C-131/00

NILSSON

OPINION OF ADVOCATE GENERAL STIX-HACKL delivered on 12 July 2001 1

I — Introductory remarks journal existed. In this check it was estab- lished that, although Mr Nilsson possessed a stall journal, it contained no information about his animals. However, it is not disputed that on the day of the on-the-spot 1. In this case, the national court (Länsrät- check Mr Nilsson possessed the number of ten i Norrbottens län (Sweden)) refers for a bovine animals stated in the application, preliminary ruling the question whether subject to the proviso that only seven of the under Community law the right to a nine milk cows listed in his application compensatory allowance for farming in were present. mountain, hill and certain less-favoured areas, which is granted inter alia for milk cows, does not exist, irrespective of the actual number of the animals in question, if none of the animals for which a compen- satory allowance (hereinafter 'aid') is claimed has been entered in the keeper's register (hereinafter 'stall journal'). III— The relevant Community provisions

Council Regulation (EEC) No 3508/92 of 27 November 1992 establishing an inte- grated administration and control system for certain Community aid schemes 2 I I — Facts

2. Ingemar Nilsson, a keeper of animals, 3. Article 5 reads: applied for such aid for the year 1997 by application dated 2 April 1997. He made the application for a total of fifteen bovine animals, including nine milk cows. An on- the-spot check was carried out on 16 Octo- ber 1997 to determine the number of 'The system for the identification and bovine animals he had and that a stall registration of animals to be taken into

'Notwithstanding the second subparagraph of the preceding paragraph, where a special premium on slaughter or on the first Commission Regulation (EEC) placing on the market of animals with a No 3887/92 of 23 December 1992 laying view to their slaughter is granted in accor- down detailed rules for applying the inte- dance with the provisions foreseen in the grated administration and control system Commission Regulation establishing for certain Community aid schemes, 4as detailed rules relating to the premium amended by Commission Regulation (EC) regime foreseen in Articles 4a to 4k of No 1648/95 of 6 July 1995 amending Reg- Council Regulation (EEC) No 805/68 6 ulation (EEC) No 3887/92 laying down each on-the-spot check shall comprise:...'

3 — OJ 1992 L 355, p. 32. 5 — OJ 1995 L 156, p. 27. 4 — O J 1992 L 391, p. 36. 6 — OJ L 148 of 28 June 1968, p. 24.

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7. Article 10(2) reads in part: (b) in other cases:

'2. If the number of animals declared in an — by the percentage corresponding to aid application exceeds that found during the difference found if this is not checks the aid shall be calculated on the more than 5%, number of animals found. However, except in cases of force majeure and after para- graph 5 has been applied, the unit amount of the aid shall be reduced:

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granted to the applicant during the calen- 10. Article 11 provides inter alia that the dar year concerned shall, except in cases of penalties laid down in this Regulation shall force majeure, be reduced proportionately. be without prejudice to additional penalties laid down at national level.

However: 11. Article 13 provides that an application shall be rejected if an on-the-spot check cannot be made through the fault of the farmer. — if the difference found during an on- the-on-the-spot check is greater than or equal to 20% of the number of animals present or if a difference of at least 3% or at least two animals is found during 12. Article 14 provides inter alia that the two checks in the same year, no pre- farmer will be required to make reimburse- mium shall be granted for that calendar ment in cases of wrong payment. year,

A — The legal situation at the relevant time 14. In this connection, the Swedish court refers the following question to the Court of Justice for a preliminary ruling: 16. The present case relates to the grant of aid, which, in accordance with the third indent of Article 1(1)(b) of Regulation No 3508/92, is within the scope of that regulation. Article 5 of Regulation 'With reference to Article 5 of Council No 3508/92 provides that the system of Regulation (EEC) No 3508/92, the Court registration of animals which is the subject of Justice is requested to give a preliminary of this case is to be set up in accordance ruling on the question whether that article with Directive 92/102. However, that direc- is to be understood as meaning that entitle- tive ceased to apply to bovine animals as a ment to aid is excluded where no notes result of Regulation (EC) No 820/97. 7 have been made in the animal keeper's register (stall journal).'

17. In this connection, the Commission explains that under Article 22 of Regula- tion No 820/97, the provisions of that regulation apply in principle from 1 July V — The question submitted by the 1997. But by virtue of the second sentence national court of Article 1(2) of that regulation, the pro- visions of Title I of that regulation which apply to the registration of bovine animals

15. It should first be noted that Mr Nilsson 7 — Council Regulation (EC) No 820/97 of 21 April 1997 establishing a system for the identification and registration has made no submissions and that the of bovine animals and regarding the labelling of beef and beef products (OJ 1997 L 117, p. 1, see Article 1(2), second defendant authority has largely limited sentence).

18. The conclusion of the Commission's submissions is to be affirmed, but not the reasoning. For on closer consideration the subject of the national litigation is the fact that Mr Nilsson had not registered any of his animals in the stall journal although he applied for aid for several bovine animals; this infringement was punished by the Swedish authorities by a repayment order. The proceedings therefore concern the interpretation of the Community law basis for any — complete — repayment, that is, for a sanction. But in principle the 19. Taking this date as a basis, it must be relevant rules can be determined only by c o n c l u d e d t h a t , since R e g u l a t i o n the law prevailing at the date of the No 820/97 replaced Directive 92/102 (in presumed infringement. 9The first event part) at the earliest from 1 July 1997, this that suggests itself as the act constituting regulation must be disregarded in answer- the infringement is the breach of the duty to ing the question referred for a preliminary ruling. The question referred relates to the interpretation of Article 5 of Regulation 8 — See Article 10 of Commission Regulation (EC) No 2629/97 No 3508/92, and therefore it is necessary of 29 Decembet 1997 laying down detailed rules for the to proceed on the assumption that the implementation of Council Regulation (EC) No 820/97 as regards eartags, holding registets and passports in the 'system for identification and registration' framework of the system for the identification and registra- tion of bovine animals (OJ 1997 L 354, p. 19). mentioned there must be considered in the 9 — See also Article 49(1) of the Charter of Fundamental Rights light of the provisions of Directive 92/102, of the European Union (OJ C 364, p. 1, of 18 December 2000). which at that date was still fully valid.

24. The Commission argues that the com- plete loss of the right to aid can be an 22. In this connection, the Commission 'appropriate' sanction and in support refers stresses the importance of a properly kept to the judgment in the Schumacher case, stall journal for the effectiveness of the relating to a similar duty on the part of a monitoring and identification system person receiving aid, in which the Court of required by Article 5 of Regulation Justice held that, if this duty was disregar- No 3508/92. In its written submissions, ded, 'the complete loss of the special however, it limits itself mainly to quoting premium, although it was a severe sanc- from the Community legislation, giving tion, was appropriate and necessary to visual emphasis to some passages. In achieve the goal of the provision in ques- explanation, it merely submits that Arti- tion, that is, to prevent irregularities and cles 4 and 5 of Directive 92/102 impose on deception'. 10 the Member States a duty to ensure that the keepers of animals have a properly kept 10—Judgment in Case C-365/92 [1993] ECR I-6071, at stall journal in which they must enter paragraph 30.

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25. The question therefore arises as to that the Member States have an obligation w h e t h e r A r t i c l e 5 of R e g u l a t i o n to ensure that the keepers of animals have a No 3508/92, in conjunction with Directive stall journal, that they make therein the 92/102 and implementing Regulation entries required by the directive and that No 3887/92, give rise to sanctions, and if they keep the stall journal in accordance so which sanctions, where aid is applied for with particular provisions and that they in respect of animals not entered in the stall keep it available. journal.

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hill and less-favoured areas states that 'the mission, on the basis of the powers con- provisions on controls and penalties ferred by Article 12 of Regulation regarding aid for animals are to be found No 3508/92. According to the second sen- in Council Regulation No 3508/92 of tence of Article 12 of that regulation, the 27 November 1992 and Council Regula- implementing regulations relate 'in parti- tion (EEC) No 3887/92 of 23 December cular to... d) the administrative and on-the- 1992.' spot checks and the checks by remote sensing'. So, Regulation No 3887/92, in so far as it relates to 'provisions for the identification and registration of animals', serves to put Article 5 of Regulation No 3508/92 into specific terms. 30. It must therefore be concluded that the Kingdom of Sweden has clearly implemen- ted the provisions of Directive 92/102 on the stall journal in national law with regard to the substantial conditions, but not with regard to controls and penalties. It seems therefore that the penalties are transposed by way of a reference to directly applicable 32. In order to answer the question referred Community law. 1 3 Since Regulation for a preliminary ruling, therefore, it is No 3508/92 — as set out above — does necessary to consider whether it is possible not itself contain any general or specific to derive from this implementing regulation statements on the matter of sanctions, it is as a whole or from one of its provisions an necessary in addition to consider imple- indication regarding the applicable sanc- menting Regulation No 3887/92 in order tions for failing to enter animals in the stall to answer the question of interpretation journal. Such provisions are in particular referred by the national court. contained in Article 10 of the implement- ing regulation, which I will now consider in more detail, for this article also deals with checks in the case of aid provisions for 'animals'. (c) Implementing Regulation No 3887/92

34. However, it is clear that the Commis- sion considers that a sanction in the form of a complete loss of aid where no entries at 36. In addition to Article 10(3), Arti- all have been made in the stall journal can cle 10(2) of the implementing regulation be justified on the basis of Article 10(3) of also contains a provision under which in Regulation No 3887/92 because under the certain circumstances the claim to aid may first subparagraph of Article 10(4) of that be completely lost. The scope of this regulation, 'male bovine animals shall not provision, unlike that of paragraph 3, is be counted [for the grant of aid] unless not restricted to specific types of aid. these are the animals identified in the aid application, or in the case where paragraph 3 is applied, if they can be identified with the help of the register.'

the present one, therefore, in which fewer that both in the judgment cited and in than 20 animals were stated to exist and numerous other judgments of the Court 15 this difference was a difference of exactly the question was whether a sanction that two animals, under Article 10(2)(a) first existed in Community law was incompati- indent of the implementing regulation, the ble with the general principles of Commu- only possibility is a pro rata reduction of nity law to the extent that it had to be the aid. The Swedish authority — as can considered as 'disproportionate' as defined be seen from the supporting documents to in the case-law of the Court. Unlike in its observations — decided that there was those cases, however, the question to be a 100% difference, because it evidently answered now is whether in the present equated the number of animals determined case any sanction at all follows from the in an on-the-spot check, which is one of the relevant Community law and if so, which. necessary elements, with the number of animals recorded in the stall journal.

40. As a first step, therefore, it would be 38. It must therefore be considered that necessary to investigate whether the general Regulation No 3887/92 likewise contains context of the Community provisions relat- no express or implied provisions to the ing to the stall journal provides a legal basis effect that, as a general rule, a failure to for a sanction such as that in the present enter animals in the stall journal is, or case, that is to say the total loss of could be, penalised by total loss of the right entitlement to aid where the animal keeper to aid. has applied for such aid for animals with- out having entered the animals in the stall journal.

45. Could the identification of the animals 42. That is the case here. For it has been be seen as one of these purposes of the stall shown that in the present case, at the date journal? relevant to the question referred for a preliminary ruling, the duty to possess a properly kept stall journal arose from Article 5 of Regulation No 3508/92 in conjunction with Directive 92/102. The Swedish statutory provisions applicable to controls and penalties, however, refer to 46. In order to emphasise the importance implementing Regulation No 3887/92, of a properly kept stall journal for an which in turn contains no express or effective monitoring system, the Commis- implied legal basis for a sanction such as sion set out what information is to be that imposed in the present case. entered into the stall journal under Direc- tive 92/102. It also referred to the first subparagraph of Article 10(4) of Regula- tion No 3887/92, which provides that animals are not taken into account for the grant of aid if it is not possible to identify 43. In the Hopermann rulings, the Court them in an on-the-spot check or, in the case held that, where the requirements for of paragraph 3, by means of the stall sanctions for non-compliance with an obli- journal. gation under Community law are not mentioned in the Community law provi- sions themselves, those requirements are fulfilled if compliance with the Community law obligation which is to be implemented is 'essential in order to ensure the proper functioning of the scheme of aid in ques- 47. There is no doubt that the existence of tion' and it follows 'from the purpose of properly kept stall journals makes it easier this obligation' that 'only ... loss of entitle- to monitor the aid covered by Regulation ment to the aid' is an effective sanction for failure to observe it. 17 18 — Here, a particularly strict standard, particularly with regard to the principle of legality laid down in Arti- cle 49(1) of the Charter of Fundamental Rights of the 17 — Cited above at footnote 16, Case C-357/88, at paragraph European Union (cited above at footnote 9), should be 8, and Case C-358/88, at paragraphs 9 and 11. applied.

50. If it must therefore be assumed that a 48. This conclusion follows firstly from the properly kept stall journal serves mainly to fact that Article 10(2) of Regulation identify the animals and that the determi- No 3887/92 contains a system for deter- nation of the number of animals is in mining the number of animals which principle to be made by on-the-spot checks, appears to consist largely in an on-the-spot then it must once again be emphasised that, check on the number of animals actually according to the information provided by present. If the number deviates from the the national court, only the number of milk number given in the application, in other cows that may afford entitlement to aid is words if it is lower, the graduated sanction at issue in the main proceedings, in so far as mechanisms mentioned above apply. Only the number did not coincide with the in the case of particular types of aid, that is number in the application at the date of to say, those that are within the scope of the on-the-spot check. As far as can be Article 10(3) in conjunction with Arti- seen, the Swedish authority did not ques- cle 6(6) of Regulation No 3887/92, does tion that the animals for which the appli- it appear that the number of animals is also cation was made were the same animals to be determined additionally by way of the that were undisputedly in the possession of entry in the 'special register' mentioned the keeper. there.

51. Nevertheless, it should be considered whether one of the purposes of the stall journal may also be related to the checking 49. To support its view that the implement- of the number of the animals. ing regulation contains a legal basis for sanctions such as those in the present case, the Commission cites Article 10(4) subpar- agraph 1, but this subparagraph, too, tends rather to support the assumption that a properly kept stall journal serves mainly to identify the animals. In addition, even 52. Could, therefore, one of the purposes under this provision the identification may of a properly kept stall journal be seen to lie in principle be made without a stall journal. in establishing the number of animals?

53. With regard to the number of animals Court of Justice in the Hopermann cases, that may afford entitlement to aid, a this sanction does not appear to be 'essen- properly kept stall journal appears to be tial' in this case. important at most as a matter of evidence. This is important inter alia where the animal keeper — as in the present case — claims that a certain number of the animals listed in the application became ill and died or were slaughtered after the application was made but before the date of the on-the-spot check. 55. So, where — as in this case — it is not the identity of the animals which is actually in question, but the fact that the number of animals at the date of the on-the-spot check is lower than the number in the application for aid, then the failure to enter animals in the stall journal cannot in any event be regarded, according to the case-law quoted, as such a serious violation of a Community law obligation that no sanction other than the complete loss of the right to aid would 54. Thus, for the determination of the guarantee attainment of the aim of that number of animals — which determines obligation. the amount of aid — the second sentence of Article 4(1)(a) of Directive 92/102 pro- vides that there shall be an obligation, laid down in national law, for all movements in the animals present on a holding to be documented in the stall journal. Arti- cle 10(2) of Regulation No 3887/92 relies on the number of animals actually found in 56. In view of all the foregoing considera- the on-the-spot check as a basis for reduc- tions, it cannot therefore be accepted that tion or cancellation of the right to aid. If — the general context of the Community law as in the present case — the animal keeper provisions relating to the stall journal submits that the reduced number of ani- affords, in the circumstances of the present mals on the holding results from changes case, a legal basis supporting a sanction for that took place after the application was non-entry of animals in the stall journal by made, he will presumably be able to prove complete loss of the right to aid. 19 this only on the basis of a properly kept stall journal. In contrast to the pursuit of public interest purposes (for example, 19 — The argument that Article 5 of Regulation No 3508/92 in conjunction with implementing Regulation No 3887/92, where the stall journal enables identifica- as amended at the date relevant to the national litigation, still did not provide for a complete loss of aid where entries tion), the proper keeping of the stall journal were missing is also supported by the fact that the current is at all events mainly in the animal keeper's version of Article 10 of Regulation No 3887/92 now contains a provision dealing with defective register keeping own interest and thus needs no sanction, let for all forms of aid covered by the Regulation; this provision is based on the former rules in Article 10(3) of alone a sanction in the form of the com- Regulation No 3887/92. Under the rules now in force, aid plete loss of the right to aid — or, in other is in principle reduced in accordance with the difference between the number of animals stated in the application words, to quote from the case-law of the and animals entered in the stall journal.

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