Poland v Commission (Judgment) [2015] EUECJ T-290/12 (22 April 2015)

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(Agriculture — Common organisation of markets — Processed fruit and vegetables sectors — Aid to producer groups — Limitation on the Union’s financial participation — Legal certainty — Legitimate expectations — Obligation to state reasons — Sincere cooperation)

Republic of Poland, represented initially by B. Majczyna and M. Szpunar, and subsequently by Majczyna and K. Strás, acting as Agents,

European Commission, represented initially by N. Donnelly, B. Schima and D. Milanowska, and subsequently by D. Milanowska and B. Schima, acting as Agents,

ACTION for annulment of Article 1(2) to (4), (6), (12) and (13), Article 2(1) to (3), read in conjunction with Article 3 of, and Annexes I and II to Commission Implementing Regulation (EU) No 302/2012 of 4 April 2012 amending Implementing Regulation (EU) No 543/2011 laying down detailed rules for the application of Council Regulation (EC) No 1234/2007 in respect of the fruit and vegetables and processed fruit and vegetables sectors (OJ L 99, p. 21),

composed of D. Gratsias, President, M. Kancheva and C. Wetter (Rapporteur), Judges,

having regard to the written procedure and further to the hearing on 17 September 2014,

1 On 5 April 2012, Commission Implementing Regulation (EU) No 302/2012 of 4 April 2012 amending Implementing Regulation (EU) No 543/2011 laying down detailed rules for the application of Council Regulation (EC) No 1234/2007 in respect of the fruit and vegetables and processed fruit and vegetables sectors (OJ 2012 L 99, p. 21) entered into force. Implementing Regulation No 302/2012 amends Commission Implementing Regulation (EU) No 543/2011 of 7 June 2011 laying down detailed rules for the application of Council Regulation (EC) No 1234/2007 in respect of the fruit and vegetables and processed fruit and vegetables sectors (OJ 2011 L 157, p. 1) with a view to limiting the Union’s financial aid to fruit and vegetable producer groups (‘PGs’).

2 Implementing Regulation No 302/2012 provides for the addition of Annexes Va and Vb to Implementing Regulation No 543/2011 and for the introduction of amendments to Articles 36 to 39, 44, 47, 92, 95, 97, 98 and 112 of that regulation.

3 PGs are entities formed at the initiative of fruit and vegetable producers situated in Member States which acceded to the European Union on 1 May 2004 or thereafter, in the outermost regions of the Union or in the smaller Aegean Islands. They are transitory in nature and were created with a view to fulfilling the criteria enabling them to be recognised as producer organisations (‘POs’) within a maximum of five years.

4 The possibility of establishing PGs is provided for by Article 125e of Council Regulation (EC) No 1234/2007 of 22 October 2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (‘the Single CMO Regulation’) (OJ 2007 L 299, p. 1), as amended.

5 POs are the principal players in the fruit and vegetable sector. In order to acquire the status of PO, a given entity must fulfil the criteria laid down in Article 122, Article 125a and Article 125b of the Single CMO Regulation, including in particular the obligation to have a minimum number of members and to market a minimum volume of production. Recognised POs are eligible to receive financial aid under the operational programmes.

6 Article 103a(1) of the Single CMO Regulation provides that during a transitional period Member States may grant to PGs two types of financial aid: aid to encourage their formation and facilitate their administrative operation and aid to cover part of the investments required to attain recognition and set out accordingly in the recognition plan.

7 First, the Member State pays aid to the PG. Then, part of the funds paid out is reimbursed by the Union.

8 The amendments introduced by Implementing Regulation No 302/2012 concern reimbursement by the Union. Article 103a(2) of the Single CMO Regulation provides that aid paid out pursuant to Article 103a(1) is to be reimbursed by the Union in accordance with rules to be adopted by the European Commission on the financing of such measures, including the applicable thresholds and ceilings and the degree of Union financing. The grant of aid to PGs depends largely on the Member States. Article 103a(1) of the Single CMO Regulation provides that ‘Member States may grant [aid] to [PGs]’. Article 36 of Implementing Regulation No 543/2011, as amended, allows the Member States discretion to set the minimum criteria which the legal entity must meet to be able to submit a recognition plan, the rules for the content and implementation of recognition plans, the administrative procedures for the approval, monitoring and fulfilling of recognition plans and the amendments which may be made to plans without authorisation being required from the competent authority. The Member States also decide on the how much financing is to be granted to PGs under the agricultural policy. The application of more favourable financing rules to PGs than those for POs is aimed at enabling producers in the fruit and vegetable sector who are not yet able to fulfil the criteria laid down for POs to organise themselves formally on the market. According to recital 29 in the preamble to Implementing Regulation No 543/2011, as amended, to promote the formation of stable POs capable of making a lasting contribution to the attainment of the objectives of the fruit and vegetables sector, preliminary recognition should be granted only to PGs which can demonstrate their ability to meet all the requirements for recognition within a specified time limit.

9 Having found that the amounts initially earmarked had been exceeded and, during inspection visits in the Member States, that there were certain irregularities in the application of Union provisions concerning financing for PGs, the Commission adopted Implementing Regulation No 302/2012.

10 Prior to 5 April 2012, the date of entry into force of Implementing Regulation No 302/2012, there was no annual ceiling amount for the Union’s financial participation in the aid granted to PGs or any limit on the Union’s participation in the investment aid referred to in Article 103a(1)(b) of the Single CMO Regulation.

11 As regards the POs, by contrast, the Union’s participation in investment aid was limited to 4.1% of the marketed production value. PGs could also finance investments which were ineligible for PO financing.

12 The entry into force of Implementing Regulation No 302/2012 was preceded by work within the Management Committee for the Common Organisation of Agricultural Markets (‘the Management Committee’). An initial draft amendment of the rules concerning the Union’s financial participation contained in Implementing Regulation No 543/2011 was presented to the Management Committee in September 2011. That draft, from the Commission, proposed inter alia a limit on the investment aid provided for by Article 103a(1)(b) of the Single CMO Regulation, a list of aid-ineligible investments and a ceiling on the possibility of amending recognition plans in the course of implementation to 25% of the amount initially approved. That first draft was examined during meetings of the Management Committee of 20 September and 4 and 19 October 2011. During the meeting of the Management Committee of 19 October 2011, the draft amendment was put to a vote. As the Management Committee did not deliver an opinion at that meeting, the Commission decided to suspend its adoption.

13 The Commission then presented a second draft amendment to Implementing Regulation No 543/2011, which was examined at the meetings of the Management Committee of 27 and 29 March and 3 April 2012, the date on which the vote on the draft took place. In that draft, the Commission had, in essence, envisaged amending the limits on investment aid provided by Article 103a(1)(b) of the Single CMO Regulation, to maintain the list of aid-ineligible investments and to reduce the ceiling of possible amendments in the course of implementation of the recognition plan to 5% of the amount initially approved. It also provided for the introduction of a limit on the Union’s financial participation in aid referred to in Article 103a of the Single CMO Regulation to EUR 10 million per calendar year. Once again, the Management Committee did not deliver an opinion on that draft.

15 By application lodged at the Court Registry on 29 June 2012, the Republic of Poland brought the present action.

16 The statement in defence was lodged at the Court Registry on 14 September 2012.

19 Following the departure of the Judge-Rapporteur initially designated, the present case was assigned to a new Judge-Rapporteur.

20 Following a partial change in the composition of the Chambers of the General Court, the Judge-Rapporteur was assigned to the Eighth Chamber and the present case was therefore reallocated to that chamber.

21 On hearing the report of the Judge-Rapporteur, the General Court decided to open the oral procedure and, by way of measures of organisation of procedure pursuant to Article 64 of its Rules of Procedure, put questions in writing to the parties. The parties responded within the time allowed.

22 At the hearing on 17 September 2014, the parties presented oral argument and answered the questions put to them by the Court.

– annul Article 1(2) to (4), (6), (12) and (13), Article 2(1) to (3), read in conjunction with Article 3 of, and Annexes I and II to Implementing Implementing Regulation No 302/2012 (‘the contested provisions’);

25 The Republic of Poland puts forward four pleas in law in support of its action: (i) infringement of the principles of legal certainty and of the protection of legitimate expectations; (ii) infringement of the principle of proportionality; (iii) infringement of Article 296 TFEU due to a lack of sufficient reasons given for the contested provisions; and (iv) infringement of the principles of sincere cooperation and of solidarity.

26 It is appropriate to examine the third plea, alleging infringement of the obligation to state reasons, before turning to the other pleas.

Third plea: infringement of Article 296 TFEU due to a lack of sufficient reasons given for the contested provisions

27 The Republic of Poland submits that the Commission failed to provide a sufficient statement of reasons for limiting the Union’s financial participation in favour of PGs and therefore failed in its obligation to state reasons provided for in Article 296 TFEU.

28 The Republic of Poland takes the view that the Commission was bound to provide reasons for the contested provisions, since they have had a very negative impact on fruit and vegetable producers and introduced unusual, unprecedented changes which were put in place rapidly.

29 The Republic of Poland adds that, in the light of the prevailing case-law, the Commission had to state the facts justifying the introduction of limits on the Union’s financial participation in favour of PGs and the objectives pursued by the introduction of such limits.

30 The Republic of Poland observes that the Commission did not state unequivocally the objectives pursued by the introduction of the limits in question.

31 The Commission challenges the arguments put forward by the Republic of Poland.

32 According to settled case-law, the statement of reasons required by Article 296 TFEU must be appropriate to the act at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in question in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the competent Union Court to exercise its power of review (see judgment of 24 November 2005 in Italy v Commission, C‑138/03, C‑324/03 and C‑431/03, ECR, EU:C:2005:714, paragraph 54 and the case-law cited).

33 That requirement must be appraised by reference to the circumstances of each case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 296 TFEU must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (see judgment in Italy v Commission, paragraph 32 above, EU:C:2005:714, paragraph 55 and the case-law cited). This is a fortiori the case where the Member States have been closely associated with the process of drafting the contested measure and are thus aware of the reasons underlying that measure (see judgments of 22 November 2001 in Netherlands v Council, C‑301/97, ECR, EU:C:2001:621, paragraph 188, and of 26 June 2012 in Poland v Commission, C‑335/09 P, ECR, EU:C:2012:385, paragraph 153 and the case-law cited).

34 In the case of a regulation, the statement of reasons may be limited to indicating the general situation which led to its adoption, on the one hand, and the general objectives which it is intended to achieve, on the other (see judgments of 3 July 1985 in Abrias and Others v Commission, 3/83, ECR, EU:C:1985:283, paragraph 30, and of 10 March 2005 in Spain v Council, C‑342/03, ECR, EU:C:2005:151, paragraph 55).

35 Moreover, if a measure of general application clearly discloses the essential objective pursued by the institution, it would be excessive to require a specific statement of reasons for the various technical choices made (see judgment of 7 September 2006 in Spain v Council, C‑310/04, ECR, EU:C:2006:521, paragraph 59 and the case-law cited).

36 In the present case, the reasons for the introduction of the amendments to the Union’s financial participation in favour of PGs are set out in recitals 5 and 6 in the preamble to Implementing Regulation No 302/2012. There it is stated that ceiling amounts were introduced for ‘reasons of budgetary discipline’ and ‘in order to optimise the allocation of financial resources in a sustainable and effective way’.

37 It is also clear from recital 2 in the preamble to Implementing Regulation No 302/2012 that the amendments to the financing system were introduced in order to prevent situations which would be contrary to the objectives of the Single CMO Regulation, including ones where the entities in question would artificially create conditions enabling Union aid to be obtained because the producers would go from one PG to another in order to claim the benefit of aid for longer than five years and receive that aid, even when they fulfilled the criteria for being recognised as a PO.

38 Recital 17 in the preamble to Implementing Regulation No 302/2012 refers to legitimate expectations of producers and provides inter alia that the amendments are not to apply to recognition plans which were accepted before the date of entry into force of that regulation where the entities had already committed themselves financially or entered into legally binding arrangements with third parties to carry out investments.

39 As regards the entry into force of Implementing Regulation No 302/2012, it is apparent from recital 19 in the preamble thereto that it entered into force the day of its publication in order ‘to control Union expenditure’.

40 Moreover, the context in which the contested provisions were adopted made it possible for the Republic of Poland to know the reasons which led to its adoption. The Republic of Poland took part in the meetings of the Management Committee at which the draft amendments were discussed. Similarly, it acknowledged at the hearing that the representatives of fruit and vegetable producers had been kept informed of significant amendments in the offing.

41 Thus, in the light of the case-law referred to in paragraphs 32 to 35 above, the reasons given for the contested provisions were sufficient, since they enable the Republic of Poland and economic operators to know the reasons for the measure taken and the General Court to exercise its power of review.

42 Consequently, the third plea, alleging infringement of Article 296 TFEU due to a lack of sufficient reasons given for the contested provisions, must be dismissed as unfounded.

The first plea: infringement of the principles of legal certainty and the protection of legitimate expectations

43 The Republic of Poland submits that the contested provisions were introduced in such a way as to make it impossible for fruit and vegetable producers to foresee the amendments in question and to adapt their activity to the change. It takes the view that, even if changes to their financial situation were possible, those producers could nevertheless expect those amendments to be introduced at a pace in and such a manner as to allow for adaptation within a reasonable time.

44 The Republic of Poland submits that fruit and vegetable producers must make organisational and financial efforts, even before a recognition plan is presented. It states that, in return, a financial commitment had to be made by the public authorities at Union and Member State level to subsidise the producers’ activities. The purpose of that mechanism was to structure better the market for fruit and vegetables.

45 The fruit and vegetable producers were thus entitled to expect that the financing rules for PGs would not be modified ‘in the course of play’ and that the decision that had led them to deploy efforts to create a PG would not be withdrawn just before acceptance of the recognition plan or thereafter.

46 The transitional provisions of Implementing Regulation No 302/2012 are, in the Republic of Poland’s submission, too ‘narrow’ because they apply only to recognition plans accepted before the entry into force of that regulation, as provided for by Article 2(1) thereof. This also holds true for the transitional rules providing that the ceiling on the Union’s financial participation is not applicable to recognition plans accepted before the entry into force of Implementing Regulation No 302/2012 and for which the PG concerned is already financially committed or has concluded legally binding agreements with third parties for the relevant investments.

47 The Republic of Poland adds that, for PGs whose recognition plan has been accepted and who committed themselves legally or financially before the entry into force of Implementing Regulation No 302/2012, the elimination of the possibility of increasing the amount of expenses being incurred under the recognition plan is an infringement of the principle of legal certainty.

48 Lastly, the Republic of Poland submits that the Commission ought to have provided for a longer period between the adoption of the contested provisions and their entry into force, in order to allow PGs to adapt to the amendments made to Implementing Regulation No 543/2011.

49 The Commission challenges the arguments put forward by the Republic of Poland.

50 The principle of legal certainty requires that rules of law be clear, precise and predictable as regards their effects, in particular where they may have unfavourable consequences for individuals and undertakings (see, to that effect, judgments of 7 June 2005 in VEMW and Others, C‑17/03, ECR, EU:C:2005:362, paragraph 80, and of 16 February 2012 in Costa and Cifone, C‑72/10 and C‑77/10, ECR, EU:C:2012:80, paragraph 74 and the case-law cited).

51 In the present case, the Commission did not infringe the principle of legal certainty. The provisions of Implementing Regulation No 302/2012 set out the rights and obligations of the legal entities concerned in a clear and precise manner so as to enable them to know unambiguously their rights and obligations upon the entry into force of that regulation. The rights and obligations of PGs are set out in Article 1(3)(c) of Implementing Regulation No 302/2012 (relating to Article 38(5) of Implementing Regulation No 543/2011, as amended), which provides explicitly that, once the allocation coefficients have been set, the competent authority of the Member State is to provide the PGs concerned with an opportunity to amend or withdraw their recognition plan. Similarly, Article 1(4) of Implementing Regulation No 302/2012 (relating to the third subparagraph of Article 39(2) of Implementing Regulation No 543/2011, as amended) provides that PGs may be authorised by the competent authority of the Member State to increase the total amount of expenditure laid down in a recognition plan by a maximum of 5% of the amount initially approved, or to decrease it by a maximum percentage.

52 The same is true of the transitional provisions in Article 2(1) to (3) of Implementing Regulation No 302/2012, which govern the rights of PGs in the application of the new rules on the amounts of aid. Those transitional provisions also satisfy the foreseeability requirement because they enable the fruit and vegetable producers concerned to know the financing rules which will be applicable to them in future according to what stage the investments provided for in their recognition plans have reached.

53 Therefore, the arguments alleging infringement of the principle of legal certainty must be dismissed.

54 As regards the principle of the protection of legitimate expectations at present, it is settled case-law that the right to rely on that principle extends to any individual who is in a situation in which it is apparent that the Union administration led him to entertain legitimate expectations (see judgment of 11 March 1987 in Van den Bergh en Jurgens and Van Dijk Food Products v Commission, 265/85, ECR, EU:C:1987:121, paragraph 44). Moreover, a person may not plead infringement of the principle unless he has been given precise assurances by the administration (see judgments of 24 November 2005 in Germany v Commission, C‑506/03, EU:C:2005:715, and of 18 January 2000 in MehibasDordtselaan v Commission, T‑290/97, ECR, EU:T:2000:8, paragraph 59).

55 It is clear from the Court’s settled case-law that where a prudent and circumspect economic operator could have foreseen that the adoption of a measure is likely to affect his interests, he cannot plead that principle if the measure is adopted (see, to that effect, inter alia, judgments of 15 July 2004 in Di Lenardo and Dilexport, C‑37/02 and C‑38/02, ECR, EU:C:2004:443, paragraph 70; of 7 September 2006 in Spain v Council, EU:C:2006:521, paragraph 35 above, paragraph 81; and of 10 September 2009 in Plantanol, C‑201/08, ECR, EU:C:2009:539, paragraph 53 and the case-law cited).

56 Furthermore, economic operators are not justified in having a legitimate expectation that an existing situation which is capable of being altered by the Union institutions in the exercise of their discretionary power will be maintained, particularly in an area such as that of the common organisation of the markets, the objective of which involves constant adjustment to reflect changes in economic circumstances (see judgments of 15 February 1996 in Duff and Others, C‑63/93, ECR, EU:C:1996:51, paragraph 20; of 15 April 1997 in Irish Farmers Association and Others, C‑22/94, ECR, EU:C:1997:187, paragraph 25; and Poland v Commission, paragraph 33 above, EU:C:2012:385, paragraph 180 and the case-law cited).

57 The same applies to an acceding Member State (see judgment in Poland v Commission, paragraph 33 above, EU:C:2012:385, paragraph 181).

58 In the present case, the Republic of Poland has not demonstrated or argued that the Commission gave it precise assurances. The argument that precise assurances were given to economic operators which led them to entertain legitimate expectations should be construed with the following in mind.

59 Regarding legal entities whose recognition plans had not been accepted before the entry into force of the contested provisions, it should be noted that the competence conferred on the Commission by the combined provisions of Article 103a(2) and letter (a) of the first subparagraph of Article 103h of the Single CMO Regulation gives it the power to set rules allowing for the adoption of thresholds and ceilings in respect of applicable aid and the extent of Union financing. Given the Commission’s discretion and the fact that the legal entities in question operate in the field of the common organisation of the markets, they could not entertain a legitimate expectation that the provisions antedating the entry into force of the contested provisions would endure in perpetuity.

60 There is, moreover, nothing in the case file to indicate that precise assurances were given by Union institutions to the legal entities in question. Article 38 of Implementing Regulation No 543/2011 did not guarantee that recognition plans would be accepted once they were lodged, even less that lodging the plan would bind the Union financially. In fact, Article 38(3) provided that, following the conformity checks referred to in Article 111 of that regulation, Member States accept the recognition plan, request changes to the plan or reject it.

61 The organisational and financial efforts deployed by the legal entities in question, even before the presentation of a recognition plan, did not, therefore, come about as the result of any precise assurance from which they could entertain any expectation, but solely from the hope that their recognition plans would be accepted once lodged. They deployed those efforts in full knowledge of the risk that the recognition plan might not be accepted or that amendments might be required by the Polish authorities.

62 It is, moreover, apparent from a letter dated 14 March 2012 addressed to the Commission by the Polish ministry of agriculture and rural development, as confirmed by the Republic of Poland at the hearing, that the fruit and vegetable producers were aware of the draft amendment to Implementing Regulation No 543/2011 in the autumn of 2011 and that, upon being informed of the proposed amendments to Implementing Regulation No 543/2011, they endeavoured to have their recognition plans accepted in the last two months of 2011.

63 Accordingly, the legal entities in question knew or ought have known that, at the latest by the autumn of 2011, there were plans to amend the financing rules under Implementing Regulation No 543/2011. Nevertheless, they continued to submit recognition plans for acceptance, in the hope that they would be accepted before the amendment to the rules in force.

64 This finding is not called into question, as asserted by the Republic of Poland, by the fact that the fruit and vegetable producers had not had access to the Commission’s draft legal measures presented at the Management Committee meetings. Those measures were confidential in nature in accordance with Article 13(3) of that committee’s rules of procedure.

65 In order to rule out the existence of a legitimate expectation, suffice it to observe that where a prudent and circumspect economic operator could have foreseen that the adoption of a measure is likely to affect his interests, he cannot plead that principle if the measure is adopted. In the present case, it was therefore not necessary for the fruit and vegetable producers to have knowledge of the precise content of the contested provisions in order to judge whether they had sufficient knowledge of the proposed amendments to Implementing Regulation No 543/2011 so as to eliminate the possibility of any legitimate expectation on their part.

66 Nor could the fruit and vegetable producers expect a longer period to be provided for them between the adoption of the contested provisions and their entry into force. As observed in paragraphs 40 and 62 of this judgment, it must be remembered that the legal entities in question and the Republic of Poland knew or ought to have known, in the light of the circumstances of the present case, that an amendment to the financial system was imminent.

67 The principle of the protection of legitimate expectations was not, therefore, infringed in respect of the legal entities whose recognition plans had not been accepted before the entry into force of the contested provisions.

68 Next, as to the PGs whose recognition plans had been accepted before the entry into force of the contested provisions, the following remarks are apposite. First of all, as prudent and informed economic operators they could foresee that amendments were going to be made to Implementing Regulation No 543/2011. Secondly, the Commission had made sufficient provision for the protection of their legitimate expectations through transitional rules laid down in Article 2 of Implementing Regulation No 302/2012, without its being necessary to provide for a longer period of time between the adoption of the contested provisions and their entry into force. This allowed, moreover, for both the PGs’ interests and the Union’s financial interests to be safeguarded.

69 The protection of any legitimate expectations on the part of PGs whose recognition plans had been accepted but who had not committed themselves legally or financially before the entry into force of the contested provisions was taken into consideration by the Commission, which laid down provisions in that regard in Article 1(3) of Implementing Regulation No 302/2012 (corresponding to Article 38(5) of Implementing Regulation No 543/2011, as amended). That article provides that once they have received information about the allocation coefficients for the Union’s participation, set in accordance with the second subparagraph of Article 47(4) of Implementing Regulation No 543/2011, as amended, the PGs may amend or withdraw their recognition plans. The situation of the PGs whose recognition plans had been accepted but who had not committed themselves legally or financially before 5 April 2012 is also taken into account by the transitional provisions of Implementing Regulation No 302/2012. The PGs in such a situation receive the full amount of aid for formation and to facilitate their administrative operation in accordance with Article 2(3)(c) of Implementing Regulation No 302/2012. Furthermore, Article 2(3)(d) of Implementing Regulation No 302/2012 provides that, in the case of withdrawal, expenditure incurred by the PG after the initial acceptance of the plan in respect of its formation and administration are to be reimbursed by the Union up to an amount not exceeding 3% of the aid to which the PG would have been entitled to under Article 103a(1)(a) of the Single CMO Regulation if their recognition plan had been implemented.

70 Lastly, as regards those PGs whose recognition plans had been accepted and who had committed themselves financially or legally on the basis of those plans before the entry into force of the contested provisions, the conclusion must be that, in adopting Regulation No 302/2012, the Commission did not undermine their legitimate expectation, given that they can proceed with the investments outlined in their recognition plans on the basis of the earlier financing rules, as provided for by Article 2(1) and (2)(a) of Implementing Regulation No 302/2012. Moreover, the 5% ceiling on increases in the amount of ongoing expenditure under the recognition plan is not an infringement of the principle of the protection of legitimate expectations in respect of those PGs, since the increase in the amount of ongoing expenditure under the recognition plan cannot be deemed to be a precise assurance given to them by the Commission. It is clear from the wording of Article 39(2) of Implementing Regulation No 543/2011 that an amendment of this nature could be requested on the terms determined by the Member States. It was accordingly a mere possibility of amending the recognition plans in the course of their implementation, not a precise assurance given to them by the Commission.

71 In the light of the foregoing, the first plea should be rejected as unfounded.

72 The Republic of Poland submits that the Commission made no checks to ascertain whether, in adopting the contested provisions, it was infringing the principle of proportionality. That failure to make any checks is in itself an infringement of the principle of proportionality.

73 The Republic of Poland does not dispute that judicial review of acts adopted by the Union institutions is limited in the field of the common agricultural policy, especially legislative acts involving difficult political choices in which the Commission must strike a balance between the various objectives of the common agricultural policy, which often conflict with each other. That limitation on judicial review does not, however, concern acts of the Commission which do not entail such political choices and in which it merely sets out the practical implementation and management of a plan or policy. Consequently, acts which seriously undermine the fundamental principles of EU law, including the principle of proportionality, do not fall outside the scope of judicial review.

74 The Republic of Poland observes that one of the major limitations is the introduction of the EUR 10 million ceiling per year for PGs for the whole of the Union, provided for by Article 1(6) of Implementing Regulation No 302/2012 (corresponding to Article 47(4) of Implementing Regulation No 543/2011, as amended). It submits that such limited investment aid has merely symbolic value as compared to actual needs and the commitment of producers in the organisation of the fruit and vegetable sector.

75 That limitation on the Union’s financial participation leads to the elimination of an incentive for producers to cooperate in forming PGs for fruits and vegetables, given the situation of the fruit and vegetable market in Poland and in other new Member States.

76 Similarly, the Republic of Poland submits that the introduction, in Article 1(6) of Implementing Regulation No 302/2012, of ceilings on investment aid of 70%, 50% and 20% respectively of the value of the production marketed by the PGs in the third, fourth and fifth year of implementation of their recognition plan will be a disincentive for fruit and vegetable producers.

77 As regards the provisions excluding certain types of investment aid (Article 1(2) and (12) of and Annex I to Implementing Regulation No 302/2012), the Republic of Poland takes the view that those provisions as well undermine the principle of proportionality because they do not contribute towards the attainment of financial security and legal certainty objectives. It does not dispute that the Commission is competent to draw up the list of ineligible investments, but states that the Commission must first check whether they observe the principle of proportionality, especially since the question of financial participation in investments was a matter for each of the Member States. The lists of ineligible investments laid down in Annex I do not allow account to be taken of the particularities of individual cases of PGs who were planning such investments in their recognition plans.

78 The Republic of Poland concludes that the harm to PGs caused by the entry into force of the contested provisions will be ‘much greater than the likely benefits in the form of inter alia budget savings’.

79 The Commission challenges the arguments put forward by the Republic of Poland.

80 It is settled case-law that the principle of proportionality, which is one of the general principles of EU law, requires that measures implemented by acts of the European Union are appropriate for attaining the objective pursued and do not go beyond what is necessary to achieve it (see judgments of 6 December 2005 in ABNA and Others, C‑453/03, C‑11/04, C‑12/04 and C‑194/04, ECR, EU:C:2005:741, paragraph 68; of 7 July 2009 in S.P.C.M. and Others, C‑558/07, ECR, EU:C:2009:430, paragraph 41; and of 8 June 2010 in Vodafone and Others, C‑58/08, ECR, EU:C:2010:321, paragraph 51).

81 In the sphere of the common agricultural policy, the Council may find it necessary to confer on the Commission wide implementing powers, the Commission alone being able to monitor continually and closely trends on the agricultural markets and to act with urgency if the situation requires. The limits of those powers must be determined by reference amongst other things to the essential general aims of the market organisation (see judgment of 27 November 1997 in Somalfruit and Camar, C‑369/95, ECR, EU:C:1997:562, paragraph 62 and the case-law cited).

82 It is also settled case-law that in matters concerning the common agricultural policy the Union legislature has a broad discretion which corresponds to the political responsibilities given to it by Articles 40 TFEU and 43 TFEU and that the lawfulness of a measure adopted in that sphere can be affected only if the measure is manifestly inappropriate, having regard to the objective which the competent institution is seeking to pursue (see judgment of 12 July 2012 in Association Kokopelli, C‑59/11, ECR, EU:C:2012:447, paragraph 39 and the case-law cited).

83 In the light of that case-law, the Republic of Poland’s argument that the General Court should not limit the scope of its review of the proportionality of the contested provisions must be rejected. In adopting the contested provisions, the Commission had to strike a balance between the objectives of the Single CMO Regulation, that is, the process of organising fruit and vegetable producers, on the one hand, and Union budgetary discipline, on the other. Those measures are not merely measures for implementing a plan or policy, as alleged by the Republic of Poland.

84 It is therefore appropriate to examine whether the contested provisions are manifestly inappropriate in relation to the objectives pursued.

85 The objectives of the contested provisions include, in the Commission’s submission, budgetary discipline, that is to say, the need to review Union expenditure immediately and optimise it in order to attain the objectives pursued.

86 As stated by the Commission, and not disputed by the Republic of Poland, the expenditure initially budgeted by the Commission was, in reality, largely exceeded. In 2007, the Commission had planned that Union expenditure intended for Union PGs for 2008 to 2013 would total EUR 30 million for 2008, EUR 40 million for 2009, EUR 40 million for 2010, EUR 40 million for 2011, EUR 40 million for 2012 and EUR 30 million for 2013. Yet it is apparent from the case file that, between 2009 and 2011, total Union expenditure for that purpose went from around EUR 82 million for 2009 (of which about EUR 40.9 million went to PGs in Poland) to roughly EUR 195 million for 2011 (of which close to EUR 174 million went to PGs in Poland).

87 It is, moreover, not disputed that the favourable financing terms for PGs meant that they were less inclined to seek recognition as POs.

88 To remedy that situation, the Commission, through the contested provisions, placed a ceiling on the Union’s participation in the financing of PGs and excluded contributions to certain investments listed in Annex I to Implementing Regulation No 302/2012 (new Annex V(a) to Implementing Regulation No 543/2011, as amended) corresponding to the exclusions already applicable to POs, which are included in the list of ineligible actions and expenditure under the operational programmes referred to in Article 60(1) of Implementing Regulation No 543/2011.

89 Moreover, through Article 1(3)(b) of Implementing Regulation No 302/2012, the Commission introduced rules allowing for more precise review of the duration of implementation of recognition plans and for rejection of plans presented by entities which already fulfilled the recognition criteria applicable to POs.

90 Of course, the possibility cannot be ruled out that the reduction in the Union’s financial participation may affect the incentive for PGs in the fruit and vegetables sector to organise themselves. Aid to PGs will continue to exist, however, although it will be governed by new rules. Aid to PGs always differs in relation to the financing of POs, who do not receive aid for formation. The acceptance of the recognition plan always allows PGs to receive financial aid from the Union, even if they do not fulfil the conditions required to obtain the status of PO. The process of organising PGs will, accordingly, not be brought to a halt, as claimed by the Republic of Poland.

91 As regards the speed at which the contested provisions entered into force, the Commission did not manifestly go beyond what was necessary in order to attain the objectives pursued. It sought to verify immediately the Union expenditure whilst taking into account the situations of those PGs whose recognition plans had been accepted. For those legal entities whose recognition plans had not been accepted before the entry into force of the contested provisions, it should be noted, as observed in paragraphs 59 to 66 above, that they had no grounds to entertain any legitimate expectation and that the Union institutions had offered no precise assurances to them. It was therefore not necessary to provide for a longer period between the adoption of the contested provisions and their entry into force or transitional provisions. Moreover, as observed above, the Commission was required to act quickly because the number of acceptances of recognition plans had increased dramatically in the last two months of 2011.

92 In the light of the foregoing, the contested provisions are not manifestly inappropriate in the light of the objectives pursued.

93 Accordingly, the second plea alleging an infringement of the principle of proportionality must be rejected as unfounded.

The fourth plea: infringement of the principle of solidarity and of the principle of sincere cooperation

94 In the Republic of Poland’s submission, the principle of sincere cooperation was infringed because of a failure to comply with the declaration made by the Commission in the document of 15 June 2007, entitled ‘Compromise of the Presidency, in agreement with the Commission’ (‘the 2007 Compromise’). By that declaration, the Commission clearly undertook to maintain the hitherto-prevailing level of financing. The contested provisions reduce the level of financing dramatically and infringe that compromise, which were concluded during the work on the abovementioned reform.

95 According to the Republic of Poland, the principle of sincere cooperation in relations between the Commission and the Member States was also infringed by the working methods used to draw up the contested provisions. Given the brief time period between the first tabling of the principal change, consisting in the introduction of a ceiling on Union financing fixed at EUR 10 million, and the adoption of Implementing Regulation No 302/2012, the Commission acted by surprise and placed the Member States before a fait accompli without consulting them.

96 The Republic of Poland further submits that the contested provisions undermine the principle of solidarity, as the Commission achieved budgetary savings affecting entities where the level of organisation in the fruit and vegetable sector is the weakest. Thus, fruit and vegetable producers who henceforth attempt to organise themselves will feel the effects of the amendments in question more strongly. The limitation on financing, by contrast, does not affect those who already act as part of a PO, that is to say, producers in regions where the level of organisation in the fruit and vegetable sector is high. Thus, the contested provisions accentuate the differences between the Member States in terms of development of the market for fruit and vegetables, instead of helping to minimise those differences.

97 The Commission challenges the arguments put forward by the Republic of Poland.

‘Pursuant to the principle of sincere cooperation, the Union and the Member States shall, in full mutual respect, assist each other in carrying out tasks which flow from the Treaties.’

99 It should be observed, as a preliminary point, that Articles 4, 103h and 127 of the Single CMO Regulation confer powers of implementation on the Commission, whilst Article 195(1) and (2) of that regulation provides that the Commission is to be assisted by the Management Committee. Article 13(1)(b) of Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers (OJ 2011 L 55, p. 13), provides that the examination procedure referred to in Article 5 of that regulation is to apply for the exercise of implementing powers by the Commission. The work of the Management Committee is governed by its rules of procedure.

100 The procedures laid down in Regulation No 182/2011 and the Management Committee’s rules of procedure make the adoption of implementing acts by the Commission subject to control by the Member States and allow them to express their views on the Commission’s legislative drafts. It should therefore be examined whether, at the time Implementing Regulation No 302/2012 was adopted, the Commission complied with the rules governing the procedure for adopting that regulation and whether, in the course of that procedure, it observed the principle of sincere cooperation.

101 It must be remembered that the Commission first of all presented a draft amendment to the rules governing the Union’s financial participation. Subsequently, on 19 October 2011, it put that draft amendment to Implementing Regulation No 543/2011 to a vote in the Management Committee. The Management Committee did not deliver an opinion on that occasion. The Commission then presented a new draft amendment to the Member States on 27 March 2012, which was put to a vote by the Management Committee on 3 April 2012. Again, the Management Committee did not deliver an opinion.

102 Given that the Management Committee did not deliver an opinion at the time of its vote on 3 April 2012, the Commission adopted Implementing Regulation No 302/2012 on 4 April 2012.

103 In the light of the foregoing, the conclusion is that the Commission adopted Implementing Regulation No 302/2012 in accordance with the prevailing procedural rules and there is nothing to indicate that it infringed the principle of sincere cooperation in the course of the procedure for adopting that regulation. Nor does the Republic of Poland dispute that Implementing Regulation No 302/2012 was adopted in accordance with the rules of procedure.

104 As regards the supposedly unexpected ceiling of EUR 10 million placed on the Union’s financial participation, it is true that the ceiling was presented on 27 March 2012, a few days before the Management Committee’s vote of 3 April 2012 on Implementing Regulation No 302/2012. However, the draft amendment to the rules on the Union’s financial participation had been the subject of consultations and discussions with the Polish authorities and the other Member States since September 2011 and the adoption of the draft amendment had been suspended after the Management Committee’s vote of 19 October 2011. It is therefore not surprising that the Commission decided to adopt the second draft amendment after the vote on that draft on 3 April 2012, when it had, moreover, emphasised the importance of adopting that draft expeditiously at the meeting of the Management Committee on 29 March 2012. Furthermore, Article 5(4) of Regulation No 182/2011 provides that the Commission may adopt the draft implementing act where the Management Committee does not deliver an opinion. The adoption is not subject to any waiting period whatsoever. It is also clear from the draft amendments that the Commission was planning for a prompt entry into force of the proposed amendments to Implementing Regulation No 543/2011 after their adoption. In the first draft amendment, the entry into force of those amendments was set at the seventh day following publication in the Official Journal of the European Union and, in the second draft amendment, the entry into force of those amendments was set at the day of publication in the Official Journal. The Republic of Poland, in full knowledge of those rules and having taken part in the work of the Management Committee, cannot validly claim that the Commission acted by surprise, presenting the Member States with a fait accompli without consulting them.

105 It follows that the Commission observed the principle of sincere cooperation in the adoption of Implementing Regulation No 302/2012.

106 Moreover, the declaration in paragraph 29 of the 2007 Compromise concerns observance of the co-financing rates fixed in Article 8 of Commission Regulation (EC) No 1943/2003 of 3 November 2003 laying down rules for the application of Council Regulation (EC) No 2200/96 as regards aid to producer groups granted preliminary recognition (OJ 2003 L 286, pp. 5 to 9). Implementing Regulation No 302/2012 does not modify those rates, which were maintained in Article 47 of Implementing Regulation No 543/2011, as amended.

107 As for the principle of solidarity, it is true that the contested provisions affect non-organised fruit and vegetable producers. However, that limitation on the Union’s financial participation does not prevent organisation in the markets for fruit and vegetables in accordance with the political orientation and objectives of the Single CMO Regulation. The contested provisions do not modify the financing rules of the POs and, as noted in paragraph 90 above, are aimed at stimulating the formation of PGs despite the limitation on support granted to them.

108 In the light of the foregoing, the fourth plea in law should be dismissed as unfounded, as should the action as a whole.

109 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Republic of Poland has been unsuccessful, it must be ordered to pay the costs, in accordance with form of order sought by the Commission.

2. Orders the Republic of Poland to bear its own costs and to pay those incurred by the European Commission.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Poland v Commission (Judgment) [2015] EUECJ T-290/12 (22 April 2015) URL: http://www.bailii.org/eu/cases/EUECJ/2015/T29012.html Cite as: EU:T:2015:221, ECLI:EU:T:2015:221, [2015] EUECJ T-290/12

Court of Justice of the European Communities (including Court of First Instance Decisions)