Greece v Commission (Agriculture and Fisheries - Judgment) [2019] EUECJ C-670/17P (27 February 2019)

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(Appeal — European Agricultural Guidance and Guarantee Fund (EAGGF) — Guidance Section — Reduction of financial assistance — Regulation (EC) No 1260/1999 — Operational programme — Financial corrections — Article 39 — Legal basis — Transitional provisions)

APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 28 November 2017,

Hellenic Republic, represented by G. Kanellopoulos, A. Vasilopoulou and I. Pachi, acting as Agents,

European Commission, represented by D. Triantafyllou and J. Aquilina, acting as Agents,

composed of J.-C. Bonichot, President of the Chamber, C. Toader, A. Rosas, L. Bay Larsen and M. Safjan (Rapporteur), Judges,

after hearing the Opinion of the Advocate General at the sitting on 8 November 2018,

1 By its appeal, the Hellenic Republic asks the Court to set aside the judgment of the General Court of the European Union of 19 September 2017, Greece v Commission (T‑327/15, not published, ‘the judgment under appeal’, EU:T:2017:631) in so far as by that judgment the General Court dismissed its action for the annulment of Commission Implementing Decision C(2015) 1936 final of 25 March 2015 on applying financial correction on the EAGGF Guidance Section of the operational programme CCI No 2000GR061PO021 (Greece — Objective 1 — Rural Reconstruction) (‘the decision at issue’).

2 Council Regulation (EC) No 1260/1999 of 21 June 1999 laying down general provisions on the Structural Funds (OJ 1999 L 161, p. 1) provides in Article 39, headed ‘Financial corrections’:

‘1. The Member States shall, in the first instance, bear the responsibility for investigating irregularities, acting upon evidence of any major change affecting the nature or conditions for the implementation or supervision of assistance and making the financial corrections required.

The Member State shall make the financial corrections required in connection with the individual or systemic irregularity. The corrections made by the Member State shall consist in cancelling all or part of the Community contribution. The Community funds released in this way may be reused by the Member State for the assistance concerned, in compliance with the arrangements to be defined pursuant to Article 53(2).

2. If, after completing the necessary verifications, the Commission concludes that:

(b) all or part of an operation justifies neither part nor the whole of the contribution from the Funds;

the Commission shall suspend the interim payments in question and, stating its reasons, request that the Member State submit its comments and, where appropriate, carry out any corrections, within a specified period of time.

If the Member State objects to the observations made by the Commission, the Member State shall be invited to a hearing by the Commission, in which both sides in cooperation based on the partnership make efforts to reach an agreement about the observations and the conclusions to be drawn from them.

3. At the end of the period set by the Commission, the Commission may, if no agreement has been reached and the Member State has not made the corrections and taking account of any comments made by the Member State, decide within three months to:

(b) make the financial corrections required by cancelling all or part of the contribution of the Funds to the assistance concerned.

The Commission shall when deciding the amount of a correction take account, in compliance with the principle of proportionality, of the type of irregularity or change and the extent and financial implications of the shortcomings found in the management or control systems of the Member States.

In the absence of a decision to do either (a) or (b) the interim payments shall immediately cease to be suspended.

4. Any sum received unduly and to be recovered shall be repaid to the Commission, together with interest on account of late payment.

3 Under the heading ‘Expenditure under the [European Agricultural Guidance and Guarantee Fund (EAGGF)] Guidance Section, Article 40 of Council Regulation (EC) No 1290/2005 of 21 June 2005 on the financing of the common agricultural policy (OJ 2005 L 209, p. 1) provides:

‘1. Amounts committed to finance rural development measures from the EAGGF Guidance Section under a Commission decision adopted between 1 January 2000 and 31 December 2006, in respect of which the documents required for closure of the assistance have not been sent to the Commission by the end of the time allowed for transmission of the final report, shall be automatically decommitted by the Commission no later than 31 December 2010 and shall result in the reimbursement by the Member States of amounts wrongly received. The documents required for closure of the assistance shall be the declaration of expenditure relating to payment of the balance, the final implementing report and the declaration provided for in Article 38(1)(f) of [Regulation No 1260/1999].

2. Amounts relating to operations or programmes which are the subject of legal proceedings or an administrative appeal which, under the legislation of the Member State, has a suspensory effect shall be excluded from the calculation of the amount to be automatically decommitted, as provided for in paragraph 1.’

4 Under the heading ‘Subject matter’, Article 1 of Council Regulation (EC) No 1083/2006 of 11 July 2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation No 1260/1999 (OJ 2006 L 210, p. 25) provides, in its first paragraph:

‘This Regulation lays down the general rules governing the European Regional Development Fund (ERDF), the European Social Fund (ESF) ([“the Structural Funds”]) and the Cohesion Fund, without prejudice of the specific provisions laid down in [Regulation (EC) No 1080/2006 of the European Parliament and of the Council of 5 July 2006 on the European Regional Development Fund and repealing Regulation (EC) No 1783/1999 (OJ 2006 L 210, p. 1), in Regulation (EC) No 1081/2006 of the European Parliament and of the Council of 5 July 2006 on the European Social Fund and repealing Regulation (EC) No 1784/1999 (OJ 2006 L 210, p. 12), and in Council Regulation (EC) No 1084/2006 of 11 July 2006 establishing a Cohesion Fund and repealing Regulation (EC) No 1164/94 (OJ 2006 L 210, p. 79)].’

5 Article 105 of Regulation No 1083/2006, entitled ‘Transitional provisions’, reads as follows:

‘1. This Regulation shall not affect the continuation or modification, including the total or partial cancellation, of assistance co-financed by the Structural Funds or of a project co-financed by the Cohesion Fund approved by the Commission on the basis of [Council Regulation (EEC) No 2052/88 of 24 June 1988 on the tasks of the Structural Funds and their effectiveness and on coordination of their activities between themselves and with the operations of the European Investment Bank and the other existing financial instruments (OJ 1988 L 185, p. 9), of Council Regulation (EEC) No 4253/88 of 19 December 1988, laying down provisions for implementing Regulation No 2052/88 as regards coordination of the activities of the different Structural Funds between themselves and with the operations of the European Investment Bank and the other existing financial instruments (OJ 1988 L 374, p. 1), of Council Regulation (EC) No 1164/94 of 16 May 1994 establishing a Cohesion Fund (OJ 1994 L 130, p. 1), and of Regulation No 1260/1999] or any other legislation which applies to that assistance on 31 December 2006, which shall consequently apply thereafter to that assistance or the projects concerned until their closure.

2. While taking decision on operational programmes, the Commission shall take account of any assistance co-financed by the Structural Funds or of any project co-financed by the Cohesion Fund approved by the Council or by the Commission before the entry into force of this Regulation and having financial repercussions during the period covered by those operational programmes.

3. By way of derogation from Articles 31(2), 32(4) and 37(1) of [Regulation No 1260/1999], partial sums committed for assistance co-financed by the ERDF or the ESF approved by the Commission between 1 January 2000 and 31 December 2006 for which the certified statement of expenditure actually paid, the final report on implementation and the statement referred to in Article 38(1)(f) of that Regulation have not been sent to the Commission within 15 months after the final date of eligibility of expenditure laid down in the decision granting a contribution from the Funds, shall be automatically decommitted by the Commission not later than 6 months after that deadline, giving rise to the repayment of amounts unduly paid.

Amounts relating to operations or programmes which have been suspended due to legal proceedings or administrative appeals having suspensory effect shall be disregarded in calculating the amount to be automatically decommitted.’

‘Without prejudice to the provisions laid down in Article 105(1) of this Regulation, [Regulation No 1260/1999] is hereby repealed as of 1 January 2007.

References to the repealed Regulation shall be construed as references to this Regulation.’

7 Under the heading ‘Transitional provisions’, Article 152 of Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Regulation No 1083/2006 (OJ 2013 L 347, p. 320) provides:

‘1. This Regulation shall not affect either the continuation or modification, including the total or partial cancellation of assistance approved by the Commission on the basis of [Regulation No 1083/2006] or any other legislation applying to that assistance on 31 December 2013. That Regulation or such other applicable legislation shall consequently continue to apply after 31 December 2013 to that assistance or the operations concerned until their closure. For the purposes of this paragraph assistance shall cover operational programmes and major projects.

2. Applications to receive assistance made or approved under [Regulation No 1083/2006] shall remain valid.

3. Where a Member State makes use of the option set out in Article 123(3), it may submit a request to the Commission for the managing authority to carry out the functions of the certifying authority by way of derogation from point (b) of Article 59(1) of [Regulation No 1083/2006] for the corresponding operational programmes implemented on the basis of [Regulation No 1083/2006]. The request shall be accompanied by an assessment made by the audit authority. Where the Commission is satisfied on the basis of information made available from the audit authority and from its own audits that the management and control systems of those operational programmes function effectively and that their functioning will not be prejudiced by the managing authority carrying out the functions of the certifying authority, it shall inform the Member State of its agreement within two months of the date of receipt of the request.’

8 The background to the dispute, as set out in paragraphs 1 to 15 of the judgment under appeal, may, for the purposes of the present proceedings, be summarised as follows.

9 By letter of 31 March 2011 and in accordance with Article 38(1)(f) of Regulation No 1260/1999, the Greek authorities filed at the Commission a closure declaration for operational programme CCI No 2000GR061PO021 (Greece — Objective 1 — Rural Reconstruction) (‘the operational programme at issue’) for the period from 2000 to 2006. That declaration, in order for the Hellenic Republic to benefit from EU funding, included, inter alia, the final implementation report referred to in Article 37 of that regulation on the operational programme at issue.

10 By letter of 2 August 2011, the Commission asked the Greek authorities to provide it with additional information concerning the declaration of closure of the operational programme at issue within 10 days and informed them that they could, following the assessment of the content of that declaration, initiate the procedure provided for in Article 39 of Regulation No 1260/1999. The Greek authorities provided the requested information by letter of 5 August 2011.

11 By letter of 24 May 2012, the Commission informed the Greek authorities that the final implementation report for the operational programme at issue had been accepted.

12 On 3 January 2013, the Commission asked the Greek authorities to indicate within two months whether they would accept application of a financial correction of a total amount of EUR 94 465 089.65, which corresponded to the difference between the amount of payments made under the EAGGF and the amount of the contribution payable under that fund for the operational programme at issue. The Commission added that, in the absence of agreement within that period, it would continue its review of the eligibility of expenditure incurred by the Greek authorities and could impose financial corrections the amount of which, calculated according to all data submitted by those authorities, could amount to EUR 211 582 686.65, excluding corrections already decided by the Greek authorities.

13 By letter of 5 March 2013, the Greek authorities informed the Commission that they did not agree with the amounts referred to in the previous paragraph on the ground that they had already adopted appropriate control and corrective measures, as a result of which any further financial correction would lead to a double correction. They also indicated that the total amount of financial corrections that they had applied to the entire operational programme at issue amounted to EUR 143 206 588.48, which corresponded to EU funding in the amount of EUR 108 308 798.38.

14 By letter of 8 March 2013, the Greek authorities reiterated that they had adopted appropriate corrective measures in all areas where irregularities had been identified.

15 On 17 July 2013, following the re-evaluation of the amount of the contribution due under the EAGGF for the operational programme at issue, the Commission asked the Greek authorities to indicate within two months whether they accepted the application of a financial correction of a total amount of EUR 30 472 624.09, which corresponded to the difference between the amount of payments made under the EAGGF and the amount of that contribution. The Commission also stated that, in the absence of agreement with the Greek authorities within that period, it would continue its review of the eligibility of expenditure incurred by those authorities and could apply financial corrections the amount of which, calculated according to all data submitted by those authorities, could amount to EUR 116 487 848.75, excluding corrections already decided by the Greek authorities.

16 By letter of 19 September 2013, the Greek authorities disputed those amounts again. On 13 and 14 January 2014, they also provided the Commission with the additional information that it had requested from them on 13 September 2013.

17 A hearing was held at the Commission on 27 May 2014 and the Greek authorities provided additional information on 20 June 2014.

18 By letter of 11 July 2014, the Commission sent the Greek authorities the minutes of the hearing of 27 May 2014 and requested further additional information from them within two months. The Commission prolonged that deadline on 5 September 2014. The Greek authorities provided the requested information on 26 September 2014.

19 By letter of 13 February 2015, the Commission notified the Greek authorities of its final position regarding the financial consequences resulting from its analysis of the documents produced by those authorities, namely the exclusion of EU funding under the EAGGF in the amount of EUR 72 105 592.41.

20 By the decision at issue, the Commission excluded certain expenditure from EU financing which had been incurred by the Hellenic Republic under the EAGGF Guidance Section for the period from 2000 to 2006 in the amount of EUR 72 105 592.41.

21 By application lodged at the Court Registry on 2 June 2015, the Hellenic Republic brought an action for annulment of the decision at issue, in support of which it put forward four pleas in law. The first plea alleged lack of legal basis for the decision at issue, the second, that the Commission had no power ratione temporis to adopt the decision and had breached essential procedural requirements, the right to be heard and the rights of the defence, the third, that it had breached the principles of legal certainty and of the protection of legitimate expectations and the fourth, that it had breached the principle ne bis in idem and the principle of proportionality.

22 By the judgment under appeal, the General Court dismissed those pleas and therefore dismissed the action brought by the Hellenic Republic in its entirety.

23 As regards, specifically, the first limb of the first plea, alleging a lack of legal basis for the decision at issue on the ground that Article 39 of Regulation No 1260/1999 had been repealed before the adoption of that decision, the General Court stated, inter alia, in paragraphs 23 to 34 of the judgment under appeal, as follows:

‘23 From 1 January 2007, Regulation No 1083/2006, in accordance with Article 107(1) thereof, repealed Regulation No 1260/1999. According to Article 1(1) of Regulation No 1083/2006, that regulation applies to the [ERDF], [ESF] and Cohesion Funds. However, as is apparent from recital 6 of that regulation, the instruments providing aid for rural development, namely the [European Agricultural Fund for Rural Development (EAFRD)], which replaced the EAGGF Guidance Section, and for the fisheries sector, namely the European Fisheries Fund (EFF), should be integrated into the instruments under the common agricultural policy and the common fisheries policy and coordinated with those under the cohesion policy. In that regard, Regulation No 1290/2005 established, as is clear from recital 1 and Article 1 thereof, two European agricultural funds, the European Agricultural Guarantee Fund (EAGF), which funds market measures and other measures, and the EAFRD, which is intended to finance rural development programmes.

24 However, Article 105(1) of Regulation No 1083/2006, headed “Transitional provisions”, provides that “this Regulation shall not affect the continuation or modification, including the total or partial cancellation, of assistance co-financed by the Structural Funds or of a project co-financed by the Cohesion Fund approved by the Commission on the basis of [Regulation No 1260/1999] or any other legislation which applies to that assistance on 31 December 2006, which shall consequently apply thereafter to that assistance or the projects concerned until their closure”.

25 In addition, Article 105(2) of Regulation No 1083/2006 provides that “while taking decision on operational programmes, the Commission shall take account of any assistance co-financed by the Structural Funds or of any project co-financed by the Cohesion Fund approved by the Council or by the Commission before the entry into force of this Regulation and having financial repercussions during the period covered by those operational programmes”.

26 It follows that Article 105(2) of Regulation No 1083/2006 is intended to lay down the transitional scheme for structural funds which were approved on the basis of EU rules in force until 31 December 2006 which continue beyond that date and closure of which takes place at a later date (judgment of 21 September 2016, Commission v Spain, C‑140/15 P, EU:C:2016:708, paragraph 94).

27 In other words, Regulation No 1260/1999 was repealed by Regulation No 1083/2006, but, in accordance with Article 105(1) and Article 107(1) of Regulation No 1083/2006, Regulation No 1260/1999 continues to apply to previous operational programmes (judgment of 22 September 2011, Spain v Commission, T‑67/10, not published, EU:T:2011:518, paragraph 6).

28 The transitional scheme set out in Article 105(2) of Regulation No 1083/2006 concerns the substantive rules applicable to previous operational programmes, as, moreover, is clear from the use of the terms “assistance” and “project” in that article, in the same way as the content of paragraphs 2 and 3 thereof. By contrast, that transitional scheme does not concern rules of a procedural nature, in accordance with the principle that procedural rules are immediately applicable (judgment of 21 September 2016, Commission v Spain, C‑140/15 P, EU:C:2016:708, paragraphs 92 and 95).

34 It follows that, under Article 105(1) of Regulation No 1083/2006, that regulation maintained in force the substantive provisions of Article 39 of Regulation No 1260/1999, that is to say those which set out the respective roles and rights and obligations of the Member States and of the Commission in the context of the procedure applicable in the event of irregularities established pursuant to a financial review conducted by the EAGGF.’

– annul the decision at issue in accordance with the form of order sought at first instance; and

– order the Commission to pay the costs relating to the proceedings at first instance and on appeal.

26 In support of its appeal, the Hellenic Republic relies on five grounds of appeal. The first is based on an erroneous interpretation and application of the transitional provisions of Regulations No 1083/2006 and No 1303/2013, read in conjunction with the provisions of Regulation No 1290/2005, on an error of law and on an erroneous and insufficient statement of the reasons in the judgment under appeal, the second, on an erroneous interpretation and application of Article 39 of Regulation No 1260/1999 and on an insufficient and contradictory statement of reasons in the judgment under appeal, the third, on an erroneous interpretation and flawed application of Articles 144 and 145 of Regulation No 1303/2013 and on an insufficient and contradictory statement of reasons in the judgment under appeal, the fourth, on an erroneous interpretation and application of the principles of legal certainty and of legitimate expectations and, the fifth, on an insufficient statement of the reasons why the General Court, rejected the complaints relating to the disproportionate nature of the financial correction applied.

27 The Hellenic Republic criticises the General Court for holding that the correct legal basis for the decision at issue was Article 39 of Regulation No 1260/1999. In that regard, it claims, in essence, that the General Court erred in law in paragraphs 25 to 28 and 34 of the judgment under appeal by holding that the exception referred to in Article 105(1) of Regulation No 1083/2006 included the EAGGF Guidance Section operational programmes. Contrary to what is stated in the judgment under appeal, the transitional scheme for Structural Funds, as defined in the first paragraph of Article 1 of Regulation No 1083/2006, would have been established exclusively by Article 105(1) and not by Article 105(2) of that regulation. In paragraphs 25 and 28 of the judgment under appeal, the General Court was wrong to rely on Article 105(2) of the regulation and apply it, in paragraphs 26 and 27 of that judgment, for the purpose of drawing a conclusion specific to the EAGGF Guidance Section operational programmes. That fund, which is the subject of Regulation No 1290/2005, was excluded from the scope of Article 105(1) of Regulation No 1083/2006. The exception laid down in Article 107 of that regulation must, as far as it is concerned, be interpreted strictly and refers exclusively to the provisions of Article 105(1) of the regulation and not to those of Article 105(2) of the regulation. In that regard, paragraph 26 of the judgment under appeal, which refers to Article 105(2) of Regulation No 1083/2006, modifies paragraph 94 of the judgment of 21 September 2016, Commission v Spain (C‑140/15 P, EU:C:2016:708), which refers to Article 105(1) of that regulation.

28 Since the measure laid down in Article 105(3) of Regulation No 1083/2006 was, as regards EAGGF Guidance Section expenditure, specifically added to Article 40 of Regulation No 1290/2005, the General Court wrongly drew a conclusion on the basis of Article 105(3) of Regulation No 1083/2006 in paragraph 28 of the judgment under appeal.

29 Having resolved all issues specifically concerning the Funds relating to the agricultural sector in Regulation No 1290/2005, the EU legislature repealed Regulation No 1260/1999 in its entirety, as is clear from the title of Regulation No 1083/2006. The General Court therefore wrongly concluded, in paragraphs 23 and 34 of the judgment under appeal, that that was not the case.

31 It maintains that the General Court correctly held that the EAGGF fell, for 2000-2006 programmes, within the Structural Funds. Accordingly, the EAGGF Guidance Section is of the same nature and belongs to the same source as those of the Structural Funds. However, Regulation No 1083/2006 applies solely to the ERDF, the ESF and the Cohesion Fund whereas the EAFRD, which replaced the EAGGF Guidance Section, was incorporated into the financing mechanisms of the common agricultural policy.

32 The Commission contends that the General Court therefore correctly inferred from the express wording of Article 105(1) of Regulation No 1083/2006 that, although Regulation No 1260/1999 was repealed by Regulation No 1083/2006, the former continued to apply to previous operational programmes under Article 105(1) of Regulation No 1083/2006.

33 By the first ground of appeal, the Hellenic Republic submits, in essence, that the General Court erred in upholding recourse to Article 39 of Regulation No 1260/1999 as the legal basis for the decision at issue.

34 Under Article 107(1) of Regulation No 1083/2006, Regulation No 1260/1999 was repealed from 1 January 2007. At the time the decision at issue was adopted, that decision could therefore have been based on Article 39 of Regulation No 1260/1999 only if specific provisions had extended the application of that article.

35 In that regard, the General Court stated, in paragraph 38 of the judgment under appeal, that Article 39 of Regulation No 1260/1999 was, in relation to 2000-2006 operational programmes, kept in force until 31 December 2013 by virtue of Regulation No 1083/2006, and that that article was again, in relation to the same programmes, kept in force from 1 January 2014 by virtue of Regulation No 1303/2013.

36 In so far as Regulation No 1083/2006, Article 105(1) of which provided for the continued application of Regulation No 1260/1999, was itself repealed as of 1 January 2014, the power to base the decision at issue on Article 39 of Regulation No 1260/1999 lay in Article 152(1) of Regulation No 1303/2013, which subjected the continued application of Regulation No 1083/2006 to there being ‘assistance approved by the Commission on the basis of [Regulation No 1083/2006] or any other legislation applying to that assistance on 31 December 2013’.

37 It must, however, be observed that Article 105(1) of Regulation No 1083/2006 provides for the continued application of Regulation No 1260/1999 only in respect of ‘assistance co-financed by the Structural Funds or of a project co-financed by the Cohesion Fund’.

38 In that regard, the fact remains that the EAGGF Guidance Section forms a part neither of the Structural Funds, which are defined in Article 1 of Regulation No 1083/2006 as the ERDF and the ESF, nor of the Cohesion Fund.

39 The General Court nevertheless held that Article 105(1) of that regulation could apply to 2000-2006 operational programmes co-financed by the EAGGF Guidance Section.

40 However, it cannot be inferred from the wording of Article 105(1) or Article 105(2) of Regulation No 1083/2006, or even from the judgment of 21 September 2016, Commission v Spain (C‑140/15 P, EU:C:2016:708), that Article 105(1) of Regulation No 1083/2006 applies to 2000-2006 operational programmes co-financed by the EAGGF Guidance Section.

41 First, as the Advocate General stated in point 36 of his Opinion, the General Court’s reasoning in paragraphs 25 and 26 of the judgment under appeal as regards Article 105(2) of Regulation No 1083/2006 cannot bring into question the definition of the Structural Funds provided in Article 1 of Regulation No 1083/2006 nor, as a result, the restricted scope of Article 105(1) of that regulation.

42 Second, Article 105(2) of Regulation No 1083/2006 refers to the ‘Structural Funds’ and the ‘Cohesion Fund’ and does not amend their definition as laid down in Article 1 of Regulation No 1083/2006.

43 Third, as regards the judgment of 21 September 2016, Commission v Spain (C‑140/15 P, EU:C:2016:708), it is common ground that that judgment related exclusively to the Cohesion Fund, which, in contrast to the EAGGF Guidance Section clearly fell within the scope of Article 105(1) of Regulation No 1083/2006.

44 Thus, through an extended application of Article 105(1) of Regulation No 1083/2006 to operational programmes co-financed by the EAGGF Guidance Section, and in holding, as a result, that the Commission was entitled to base the decision at issue on Article 39 of Regulation No 1260/1999 for the period from 2000 to 2006, the General Court erred in law.

45 The Court therefore upholds the first ground of appeal and sets aside the judgment under appeal without it being necessary to examine the other grounds of appeal.

46 In accordance with the first paragraph of Article 61 of the Statute of the Court of Justice of the European Union, if the Court of Justice quashes the decision of the General Court, it may itself give final judgment in the matter, where the state of the proceedings so permits.

47 That applies to the present case. It is therefore necessary to examine the action for annulment of the decision at issue brought by the Hellenic Republic.

48 In the first limb of the first plea in law relied on before the General Court, the Hellenic Republic submitted, in essence, that Article 105(1) of Regulation No 1083/2006 did not apply to funding from the EAGGF Guidance Section for the period from 2000 to 2006. Given that the decision at issue could not therefore have been based on Article 39 of Regulation No 1260/1999, it has no legal basis and must therefore be annulled.

49 The Commission replies, in essence, that Article 105(1) of Regulation No 1083/2006 provides expressly that funding approved under Regulation No 1260/1999 — ‘including [its] cancellation’ — is not to be affected by Regulation No 1083/2006, ‘until [its] closure’. It contends that that provision therefore refers to all funding granted under Regulation No 1260/1999.

50 In addition, in so far as the provision refers to the rules applicable under Regulation No 1260/1999, it should necessarily refer to all programmes which were approved under those rules, in maintaining their legal basis and legal context unchanged until their closure. Thus, according to the Commission, the EAGGF Guidance Section should have been included in the group into which the Structural Funds and the Cohesion Fund fell ‘both from a systemic and teleological point of view’, so that it maintains its initial legal context.

51 It must be borne in mind from the outset that, according to the Court’s settled case-law, while a legal situation that has arisen and become definitive under the old law remains subject to that law, the legislator is free to provide otherwise, in particular by means of transitional rules (see, to that effect, judgment of 7 November 2013, Gemeinde Altrip and Others, C‑72/12, EU:C:2013:712, paragraph 22 and the case-law cited).

52 However, transitional provisions are to be interpreted strictly (judgment of 2 September 2010, Kirin Amgen, C‑66/09, EU:C:2010:484, paragraph 33).

53 In the present case, the wording of Article 105(1) of Regulation No 1083/2006 refers, inter alia, to the cancellation of assistance co-financed by the Structural Funds or of a project co-financed by the Cohesion Fund. As is clear from paragraph 38 above, the EAGGF Guidance Section is not included within those Funds.

54 According to the Court’s case-law, the principle of legal certainty requires that rules must enable those concerned to know precisely the extent of the obligations imposed on them, in particular where there is a risk of financial consequences (judgment of 6 September 2018, Czech Republic v Commission, C‑4/17 P, EU:C:2018:678, paragraph 58).

55 The Commission’s line of argument, according to which the concept of ‘Structural Funds’ used in Article 105(1) of Regulation No 1083/2006 should not be defined as regards Article 1 of that regulation, but on the basis of the provisions of Regulation No 1260/1999, as a result of which that concept also refers to the EAGGF Guidance Section, would mean imposing, by way of a financial correction, financial consequences on the Member State concerned which cannot be assumed from the wording of Regulation No 1083/2006.

56 Since autonomous concepts of EU law must be interpreted in the light of the context of the legislation in which they are used and the objectives pursued by that legislation (judgment of 15 November 2018, BTA Baltic Insurance Company, C‑648/17, EU:C:2018:917, paragraph 31), it must be held that, failing an express reference, in Article 105 of Regulation No 1083/2006, to a broader definition of ‘Structural Funds’ in Regulation No 1260/1999 than in Regulation No 1083/2006, the mere fact that that provision lays down ‘transitional provisions’, as is clear from its heading, does not, contrary to what the Commission claims, mean that the concepts which that provision uses may be taken from scope of the definition given by Regulation No 1083/2006, to which those concepts belong.

57 In the light of the foregoing considerations, the Court finds that Article 105(1) of Regulation No 1083/2006 does not apply to funding from the EAGGF Guidance Section for the period from 2000 to 2006. Since the decision at issue could therefore not have had Article 39 of Regulation No 1260/1999 as its legal basis, it has no legal basis and must, accordingly, be annulled, without it being necessary to examine the second limb of the first plea in law or the other pleas in law relied on by the Hellenic Republic before the General Court.

58 Under Article 184(2) of the Rules of Procedure of the Court of Justice, where an appeal is well founded and the Court of Justice itself gives final judgment in the case, it is to make a decision as to costs.

59 Article 138(1) of those rules, which is applicable to appeal proceedings by virtue of Article 184(1) of the same rules, provides that 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 Hellenic Republic has been successful in its appeal and its action before the General Court has been upheld, the Commission must be ordered, in accordance with the form of order sought by the Hellenic Republic, to bear, in addition to its own costs, those incurred by the Hellenic Republic both at first instance and in relation to its appeal.

1. Sets aside the judgment of the General Court of the European Union of 19 September 2017, Greece v Commission (T‑327/15, not published, EU:T:2017:631);

2. Annuls Commission Implementing Decision C(2015) 1936 final of 25 March 2015 on applying financial correction on the EAGGF Guidance Section of the operational programme CCI No 2000GR061PO021 (Greece — Objective 1 — Rural Reconstruction);

3. Orders the European Commission to bear its own costs and to pay those incurred by the Hellenic Republic both in the proceedings at first instance and on appeal.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Greece v Commission (Agriculture and Fisheries - Judgment) [2019] EUECJ C-670/17P (27 February 2019) URL: http://www.bailii.org/eu/cases/EUECJ/2019/C67017P.html Cite as: [2019] EUECJ C-670/17P, ECLI:EU:C:2019:145, EU:C:2019:145

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