Exclusion as a result
of failure to comply with conditions governing eligibility for grant of aid is
not a penalty, but merely the consequence of failure to fulfil the conditions
>> This case concerned the question
whether Regulation 1257/1999, read in conjunction with Regulation 817/2004, precluded
national legislation which provided that, where a farmer who was the
beneficiary of financial supported prevented an on-the-spot check of the land
concerned, all the aid already granted during the commitment period to that
farmer in relation to an agri‑environmental measure must be
repaid, even where it had already been paid in respect of a number of years.
In
accordance with Regulation No 1257/1999, the competent Austrian ministry
adopted the Special Directive on the Austrian aid programme for extensive
agriculture. Mr Hehenberger applied in 2000, for the first time, to the
Austrian paying body acting on behalf of the Republik Österreich, for
agri-environmental support under ÖPUL 2000. Mr Hehenberger made a statement by
which he undertook for a period of 5 years from 1 January 2001, certain
agri-environmental measures referred to in ÖPUL 2000. On the basis of that
commitment and the aid applications made each year by Mr Hehenberger, the
Austrian paying body paid the agri-environmental support concerned for the
years from 2001 to 2005.
In 2007, the Austrian paying body claimed that
Mr Hehenberger had made it impossible to carry out the on-the-spot check on 12
September 2005. Mr Hehenberger denied access to that land, thus preventing the
check from being carried out. As a consequence, that body required repayment of
all the aid which had been paid to Mr Hehenberger under ÖPUL 2000 for the years
2001 to 2005. Mr Hehenberger has
accordingly challenged the repayment claim before the referring Court.
The
Court of Justice pointed out that Arts 22 to 24 of Regulation 1257/1999 set out
the general conditions for the grant of supported for farming practices
designed, in particular, to maintain the countryside. The Court held that it
followed from those provisions that agri-environmental measures were
characterised by the five-year commitment given by the farmers concerned to
practise a form of agriculture which respect to the environment. In return for
the agri-environmental commitments for a minimum of five years, financial supported
was allocated annually by the States according to the loss of revenue incurred
or the resulting additional costs (Case C‑241/07 JK Otsa
Talu [2009]).
The Court held that as regards the
agri-environmental supported characterised by a multi‑annual
commitment, those conditions for the grant of supported were not required
simply for the year during which an on-the-spot check had been made, but
throughout the entire commitment period in respect of which the supported was
granted, which means that the on‑the-spot checks connected with that supported
related to all the commitments entered into. Accordingly, conduct on the part
of the farmer which made it impossible to carry out those checks prevented
verification that those conditions had been complied with throughout the
commitment period.
The Court thus held that as regards
agri-environmental measures relating to a number of years, where the
beneficiary of the agri-environmental supported had prevented an on-the-spot
check from being carried out, making it impossible to ascertain whether the
conditions for eligibility of the aid had been complied with throughout the
commitment period, the applications for agri-environmental aid concerned must
be rejected in accordance with Arts 17(3) of Regulation 2419/2001 and 23(2) of Regulation
796/2004. For the purposes of those provisions, the applications concerned
accordingly cover all the applications with respect to the conditions of
eligibility, which must be complied with throughout the duration of the
agri-environmental project in respect of which the beneficiary had pledged an
undertaking and to which the on-the-spot checks related.
In consequence, as was clear from Art. 71(2) of
Regulation 817/2004, the beneficiary was under an obligation to repay all the
agri-environmental aid already paid in respect of the applications which had been
rejected.
The Court held that that, where the European
Union legislature laid down the conditions governing eligibility for the grant
of aid, exclusion as a result of failure to comply with those conditions was not
a penalty, but merely the consequence of failure to fulfil the conditions laid
down by law (see, to that effect, Case C‑171/03 Toeters
and Verberk [2004]; and Case C‑45/05 Maatschap Schonewoulde-Prins
[2007]). By the same token, the rejection of an aid application on the grounds
that it was impossible to verify the eligibility conditions because dof the
conduct of the farmer, who had prevented an on-the-spot check from being
carried out, could not be regarded as a penalty and, accordingly, could not be
subject to the application of Art. 73 of Regulation 817/2004.
The Court thus concluded that Regulation
1257/1999, read in conjunction with Regulation 817/2004, did not preclude
national rules which provided that, where a farmer who was the beneficiary of
financial supported prevented an on-the-spot check of the land concerned, all
the supported already granted during the commitment period to that farmer in
relation to an agri-environmental measure must be repaid, even where it had
already been paid in respect of a number of years.
