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Court of Justice of the European Communities (including Court of First Instance Decisions)
You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Strawson and Gagg & Sons (Agriculture) [2002] EUECJ C-304/00 (19 November 2002)
URL: http://www.bailii.org/eu/cases/EUECJ/2002/C30400.html
Cite as: [2002] EUECJ C-304/, [2002] EUECJ C-304/00

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IMPORTANT LEGAL NOTICE - The source of this judgment is the web site of the Court of Justice of the European Communities. The information in this database has been provided free of charge and is subject to a Court of Justice of the European Communities disclaimer and a copyright notice. This electronic version is not authentic and is subject to amendment.

JUDGMENT OF THE COURT (Sixth Chamber)

19 November 2002(1)

(Common agricultural policy - Integrated administration and control system for certain Community aid schemes - Article 9(2) of Regulation (EEC) No 3887/92 - Application for 'area' aid - Penalties - Limitation period)

In Case C-304/00,

REFERENCE to the Court under Article 234 EC by the High Court of Justice of England and Wales, Queen's Bench Division (Crown Office), for a preliminary ruling in the proceedings pending before that court between

The Queen

and

Ministry of Agriculture, Fisheries and Food,

ex parte:

W.H. Strawson (Farms) Ltd,

and

J.A. Gagg & Sons (a firm),

on the interpretation of Article 9(2) 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),

THE COURT (Sixth Chamber),

composed of: J.-P. Puissochet, President of the Chamber, C. Gulmann, V. Skouris, F. Macken (Rapporteur) and N. Colneric, Judges,

Advocate General: P. Léger,


Registrar: M.-F. Contet, Administrator,

after considering the written observations submitted on behalf of:

- W.H. Strawson (Farms) Ltd and J.A. Gagg & Sons, by S. Isaacs QC and C. Lewis, Barrister, instructed by D. de Ferrars, Solicitor,

- the United Kingdom Government, by R. Magrill, acting as Agent, and P.M. Roth QC and R. Haynes, Barrister,

- the French Government, by G. de Bergues and L. Bernheim, acting as Agents,

- the Commission of the European Communities, by M. Niejahr and K. Fitch, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of W.H. Strawson (Farms) Ltd and J.A. Gagg & Sons, represented by S. Isaacs and C. Lewis, of the United Kingdom Government, represented by P. Ormond, acting as Agent, and P.M. Roth and R. Haynes, and of the Commission, represented by M. Niejahr and K. Fitch, at the hearing on 7 February 2002,

after hearing the Opinion of the Advocate General at the sitting on 21 March 2002,

gives the following

Judgment

  1. By order of 26 January 2000, received at the Court on 10 August 2000, the High Court of Justice of England and Wales, Queen's Bench Division (Crown Office), referred to the Court for a preliminary ruling under Article 234 EC a question on the interpretation of Article 9(2) 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).

  2. That question was raised in proceedings between W.H. Strawson (Farms) Ltd and J.A. Gagg & Sons and the Ministry of Agriculture, Fisheries and Food ('MAFF') concerning the penalties imposed on the former by the latter pursuant to Article 9(2) of Regulation No 3887/92.

    Relevant provisions

    The aid scheme applicable to arable crops and land set aside

    Regulation (EEC) No 1765/92

  3. Article 2(1) of Council Regulation (EEC) No 1765/92 of 30 June 1992 establishing a support system for producers of certain arable crops (OJ 1992 L 181, p. 12) provides that Community producers of arable crops may apply for a compensatory payment on the conditions set out in Articles 2 to 13 of that regulation.

  4. The second paragraph of Article 2(2) of Regulation No 1765/92 provides that the compensatory payment is to be granted for the area which is put down to arable crops or which is set aside.

    The rules for application of the aid schemes

    Regulation (EEC) No 3508/92

  5. Council Regulation (EEC) No 3508/92 of 27 November 1992 (OJ 1992 L 355, p. 1) establishes an integrated administration and control system ('the integrated system') for certain Community aid schemes established under the common agricultural policy.

  6. Article 6(1) of Regulation No 3508/92 provides:

    'In order to be eligible under one or more Community schemes governed by this regulation, each farmer shall submit, for each year, an area aid application indicating:

    - agricultural parcels, including areas under forage crops, and agricultural parcels covered by a set-aside measure for arable land and those laid fallow,

    - where applicable, any other necessary information provided for either by the regulations relating to the Community schemes, or by the Member State concerned.'

    Regulation No 3887/92

  7. Regulation No 3887/92 lays down detailed rules for the application of the integrated system.

  8. Article 4(1) of Regulation No 3887/92 sets out the information which must be contained in an application for 'area' aid, which includes, inter alia, particulars permitting identification of all the agricultural parcels on the holding, their area, location, use and also the aid scheme concerned.

  9. In accordance with Article 6(1) of that regulation, administrative and on-the-spot checks are to be made in such a way as to ensure effective verification of compliance with the terms on which the aid and premiums are granted.

  10. Article 6(4) provides that applications subjected to on-the-spot checking are to be selected by the competent authority on the basis inter alia of a risk analysis and an element of representativeness of the aid applications submitted. The risk analysis is to take account of the amount of aid involved, the number of parcels and the area or number of animals for which aid is requested, changes from the previous year, the findings of checks made in past years, and other factors to be defined by the Member State.

  11. Article 6(7) of Regulation No 3887/92 is worded as follows:

    'Agricultural parcel areas shall be determined by any appropriate means defined by the competent authority which ensure measurement of a precision at least equivalent to that required for official measurements under the national rules. The competent authority shall set a tolerance margin taking account of the measuring method used, the accuracy of the official documents available, local factors (such as slope, shape of parcel) and the provisions of the following subparagraph.

    The total area of an agricultural parcel may be taken into account provided that it is fully utilised according to the customary standards of the Member State or region concerned. In other cases the area actually utilised shall be taken into account.'

  12. Article 9(2) of Regulation No 3887/92, in the version applicable to applications for aid made for the years 1993 to 1995, provided:

    'If the area actually determined is found to be less than that declared in an area aid application, the area actually determined on inspection shall be used for calculation of the aid. However, except in cases of force majeure, the area actually determined on inspection shall be reduced:

    - by twice the difference found if this is more than 2% or two hectares but not more than 10% of the determined area.

    - by 30% if the difference found is more than 10% but not more than 20% of the determined area,

    If the difference is more than 20% of the determined area no area-linked aid shall be granted.

    However, in the case of a false declaration made intentionally or as a result of serious negligence:

    - the farmer in question shall be excluded from the aid scheme concerned for the calendar year in question, and

    - in the case of a false declaration intentionally made, from any aid scheme referred to in Article 1(1) of Regulation (EEC) No 3508/92 for the following calendar year, in respect of an area equal to that for which his aid application was rejected.

    These reductions shall not be applied if the farmer can show that his determination of the area was accurately based on information recognised by the competent authority.

    ...

    For the purposes of this article, determined area means the area for which all of the conditions laid down in the rules have been met.

    ...'

  13. Under Article 1(5) of Commission Regulation (EC) No 1648/95 of 6 July 1995 amending Regulation (EEC) No 3887/92 (OJ 1995 L 156, p. 27):

    'In Article 9(2), first subparagraph, the first and second indents shall be replaced by the following:

    ... by twice the difference found if this is more than 3% or two hectares but not more than 20% of the determined area.'

  14. Pursuant to the second paragraph of Article 2 of Regulation No 1648/95, that amendment was to apply to applications for aid made for the year 1996 onward.

  15. In accordance with the first paragraph of Article 14(1) of Regulation No 3887/92:

    'In cases of wrong payment the farmer will be required to reimburse the amount in question plus interest for the period between payment and the reimbursement by the beneficiary.'

    Temporal application of the administrative penalties provided for by Community measures

    Regulation (EC, Euratom) No 2988/95

  16. Article 1(1) of Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European Communities' financial interests (OJ 1995 L 312, p. 1), provides:

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

  17. Article 1(2) of that regulation provides:

    '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.'

  18. In accordance with Article 2(2) of that regulation:

    '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.'

  19. Article 3(1) of Regulation No 2988/95 is worded as follows:

    'The limitation period for proceedings shall be four years as from the time when the irregularity referred to in Article 1(1) was committed. However, the sectoral rules may make provision for a shorter period which may not be less than three years.

    In the case of continuous or repeated irregularities, the limitation period shall run from the day on which the irregularity ceases. In the case of multiannual programmes, the limitation period shall in any case run until the programme is definitively terminated.

    The limitation period shall be interrupted by any act of the competent authority, notified to the person in question, relating to investigation or legal proceedings concerning the irregularity. The limitation period shall start again following each interrupting act.

    However, limitation shall become effective at the latest on the day on which a period equal to twice the limitation period expires without the competent authority having imposed a penalty, except where the administrative procedure has been suspended in accordance with Article 6(1).'

    The dispute in the main proceedings and the question referred for a preliminary ruling

  20. The applicants in the main proceedings both applied for compensatory payments for the 1997 calendar year under the 'area' aid scheme. They had previously applied for and obtained compensatory payments for the calendar years 1993 to 1996.

  21. It is apparent from the documents before the Court that one of the two applicants in the main proceedings calculated the areas concerned by its application using maps drawn by the Ordnance Survey ('OS maps'). Since 1993 MAFF, the competent authority in the United Kingdom responsible for the administration of the integrated system and the making of payments under the 'area' aid scheme, has stated in its guidance notes that the areas shown in OS maps are as a general rule acceptable in the preparation of applications for aid.

  22. It is also apparent from those documents that, in order to ascertain the areas in respect of which its application for aid was submitted, the other applicant in the main proceedings had recourse both to OS maps and to the measurements of the areas calculated by MAFF when making an inspection in 1995.

  23. On making several checks in 1997, MAFF discovered that, in respect of certain fields, the areas had been overstated and the relevant applications had overclaimed, whilst in respect of other fields, the areas had been understated and the applications had underclaimed.

  24. Following those inspections, MAFF determined the areas for which 'area' aid was paid in 1997 and imposed the penalties provided for by Article 9(2) of Regulation No 3887/92.

  25. MAFF also recalculated the payments made for each of the calendar years 1993 to 1996 and, accepting that overpayments could be set off against underpayments,recalculated the amount of 'area' aid payable for those years on the basis of the area as actually determined at the time of the inspections carried out in 1997. The area was thus reduced in accordance with the rules laid down in Article 9(2) of Regulation No 3887/92, as amended by Regulation No 1648/95 ('Regulation No 3887/92').

  26. In consequence MAFF informed the applicants in the main proceedings of the penalties imposed on them for the years 1993 to 1996 in respect of the compensatory payments made under the system of support for producers of certain arable crops.

  27. The applicants in the main proceedings have brought an action before the court making the reference, challenging the sums which MAFF has ordered them to pay by way of reimbursement of 'area' aid wrongly paid.

  28. It is clear from the order for reference that the incorrect declarations made by the applicants in the main proceedings consisted, in particular, of inaccurate statements of the areas eligible for the grant of aid. In that regard, the national court finds that those errors were not made intentionally or as the result of serious negligence.

  29. The order also makes it clear that the dispute between the applicants and MAFF does not concern the manner in which the latter dealt with the 'area' aid applications for the year 1997.

  30. Taking the view that the outcome of the dispute brought before it depended on interpretation of Article 9(2) of Regulation No 3887/92, the High Court of Justice of England and Wales, Queen's Bench Division (Crown Office), decided to stay proceedings and to refer the following question to the Court for a preliminary ruling:

    'In circumstances where

    (i) as a result of an inspection the competent authority discovers that an applicant under the Arable Area Payments Scheme has made an error (otherwise than intentionally or as a result of gross negligence) which has resulted in an over-declaration of area in the application for aid payments; and

    (ii) the competent authority is satisfied by reason of that inspection and other checks that the applicant has made a corresponding error in previous years resulting in each of those years in an overdeclaration of area in the application for aid payments:

    is the competent national authority required to reduce the area actually determined on inspection pursuant to Article 9(2) of Commission Regulation (EEC) No. 3887/92 for the purpose of calculating the aid due in respect of previous years?'

    The question referred for a preliminary ruling

  31. By that question, the national court seeks to ascertain whether, on a proper construction of the first and second paragraphs of Article 9(2) of Regulation No 3887/92, where the competent authority discovers that an applicant for 'area' aid has made an incorrect declaration, neither intentionally nor as the result of serious negligence, which has entailed an overdeclaration of the area eligible for aid and that the same mistake was made in the years prior to that in which it was discovered, thus leading to overdeclaration of the area eligible for aid in each of those years, that authority is required to reduce the area actually determined in order to calculate the aid payable in respect of the previous years.

    Observations submitted to the Court

  32. The applicants in the main proceedings do not dispute that the area actually determined when the competent authority made its inspection in 1997 must serve as the basis for calculating the aid payable for the years 1993 to 1996 and, therefore, that they are obliged, pursuant to the first paragraph of Article 14(1) of Regulation No 3887/92, to reimburse the overpayments in respect of those years.

  33. They submit, none the less, that the first and second paragraphs of Article 9(2) of Regulation No 3887/92 do not authorise the competent authority to apply, by way of penalties for errors made in determining the agricultural areas as established as a result of an inspection made in 1997, reductions in the areas actually determined, as provided for by that article, to the aid paid for the years before that in which the inspection was made. To interpret the first and second paragraphs of Article 9(2) as entailing the retroactive imposition of penalties, where the errors were not committed intentionally or as the result of serious negligence, would amount to breach of the principles of proportionality and legal certainty.

  34. According to the United Kingdom Government, where an inspection or other check discloses an overdeclaration of the area eligible for aid which has led to overpayment, and where administrative checking of the declarations made in earlier years shows that the same mistake was made, also leading to the payment of sums which were not due, then, subject to any question of limitation, it would be anomalous if the competent authority were to be entitled to use the correct area for the current year only and not to be able to make corrections in respect of the earlier years. The provisions of Article 3 of Regulation No 2988/95 make it clear that penalties may be imposed, or reimbursement demanded, with retroactive effect.

  35. The French Government submits that, although the MAFF inspections did not take place until 1997, the occurrence which gave rise to the penalties to be imposed, that is to say, the overdeclaration of the areas, took place in 1993. In its view, therefore, the question is not whether the penalties provided for by Regulation No 3887/92 may be retroactive but simply whether application of those penalties is time-barred for the years 1993 to 1996.

  36. The Commission submits that there is nothing in Regulation No 3887/92 to suggest prima facie that irregularities coming to light after the end of the year in which payment was made ought not to be penalised. The integrated system introduces a regime of checking by sampling, which means that a thorough on-the-spot check cannot be carried out every year for each application submitted. It is therefore inevitable that certain inaccuracies should not become apparent to the competent authority until some years after the application for aid was made.

    Findings of the Court

  37. As a preliminary point, it is to be noted that, according to the seventh and ninth recitals in the preamble to Regulation No 3887/92, that regulation is intended to ensure effective monitoring of compliance with the provisions on Community aid and to prevent and penalise effectively irregularities and fraud.

  38. On submitting an application for 'area' aid, a farmer is bound by Article 4(1) of Regulation No 3887/92 to declare the parcels of the holding which satisfy the various conditions imposed by the Community rules on the grant of such aid.

  39. In addition, the Court has held, with regard to the integrated system established by Regulations Nos 3508/92 and 3887/92, that an effective administrative and control procedure requires the information to be provided by an applicant for aid to be complete and accurate from the outset in order that he may make a proper application for the grant of compensatory payments and avoid the imposition of penalties (see, to that effect, Case C-369/98 Fisher [2000] ECR I-6751, paragraphs 27 and 28, and Case C-63/00 Schilling and Nehring [2002] ECR I-4483, paragraph 34).

  40. The construction which the applicants in the main proceedings propose to place on the first and second paragraphs of Article 9(2) of Regulation No 3887/92 would run directly counter to the objectives pursued by that regulation and to the system of penalties established by the Community institutions within the integrated system.

  41. As the Commission has rightly observed, if it were impossible to impose penalties on recipients of aid because they had overestimated the areas declared in the years before that in which the inspection was made, farmers who had, in the past, made inaccurate declarations as to the areas for which aid was requested and who, therefore, received aid for an overestimated area, would be unjustly enriched.

  42. Moreover, the restrictive interpretation of the first and second paragraphs of Article 9(2) of Regulation No 3887/92 proposed by the applicants in the main proceedings would render impossible any efficient administration of the Community aid scheme and would impose an unreasonable duty to perform inspections on the competent authorities.

  43. The provisions establishing the integrated system make it clear that the national authorities are not required, or even able, to carry out checks to verify all statements made in aid applications submitted to them (see, to that effect, Schilling and Nehring, cited above, paragraph 37). With regard, in particular, to the on-the-spot checks provided for in Article 6(3) of Regulation No 3887/92, those checks are to relate to a significant percentage of applications, which may, however, represent only 5% of the applications for 'area' aid submitted by farmers.

  44. It necessarily follows that the competent authorities are neither required nor able to find inaccuracies or overestimations in the areas declared in the applications for aid in the very year in which they are submitted, and it may be that they do not become aware of them until some years after the first application was submitted.

  45. Furthermore, the construction placed on the first and second paragraphs of Article 9(2) of Regulation No 3887/92 by the applicants in the main proceedings would be contrary to the Community's financial interests, whereas Regulation No 2988/95 was adopted in order to protect those interests.

  46. Since an inaccurate declaration of the eligible area in the application for aid referred to in the first and second paragraphs of Article 9(2) of Regulation No 3887/92 constitutes an irregularity within the meaning of Article 1(2) of Regulation No 2988/95, and since the reduction in the area actually determined and, consequently, the reduction in the amount of aid calculated on that basis constitute an administrative penalty for the purposes of Article 2(2) of that regulation, the latter is plainly applicable to a dispute such as that in the main proceedings.

  47. According to the seventh recital in the preamble to Regulation No 2988/95, Community administrative penalties, such as those provided for under the integrated system, must provide adequate protection of the Community's financial interests. In addition, the 13th recital in the preamble to that regulation makes it clear that Community law requires the Commission and the Member States to check that Community budget resources are used for their intended purpose.

  48. Where the applicant for aid has submitted incorrect declarations for the years before that in which an inspection or other check has revealed the irregularities he has committed, limiting the application of the penalties provided for in the first and second paragraphs of Article 9(2) of Regulation No 3887/92 to that one year alone would not constitute adequate protection of the Community's interests.

  49. The argument adduced by the applicants in the main proceedings that such a construction of the first and second paragraphs of Article 9(2) of Regulation No 3887/92 would be contrary to the principle of proportionality cannot be accepted.

  50. It must here be borne in mind, first, that the Community institutions have a wide measure of discretion in agricultural matters and, second, that Regulation No 3887/92provides for penalties graduated according to the seriousness and magnitude of the irregularity committed (Schilling and Nehring, cited above, paragraph 39). With regard to the penalties concerning applications for 'area' aid, Article 9(2) of that regulation lays down penalties ranging from reduction of the unitary amount of the aid to complete exclusion from the aid scheme.

  51. In addition, in accordance with Article 3(1) of Regulation No 2988/95, proceedings in respect of irregularities within the meaning of that regulation are subject to limitation periods. Those periods are of four years from the time the irregularity was committed or, in the case of continuous or repeated irregularities, from the day on which the irregularity ceased.

  52. Accordingly, the application of deterrent and effective penalties in respect of irregularities in applications for aid concerning the years before that in which those irregularities came to light, subject to observance of the limitation periods prescribed by Regulation No 2988/95, to a farmer who has made an inaccurate declaration, even though not intentionally or as a result of serious negligence, cannot be considered to be unjustified or disproportionate.

    Further observations submitted to the Court

  53. The applicants in the main proceedings observe, as a subsidiary point, that pursuant to the fourth paragraph of Article 9(2) of Regulation No 3887/92, the reductions provided for by the second sentence of the first paragraph of Article 9(2) are not to be applied if the farmer can show that his determination of the area was accurately based on information recognised by the competent authority.

  54. The French Government also submits that it is possible not to apply the penalties under the first and second paragraphs of Article 9(2) of Regulation No 3887/92, in accordance with the fourth paragraph thereof, if the farmer proves that he made correct use of information recognised by the competent authority.

  55. The Commission observes that, in accordance with the fourth paragraph of Article 9(2) of Regulation No 3887/92, the reductions provided for in the first and second paragraphs thereof are not to be applied if the farmer can show that his determination of the area was accurately based on information recognised by the competent authority. Since the documents published by MAFF have always accepted that the size of parcels indicated on OS maps would be allowed for the purposes of the integrated system, the Commission submits that the derogation provided for by that paragraph might in fact be relevant to the case before the national court.

  56. In the Commission's opinion, the only situations in which that derogation ought not to be applied would be where the parcel size shown on the OS map was so clearly wrong that the applicant could not reasonably have relied on it or where the competent authority can show that the applicant possessed other data which clearly showed thatthe data he used were incorrect. Such errors would manifestly be indicative of serious negligence or fraud.

    Findings of the Court

  57. It is settled case-law that the Court can provide the national court with an interpretation of Community law which may assist it in deciding the case in the main proceedings (Case C-175/99 Mayeur [2000] ECR I-7755, paragraph 22).

  58. The Court of Justice may therefore deem it necessary to consider provisions of Community law to which the national court has not referred in the text of its question (Case 35/85 Tissier [1986] ECR 1207, paragraph 9).

  59. The fourth paragraph of Article 9(2) of Regulation No 3887/92 is not mentioned in the order for reference, but it provides that the reductions referred to in particular in its first two paragraphs are not to be applied if the farmer can show that his determination of the area was accurately based on information recognised by the competent authority.

  60. As paragraphs 21 and 22 above make clear, the applicants in the main proceedings calculated the areas referred to in their applications for aid using OS maps which were accepted by MAFF in the preparation of those applications. One of them also used the areas of the fields in question as calculated by MAFF during an inspection carried out in 1995.

  61. In response to a question asked at the hearing, as to whether the national court might apply the fourth paragraph of Article 9(2) of Regulation No 3887/92 in the dispute in the main proceedings, the United Kingdom Government stated that, although farmers may in general rely on OS maps in calculating the area declared in their applications for aid, they must take account of any subsequent alterations to those maps and comply with the instructions with regard to the integrated system contained in MAFF's manual concerning the use of those maps. The parcels in question must be farmed or used in their entirety in step with normal farming practice and there must have been no change in their delimitation.

  62. The fourth paragraph of Article 9(2) of Regulation No 3887/92 provides that if an application for aid has been accurately based on information recognised by the competent authority the penalties provided for in the first and second paragraphs of that provision must not be imposed.

  63. It falls, therefore, to the national court to consider, in accordance with the provisions of the fourth paragraph of Article 9(2), whether the applicants in the main proceedings accurately based their applications for aid on information recognised by the competent authority. If they did, the provisions of the fourth paragraph of Article 9(2) make it clear that the first and second paragraphs of that article cannot be applied.

  64. In light of the foregoing, the answer to be given to the question referred for a preliminary ruling must be that, on a proper construction of the first and second paragraphs of Article 9(2) of Regulation No 3887/92, where the competent authority discovers that an applicant for 'area' aid has made an incorrect declaration, neither intentionally nor as the result of serious negligence, which has entailed overdeclaration of the area eligible for aid and that the same mistake was made in the years prior to that in which the mistake was discovered, thus leading to overdeclaration of the area eligible for aid in each of those years, that authority is required, subject to observance of the limitation periods laid down in Article 3(1) of Regulation No 2988/95, to reduce the area actually determined in order to calculate the aid payable in respect of the previous years.

  65. In accordance with the fourth paragraph of Article 9(2) of Regulation No 3887/92, the reductions referred to in the first and second paragraphs of that article are not to be applied if the farmer shows that his determination of the area was accurately based on information recognised by the competent authority. It is for the national court to establish whether or not that has been shown in the case in the main proceedings.

    Costs

    66. 66. The costs incurred by the United Kingdom and French Governments 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 action pending before the national court, the decision on costs is a matter for that court.

    On those grounds,

    THE COURT (Sixth Chamber),

    in answer to the question referred to it by the High Court of Justice of England and Wales, Queen's Bench Division (Crown Office), by order of 26 January 2000, hereby rules:

    On a proper construction of the first and second paragraphs of Article 9(2) 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, as amended by Commission Regulation (EC) No 1648/95 of 6 July 1995, where the competent authority discovers that an applicant for 'area' aid has made an incorrect declaration, neither intentionally nor as the result of serious negligence, which has entailed overdeclaration of the area eligible for aid and that the same mistake was made in the years prior to that in which the mistake was discovered, thus leading to overdeclaration of the area eligible for aid in each of those years, that authority is required, subject to observance of the limitation periods laid down in Article 3(1) of Council Regulation (EC, Euratom)No 2988/95 of 18 December 1995 on the protection of the European Communities' financial interests, to reduce the area actually determined in order to calculate the aid payable in respect of the previous years.

    In accordance with the fourth paragraph of Article 9(2) of Regulation No 3887/92, the reductions referred to in the first and second paragraphs of that article are not to be applied if the farmer shows that his determination of the area was accurately based on information recognised by the competent authority. It is for the national court to establish whether or not that has been shown in the case in the main proceedings.

    Puissochet
    Gulmann
    Skouris

    MackenColneric

    Delivered in open court in Luxembourg on 19 November 2002.

    R. Grass F. Macken

    Registrar President of the Sixth Chamber

    1: Language of the case: English.

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