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1 — Original language: French. 2 — OJ 1992 L 391, p. 36 (hereinafter also referred to as 'the Regulation1). 4. Article 2(2), second subparagraph, of 3 — This notion will be explained in point 44 of this Opinion. It Regulation No 1765/92 states that 'the is used here in its usual, but legally incorrect, sense. 4 — This is Community aid the amount of which is proportional to the area cultivated. Payment of the aid is subject to compliance with certain requirements, in particular the need to declare the area of the agricultural holding which is under 5 — Council Regulation of 30 June 1992 establishing a support cultivation. I will return to this question when setting out system for producers of certain arable crops (OJ 1992 the legal background to this case. L 181, p. 12).

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compensatory payment is granted for the each year, an "area" aid application indi- area which is down to arable crops or cating: subject to set-aside in accordance with Article 76 of this Regulation...'.

— agricultural parcels, including areas under forage crops, and agricultural parcels covered by a set-aside measure for arable land and those laid fallow, B — The rules implementing the aid sys- tem

— where applicable, any other necessary Regulation (EEC) No 3508/92 7 information provided for either by the regulations relating to the Community schemes, or by the Member State con- cerned.

enable the parcel to be identified in the tativeness of the aid applications submitted. alphanumeric identification system for The risk analysis is to take account of the agricultural parcels.' amount of aid, 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 the past years, and other factors to be defined by the Member State. Regulation No 3887/92

7. The Regulation defines the detailed rules for the application of the integrated system. 11. Article 6(7) of the Regulation is worded as follows:

However, in the case of a false declaration made intentionally or as a result of serious '1. If the area actually determined is found negligence: to be greater than that declared in the "area" application, the area declared shall be used for calculation of the aid.

— the farmer in question shall be excluded from the aid scheme con- cerned for the calendar year in ques- tion, 2. If the area actually determined is found to be less than that declared in an "area" aid application, the area actually deter- mined on inspection shall be used for calculation of the aid. However, except in cases of force majeure, the area actually and determined on inspection shall be reduced:

— in the case of a false declaration intentionally made, from any aid — by twice the difference found if this is scheme referred to in Article 1(1) of more than 2% or two hectares but not Regulation (EEC) No 3508/92 for the more than 10% of the determined area, following calendar year, in respect of an area equal to that for which his aid application was rejected.

— by 30% if the difference found is more These reductions shall not be applied if the than 10% but not more than 20% of farmer can show that his determination of the determined area. the area was accurately based on infor-

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13. Article 9(2) of Regulation No 3887/92 was subsequently amended by Commission Regulation (EC) No 1648/95. 9The first and second indents of that provision were replaced by the following words: 10 15. Pursuant to Article 14(1), first sub- paragraph, of Regulation No 3887/92, in cases of wrong payment the farmer con- cerned is required to reimburse the amount in question plus interest for the period between payment and the reimbursement by the beneficiary. '... by twice the difference found if this is more than 3% or two hectares but not 11 — Council Regulation of 18 December 1995 on the pro- more than 20% of the determined area'. tection of the European Communities' financial interests (OJ 1995 L 312, p. 11). 12 — On the basis of that provision, the Court held in Case C-354/95 National Farmers' Union and Others [1997] ECR I-4559, paragraphs 40 and 41, that the less severe 9 — Commission Regulation of 6 July 1995 (OJ 1995 L 156, penalties provided for by Article 9{2), first and second p. 27). subparagraphs, of Regulation No 3887/92, as amended by 10 — See Article 1, point 5, of Regulation No 1648/95. Regulation No 1648/95, had to be applied retroactively.

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20. According to the order for reference, the errors made by the applicants in the 17. W.H. Strawson (Farms) Ltd and J.A. main proceedings were not made as a result Gagg & Sons (a firm) ('the applicants in the of serious negligence or intentionally. Fol- main proceedings') are farmers who lowing the inspections, the MAFF deter- applied for 'area' aid payments for the mined the area concerned by the 'area' aid 1997 calendar year. in 1997 and applied the penalties set out in Article 9 of Regulation No 3887/92. The order for reference also states that the dispute between the applicants in the main proceedings and the MAFF does not relate to the way in which the MAFF dealt with 18. They had previously received payments the 'area' aid applications for the 1997 of the same kind in respect of the 1993 to calendar year but to the way in which it 1996 calendar years. dealt with the applications made for the 1993 to 1996 calendar years.

13 — As to the causes, the objectives pursued by that reform and the mechanisms established in order to achieve them, see points 3 to 6 of my Opinion in the National Fanners' 14 — Hereinafter 'the OS maps'. Union case. 15 — Hereinafter 'the MAFF.

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24. 'In circumstances where

22. The applicants in the main proceedings disputed that they were under an obligation to repay to the MAFF the sums of GBP 21 052.90 and GBP 6 770.06 respectively (i) as a result of an inspection, the com- and brought an action before the national petent authority discovers that an court. They accept the MAFF's decision applicant under Arable Area Payments with regard to the measures adopted by it Scheme has made an error (otherwise in relation to the applications for the 'area' than intentionally or as a result of gross aid in respect of the 1997 calendar year. negligence) which has resulted in an Moreover, they accept that, pursuant to over-declaration of area in the appli- Article 14 of the Regulation, they must also cation for aid payments; and

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(ii) the competent authority is satisfied by 26. At the outset, I would point out that it reason of that inspection and other is settled case-law,16 that a preliminary checks that the applicant has made a reference is a direct means of cooperation corresponding error in previous years between the national court and the Court resulting in each of those years in an of Justice. Similarly, the Court of Justice overdeclaration of area in the appli- has invariably held that assessment of the cation for aid payments, facts is a matter for the national court and that the Court of Justice may not alter the substance of questions referred for a pre- liminary ruling. 17

is the competent national authority required to reduce the area actually deter- mined on inspection pursuant to 27. However, in the context of proceedings Article 9(2) of Commission Regulation under Article 234 EC, the Court has also (EEC) No 3887/92 for the purpose of always held that in order to provide an calculating the aid due in respect of pre- answer which is useful to the national vious years?' court, it may, taking into account the facts communicated by that court, 18 extract from the wording of the questions formu- lated by the national court those matters which pertain to the interpretation of Community law. 19

30. The Court of Justice may therefore reformulate the question referred to it in such a way as to enable the national court 32. In the present case, it is clear from the to resolve the dispute in the main proceed- grounds of the order for reference that the ings in compliance with the relevant provi- High Court is essentially asking whether sions of Community law. the penalty, namely the reduction of the area determined following the investi- gations during 1997, is lawful in regard to the aid paid in respect of the 1993 to 1996 calendar years. However, in its question to 31. Consequently, in my opinion, in order the Court of Justice, the High Court fails to to provide an appropriate answer to the include one fundamental fact. 21 national court, the Court of Justice may also take into account the facts, where they are:

33. The order for reference explains that:

— capable of legal classification under the Community legislation which the Court of Justice is being asked to interpret; 'The applicants calculated the area in respect of which the application [for the 1993 to 1997 calendar years] was made by reference to Ordnance Survey maps. MAFF Guidance notes on [the integrated system] — set out in the grounds of the order for payments had, since 1993, stated that the reference; area shown in Ordnance Survey maps

20 — See, to that effect, Case C-61/98 De Haan [1999] ECR 21 — Applying the criteria which I have set out in point 31 of 1-5003, paragraphs 27 and 28. this Opinion.

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'These reductions shall not be applied if the 24 — In the present case, the High Court's question relates farmer can show that his determination of exclusively to the reduction of the area determined in respect of the aid granted for the 1993 to 1996 calendar the area was accurately based on infor- years (that is to say, prior to the 1997 investigation and mation recognised by the competent auth- inspection measures) in application of the rules laid down in Article 9(2), first and second subparagraphs, of the ority.' Regulation. As the question whether the reductions pro- vided for in that provision apply to the aid granted in respect of the 1997 calendar year has not been referred to the Court of Justice, the Court should not answer it. In that regard, I would point out that, in proceedings for a preliminary ruling, it is not for the Court of Justice to involve itself in the resolution of national issues which fall within the scope of the national court's jurisdiction (see, for example, Joined Cases C-10/97 to C-22/97 IN. CO. GE.-90 and Others [1998] ECR I-6307 paragraph 14). The preliminary reference procedure is based on a clear 36. This subparagraph therefore expressly separation of functions between national courts and tribunals on the one hand and the Community judicature covers situations such as those with which on the other (see, for example. Case 5/77 Tedeschi [1977] the High Court is concerned in the main ECR 1555). The question of the reductions due in respect of 1997, the calendar year in which the inspections took proceedings. Article 9(2), fourth subpara- place, might therefore have been the subject of a final decision under the national procedure. To suggest to the Court of Justice that its answer to the national court should be that the applicants for 'area' aid may not have such aid paid in respect of the calendar year of the 22 — Paragraph 4. inspections reduced in accordance with Article 9(2), first 23 — Which, it should be recalled, is the competent authority and second subparagraphs, of Regulation No 3887/92. with responsibility in the United Kingdom for administer- would be tantamount to suggesting that the Court should ing the integrated system and for making payments under intervene in issues falling exclusively within the national the 'area' aid schemes. legal system.

38. In the light of the above considerations, ent authority only upon the express con- I propose that the Court should reformu- dition that the fields thus measured have late the High Court's question in such a not been altered after publication of those way as to allow it to decide on the dispute maps. He stated that a manual concerning it in a way which complies with the the application of those maps provides all relevant provisions of Community law. necessary explanations in that regard. He Consequently, the Court of Justice will thus contended that, contrary to what is need to answer the question concerning the stated in the order for reference, the OS interpretation of Article 9(2), fourth sub- maps are recognised by the competent paragraph, of Regulation No 3887/92 by authority only if the applicant has complied reference to the situation described by the with the recommendations set out in the national court. In essence, it will be necess- manual. He went on to state that the ary to rule whether that provision auth- applicants in the main proceedings had orises a competent authority to apply, in not complied with the instructions in the the circumstances of the present case, the manual and that, accordingly, the dispute penalties which it has applied. 25 in the main proceedings relates to errors in the declarations of agricultural areas which do not originate in information recognised by the competent authority. Those various matters had been discussed before the High Court, which had found in favour of the MAFF. The High Court held that the applicants in the main proceedings had 39. In the light of the above considerations, not proved that they had in fact taken I also propose that the Court should answer information recognised by the competent that question in the negative. authority as a basis for determining the eligible areas. Consequently, the High Court ruled out the application of Article 9(2), fourth subparagraph, of the Regulation. The applicants in the main proceedings did not dispute that presenta- tion of the facts. 40. However, I cannot ignore an important aspect which came to light at the hearing. On that occasion, the relevant facts and national procedure set out by the High Court were the subject of considerable comment by the representative of the United Kingdom Government, who claimed that the High Court's presentation of those matters is incomplete. He sub- mitted that the agricultural areas indicated in OS maps are recognised by the compet-

exclusive jurisdiction of the national penalty, to aid paid in respect of years court 26 and that in proceedings under preceding that inspection. Article 234 EC the national court must set out the facts which will allow the Court of Justice to gain sufficient knowledge of the subject matter of the dispute and the matters at stake in it to give an interpre- 44. Like the French Government in its tation of Community law which is of use to observations, I consider that the applicants the national court. in the main proceedings are confusing the 'retroactivity' of penalties with the 'limita- tion' of the action imposing those penalties. The principle of the non-retroactivity of penalties is a principle common to all the legal systems of the Member States and 42. The dispute regarding the facts and the enshrined in Article 7 of the European national procedure set out by the High Convention on the Protection of Human Court must be determined by the compet- Rights and Fundamental Freedoms. It is ent national court in accordance with the also an integral part of the general prin- applicable national rules. ciples of law whose observance is ensured by the Court of Justice. 28 The Court has already held that provisions of Community law cannot have the effect of determining or aggravating the liability in criminal law 43. However, as a subsidiary point, I of persons who have committed offences believe that I must continue my line of before the entry into force of those provi- reasoning. For if the factual and procedural sions. 29 Retroactivity therefore refers to framework presented by the United King- the application of a legal measure to events dom Government at the hearing before the which have taken place before it entered Court of Justice is in fact correct 27 it would into force. Limitation, on the other hand, is be better to enable the High Court to avoid a means whereby a right or a right of action having to make a new reference for a is extinguished as a result of the failure to preliminary ruling and thus to avoid the exercise it before the expiry of the period additional delay inherent in such a pro- laid down by law. cedure. If the High Court considers that the errors committed in good faith by the applicants for 'area' aid did not originate in information recognised by the competent authority, it will be necessary to state 45. In the present case, although the whether the competent authority is auth- inspections took place only in 1997, the orised, by reason of errors committed when fact giving rise to the penalties, namely the determining the area which are discovered error in determining the eligible areas, following an inspection in a given year, to might have occurred when action in respect apply the reductions in eligible areas, as a of those penalties had not yet become

48. In the light of the above considerations, 47. The Regulation does not contain a I propose, in the alternative, that the provision on the limitation period in Court's answer to the High Court should respect of action by the competent auth- be that in a factual situation such as that set orities where they find such errors. How- out by the United Kingdom Government, ever, Article 3 of Regulation No 2988/95, Article 9(2), first and second subpara- which applies in the present case, 31 pro- graphs, of the Regulation, as amended by Regulation No 1648/95, does not preclude a competent authority from applying 30 — See National Farmers' Union and Others, paragraph 55. reductions in the eligible area, by reason 31 — Although Regulation No 2988/95 entered into force after of errors committed in determining the the first errors had been committed, the provisions in question laid down procedural rules. They introduced an agricultural areas discovered following an element of legal certainty which had not previously inspection in one year, as a penalty to aid existed, as they allow persons committing an infringement to ascertain the period after which the infringement will no paid in respect of the years preceding that longer be subject to penalties. By that regulation, the inspection. The competent authority's Community legislator wished to lay down general rules applicable to Community administrative penalties, for action must, however, observe the limi- example, rules on the limitation and the non-retroactivity of provisions for penalties (see the seventh recital in the tation periods laid down by Article 3 of Council's Proposal for Regulation (EC, Euratom) on the Regulation No 2988/95. protection of the Community's financial interests (COM 94/214 final, OJ 1994 C 216, p, 11)). Those procedural provisions therefore benefit the public and should be applied with immediate effect. Moreover, it follows from the Court's settled case-law that procedural rules apply to all proceedings pending at the time when they enter into 32 — Article 3(1), first subparagraph, of Regulation force (since Joined Cases 212/80 to 217/80 Salumi [1981] No 2988/95. ECR 2735, paragraph 9). 33 — Ibidem, second subparagraph.

— an applicant for 'area' aid has made an error which has resulted in an over-declaration of the area eligible for aid and that similar errors have been committed in previous years, but that

— the applicant can show that he correctly relied on information recognised by the competent authority in order to determine the eligible areas;

(ii) the competent authority is not required to reduce the area actually determined on inspection pursuant to Article 9(2), first and second subparagraphs, of Regulation No 3887/92 for the purpose of calculating the aid due in respect of previous years.

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