scheme for areas with natural constraints, the single area payment scheme and aid for agricultural practices beneficial for the climate and the environment, had been reduced and that penalties had been imposed for over-declaration of areas.
28 LQ brought before the Administrativen sad – Varna (Administrative Court, Varna, Bulgaria) an action against that letter, claiming that the letter lacked a statement of reasons, which made it impossible to understand on what factual basis that decision had been taken, and that the competent authority had erred in law.
29 It is apparent from the order for reference that the decision to reduce the aid amounts that LQ had applied for was based on the outcome of an administrative check to verify the eligibility of areas, carried out in accordance with Article 74 of Regulation No 1306/2013, Articles 28 and 29 of Commission Implementing Regulation (EU) No 809/2014 of 17 July 2014 laying down rules for the application of Regulation (EU) No 1306/2013 of the European Parliament and of the Council with regard to the integrated administration and control system, rural development measures and cross compliance (OJ 2014 L 227, p. 69), and Article 37(2) of the ZPZP, by comparing the information available in the IACS registers to that in the database of the Bulgarian Ministry for Agriculture, Food and Forestry.
30 During that check, it was established that the areas declared in the aid application submitted by LQ for the 2021 marketing year were greater than those for which the legal basis for use had been registered under the national legislation.
31 For the areas indicated in LQ’s aid application, which were deemed ineligible or over-declared, a penalty under Article 19a of Delegated Regulation No 640/2014 was imposed on LQ.
32 LQ submits that the letter dated 13 January 2023, referred to in paragraph 27 above, makes no reference to the fact that the data provided in the aid application might be inconsistent with the data used by the DFZ during its checks. Specifically, that letter does not provide any information from which it could be concluded that administrative checks were carried out, nor does it indicate which instances of non-compliance were found in the aid application.
33 The DFZ contends that, in accordance with Article 41(3) of the ZPZP, the agricultural areas declared in the aid application must be available to farmers on 31 May of the calendar year concerned, which can be established through registration of the legal basis for the use of those areas.
34 In the present case, the DFZ maintains that it decided to reduce the amounts of aid granted to LQ and to impose penalties in accordance with that provision, since LQ had declared in the aid application an area greater than that ascertained following the administrative checks carried out. In that regard, the DFZ notes that, by letter of 8 June 2023, it had first informed LQ of the absence of data relating to the legal basis for use of the parcel bearing the number 78519-1127-22-1, which LQ had referred to in the aid application under the payment scheme for areas with natural constraints. As regards LQ’s aid application under the single area payment scheme, the DFZ submits that the parcel bearing the number 001182-8-1-1 does not have the appropriate characteristics for the purposes of the corresponding aid. Lastly, the DFZ claims that, in a letter of 30 October 2023, it informed LQ that administrative penalties had been imposed precisely because of a discrepancy found between the area declared and the area determined through checks.
35 The referring court asks whether EU law allows a national provision such as Article 41(3) and (4) of the ZPZP or a practice of the competent national administrative authority to refuse to grant aid to farmers for areas for which they have failed to register, within the time limits laid down by national law, the legal basis for use in the databases provided for to that end.
36 As regards Article 19a of Delegated Regulation No 640/2014, on the basis of which the DFZ imposed penalties on LQ, the referring court observes that that delegated regulation, even if repealed with effect from 1 January 2023, continues to apply to aid applications relating to direct payments submitted before that date, as is the case in the main proceedings. However, it notes that the consolidated version of that delegated regulation no longer contains that Article 19a. Therefore, the referring court asks whether that article must be regarded as having been in force on the date on which the penalties were imposed on LQ, namely on 13 January 2023.
37 In those circumstances, the Administrativen sad – Varna (Administrative Court, Varna) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:
‘(1) Under Article 4(4) of [Regulation 2021/2115], Article 28 of [Implementing Regulation No 908/2014] and Articles 18 and 19 of [Delegated Regulation No 640/2014], is national legislation and practice on the part of the paying agency of the Republic of Bulgaria in respect of the application of national provisions – in particular, Article 41(3) and (4) of [the ZPZP] – permissible whereby a farmer is denied entitlement to financial assistance for areas in respect of which he … has concluded a land-use agreement for the same year without [indicating] that legal basis [for use] … in the system of the Ministry of Agriculture within the statutory timeframe for doing so?
(2) Having regard to the third sentence of Article 49(1) of the [Charter], is a penalty under Article 19a of Commission Delegated Regulation (EU) No 640/2014 of 11 March 2014 (repealed by Commission Delegated Regulation (EU) 2022/1172 …, recital 16 of which reads, “in the interest of clarity and legal certainty, Delegated Regulation (EU) No 640/2014 should be repealed. However, that [delegated] regulation should continue to apply to aid applications for direct payments lodged before 1 January 2023, to payment claims made in relation to support measures implemented under Regulation (EU) No 1305/2013 and to the control system and administrative penalties as regards rules on cross-compliance”), which was in force for the 2021 marketing year, to be imposed on a farmer if, on the date of the letter imposing the penalty, that is to say, on 13 January 2023, [that] Article 19a … did not exist in the version [of Delegated Regulation (EU) No 640/2014] applicable from 1 January 2023?’
Consideration of the questions referred
The first question
Admissibility
38 The European Commission harbours doubts as to the admissibility of the first question referred in that the factual and legal material necessary for the Court to give a useful answer to the question referred to it does not emerge unambiguously from the order for reference. It argues that the referring court has neither clearly set out the facts nor reproduced the relevant national legal framework, in particular the national provisions laying down the obligation to register the legal basis for use of agricultural land. Nor does it specify the reasons why it considers that an interpretation of Article 4(4) of Regulation 2021/2115, of Article 28 of Implementing Regulation No 908/2014 and of Articles 18 and 19 of Regulation No 640/2014 is necessary.
39 According to settled case-law, the procedure provided for in Article 267 TFEU is an instrument of cooperation between the Court and the national courts by means of which the Court provides the national courts with the points of interpretation of EU law which they need in order to decide the disputes before them (judgment of 27 April 2023, Castorama Polska and Knor, C‑628/21, EU:C:2023:342, paragraph 25 and the case-law cited).
40 In that regard it should be recalled that, in the context of that procedure, it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine, in the light of the particular circumstances of each case, both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. Consequently, where the questions submitted concern the interpretation of EU law, the Court is in principle bound to give a ruling. It follows that questions relating to EU law enjoy a presumption of relevance. The Court may refuse to rule on a question referred by a national court only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (judgment of 29 July 2024, LivaNova, C‑713/22, C‑16/22, EU:C:2024:642, paragraph 53 and the case-law cited).
41 In the present case, as is apparent from the information provided by the referring court, the action in the main proceedings is directed against the letter from DFZ, dated 13 January 2023, by which it informed LQ of the reduction in the amounts of financial aid applied for by LQ for the 2021 marketing year under several aid schemes and measures for direct area payments and of the imposition of penalties for over-declaration of areas found to exist.
42 The DFZ reduced the amount of financial aid applied for by LQ on the ground that, following a check to verify the eligibility of the areas, carried out on the basis of a comparison of the data declared by LQ in the aid application with those in the system of the Ministry of Agriculture, Food and Forestry, it was found that LQ had not, as required by Article 41(3) and (4) of the ZPZP, registered the legal basis for use of all the agricultural parcels referred to in the aid application.
43 Thus, the first question clearly relates to a situation in which the computerised database of the Ministry of Agriculture, Food and Forestry contains no information concerning the legal basis for use of a parcel covered by the application for financial aid submitted by LQ for the 2021 marketing year.
44 Consequently, contrary to the Commission’s submissions, the request for a preliminary ruling contains an account of the subject matter of the dispute in the main proceedings and of the relevant facts, as well as the content of the national provisions concerned, including Article 41(3) and (4) of the ZPZP.
45 In addition, the request for a preliminary ruling sets out the reasons which led the referring court to seek an interpretation of the EU legislation. It is apparent from that request that the Court’s existing case-law concerns facts different from those at issue in the main proceedings and national legislation different from that at issue in those proceedings.
46 It follows that the first question is admissible.
Substance
47 It should be noted as a preliminary point that, according to settled case-law, in the context of the cooperation between national courts and the Court of Justice provided for by Article 267 TFEU, it is for the latter to provide the national court with an answer which will be of use to it and enable it to decide the case before it. To that end, the Court should, where necessary, reformulate the questions referred to it. Similarly, the Court may also find it necessary to consider provisions of EU law which the national court has not referred to in its questions (see, to that effect, judgment of 7 September 2023, Groenland Poultry, C‑169/22, EU:C:2023:638, paragraph 47 and the case-law cited).
48 In the present case, the first question refers to Article 4(4) of Regulation 2021/2115, which, for the purpose of types of intervention in the form of direct payments, defines the concept of ‘eligible hectare’.
49 As is apparent from the request for a preliminary ruling, LQ submitted an application for financial aid for the 2021 marketing year, under several aid schemes and measures for area-related direct payments financed by the EAGF, the EAFRD and the national budget of the Republic of Bulgaria.
50 It follows that only the provisions of Regulation No 1307/2013 can apply ratione materiae to the dispute in the main proceedings. According to Article 1(2) and Article 154 of Regulation 2021/2115 respectively, first, that regulation applies to EU support financed by the EAGF and the EAFRD for interventions specified in a CAP Strategic Plan drawn up by a Member State and approved by the Commission, covering the period from 1 January 2023 to 31 December 2027, and, second, Regulation No 1307/2013 continues to apply in respect of aid applications relating to claim years starting before 1 January 2023.
51 In that regard, since, according to the information in the order for reference, the alleged absence of registration the legal basis for use of one of LQ’s parcels concerns the aid application submitted under the payment scheme for areas with natural constraints, the provisions of Article 48 of Regulation No 1307/2013, which lays down the general rules governing the payment scheme for such areas, are relevant in the context of the first question.
52 Article 48(1) and (3) refers, for the purposes of identifying the areas falling within the scope of the aid relating to areas with natural constraints and determining the specific rules for payment thereof, to the provisions applicable to the basic payment scheme and to those relating to the single area payment scheme.
53 In the present case, the first question relates primarily to the burden of proof on farmers to establish that the agricultural parcels declared in their aid application were actually at their disposal on the date on which the application was submitted. In addition, it is apparent from the information in the order for reference that LQ submitted an aid application solely under the single area payment scheme, without seeking any support under the basic payment scheme. It must therefore be held that, in the context of the first question, the referring court seeks an interpretation of Article 32(2)(a) and of Article 36(2) and (5) of Regulation No 1307/2013, which, respectively, define ‘eligible hectare’ and lay down the condition that the hectares declared in the aid application must be ‘at the farmer’s disposal on a date fixed by the Member State’.
54 Accordingly, it must be held that, by its first question, the referring court asks, in essence, whether Article 32(2)(a) and Article 36(2) and (5) of Regulation No 1307/2013 must be interpreted as precluding national legislation or a national practice whereby a farmer may be denied entitlement to the payment of aid in respect of areas for the use of which that farmer has concluded a contract for the year concerned, where that contract, as the legal basis for use of those areas, has not been registered in the computerised database designated for that purpose or within the time limits prescribed by national law.
55 According to settled case-law, in interpreting provisions of EU law, it is necessary to consider not only their wording but also the context in which they occur and the objectives pursued by the rules of which they are part (see, to that effect, judgment of 19 September 2024, Agrarmarkt Austria, C‑350/23, EU:C:2024:771, paragraph 57 and the case-law cited).
56 In that regard, it should be recalled, first, that Article 32(2)(a) of Regulation No 1307/2013 defines the concept of ‘eligible hectare’ as ‘any agricultural area of the holding that … is used for an agricultural activity or, where the area is also used for non-agricultural activities, is predominantly used for agricultural activities’.
57 According to the wording of Article 36(2) and (5) of that regulation, the single area payment is to be granted on an annual basis for each eligible hectare declared by the farmer in accordance with point (a) of the first subparagraph of Article 72(1) of Regulation No 1306/2013 and, except in the case of force majeure or exceptional circumstances, those hectares must be at the farmer’s disposal on a date fixed by the Member State, which must not be later than the time limit fixed by that Member State for amending the aid application as referred to in Article 72(1) of that regulation.
58 It follows from reading those provisions together that, for the aid applied for to be granted, the farmer must actually use and have at his disposal the areas declared in the aid application.
59 Second, as regards the context in which those provisions occur, it should be noted that Regulation No 1307/2013 lays down the provisions applicable to support schemes, in particular those relating to direct payments to farmers, including those concerning the conditions of access to those payments.
60 In that regard, it should be noted that Article 32(2)(a) and Article 36(2) and (5) of Regulation No 1307/2013 are in the sections of that regulation devoted to the implementation of the basic payment scheme and of the single area payment scheme. Given that aid under those schemes is granted to farmers following the activation of a payment entitlement per eligible hectare, the determination of the eligible hectares which are at the farmer’s disposal is essential for the proper implementation of those schemes, since it serves to verify compliance with the conditions for granting that aid and the number of eligible hectares constitutes the basis for the calculation of the amount of aid to be paid to the farmer who applied for aid.
61 The definition of the concept of ‘eligible hectare’, laid down in Article 32(2)(a) of that regulation, although inserted in the section of that regulation relating to the implementation of the basic payment scheme, is, as stated in the provision itself, relevant ‘for the purposes of [that] Title’, which includes Article 36 of the regulation.
62 Third, the objectives pursued by Regulation No 1307/2013 must be determined in the light of the tasks of shared management of EU funds with the Member States, under the CAP.
63 In that regard, first, it should be recalled that one of the key requirements of the CAP reform implemented by Regulation No 1307/2013, as set out in recital 2 of that regulation, is the reduction of the administrative burden.
64 That being said, it follows clearly from the EU legislation concerning the protection of the financial interests of the European Union, the financing of the CAP and the IACS, that the Member States must adopt measures to ensure the proper implementation of the IACS and that they are especially required to take the necessary measures to ensure the reality and the regularity of the aid schemes financed by the European Union, as well as to prevent and deal with irregularities (see, to that effect, judgment of 24 June 2010, Pontini and Others, C‑375/08, EU:C:2010:365, paragraph 75).
65 To that end, first, in accordance with Articles 63, 64 and 77 of Regulation No 1306/2013, which, as is apparent from Article 5 of Regulation No 1307/2013, is closely linked to the latter regulation, Member States are to impose administrative penalties, which are proportionate and graduated according to the severity, extent, duration and reoccurrence of the non-compliance found, and which may take the form of a reduction in the amount of aid, payment of an amount calculated on the basis of the quantity and/or period concerned by the non-compliance, the suspension or withdrawal of an authorisation, recognition or approval, or the exclusion from the right to participate in, or benefit from, the aid scheme, support measure or other measure concerned.
66 Second, under Articles 67 to 73 of Regulation No 1306/2013, Member States are to establish and manage an IACS, which applies to the support schemes listed in Annex I to Regulation No 1307/2013 and includes, inter alia, an identification system for agricultural parcels and a system for the registration of aid applications and payment claims. Its main purpose is to check the genuineness of operations financed by the EU budget under the CAP and their compliance with the eligibility criteria for aid or support measures, as well as to improve the effectiveness and monitoring of EU support, in particular by facilitating the prevention of irregularities and fraud, and the application of appropriate penalties.
67 Consequently, there is nothing in Delegated Regulation No 640/2014 to suggest that Member States cannot, with a view to ensuring the proper implementation of that delegated regulation, adopt national rules requiring farmers, when they submit an aid application through the computerised database designated for that purpose, to indicate, in support of that application, the legal bases for the use of the agricultural parcels identified as eligible hectares for the purposes of eligibility for the support measure applied for and for the calculation of the aid amount.
68 In that regard, the Court has already ruled that Member States enjoy a measure of discretion as regards the supporting documents and the evidence to be required from an aid applicant in relation to the areas covered by the application (judgment of 17 December 2020, Land Berlin (Payment entitlements linked to the CAP), C‑216/19, EU:C:2020:1046, paragraph 35 and the case-law cited). In the light of that discretion, it is permissible for the Member States to lay down more detailed rules as to the evidence to be submitted in support of an aid application by referring, in particular, to the usual practices in their territory in the field of agriculture as regards the enjoyment and use of the forage areas, and the legal documents to be produced in respect of that use (judgment of 24 June 2010, Pontini and Others, C‑375/08, EU:C:2010:365, paragraph 82).
69 Nevertheless, in exercising their discretion, Member States must comply with the objectives pursued by the EU legislation concerned and the general principles of EU law, such as the principles of proportionality and of legal certainty (see, to that effect, judgments of 27 June 2019, Azienda Agricola Barausse Antonio e Gabriele, C‑348/18, EU:C:2019:545, paragraph 57, and of 7 April 2022, Avio Lucos, C‑116/20, EU:C:2022:273, paragraph 63).
70 While it is for the national court to verify, in each individual case, whether those principles have been complied with (see, to that effect, judgment of 24 June 2010, Pontini and Others, C‑375/08, EU:C:2010:365, paragraph 89), in accordance with settled case-law, the Court has jurisdiction to give the national court full guidance on the interpretation of EU law in order to enable it to determine the issue of compatibility for the purposes of the case before it (judgment of 11 June 2020, Subdelegación del Gobierno en Guadalajara, C‑448/19, EU:C:2020:467, paragraph 17 and the case-law cited).
71 As regards the principle of legal certainty, which the Court takes into account in the area of aid to farmers, in particular as regards the provisions on administrative penalties (see, to that effect, judgment of 18 April 2024, Kaszamás, C‑79/23, EU:C:2024:329, paragraph 59 and the case-law cited), it must be borne in mind that it requires not only that EU rules enable those concerned to know precisely the extent of the obligations which are imposed on them, but also that those persons must be able to ascertain unequivocally what their rights and obligations are and take steps accordingly (see, to that effect, judgment of 25 July 2018, Teglgaard et Fløjstrupgård, C‑239/17, EU:C:2018:597, paragraph 52 and the case-law cited).
72 As regards the principle of proportionality, which, according to the Court, requires that measures implemented through provisions must be appropriate for attaining the objective pursued and must not go beyond what is necessary to achieve it, it must be borne in mind that that principle must be complied with both by the EU legislature and by the national legislative authorities and the national courts which apply EU law (see, to that effect, judgment of 24 June 2010, Pontini and Others, C‑375/08, EU:C:2010:365, paragraph 87).
73 As is clear from paragraph 65 to 67 above, the EU legislation relating to the IACS, the protection of the financial interests of the European Union and the financing of the CAP requires the adoption of national measures specifically designed to ensure the proper implementation of the IACS, as well as the reality and regularity of the aid schemes financed by the European Union. In that regard, and in so far as it is relevant in the context of the dispute in the main proceedings, it should be noted that Article 72(1)(c) of Regulation No 1306/2013 lists the particulars which must be indicated in the aid application or in the payment claim. It is stated therein that, in addition to the information that must be included in those applications under that regulation, they may also be the subject of any other information required by the competent Member State, thereby helping to ensure compliance with the principles of legal certainty and of proportionality.
74 In the present case, as the Commission observes, first, a national provision such as that applicable to the dispute in the main proceedings, namely Article 41(3) and (4) of the ZPZP, pursues such an objective, in that it is intended, inter alia, to prevent farmers from unlawfully making use of land belonging to others land with the aim of circumventing the EU legislation relating to support schemes. Second, by requiring registration of the legal basis for use of the agricultural parcels declared in the aid application with the competent authorities of the place where those parcels are located, such a national provision does not appear to impose on farmers applying for aid or support an obligation which would be difficult to comply with.
75 It follows that, subject to verification by the referring court in the light of the circumstances of the case in the main proceedings, the condition, laid down by the national legislation at issue, consisting in the production of a valid legal document for the purposes of the payment of aid, is such as to satisfy the requirements arising from the principle of legal certainty, without, in accordance with the principle of proportionality, going beyond what is necessary to achieve the objective pursued by that legislation.
76 In the light of all of the foregoing considerations, the answer to the first question is that Article 32(2)(a) and Article 36(2) and (5) of Regulation No 1307/2013 must be interpreted as not precluding national legislation or a national practice whereby a farmer may be denied entitlement to the payment of aid in respect of areas for the use of which that farmer has concluded a contract for the year concerned, where that contract, as the legal basis for use of those areas, has not been registered in the computerised database designated for that purpose or within the time limits prescribed by national law, provided that the objectives pursued by the EU legislation in question and the general principles of EU law, in particular the principles of proportionality and of legal certainty, are observed.
The second question
77 By its second question, the referring court asks, in essence, whether the third sentence of Article 49(1) of the Charter is applicable to a penalty such as that imposed on a farmer under Article 19a of Delegated Regulation No 640/2014, in a situation in which that latter provision was in force on the date on which the application for support was lodged and on the date on which that penalty was imposed, but which, at the date of the examination of the action brought against that penalty, was removed from the consolidated version of that delegated regulation, which, although it was repealed with effect from 1 January 2023, continues to apply to applications lodged before that date in accordance with Article 13 of Delegated Regulation 2022/1172.
78 In that regard, in the context of the cooperation between the Court of Justice and the national courts provided for in Article 267 TFEU, it is solely for the national court, before which a dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case, both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. Consequently, where the questions referred concern the interpretation of EU law, the Court of Justice is, in principle, bound to give a ruling (judgment of 17 October 2024, FA.RO. di YK & C., C‑16/23, EU:C:2024:886, paragraph 33).
79 It follows that questions concerning EU law enjoy a presumption of relevance. The Court may refuse to rule on a question referred by a national court only where it is quite obvious that the interpretation of a rule of EU law sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (judgment of 17 October 2024, FA.RO. di YK & C., C‑16/23, EU:C:2024:886, paragraph 34).
80 First of all, it is important to remember that, in the present case, Delegated Regulation 2022/1172 repealed Delegated Regulation No 640/2014 and that it is apparent from Article 13 of that first delegated regulation that that second delegated regulation continues to apply to aid applications relating to direct payments submitted before 1 January 2023. It follows that, since the aid application at issue in the main proceedings was submitted in 2021, Article 19a of Delegated Regulation No 640/2014 continues to apply ratione temporis to the dispute in the main proceedings, even though the latter delegated regulation was repealed with effect from 1 January 2023. The fact that the penalty was imposed after the repeal of Delegated Regulation No 640/2014 is irrelevant in that regard.
81 Next, it should be noted that, contrary to what the referring court asserts, that Article 19a is still part of both the version of Delegated Regulation No 640/2014 applicable ratione temporis to the case in the main proceedings and the latest consolidated version of that delegated regulation before it was repealed.
82 In those circumstances, since it rests on an incorrect premiss, the second question concerns a problem that is hypothetical, within the meaning of the case-law referred to in paragraph 79 above, and must therefore be declared inadmissible (see, by analogy, judgment of 16 January 2025, Stangalov, C‑644/23, EU:C:2025:16, paragraph 60 and the case-law cited).
Costs
83 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.
On those grounds, the Court (Ninth Chamber) hereby rules:
Article 32(2)(a) and Article 36(2) and (5) of Regulation (EU) No 1307/2013 of the European Parliament and of the Council of 17 December 2013 establishing rules for direct payments to farmers under support schemes within the framework of the common agricultural policy and repealing Council Regulation (EC) No 637/2008 and Council Regulation (EC) No 73/2009
must be interpreted as not precluding national legislation or a national practice whereby a farmer may be denied entitlement to the payment of aid in respect of areas for the use of which that farmer has concluded a contract for the year concerned, where that contract, as the legal basis for use of those areas, has not been registered in the computerised database designated for that purpose or within the time limits prescribed by national law, provided that the objectives pursued by the EU legislation in question and the general principles of EU law, in particular the principles of proportionality and of legal certainty, are observed.
[Signatures]