(Agriculture – Common agricultural policy – Financing by the EAGGF – Actual expenditure of a Member State which is less than the forecast expenditure notified by it to the Commission – Power of the Commission to reduce sums paid as advances – Letter from a Director-General of the Commission informing the Member State of that reduction – Measure producing binding legal effects)

Summary of the Judgment

(Art. 230 EC; Commission Regulation No 750/1999, Art. 39(3))

(Rules of Procedure of the Commission, Arts 13 and 14; Commission Regulation No 1750/1999, Art. 39(3))

1.In order to ascertain whether measures are acts within the meaning of Article 230 EC, it is necessary to look to their substance, as the form in which they are cast is, in principle, immaterial in this respect. Only a measure the legal effects of which are binding on, and are capable of affecting the interests of, the applicant by bringing about a distinct change in his legal position is an act or decision which may be the subject of an action for annulment under that article.

That applies to the decision contained in the letter of the Director-General for Agriculture of the Commission informing a Member State of a reduction in advances extended, in accordance with Article 39(3) of Regulation No 1750/1999 laying down detailed rules for the application of Regulation No 1257/1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF), as most recently amended by Regulation No 1763/2001, since that decision constitutes the only measure which clearly determines the content and scope of the disputed financial correction, while the decisions regarding the advances to be paid to the Member States refer only to the overall amount of monthly advances to be paid to them and do not contain any reference to the amount of the financial corrections to be made with respect to the parties to whom they are addressed.

(see paras 35, 41-42)

2.The decision contained in the letter of the Director-General for Agriculture of the Commission informing a Member State of a reduction in advances extended, in accordance with Article 39(3) of Regulation No 1750/1999 laying down detailed rules for the application of Regulation No 1257/1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF), as most recently amended by Regulation No 1763/2001, is vitiated by a lack of powers, since its signatory did not himself have the power to adopt that decision and the Commission did not invoke any act of delegation or sub-delegation taken on the basis of Article 13 or Article 14 of the Commission’s Rules of Procedure which might have applied to that Director.

(see paras 44, 47)

JUDGMENT OF THE COURT (Second Chamber) 11 November 2004 (1)

(Agriculture – Common agricultural policy – Financing by the EAGGF – Actual expenditure of a Member State which is less than the forecast expenditure notified by it to the Commission – Power of the Commission to reduce sums paid as advances – Letter from a Director-General of the Commission informing the Member State of that reduction – Measure producing binding legal effects)

In Case C-249/02, ACTION for annulment under Article 230 EC, brought on 1 July 2002,

Portuguese Republic, represented by L. Fernandes, acting as Agent, and by C. Botelho Moniz and E. Maia Cadete, advogados, with an address for service in Luxembourg,

applicant,

Commission of the European Communities, represented by L. Visaggio, acting as Agent, and by N. Castro Marques, advogado, with an address for service in Luxembourg,

defendant,

THE COURT (Second Chamber),

composed of: C.W.A. Timmermans, President of the Chamber, C. Gulmann, J.‑P. Puissochet (Rapporteur), R. Schintgen and J.N. Cunha Rodrigues, Judges,

Advocate General: D. Ruiz-Jarabo Colomer, Registrar: M. Múgica Arzamendi, Principal Administrator,

having regard to the written procedure and further to the hearing on 1 July 2004,

after hearing the Opinion of the Advocate General at the sitting on 7 September 2004,

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

3 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.’

4 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.’

5 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.

3. A description of any likely significant effects, to the extent of the information available on such effects, of the project on the environment resulting from:

(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

Article 47(1) of Regulation No 445/2002 restates the provisions of Article 37(1) of Regulation No 1750/1999.

17

Article 48(1) of Regulation No 445/2002 repeats the provisions of the first paragraph of Article 38 of Regulation No 1750/1999.

18

The provisions of Article 39(3) of Regulation No 1750/1999 are likewise replicated at Article 49(1) and (4) of Regulation No 445/2002.

19

Lastly, Article 49(5) of Regulation No 445/2002 repeats the provisions of Article 39(4) of Regulation No 1750/1999, but states in addition that the first statement of expenditure covered is that relating to ‘the 2000 financial year’.

By decisions of 22 November 2000, and 1 March and 30 April 2001, the Commission approved, for the programming period 2000 to 2006, the rural development plans for the Portuguese mainland, the autonomous region of the Azores and the autonomous region of Madeira, respectively. Those decisions include an annex setting out a general indicative financial table which records the national public expenditure allocated to the implementation of the measures covered by the rural development plan concerned and the contribution of the EAGGF Guarantee Section. Article 2(2) of each of those decisions provides that the 2000 budgetary year is to cover payments made by the paying organisations from 16 October 1999. Under Article 3(1) of the decisions, expenditure is eligible from the date on which the rural development plans concerned were submitted to the Commission, that is to say 6 January, and 4 and 22 February 2000, respectively.

21

By communication of 30 September 2000, the Portuguese Republic submitted to the Commission its expenditure forecasts for the subsequent financial years of the programming period and for each rural development programming document, in accordance with Article 37(1)(b) of Regulation No 1750/1999. That communication stated that the amount of the forecast expenditure in respect of the 2001 financial year, that is to say from 16 October 2000 to 15 October 2001, was EUR 281 430 000.

22

However, in the light of the data forwarded each month by the Portuguese authorities, the Commission found that, in the 2001 financial year, the expenditure actually incurred by the Portuguese Republic had amounted only to EUR 197 323 332.52, corresponding to 70.11% of the forecast expenditure for that financial year.

23

As the actual expenditure was, for the Portuguese Republic as for other Member States, less than the threshold of 75% of the forecast expenditure referred to in Article 39(3) of Regulation No 1750/1999, the application of the reductions provided for under that provision was discussed at the meetings of the EAGGF Committee held on 22 January and 19 February 2002. Point 6 of the minute of the latter meeting states that ‘the [six] Member States [concerned by the reductions] will be advised by letter of the date on which the penalties will be deducted from their monthly advance …’

By the contested decision, the Director-General of the Directorate‑General for Agriculture of the Commission informed the Instituto Nacional de Garantia Agrícola (‘the INGA’), the organisation which is responsible in Portugal for the coordination of expenditure financed by the Guarantee Section of the EAGGF, that:

‘During the 2001 EAGGF financial year, the total expenditure attributed to Portugal under heading 1b (Rural development) amounted to EUR 197 323 332.52.

The forecast expenditure for 2001 which was intimated to the Commission on 30 September 2000 under Article 37 of Regulation (EC) No 1750/1999 amounted to EUR 281 430 000.

As the total of the expenditure fails to meet the threshold of 75% of the forecast submitted, Article 39(3) of Regulation (EC) No 1750/1999 is applicable. Document AGRI/46059/2001 – Rev. 2, which was discussed by the EAGGF Committee on 19 February 2002 and which sets out the detail of the calculations, is attached as an annex to this letter.

Pursuant to the abovementioned article, a reduction of EUR 4 583 055.83 will therefore be applied to the advances for 2002.

I should add that this reduction of EUR 4 583 055.83 to the advances will be attributed to Chapter B01-41 (Clearance of accounts and reductions/corrections to advances) …’

25

At the meeting held on 19 April 2002, the EAGGF Committee was consulted on the advances to be paid to the Member States in May 2002 for the booking of expenditure incurred by them in March 2002. The application of the reductions provided for in Article 39(3) of Regulation No 1750/1999 (now Article 49(4) of Regulation No 445/2002) was discussed again. Point 7.5.3 of the minute of that meeting, headed ‘Reduction provided for by Article 39(3) of Regulation No 1750/1999’), states:

‘At the request of the Danish delegation, the Chairman wishes to state that the Legal Service of the Commission has confirmed that the reduction in question is indeed of the nature of a standard financial correction, which will take the form of a deduction from the advances against booking of expenditure to be paid to the Member States concerned, either in June or in August 2002 …’

26

At the meetings held on 22 May and 19 June 2002, the EAGGF Committee was consulted as to the advances to be paid to the Member States in June and July 2002 respectively for the booking of expenditure incurred in April and May 2002. The minutes of those meetings record that the amount of the advances ‘takes into account the corrections – positive and negative – made to the expenditure declared by several Member States’.

27

By decisions of 27 May and 24 June 2002, signed by the Commissioner for Agriculture, the Commission set the amount of the advances to be paid to the Member States for April and May 2002.

28

Lastly, by Decision 2002/461/EC of 12 June 2002 on the clearance of the accounts of Member States’ expenditure financed by the European Agricultural Guidance and Guarantee Fund (EAGGF), Guarantee Section, for the 2001 financial year (OJ 2002 L 160, p. 28), taken under Article 7(3) of Regulation No 1258/1999, the Commission provided that clearance.

Forms of order sought

29

The application was registered at the Court Registry on 1 July 2002.

30

The Portuguese Republic claims that the Court should:

–

annul the contested decision, and

–

order the Commission to pay the costs.

31

The Commission claims that the Court should:

–

dismiss the action, and

–

order the applicant to pay the costs.

32

The two parties have submitted a reply and a rejoinder respectively, in which the same forms of order are sought.

The action

Admissibility

33

The Commission submits that the action is directed towards an act which has no binding legal effect and is therefore inadmissible. It states that the reduction in the monthly advances paid to the Portuguese Republic was preceded by close cooperation between the Commission and the applicant – as with all the Member States – within the EAGGF Committee, which discussed the matter at its meetings of 22 January and 19 February 2002. At the latter meeting, the Commission’s representative informed the representatives of the Member States affected by the reductions that they would be advised by letter of the date on which those reductions would be made. Further discussions also took place on the same matter at the meetings of 19 April and 22 May 2002 of the EAGGF Committee. The contested decision is simply the letter which it had been stated at the meeting of 19 February 2002 would be sent. That letter is merely a communication between the services of the Commission and those of the Portuguese Republic. It is purely informative and thus has no binding legal effect.

34

The Commission states that the only decisions having binding legal effect which are capable of affecting the interests of the Portuguese Republic are the decisions of 27 May and 24 June 2002, regarding the advances for April and May 2002, in which the Commissioner for Agriculture legitimately adopted, under delegation from the Commission, the disputed measure for the reduction of the advances.

35

In that regard, in order to ascertain whether measures are acts within the meaning of Article 230 EC, it is necessary to look to their substance, as the form in which they are cast is, in principle, immaterial in this respect. Only a measure the legal effects of which are binding on, and are capable of affecting the interests of, the applicant by bringing about a distinct change in his legal position is an act or decision which may be the subject of an action for annulment under Article 230 EC (see, to that effect, Case 60/81 IBM v Commission [1981] ECR 2639, paragraph 9, and Case C-308/95 Netherlands v Commission [1999] ECR I-6513, paragraph 26).

36

In the present case, point 6 of the minute of the 583rd meeting of the EAGGF Committee of 19 February 2002, headed ‘Information regarding the penalties to be imposed on certain Member States for failure to comply with the expenditure forecasts in relation to rural development for the 2001 EAGGF financial year [application of Article 39(3) of Regulation No 1750/1999]’, shows that, at that meeting, the Commission’s representative took the views of the representatives of the six Member States concerned on the Commission’s intention to apply the corrective financial measures provided for in Article 39 to those Member States.

37

Point 6 of the same minute states, at the end of the first paragraph, that ‘those Member States will be notified by letter of the date on which the penalties will be deducted from their monthly advance’. That point ends with a reference to a declaration by the Luxembourg delegation, stating that it ‘regrets’ that the Commission ‘did not choose to extend the transitional period referred to in Article 39 of Regulation (EC) No 1750/1999 … particularly as the adoption by the European Commission of the Luxembourg RDP occurred very late in 2000 …’.

38

It is apparent from point 6 of that minute that the financial corrections would be applied to the monthly advances paid to certain Member States and that those States would subsequently be advised of them by letter.

39

Next, the terms of the contested decision, which is the same letter which it was stated at the EAGGF Committee meeting of 19 February 2002 would be sent, show that that decision was intended to have legal effect. It is headed: ‘Application of Article 39(3) of Regulation (EC) No 1750/1999 – Correction to be applied to advances’. The next paragraph of that act, which is plainly of the nature of a decision, states that ‘because the total of expenditure does not meet the 75% threshold of the forecast submitted, Article 39(3) of Regulation (EC) No 1750/1999 is applicable. Document AGRI/46059/2001 – Rev. 2, which was discussed at the meeting of the EAGGF Committee on 19 February 2002 and which shows the detail of the calculations, is annexed’.

40

Lastly, as the applicant rightly submits, the contested decision is the only act which states that the expenditure to be booked for the 2002 financial year of the Portuguese Republic is to be reduced by EUR 4 583 055.83, is the only act by which the applicant was duly informed of the finding that the actual expenditure did not amount to 75% of the forecast expenditure, and also the only act specifying the budget chapter against which that sum was to be applied.

41

By contrast to the contested decision, the decisions of 27 May and 24 June 2002 regarding the advances to be paid to the Member States for April and May 2002 are addressed to all the Member States, refer only to the overall amount of monthly advances to be paid to them and do not contain any reference to the amount of the financial corrections to be made with respect to the parties to whom they are addressed. Furthermore, the Commission has not specified the financial corrections which those two decisions would have applied to the Portuguese Republic.

42The contested decision accordingly constitutes the only measure which clearly determines the content and scope of the disputed financial correction. The applicant is therefore right to submit that the decisions of 27 May and 24 June 2002 are no more than measures which give effect to the contested decision. This is also apparent from the terms of that act, which had stated that those decisions would be taken.

43It follows from all of the above that the contested decision is indeed the act by which the contested financial correction was taken and by which the Portuguese authorities received notification of that correction. That act therefore has binding legal effect, with the result that the applicant’s request for annulment is admissible. The preliminary objection of inadmissibility raised by the Commission must accordingly be rejected.

Substance

By the first part of its first plea, which alleges that the author of the act exceeded its powers, the applicant submits that, according to the general principles of administrative law, the delegation and sub-delegation of powers may not be inferred but must be expressly invoked where the author of the act is not acting within the scope of its own powers. In this case, the Director-General who signed the contested decision did not himself have the power to adopt that decision and did not rely upon any act of delegation or sub-delegation taken on the basis of Article 13 or Article 14 of the Commission’s Rules of Procedure.

45The Commission’s only argument against the first part of the plea states, at point 38 of the defence and at point 88 of the rejoinder, that the disputed financial correction was not taken by the contested decision, but by the decisions of 27 May and 24 June 2002, adopted by the Commissioner for Agriculture acting under a delegation of powers by the Commission.

46The Commission thus does not deny that the Director-General who signed the contested decision did not hold any delegation of powers authorising him to adopt the disputed financial corrective measure.

47Accordingly, the contested decision which, as mentioned above, constitutes the act by which the financial correction was adopted and notified to the Portuguese authorities, is vitiated by lack of powers and must, on that ground and without there being any need to consider the six remaining pleas in the application, be annulled.

Costs

48Under Article 69(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 Portuguese Republic applied for the Commission to be ordered to pay the costs and the Commission has been unsuccessful, it must be ordered to pay the costs.

On those grounds, the Court (Second Chamber) hereby:

1.Annuls the decision contained in the letter of the Director‑General of the Directorate‑General for Agriculture of the Commission of the European Communities of 18 April 2002 concerning a reduction in advances extended in the 2002 financial year in accordance with Article 39(3) of Commission Regulation (EC) No 1750/1999 of 23 July 1999 laying down detailed rules for the application of Council Regulation (EC) No 1257/1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF), as most recently amended by Commission Regulation (EC) No 1763/2001 of 6 September 2001;

2.Orders the Commission of the European Communities to pay the costs.

Signatures.

Language of the case: Portuguese.