(Reference for a preliminary ruling from the Niedersächsiches Oberverwaltungsgericht)

(Common agricultural policy – Integrated administration and control system for certain Community aid schemes – Regulations (EEC) No 3887/92 and (EC) No 2419/2001 – Applications for ‘livestock’ aid – Irregularities – Reduction in the amount of aid – Article 2(2) of Regulation (EC, Euratom) No 2988/95 – Retroactive application of a less stringent provision)

Summary of the Judgment

Agriculture – Common agricultural policy – Integrated administration and control system for certain aid schemes – ‘Livestock’ aid – Irregularity giving rise to a penalty under Regulation No 3887/92 – Regulation No 2419/2001 introducing less severe administrative penalties – Retroactive application required under Regulation No 2988/95

(Council Regulation No 2988/95, Art. 2(2); Commission Regulation No 3887/92, Art. 10(2)(a); Commission Regulation No 2419/2001, Art. 44(1))

Article 2(2) of Regulation No 2988/95 on the protection of the financial interests of the European Communities is to be interpreted as meaning that where, in an application for ‘livestock’ aid covered ratione temporis by Regulation No 3887/92 laying down detailed rules for applying the integrated administration and control system for certain Community aid schemes, there is an irregularity giving rise to a penalty under Article 10(2)(a) of that regulation, the competent authorities must apply retroactively the provisions of Article 44(1) of Regulation No 2419/2001 laying down detailed rules for applying the integrated administration and control system for certain Community aid schemes established by Council Regulation No 3508/92 on the ground that those provisions of Regulation No 2419/2001 are less severe as regards the conduct in question.

(see para. 61, operative part)

JUDGMENT OF THE COURT (Second Chamber) 1 July 2004 (1)

(Common agricultural policy – Integrated administration and control system for certain Community aid schemes – Regulations (EEC) No 3887/92 and (EC) No 2419/2001 – Applications for ‘livestock’ aid – Irregularities – Reduction in the amount of aid – Article 2(2) of Regulation (EC, Euratom) No 2988/95 – Retroactive application of a less stringent provision)

In Case C-295/02,

REFERENCE to the Court under Article 234 EC by the Niedersächsisches Oberverwaltungsgericht (Germany) for a preliminary ruling in the proceedings pending before that court between

Amt für Agrarstruktur Verden,

on the interpretation of Article 10(2)(a) of Commission Regulation (EEC) No 3887/92 of 23 December 1992 laying down detailed rules for applying the integrated administration and control system for certain Community aid schemes (OJ 1992 L 391, p. 36), Articles 44, 53 and 54 of Commission Regulation (EC) No 2419/2001 of 11 December 2001 laying down detailed rules for applying the integrated administration and control system for certain Community aid schemes established by Council Regulation (EEC) No 3508/92 (OJ 1992 L 327, p. 11), and Article 2(2) of Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the financial interests of the European Communities (OJ 1995 L 312, p. 1),

THE COURT (Second Chamber),

composed of: C.W.A. Timmermans, President of the Chamber, J.-P. Puissochet, R. Schintgen, F. Macken (Rapporteur) and N. Colneric, Judges,

Advocate General: P. Léger,

Registrar: M.-F. Contet, Principal Administrator,

after considering the written observations submitted on behalf of:

– Ms Gerken, by R. Mawick, Rechtsanwalt,

– the Amt für Agrarstruktur Verden, by H. v. d. Goltz, acting as Agent,

– the German Government, by W.-D. Plessing and M. Lumma, acting as Agents,

– the Commission of the European Communities, by M. Niejahr, acting as Agent,

after hearing the oral observations of the Amt für Agrarstruktur Verden, represented by J. Haselhoff, acting as Agent, of the German Government, represented by M. Lumma, and of the Commission, represented by M. Niejahr, at the hearing on 11 December 2003,

after hearing the Opinion of the Advocate General at the sitting on 11 December 2003,

gives the following

1 This request for a preliminary ruling concerns the interpretation of Directive 2011/92/EU of the European Parliament and of the Council of 13 December 2011 on the assessment of the effects of certain public and private projects on the environment (OJ 2012 L 26, p. 1), as amended by Directive 2014/52/EU of the European Parliament and of the Council of 16 April 2014 (OJ 2014 L 124, p. 1) (‘Directive 2011/92’).

2 The request has been made in proceedings between, on the one hand, Waltham Abbey Residents Association and, on the other hand, An Bord Pleanála (Planning Board, Ireland; ‘the Board’), Ireland and the Attorney General (Ireland), concerning authorisation granted by the Board for a strategic residential housing development.

Legal context

European Union law

Directive 2011/92

Recitals 7 to 9 of Directive 2011/92 state:

‘(7) Development consent for public and private projects which are likely to have significant effects on the environment should be granted only after an assessment of the likely significant environmental effects of those projects has been carried out. …

(8) Projects belonging to certain types have significant effects on the environment and those projects should, as a rule, be subject to a systematic assessment.

(9) Projects of other types may not have significant effects on the environment in every case and those projects should be assessed where the Member States consider that they are likely to have significant effects on the environment.’

Article 2(1) of that directive provides:

‘Member States shall adopt all measures necessary to ensure that, before development consent is given, projects likely to have significant effects on the environment by virtue, inter alia, of their nature, size or location are made subject to a requirement for development consent and an assessment with regard to their effects on the environment. Those projects are defined in Article 4.’

Under Article 3(1) of that directive:

‘The environmental impact assessment shall identify, describe and assess in an appropriate manner, in the light of each individual case, the direct and indirect significant effects of a project on the following factors:

…

(b) biodiversity, with particular attention to species and habitats protected under [Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora (OJ 1992 L 206, p. 7), as amended by Council Directive 2013/17/EU of 13 May 2013 (OJ 2013 L 158, p. 193) (“Directive 92/43”)] and Directive 2009/147/EC [of the European Parliament and of the Council of 30 November 2009 on the conservation of wild birds (OJ 2010 L 20, p. 7)];

…’

Article 4 of Directive 2011/92 provides:

‘1. Subject to Article 2(4), projects listed in Annex I shall be made subject to an assessment in accordance with Articles 5 to 10.

(a) a case-by-case examination;

(b) thresholds or criteria set by the Member State.

Member States may decide to apply both procedures referred to in points (a) and (b).

Where a case-by-case examination is carried out or thresholds or criteria are set for the purpose of paragraph 2, the relevant selection criteria set out in Annex III shall be taken into account. Member States may set thresholds or criteria to determine when projects need not undergo either the determination under paragraphs 4 and 5 or an environmental impact assessment, and/or thresholds or criteria to determine when projects shall in any case be made subject to an environmental impact assessment without undergoing a determination set out under paragraphs 4 and 5.

Where Member States decide to require a determination for projects listed in Annex II, the developer shall provide information on the characteristics of the project and its likely significant effects on the environment. The detailed list of information to be provided is specified in Annex IIA. The developer shall take into account, where relevant, the available results of other relevant assessments of the effects on the environment carried out pursuant to Union legislation other than this Directive. The developer may also provide a description of any features of the project and/or measures envisaged to avoid or prevent what might otherwise have been significant adverse effects on the environment.

The competent authority shall make its determination, on the basis of the information provided by the developer in accordance with paragraph 4 taking into account, where relevant, the results of preliminary verifications or assessments of the effects on the environment carried out pursuant to Union legislation other than this Directive. The determination shall made available to the public and:

(a) where it is decided that an environmental impact assessment is required, state the main reasons for requiring such assessment with reference to the relevant criteria listed in Annex III; or

(b) where it is decided that an environmental impact assessment is not required, state the main reasons for not requiring such assessment with reference to the relevant criteria listed in Annex III, and, where proposed by the developer, state any features of the project and/or measures envisaged to avoid or prevent what might otherwise have been significant adverse effects on the environment.

Member States shall ensure that the competent authority makes its determination as soon as possible and within a period of time not exceeding 90 days from the date on which the developer has submitted all the information required pursuant to paragraph 4. In exceptional cases, for instance relating to the nature, complexity, location or size of the project, the competent authority may extend that deadline to make its determination; in that event, the competent authority shall inform the developer in writing of the reasons justifying the extension and of the date when its determination is expected.’

Annex II.A of that directive contains the list of ‘information to be provided by the developer on the projects listed in Annex II’. That list reads as follows:

‘1. A description of the project, including in particular:

(a) a description of the physical characteristics of the whole project and, where relevant, of demolition works;

(b) a description of the location of the project, with particular regard to the environmental sensitivity of geographical areas likely to be affected.

(a) the expected residues and emissions and the production of waste, where relevant;

(b) the use of natural resources, in particular soil, land, water and biodiversity.

Annex III to that directive sets out the ‘criteria to determine whether the projects listed in Annex II should be subject to an environmental impact assessment’.

Directive 2014/52

Recitals 11 and 29 of Directive 2014/52 state:

‘(11) The measures taken to avoid, prevent, reduce and, if possible, offset significant adverse effects on the environment, in particular on species and habitats protected under [Directive 92/43] and Directive 2009/147 …, should contribute to avoiding any deterioration in the quality of the environment and any net loss of biodiversity, in accordance with the [European] Union’s commitments in the context of the [United Nations Convention on Biological Diversity, signed in Rio de Janeiro on 5 June 1992,] and the objectives and actions of the Union Biodiversity Strategy up to 2020 laid down in the [Communication from the Commission to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions] of 3 May 2011 entitled ‘Our life insurance, our natural capital: an EU biodiversity strategy to 2020’ [(COM(2011) 244 final)]

…

(29) When determining whether significant effects on the environment are likely to be caused by a project, the competent authorities should identify the most relevant criteria to be considered and should take into account information that could be available following other assessments required by Union legislation in order to apply the screening procedure effectively and transparently. In this regard, it is appropriate to specify the content of the screening determination, in particular where no environmental impact assessment is required. Moreover, taking into account unsolicited comments that might have been received from other sources, such as members of the public or public authorities, even though no formal consultation is required at the screening stage, constitutes good administrative practice.’

Directive 92/43

Article 6(3) of Directive 92/43 provides:

‘Any plan or project not directly connected with or necessary to the management of the site but likely to have a significant effect thereon, either individually or in combination with other plans or projects, shall be subject to appropriate assessment of its implications for the site in view of the site’s conservation objectives. In the light of the conclusions of the assessment of the implications for the site and subject to the provisions of paragraph 4, the competent national authorities shall agree to the plan or project only after having ascertained that it will not adversely affect the integrity of the site concerned and, if appropriate, after having obtained the opinion of the general public.’

Article 12(1) of that directive provides:

‘Member States shall take the requisite measures to establish a system of strict protection for the animal species listed in Annex IV(a) in their natural range, prohibiting:

(a) all forms of deliberate capture or killing of specimens of these species in the wild;

(b) deliberate disturbance of these species, particularly during the period of breeding, rearing, hibernation and migration;

(c) deliberate destruction or taking of eggs from the wild;

(d) deterioration or destruction of breeding sites or resting places.’

Point (a) of Annex IV to that directive mentions ‘all species’ of bats belonging to the suborder of ‘microchiroptera’.

Irish law

1.This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Communities.

2.It shall apply to aid applications relating to marketing years or premium periods starting as of 1 January 2002.

Application ratione temporis of administrative sanctions laid down by Community provisions

Regulation No 2988/95

11 Article 1 of Regulation No 2988/95 provides:

1.For the purposes of protecting the European Communities’ financial interests, general rules are hereby adopted relating to homogeneous checks and to administrative measures and penalties concerning irregularities with regard to Community law.

2.“Irregularity” shall mean any infringement of a provision of Community law resulting from an act or omission by an economic operator, which has, or would have, the effect of prejudicing the general budget of the Communities or budgets managed by them, either by reducing or losing revenue accruing from own resources collected directly on behalf of the Communities, or by an unjustified item of expenditure.

12 Article 2(2) of that regulation is worded as follows:

No administrative penalty may be imposed unless a Community act prior to the irregularity has made provision for it. In the event of a subsequent amendment of the provisions which impose administrative penalties and are contained in Community rules, the less severe provisions shall apply retroactively.

The main proceedings and the question referred

13.13 On 21 December 1995, Ms Gerken applied for a special premium for 12 male bovine animals in the first and second age brackets under Article 4b of Regulation No 805/68.

14.14 By a decision of 21 June 1996, the Amt rejected the application for 7 of the 12 bovine animals on the ground that Ms Gerken had not provided proof that the animals fulfilled the age condition laid down by Community law. It also refused to grant the premium for the five other animals, in application of Article 10(2)(a) of Regulation No 3887/92.

15.15 Ms Gerken lodged a complaint without success before the Bezirksregierung Lüneburg (Lüneburg local administration) and then brought an action on 23 July 1998 before the Verwaltungsgericht Stade (Stade Administrative Court) (Germany). Before that court she succeeded in providing the proof of age required for three of the seven bovine animals in question. The Amt therefore stated that it was prepared to grant Ms Gerken premiums, proportionally reduced in accordance with Article 10(2)(a) of Regulation No 3887/92, for those three animals and for the five others for which proof of age had already been provided.

16.16 By judgment dated 17 February 2000, the Verwaltungsgericht held that the Amt had been right to reject Ms Gerken’s application in respect of the other four bovine animals for which no proof of age had been provided. In that regard, it found that it was immaterial whether the Amt had changed its administrative practice regarding the means of proof of age of bovine animals.

17.17 However, for the other eight bovine animals, the Verwaltungsgericht held that Ms Gerken was entitled to receive full premiums and not premiums reduced in accordance with Article 10(2)(a) of Regulation No 3887/92. It held that the penalties prescribed under Regulation No 3887/92 did not apply in the case because Ms Gerken had not made any fraudulent or erroneous declaration.

18.18 The Amt appealed against the last part of the judgment given at first instance to the Niedersächsisches Oberverwaltungsgericht.

19.19 That court finds firstly that Ms Gerken has failed to adduce the required proof of age for 4 of the 12 male bovine animals declared in her application for aid and that, according to the second indent of Article 10(2)(a) of Regulation No 3887/92, the amount of aid must be reduced by twice the percentage corresponding to the difference when the difference is not more than four animals. Referring to the judgment in Case C-63/00 Schilling and Nehring [2002] ECR I-4483, according to which the penalties laid down in that provision apply even where the discrepancy between the number of animals declared and the number of animals found is not attributable to incorrect information given by the applicant, the national court considers that those penalties should therefore apply to Ms Gerken.

20.20 Nevertheless, the court observes that, in support of her application for aid, Ms Gerken produced a document issued by the veterinary officer for Landkreis Verden (Verden district) certifying that the bovine animals were free of leucosis. According to the national court, until the beginning of 1996 the Amt had accepted such certificates as proof of age for bovine animals, but changed that practice, on the basis of two ministerial orders adopted in March and June 1996, only after Ms Gerken had submitted her application. The national court therefore considers that Ms Gerken provided ‘factually correct information’ within the meaning of Article 44(1) of Regulation No 2419/2001 and that she is not at fault within the meaning of that provision, at least with regard to the allegation that she did not provide proof of age for the four bovine animals in question.

21.21 In these circumstances the national court is unclear whether it should apply the penalties prescribed in Article 10(2)(a) of Regulation No 3887/92. It notes that that regulation was repealed by the first sentence of Article 53(1) of Regulation No 2419/2001, but that that regulation, in accordance with Article 54(1) thereof, did not enter into force until 13 December 2001. Furthermore, it points out that, under the second sentence of Article 53(1) of Regulation No 2419/2001, Regulation No 3887/92 is to continue to apply to aid applications relating to marketing years or premium periods which start before 1 January 2002. It deduces from this that the penalty laid down in Article 10(2) of Regulation No 3887/92 should be applied to Ms Gerken.

22.22 However, the national court notes that, in accordance with Article 2(2) of Regulation No 2988/95, in the event of a subsequent amendment of the Community law provisions introducing administrative penalties, the less severe provisions shall apply retroactively.

23.23 Considering that the resolution of the dispute before it required an interpretation of the provisions of Regulations Nos 3887/92, 2988/95 and 2419/2001, the Niedersächsisches Oberverwaltungsgericht decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:

Is the amount of aid also to be reduced under the second indent of Article 10(2)(a) of Regulation (EEC) No 3887/92 where the special premium for male bovine animals applied for when this provision of Community law was in force cannot for legal reasons be granted to the farmer but where in the words of Article 44(1) of Regulation (EC) No 2419/2001, the farmer submitted factually correct information or where he can show otherwise that he was not at fault?

The question referred for a preliminary ruling

Observations submitted to the Court

24.24 The Niedersächsisches Ministerium für Ernährung (Lower Saxony Ministry of Food; hereinafter ‘the Ministry’), acting for the defendant in the main proceedings, and the Amt consider that the less severe penalties provided for by Regulation No 2419/2001 do not apply in the case in the main proceedings.

25.25 Articles 53(1) and 54(2) of Regulation No 2419/2001 show clearly that Regulation No 3887/92 was repealed when the new regulation entered into force and that Regulation No 2419/2001 is applicable only to applications relating to marketing years or premium periods starting as of 1 January 2002. Consequently, Regulation No 2419/2001 should not be applied to applications for premiums relating to earlier years.

26.26 Nor should Article 2(2) of Regulation No 2988/95 be applied. That provision referred to penalties imposed subsequent to an amendment of Community law, whereas Regulation No 2419/2001 repealed Regulation No 3887/92.

27.27 According to the Ministry, Ms Gerken cannot lay claim to protection of a legitimate expectation on the basis of Article 44(1) of Regulation No 2419/2001. The authority responsible for granting premiums is entitled to request proof that the conditions for their grant are fulfilled even where the grant has already been made. Furthermore, the applicant for aid is required to prove, until the end of the fourth year after the calendar year in which the premium was granted, that the conditions for the grant of that premium have been met. For four of the bovine animals in question, the applicant was not able to do so. If Article 44(1) of Regulation No 2419/2001 should nevertheless apply in the present case, it would be appropriate, for that reason, only to waive application of the exclusions and reductions, but not the refusal of the aid in respect of the four bovine animals in question.

28.28 The Ministry and the Amt consider that if, despite the repeal of Regulation No 3887/92, including the provisions laying down penalties, by Regulation No 2419/2001, the provisions of the latter regulation should have been subject to the rule of retroactive application under Regulation No 2988/95, that should have been explicitly specified in Regulation No 2419/2001.

29.29 The German Government considers that in the present case the penalties laid down in Article 10(2) of Regulation No 3887/92 should continue to be applicable. Application of that provision is not contrary to either Article 2(2) of Regulation No 2988/95 or the general principles of Community law.

30.30 With regard to Article 2(2) of Regulation No 2988/95, it considers that it is permissible to interpret that rule as meaning that it does not apply when there are in existence specific transitory provisions such as those laid down in sector-specific legislation, for example the second sentence of Article 53(1) of Regulation No 2419/2001. That provision, setting out which rules in respect of the integrated system apply before or after a particular date, constitutes, according to the German Government, a lex specialis as against the rule of retroactive application in Article 2(2) of Regulation No 2988/95.

31.31 With regard to the general principles of Community law, the fact that the integrated system provided for in Regulation No 3887/92 continues to apply in respect of aid applications relating to marketing years or premium periods which start before 1 January 2002, in accordance with the second sentence of Article 53(1) of Regulation No 2419/2001, is contrary neither to the principle of protection of legitimate expectations nor to the prohibition of retroactive measures. Ms Gerken is simply being treated in accordance with the law applicable to the period in respect of which she applied for a premium. The provisions of the second sentence of Article 53(1) of Regulation No 2419/2001 prevent her from relying on a more favourable rule which came into force after she submitted the application in question.

32.32 According to the German Government, the differences between the control and penalty systems laid down by Regulations Nos 3887/92 and 2419/2001 militate in favour of its proposed answer. Whilst in the scheme applied under the former regulation, the controls and penalties were based on the various applications for aid, in that laid down by the new regulation the controls are made and the penalties applied as part of an integrated approach based on the farm. The German Government points out that, when controls were carried out under Regulation No 3887/92, they were not carried out on the basis of the farm approach and accordingly did not take account of the whole body of Community regulations applicable to bovine animals. Consequently, the controls did not give results based on the farm which could give rise to penalties also based on the farm. As a result, it is impossible to transfer elements bound up with the scheme laid down by Regulation No 2419/2001, such as Article 44(1), into the control and penalty scheme under Regulation 3887/92.

33.33 The Commission makes the preliminary point that in Case C-354/95 National Farmers’ Union and Others [1997] ECR I-4559, paragraphs 39 to 41, the Court has already held that the rule in the second sentence of Article 2(2) of Regulation No 2988/95 of retroactive application of less severe penalties applies in principle to Regulation No 3887/92.

34.34 The facts giving rise to the case in the main proceedings fulfil the conditions for application of that rule of retroactive application.

35.35 Firstly, a farmer who submits an application for aid for livestock not eligible for aid is in breach of a provision of Community law and on that basis commits an irregularity within the meaning of Article 1(2) of Regulation No 2988/95.

36

Secondly, the introduction of Article 44(1) of Regulation No 2419/2001 amended the integrated system in that the penalties for which it provides do not apply where the farmer submitted factually correct information or where he can otherwise show that he is not at fault. In that case, that provision leads to an administrative penalty less severe than that laid down by Regulation No 3887/92

The Commission contends that the application, in the present case, of Article 2(2) of Regulation No 2988/95 is not excluded by the provisions in Articles 53 and 54 of Regulation No 2419/2001 regarding the latter’s entry into force and its application <i>ratione</i> <i>temporis</i>. It considers that, together with the provision in Article 54(2) of Regulation No 2419/2001 which is its counterpart, the second sentence of Article 53(1) of that regulation must only ensure that applications for aid relating to a period prior to 1 January 2002 may continue to be dealt with on the basis of Regulation No 3887/92 which originally applied to them and should not be subject to the new scheme upon its entry into force. The Community legislature did not, by contrast, intend to exclude by those provisions the application of the rule of retroactive application laid down in the second sentence of Article 2(2) of Regulation No 2988/95 for less severe administrative penalties within the integrated system.

The Commission did, however, accept at the hearing that there is a distinction between cases to which the rule of retroactive application in Article 2(2) of Regulation No 2988/95 applies and those to which it does not. The rule of retroactive application cannot apply when the provisions laying down penalties in Community legislation have been completely restructured as part of a new regulation.

With regard to the application in the present case of Article 44(1) of Regulation No 2419/2001, the Commission observes that an interpretation other than that which it proposes would largely deprive Article 2(2) of Regulation No 2988/95 of its purpose. It would only be possible to exclude the applicability of the rule of retroactive application if it were expressly provided for in the texts. The Commission notes that there is no such express provision in Articles 53 and 54 of Regulation No 2419/2001.

Findings of the Court

By the question which it referred for a preliminary ruling, the national court essentially asks whether Article 2(2) of Regulation No 2988/95 is to be interpreted as meaning that where in an application for ‘livestock’ aid covered <i>ratione</i> <i>temporis</i> by Regulation No 3887/92 there is an irregularity giving rise to a penalty under Article 10(2)(a) of that regulation, the competent authorities must apply the provisions of Article 44 of Regulation No 2419/2001 retroactively, on the ground that those provisions penalise less severely the conduct in question.

It must be pointed out, firstly, that the aims of Regulation No 3887/92 are, as set out in its seventh and ninth recitals, to monitor effectively compliance with the provisions on Community aid and to adopt provisions which prevent and penalise irregularities and fraud effectively.

Article 10(2) of Regulation No 3887/92 is designed to penalise, effectively and as a deterrent, not merely fraudulent declarations or those amounting to serious negligence, but also any irregularity committed by a farmer in his aid application (see <i>Schilling</i> and <i>Nehring</i>, cited above, paragraph 27).

In accordance with the provisions of the second indent of Article 10(2)(a) of Regulation No 3887/92, in force at the time of the aid application at issue in the main proceedings, the amount of the aid is to be reduced by twice the percentage corresponding to the difference found if this is more than two but not more than four animals.

In accordance with those provisions as interpreted by case-law, the amount of the aid must be reduced even where the discrepancy between the number of animals declared and the number of animals found during checks is not attributable to incorrect information given by the applicant but to the fact that the necessary conditions for the grant of the premiums are not satisfied in regard to certain animals (see <i>Schilling</i> and <i>Nehring</i>, paragraph 42).

After the applicant had lodged the aid application in question, Regulation No 3887/92 was repealed by Article 53(1) of Regulation No 2419/2001. The latter regulation also applies to the methods of implementing the integrated system for certain Community aid schemes established by Regulation No 3508/92.

In accordance with Article 44(1) of Regulation No 2419/2001, the reductions and exclusions provided for in Title IV of that regulation are not to apply where the farmer submitted factually correct information or can show otherwise that he is not at fault.

Furthermore, Regulation No 2988/95 states, in particular, in Article 2(2), that in the event of a subsequent amendment of the provisions which impose administrative penalties and are contained in Community rules, the less severe provisions are to apply retroactively.

It is therefore appropriate to examine whether that provision applies to circumstances such as those at issue in the main proceedings.

Firstly, the irregularity found in Ms Gerken’s aid application, to which Article 10(2)(a) of Regulation No 3887/92 could apply, namely the fact that she made an application for bovine animals in respect of which she had not given the required proof of age, constitutes an irregularity within the meaning of Article 1(2) of Regulation No 2988/95.

Secondly, the reduction in the amount of ‘livestock’ aid or the withdrawal of that aid constitutes an administrative penalty within the meaning of Article 2(2) of Regulation No 2998/95 (see, to that effect, <i>National</i> <i>Farmers’</i> <i>Union</i> <i>and</i> <i>Others</i>, cited above, paragraph 40, and <i>Schilling</i> <i>and</i> <i>Nehring</i>, cited above, paragraphs 26 and 27).

Thirdly, the penalty schemes relating to aid applications laid down by Regulation No 3887/92 were last amended at the time of the entry into force of Regulation No 2419/2001.

Finally, Article 44(1) of Regulation No 2419/2001 laid down provisions establishing penalties less severe than those applicable under Article 10(2)(a) of Regulation No 3887/92.

The German Government’s argument that retroactive application of those less severe penalties, in accordance with Article 2(2) of Regulation No 2988/95, should be excluded by application of the second sentence of Article 53(1) and of Article 54(2) of Regulation No 2419/2001 cannot be accepted.

The latter provisions state respectively that Regulation No 3887/92 is to continue to apply in respect of aid applications relating to marketing years or premium periods which start before 1 January 2002 and that Regulation No 2419/2001 is to apply to aid applications relating to marketing years or premium periods starting as of 1 January 2002.

However, it is apparent from the fourth recital in the preamble to Regulation No 2988/95 that the effectiveness of the combating of fraud against the Communities’ financial interests calls for a common set of legal rules to be enacted for all areas covered by Community policies. Furthermore, according to the fifth recital, irregular conduct and the administrative measures and penalties relating thereto are provided for in sectoral rules in accordance with Regulation No 2988/95.

It follows that, in the area of checks and penalties for irregularities committed under Community law, the Community legislature has, by adopting Regulation No 2988/95, laid down a series of general principles and has required that, as a general rule, all sectoral regulations comply with those principles.

Nothing in Regulation No 2419/2001 suggests that that regulation intended to exclude the principle of the retroactive application of less severe penalties in Article 2(2) of Regulation No 2988/95.

The second sentence of Article 53(1) and Article 54(2) of Regulation No 2419/2001 should therefore be construed as applying without prejudice to the application of that principle.

Without prejudice to the question whether the other provisions of Title IV of Regulation No 2419/2001 relating to the basis for the calculation of the aid, reductions and exclusions could also be applied retroactively in certain circumstances in accordance with Article 2(2) of Regulation No 2988/95, it is appropriate, under that latter provision, to apply retroactively the less severe provisions in Article 44(1) of Regulation No 2419/2001 to applications for aid covered <i>ratione</i> <i>temporis</i> by Regulation No 3887/92.

Accordingly, if a farmer shows, in accordance with Article 44(1) of Regulation No 2419/2001, that he has provided correct factual information in support of an ongoing application for aid or otherwise shows that he is not at fault in respect of irregularities in that application for aid, the penalty laid down in Article 10(2)(a) of Regulation No 3887/92, consisting of a reduction in the amount of his aid by a set percentage corresponding to the excess in the number of animals found, should not apply.

In light of the foregoing, the answer to the question referred must be that Article 2(2) of Regulation No 2988/95 is to be interpreted as meaning that where, in an application for ‘livestock’ aid covered <i>ratione</i> <i>temporis</i> by Regulation No 3887/92, there is an irregularity giving rise to a penalty under Article 10(2)(a) of that regulation, the competent authorities must apply retroactively the provisions of Article 44(1) of Regulation No 2419/2001, on the ground that those provisions are less severe as regards the conduct in question.

Costs

The costs incurred by the German Government and by the Commission, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the proceedings pending before the national court, the decision on costs is a matter for that court.

On those grounds,

THE COURT (Second Chamber),

in answer to the question referred to it by the Niedersächsisches Oberverwaltungsgericht by order of 1 August 2002, hereby rules:

Article 2(2) of Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the financial interests of the European Communities is to be interpreted as meaning that where, in an application for ‘livestock’ aid covered <i>ratione</i> <i>temporis</i> by Commission Regulation (EEC) No 3887/92 of 23 December 1992 laying down detailed rules for applying the integrated administration and control system for certain Community aid schemes, there is an irregularity giving rise to a penalty under Article 10(2)(a) of that regulation, the competent authorities must apply retroactively the provisions of Article 44(1) of Commission Regulation (EC) No 2419/2001 of 11 December 2001 laying down detailed rules for applying the integrated administration and control system for certain Community aid schemes established by Council Regulation (EEC) No 3508/92, on the ground that those provisions are less severe as regards the conduct in question.

Timmermans

Puissochet

Schintgen

Macken

Colneric

Delivered in open court in Luxembourg on 1 July 2004.

Registrar

President of the Second Chamber

1 – Language of the case: German.

* * *