Opinion of Advocate General Ćapeta delivered on 17 September 2026
Provisional text
OPINION OF ADVOCATE GENERAL
ĆAPETA
delivered on 17 September 2026 ( 1 )
Case C ‑ 470/25
E. sp. z o.o.
v
Dyrektor Podkarpackiego Oddziału Regionalnego Agencji Restrukturyzacji i Modernizacji Rolnictwa w Rzeszowie,
joined parties:
Rzecznik Praw Obywatelskich,
Prokuratura Krajowa
(Request for a preliminary ruling from the Naczelny Sąd Administracyjny (Supreme Administrative Court, Poland))
( Reference for a preliminary ruling – Agriculture – Protection of the financial interests of the European Union – Council Regulation (EC, Euratom) No 2988/95 – Article 4(3) – Common agricultural policy – Financing, management and monitoring – Regulation (EU) No 1306/2013 – Article 60 – Circumvention clause – Consequences of finding that the conditions for obtaining an advantage have been artificially created – Concept of ‘advantage’ – Refusal or withdrawal of the entire amount of the support or only that amount which results from the artificially created conditions )
I. Introduction
1. If a farmer is found to have created artificial conditions by splitting a single agricultural holding in order to obtain a higher amount of support under the common agricultural policy (CAP) than the farmer would otherwise have been entitled to under the applicable EU rules, should the entire amount of the support be refused, or instead only that amount which results from the creation of artificial conditions?
2. That is in essence the question referred by the Naczelny Sąd Administracyjny (Supreme Administrative Court, Poland; ‘the Supreme Administrative Court’) in the present case. It invites the Court of Justice to interpret the concept of ‘advantage’ as used in Article 4(3) of Regulation (EC, Euratom) No 2988/95 ( 2 ) on the protection of EU financial interests and in Article 60 of Regulation (EU) No 1306/2013 ( 3 ) on the financing, management and monitoring of the CAP.
II. Legal framework
3. Article 4 of Regulation No 2988/95 states:
‘1. As a general rule, any irregularity shall involve withdrawal of the wrongly obtained advantage:
— by an obligation to pay or repay the amounts due or wrongly received,
— by the total or partial loss of the security provided in support of the request for an advantage granted or at the time of the receipt of an advance.
2. Application of the measures referred to in paragraph 1 shall be limited to the withdrawal of the advantage obtained plus, where so provided for, interest which may be determined on a flat-rate basis.
3. Acts which are established to have as their purpose the obtaining of an advantage contrary to the objectives of the [EU] law applicable in the case by artificially creating the conditions required for obtaining that advantage shall result, as the case shall be, either in failure to obtain the advantage or in its withdrawal.
4. The measures provided for in this Article shall not be regarded as penalties.’
4. Article 5 of Regulation No 2988/95 provides:
‘1. Intentional irregularities or those caused by negligence may lead to the following administrative penalties:
(a) payment of an administrative fine;
(b) payment of an amount greater than the amounts wrongly received or evaded, plus interest where appropriate; this additional sum shall be determined in accordance with a percentage to be set in the specific rules, and may not exceed the level strictly necessary to constitute a deterrent;
(c) total or partial removal of an advantage granted by [EU] rules, even if the operator wrongly benefited from only a part of that advantage;
(d) exclusion from, or withdrawal of, the advantage for a period subsequent to that of the irregularity;
(e) temporary withdrawal of the approval or recognition necessary for participation in [an EU] aid scheme;
(f) the loss of a security or deposit provided for the purpose of complying with the conditions laid down by rules or the replenishment of the amount of a security wrongly released;
(g) other penalties of a purely economic type, equivalent in nature and scope, provided for in the sectoral rules adopted by the Council in the light of the specific requirements of the sectors concerned and in compliance with the implementing powers conferred on the Commission by the Council.
2. Without prejudice to the provisions laid down in the sectoral rules existing at the time of entry into force of this Regulation, other irregularities may give rise only to those penalties not equivalent to a criminal penalty that are provided for in paragraph 1, provided that such penalties are essential to ensure correct application of the rules.’
5. According to Article 60 of Regulation No 1306/2013, entitled ‘Circumvention clause’:
‘Without prejudice to specific provisions, no advantage provided for under sectoral agricultural legislation shall be granted in favour of a natural or legal person in respect of whom it is established that the conditions required for obtaining such advantages were created artificially, contrary to the objectives of that legislation.’
III. The dispute in the main proceedings, the question referred for a preliminary ruling and the procedure before the Court
6. E. is a Polish company (‘company E.’), which has the status of an agricultural producer.
7. Company E. applied for payments in respect of agricultural parcels under EU agricultural support schemes for the year 2019. They concerned: (1) direct payments, namely the single area payment, the greening payment and the redistributive payment, (2) agri-environment-climate payments, and (3) payments for areas subject to natural or other specific constraints.
8. Those payments fell within the 2014-2020 CAP financing period. They were governed by the then applicable EU legislation, which included Regulation (EU) No 1307/2013 ( 4 ) on direct payments, along with Regulation (EU) No 1305/2013 ( 5 ) on rural development. Common rules on financing, management and monitoring of support of the CAP were governed by Regulation No 1306/2013, while Regulation No 2988/95 lays down general rules regarding checks, administrative measures and penalties concerning irregularities for the purpose of protecting EU financial interests in all areas of EU law, thus covering the CAP. ( 6 )
9. During an administrative check, the first-instance administrative authority ( 7 ) found that company E. had the same representative as B., a Polish company (‘company B.’) which also had the status of an agricultural producer and which applied for payments identical to those applied for by company E. The sole shareholder of companies E. and B. was N., another Polish company (‘company N.’).
10. During the proceedings, the first-instance administrative authority established that links existed between those three companies and between the persons who formed them and who were related to each other. For companies E. and B., such links were further evidenced by circumstances such as identical management methods and using services of the same entities (entities performing agrotechnical treatments, agricultural advisers and lawyers). That authority concluded that those two companies were linked by persons and capital. It also noted, inter alia, that those two companies were established at almost the same time and concluded lease agreements with each other, and that they began implementing the agri-environment-climate commitment in 2015, as part of the same package and option. Consequently, that authority issued decisions refusing to grant the payments to company E.
11. This was upheld on appeal by decisions taken by the second-instance administrative authority ( 8 ) on 30 November 2021.
12. As additional evidence, that authority presented a simulation of calculations for each of the payments which companies E., B. and N. would have obtained if they had applied as a single entity. It then compared that with the amount of the payments if the three companies had applied for them separately. The difference between the two amounts was 69 916.37 zlotys (PLN) (approximately EUR 16 445). Those calculations were considered by that authority to indicate the existence of an advantage arising from conditions which were artificially created in order to obtain an overpayment.
13. Consequently, according to that authority, companies E., B. and N. had designed their structure in an artificial manner by splitting a single agricultural holding in order to maximise the payments received under EU agricultural support schemes so as to avoid the degressivity of payments based on area.
14. Company E. lodged actions against the decisions of the second-instance administrative authority before the Wojewódzki Sąd Administracyjny w Rzeszowie (Provincial Administrative Court, Rzeszów, Poland).
15. By judgment of 7 April 2022, that court dismissed those actions. In its view, company E. had artificially created the conditions to obtain the greatest possible advantages from EU subsidies. That court applied that finding to the entirety of the payments sought by company E.
16. Company E. lodged an appeal against that judgment before the Supreme Administrative Court, which is the referring court in the present case.
17. In support of that appeal, company E. argues, inter alia, that it had not created artificial conditions, and, in the alternative, that the applicable EU law had been misinterpreted in so far as the creation of artificial conditions should only have resulted in a reduction of the payments by the amount arising from the artificial conditions, and not the refusal of the payments in their entirety.
18. The referring court summarises the Court’s case-law on the determination of artificially created conditions, ( 9 ) but does not ask the Court for guidance regarding that aspect of the case. It only asks about the interpretation of EU law relating to the consequences of a finding that an applicant has artificially created conditions. Article 4(3) of Regulation No 2988/95 states that the consequence of artificially created conditions is ‘failure to obtain the advantage or in its withdrawal’, while Article 60 of Regulation No 1306/2013 states that ‘no advantage … shall be granted’ in favour of entities which have artificially created conditions. The point in dispute between the parties is how those provisions should be interpreted with regard to the concept of ‘advantage’.
19. The referring court observes that, while the inclusion of the phrase ‘no advantage’ in Article 60 of Regulation No 1306/2013 could suggest that payment of the full amount may be refused, Article 4(4) of Regulation No 2988/95, indicating that the measures should not be regarded as penalties, implies that the refusal to pay should only apply to amounts obtained under artificially created conditions, and not to the entire amount of the support.
20. Furthermore, that court notes that it is possible to adopt either an approach consisting in not granting the advantages which arise through artificially created conditions, or an approach consisting in not granting any support in full. It points out that there are divergent approaches in the case-law of Member State courts, with some, such as those in Poland, adopting the latter approach – which is referred to as a ‘punitive interpretation’ – leading to the complete exclusion of a person from the subsidy scheme if it is found that conditions have been artificially created, and others such as those in Germany, favouring the former approach – which is referred to as a ‘corrective interpretation’ – according to which only the portion of the payment resulting from the creation of artificial conditions is refused. This divergence in interpretation may have harmful consequences for Polish farmers and jeopardise the effectiveness and uniformity of EU law.
21. In those circumstances, the Naczelny Sąd Administracyjny (Supreme Administrative Court) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:
‘Must the term “advantage” used in Article 4(3) of [Regulation No 2988/95] and Article 60 of [Regulation No 1306/2013] be interpreted as meaning failure to obtain or withdrawal of the entire payment arising from sectoral agricultural legislation, or only that part of the payment which arises from the creation of artificial conditions?’
22. Written observations were submitted to the Court by company E., the Republic of Poland, the Italian Republic, the Portuguese Republic, Romania and the European Commission.
23. A hearing was held on 4 June 2026 at which company E., the Rzecznik Praw Obywatelskich (Ombudsman, Poland), Poland, the Kingdom of Denmark, Portugal and the Commission presented oral argument.
IV. Analysis
A. Admissibility
24. Poland submits that the request for a preliminary ruling in the present case is inadmissible because the referring court is not properly constituted. The request was made by a three-judge panel of the Supreme Administrative Court, one of whom was appointed as a judge of that court in a procedure involving the KRS in its new composition. ( 10 ) Poland invokes, in particular, the case-law of the Court on the failure of the Sąd Najwyższy (Supreme Court, Poland; ‘the Supreme Court’) to meet the EU requirements inherent in the second subparagraph of Article 19(1) TEU and Article 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’). ( 11 ) It considers that, as the institutional position of the Supreme Administrative Court is analogous to that of the Supreme Court, the same requirements apply to the assessment of the regularity of the composition of the Supreme Administrative Court.
25. In my view, Poland’s objection should be rejected.
26. As recently discussed in my Opinion in Naski , ( 12 ) the Court has held that the mere fact that a judge was appointed on the basis of a proposal of the KRS in its new composition is not sufficient to support the conclusion that the requirements inherent in the second subparagraph of Article 19(1) TEU and Article 47 of the Charter have not been met. Instead, it is necessary to take into consideration all of the circumstances surrounding the appointment of the judge concerned. Moreover, not every defect in the procedure for appointment leads to invalidation of the composition of a court; only those irregularities that are of such a fundamental nature as to give rise, in the minds of individuals, to serious and legitimate doubts that that judge is not free from external influence, especially from the other branches of government, are relevant.
27. As also detailed in my Opinion in Naski , ( 13 ) certain case-law referred to by Poland ( 14 ) relates to particular circumstances involving persons appointed as judges of certain chambers of the Supreme Court, which prompted the Court to find that the presumption that a national court satisfies the requirements of a ‘court or tribunal’ within the meaning of Article 267 TFEU was rebutted. ( 15 )
28. In the present case, Poland has not put forward any specific or concrete evidence to establish that any of the judges on the panel of the referring court were appointed in a procedure that is comparable to the circumstances arising in that case-law. Nor has Poland put before the Court any specific circumstances regarding the judge concerned, but has relied solely on the ground that the judge was appointed on the basis of a proposal from the KRS in its new composition.
29. Therefore, I consider that the presumption that the question is referred by a ‘court or tribunal’ within the meaning of Article 267 TFEU is not rebutted in the present case, and that the request for a preliminary ruling is admissible.
B. Substance
30. By its question, the referring court asks how the concept of ‘advantage’ as used in Article 4(3) of Regulation No 2988/95 and Article 60 of Regulation No 1306/2013 is to be understood. That interpretation is necessary to enable that court to decide whether, in circumstances in which it is established that a person has artificially created the conditions to obtain payments under EU agricultural legislation, the entire amount of the support should be refused or withdrawn, or instead only that amount which results from the artificially created conditions.
31. It is worth recalling that that question only concerns the consequences of finding artificially created conditions, not the assessment of whether there are artificially created conditions in the first place, even though company E. also challenges that latter finding before the referring court. The question raised before the Court is therefore based on the assumption that artificially created conditions have been established.
32. The parties to the proceedings before the Court take two different positions as to that matter. In essence, company E., the Ombudsman, Denmark, Romania and the Commission assert that the concept of ‘advantage’ refers only to that amount which results from the artificially created conditions. I will refer to such an approach as a ‘corrective interpretation’. In contrast, Poland, Italy and Portugal contend that that concept refers to the entire amount of the support, which I will refer to as a ‘punitive interpretation’.
33. The proponents of both a corrective and a punitive interpretation rely on the wording, context and objectives of the same provisions, but reach opposite conclusions.
34. In this Opinion, I will first present the opposing arguments of the parties, systematising them under the usual methods of interpretation of EU law, to show that both interpretations are possible. I will then make a choice, and explain why, in my view, a corrective interpretation is a better fit, taking into consideration in particular the structure and objectives of the EU rules at issue.
1. Summary of the main arguments of the parties
(a) Wording
35. Company E. submits that the wording ‘ such advantages’ ( 16 ) in Article 60 of Regulation No 1306/2013 indicates that a direct link must exist between the advantage and the creation of artificial conditions, so that only that part of the payment is to be refused or withdrawn.
36. In contrast, Poland and Portugal argue that the wording ‘ no advantage’ ( 17 ) in Article 60 of Regulation No 1306/2013 excludes the possibility of referring only to the part of the payment resulting from the artificially created conditions. That wording refers to the concept of an ‘advantage’, which falls within the broader category of ‘advantage[s] provided for in sectoral agricultural legislation’. It defines the aid that may be obtained and thus the ‘advantage’ should be equated with the amount of aid claimed by the person who created the artificial conditions.
37. Poland further asserts that, based on a literal analysis of Article 4(3) of Regulation No 2988/95, the use of the word ‘advantage’ in the singular indicates that it refers to the benefit as a whole; the word ‘advantage’ is a generic term encompassing any payment and thus to reduce that concept to a surplus would constitute an interpretation contra legem .
38. Italy claims that the wording of Article 4(3) of Regulation No 2988/95 makes no distinction between the partial and the total advantage obtained, unlike other provisions, such as Article 5(1)(c) and Article 4(2) thereof. ( 18 ) Thus, when the EU legislature intends to refer solely to part of the advantage obtained unlawfully, it does so expressly. Furthermore, reading the wording of Article 4 of Regulation No 2988/95 in a systemic way, Italy concludes that the restriction of the withdrawal of the advantage to what has been unduly obtained is provided for only in paragraph 2 of that article, which in turn refers only to paragraph 1, with the result that the term ‘advantage’ in paragraph 3 denotes the full amount of support received.
(b) Context
39. As regards the immediate context, that is to say, other provisions of the EU acts in which the provisions whose interpretation is sought are situated, the parties, notwithstanding whether they are proponents of a corrective or a punitive interpretation, rely on the distinction between administrative measures and penalties, but draw different conclusions from such a distinction.
40. The proponents of a corrective interpretation stress that Article 4(3) of Regulation No 2988/95, which relates to administrative measures, and Article 60 of Regulation No 1306/2013, which implements that provision in the context of the CAP, remove unduly paid amounts and restore the situation as it would have existed in the absence of artificially created conditions. Therefore, the concept of ‘advantage’ in those provisions covers only the portion of the support that a farmer receives through artificially created conditions, and not the support the farmer is entitled to in the absence of such conditions, as that would amount to penalising that person.
41. As company E. and the Ombudsman emphasised at the hearing, those provisions, which relate to administrative measures, cannot in themselves serve as a legal basis for Member States to impose penalties on farmers. According to the Commission, if, under the legal system of a Member State, there is no provision governing the issue of penalties, that omission cannot be remedied by broadening the interpretation of Article 60 of Regulation No 1306/2013. For Denmark and the Commission, the provisions at issue must be applied uniformly across the Member States, whereas if Member States wish to go further and impose penalties, there may be differences between them at that stage.
42. In contrast, the proponents of a punitive interpretation do not understand the refusal or withdrawal of the entire amount of the support as a penalty. In that respect, a ‘punitive interpretation’ might in fact be a misnomer for that approach; however, as it is used by all the participants in the present proceedings, I will retain it.
43. For Poland, the distinction between administrative measures and penalties in Regulation No 2988/95 in fact indicates that the total exclusion is not a punitive measure against the beneficiary, but an act of restoring legality; it is the simple cancellation of the economic effects of the undue payment. On top of that, the Member States can still impose penalties.
44. For Italy, however, the creation of artificial conditions constitutes intentional conduct characterised by deceit and thus constitutes an intentional irregularity under Article 5 of Regulation No 2988/95, which is implemented in Article 60 of Regulation No 1306/2013. The unworthiness of an applicant’s conduct cannot be broken down into quantitative terms, as artificially created conditions undermine the relationship of trust between the authority granting the advantage and the person receiving it. Thus, the entire amount of support is to be refused or withdrawn.
(c) Objectives
45. Company E., Denmark, Romania and the Commission argue that a corrective interpretation is in line with the objectives of the provisions at issue, while Poland and Portugal contend that a punitive interpretation is in line with those objectives.
46. In that regard, company E. submits that an objective of the CAP is to support farmers who engage in genuine agricultural activity. In line with that objective, if only part of the support relating to the artificial conditions is refused or withdrawn, farmers will receive the support they are entitled to; otherwise, a farmer would receive no support despite actually carrying out agricultural activity. It additionally invokes the principle ne bis in idem and the principle of proportionality, as interpreting the provisions as being based on restitution removes the risk of applying a punitive measure twice against the same entity, and exclusion from payment schemes regardless of the amount of the advantage obtained is disproportionate and detrimental to farmers.
47. The Commission invokes the protection of EU financial interests as the objective of the provisions at issue. Those interests are protected by reducing the amount granted by subtracting what is undue.
48. In Denmark’s view, refusing or withdrawing only the support that the farmer received due to artificially created conditions is a solution that strikes a proper balance between the objectives of the CAP and the protection of EU financial interests.
49. For its part, Poland agrees that the objectives of the provisions at issue are to ensure the effective implementation of the CAP and to protect EU financial interests. However, those objectives would not be achieved if it were accepted that, despite the creation of artificial conditions, part of the support could be obtained, as that would not encourage the correct and effective use of EU funds. Article 325 TFEU and Article 4(3) TEU must be taken into account, according to which Member States are obliged to implement support schemes and to take concrete steps to combat abuse.
50. Furthermore, according to Poland, refusal or withdrawal of the entire amount of the support cannot be understood as depriving the farmer of a right. The right to support never existed, as an applicant who obtained the support on the basis of artificially created conditions did not meet the substantive conditions, so the entire payment was an undue payment. In that sense, the refusal or withdrawal of the entire payment is proportionate, as it fully neutralises the effects of the creation of artificial conditions; it is appropriate because it directly eliminates the effect of the creation of such conditions; and there are no less severe measures that would be equally effective, as only recovering the excess leaves part of the effects of circumvention intact.
51. For Portugal, total exclusion of support is in line with the objectives of effectiveness and deterrence which administrative measures must have in order to ensure the protection of EU financial interests, in accordance with the second sentence of Article 2(1) of Regulation No 2988/95.
(d) Legislative history
52. Only Poland advances arguments that concern legislative history. It points out that circumvention clauses similar to Article 60 of Regulation No 1306/2013 were contained in previous EU regulations concerning the CAP, which already provided that no advantage was to be granted to persons found to have artificially created conditions. Although Article 60 of Regulation No 1306/2013 does not directly refer to the failure to obtain or withdraw any payments, the legislative history does not indicate any need to exclude that solution. It is therefore difficult to consider that the intention of the EU legislature was to limit the application of the total exclusion of support in the event of circumvention of the applicable legislation.
53. To my mind, Poland’s line of argument based on legislative history does not support either a punitive or a corrective interpretation, as there are no indications that previous provisions similar to Article 60 of Regulation No 1306/2013 should be interpreted according to one solution or the other. ( 19 ) In other words, they were equally ambiguous as is Article 60 of Regulation No 1306/2013. ( 20 )
2. The proposed interpretation
54. In the absence of any explanation of the concept of ‘advantage’ in either Regulation No 2988/95 or Regulation No 1306/2013, it is not possible to conclude, solely on the basis of the wording, whether that concept refers to the entire amount of support, or instead only to that amount which results from the artificially created conditions.
55. Indeed, taking the wording of those provisions in isolation, either a corrective or a punitive interpretation could be accepted. As I have indicated in previous Opinions, in the majority of cases, it is not possible to understand the meaning of provisions of EU law simply by taking account of the words used. In such cases, the wording of such provisions cannot be detached from their context and objectives. ( 21 )
56. To recall, this case concerns support under the CAP. As presented to the Court, it starts from the position that the agricultural holdings of companies E., B. and N. have been artificially split in order to obtain a higher payment than they would have been entitled to had they applied as a single entity. Nevertheless, subject to verification by the referring court, it does not seem to be disputed in the present case that company E. was engaged in agricultural activity in the period for which the support was to be granted. It therefore seems that company E. would be entitled to support, but that the amount of the support would be lower due to the system of degressive payments introduced in order to favour smaller holdings.
57. In those circumstances, the directly relevant provision on the basis of which the referring court should decide whether the entire amount or only the surplus is to be refused is the circumvention clause contained in Article 60 of Regulation No 1306/2013. To resolve the dispute pending before it, the referring court must understand the meaning of the concept of ‘advantage’ in that provision.
58. Article 60 of Regulation No 1306/2013 is part of Title V thereof, entitled ‘Control systems and penalties’. As is clear from Article 58, the first provision under that title, those control systems and penalties, which must be introduced by the Member States, serve to protect EU financial interests. The relevant context for the interpretation of the provisions of that title is therefore Regulation No 2988/95, which is general legislation aimed at the protection of EU financial interests in all areas in which the EU budget is involved, including the CAP.
59. This is confirmed by recital 39 of Regulation No 1306/2013, in which it is stated: ‘In order to protect the financial interests of the Union’s budget, measures should be taken by Member States to satisfy themselves that transactions financed by the Funds are actually carried out and are executed correctly. Member States should also prevent, detect and deal effectively with any irregularities or non-compliance with obligations committed by beneficiaries. To this end, [Regulation No 2988/95] should apply. …’ ( 22 )
60. The Court has already interpreted Article 4 of Regulation No 2988/95 as containing administrative measures whose purpose is to protect the revenue and expenditure of the EU budget. In that respect, the Court has distinguished administrative measures from penalties. Such a conclusion indeed follows from Article 4(4) of Regulation No 2988/95, according to which ‘the measures provided for in this Article shall not be regarded as penalties.’
61. That is confirmed in the case-law, in which the Court has consistently held that ‘the obligation to repay is not a penalty for which a clear and unambiguous legal basis would be necessary, but simply the consequence of a finding that the conditions required to obtain the advantage derived from the [EU] rules were created artificially, thereby rendering the refunds granted undue payments and thus justifying the obligation to repay them.’ ( 23 )
62. On that basis, in Cimmino and Others , ( 24 ) the Court found that an operator who placed himself artificially in a situation enabling him to obtain unlawfully the benefit of the preferential rate of duty for the importation of bananas was obliged to pay the duties on the goods concerned, without prejudice, where appropriate, to any penalties provided for by national law.
63. In short, Regulation No 2988/95 thus distinguishes between administrative measures and penalties, the former being set out in Article 4 thereof and the latter in Article 5, and it is clear from the case-law that administrative measures serve the purpose of protecting the EU budget, and not of punishing persons who circumvent EU rules. To quote Advocate General Sharpston, ‘those measures are in essence about recovering specific monies that should have been, but were not, paid into the EU budget; or that were wrongly paid out of that budget’, ( 25 ) or, as in the present case, that should not be paid out of the EU budget.
64. All parties to these proceedings, except Italy, ( 26 ) agree that Article 60 of Regulation No 1306/2013 constitutes not a penalty, but an administrative measure, thereby implementing Article 4 of Regulation No 2988/95 in the context of the CAP.
65. As essentially indicated by the Commission, the structure of Regulation No 1306/2013, which contains rules on administrative measures in Article 60 and Article 63 (in part) and rules on administrative penalties in Article 63 (in part) and Article 64, reflects the distinction that exists in Regulation No 2988/95 as between Articles 4 and 5 thereof.
66. Unlike the proponents of a corrective interpretation, Poland, which agrees that Article 60 of Regulation No 1306/2013 concerns administrative measures and not penalties, does not consider that the refusal or withdrawal of the entire amount of the support would represent a penalty. That Member State, along with Portugal, submit that, if only the surplus of the support were refused or withdrawn, that would deprive that provision of any deterrent effect, which is liable to weaken the system of protection of EU financial interests.
67. However, that argument based on deterrence pertains to penalties, not administrative measures. Contrary to what Portugal contends, the fact that Article 2(1) of Regulation No 2988/95 stipulates that ‘administrative checks, measures and penalties’ must be ‘effective, proportionate and dissuasive’ does not invalidate this, as that phrasing expresses general principles of the scheme introduced by that regulation in Title I, whereas the distinction between measures and penalties is introduced later in Title II of that regulation.
68. One could add that Article 62 of Regulation 2021/2116, which has since replaced Article 60 of Regulation No 1306/2013, provides: ‘Without prejudice to specific provisions of Union law, Member States shall take effective and proportionate measures to avoid provisions of Union law to be circumvented and ensure, in particular, that no advantage provided for under agricultural legislation is granted in favour of a natural or legal person in respect of whom it is established that the conditions required for obtaining such advantages were created artificially, contrary to the objectives of that legislation.’ ( 27 )
69. As that new provision uses the conjunction ‘and’, it seems to confirm that preventive measures are indeed required, but that they are different from administrative measures that aim to nullify the consequences of abuse if it happens.
70. Furthermore, contrary to the arguments advanced by Poland, in order to achieve the objective of administrative measures, it is not necessary to refuse or withdraw the entire amount of the support, but only the amount that should not be paid, or was wrongly paid, from the EU budget.
71. If a Member State seeks to go further and take away something more, it must do so under a separate legal basis, and cannot rely on Article 4(3) of Regulation No 2988/95 or Article 60 of Regulation No 1306/2013.
72. Without such a clear legal basis for a penalty, there would be a breach of the principle of legality. The Court has considered that refusing or withdrawing a payment not due, as it was received on the basis of abuse of EU rules, does not conflict with the principle of legality. ( 28 ) However, refusing the entire amount, even if a farmer were entitled to some support under the CAP, would result in penalising that farmer.
73. In that respect, it seems that there is an important difference between the situation as it exists in Portugal and in Poland. At the hearing, Portugal indicated that domestic legislation has been enacted in that Member State which expressly stipulates that no payment is to be granted to beneficiaries if they have artificially created the conditions to obtain advantages. However, as the Ombudsman emphasised and Poland confirmed, no such legislation exists in Poland.
74. Interpreting Article 4(3) of Regulation No 2988/95 and Article 60 of Regulation No 1306/2013 as enabling a Member State, in itself, to refuse the entire amount of the support would be contrary to the principle nulla poena sine lege, as the imposition of penalties requires a clear legal basis informing addressees in advance that certain behaviour will result in a penalty.
75. Moreover, such an interpretation is not required in order to ensure the effectiveness of administrative measures, the purpose of which is to protect EU financial interests, and not to penalise abuses. EU financial interests are already protected by refusing or withdrawing only that amount of support that is linked to the artificially created conditions.
76. Additionally, as indicated by Denmark, the proposed solution is also in line with the objectives of the CAP. One such objective is to provide support to farmers who carry out genuine agricultural activity. The assessment of whether that is so depends, as indicated by company E., Denmark and Romania, on the circumstances of the particular case. If a farmer who received support did not engage in agricultural activity, that would justify refusal or withdrawal of the entire amount of support. However, if a farmer carried out the activities for which he or she was granted the support, it would be contrary to that objective of the CAP to deprive him or her of the support for those activities.
77. To my mind, therefore, the Court should adopt an interpretation of the concept of ‘advantage’ in Article 4(3) of Regulation No 2988/95 and Article 60 of Regulation No 1306/2013 as requiring the refusal or withdrawal only of the amount of support that was not due as it resulted from the artificially created conditions, and not of the entire amount of support, provided that the agricultural activity has been carried out. That interpretation would best reconcile the objectives of the CAP with the protection of EU financial interests.
78. It remains for me to address certain practical arguments raised by the proponents of a punitive interpretation.
79. Poland argues that an interpretation according to which only the surplus should be refused or withdrawn would lead to arbitrariness and unpredictability, as the authorities would have to construct hypothetical scenarios to calculate which amount a farmer would have been entitled to and which amount should be refused or withdrawn. That Member State stressed at the hearing that there are considerable difficulties in making such assessments.
80. Portugal argues that identifying situations of artificially created conditions entails high administrative costs, as it requires the authorities to replace an incorrect application for support with a correct one.
81. Even if I find those arguments relevant, such practical difficulties would not seem to be insurmountable. The present case demonstrates that it is possible to make the necessary calculations (see point 12 of the present Opinion).
82. Furthermore, as indicated by the Commission, the potential burden placed on authorities would not be excessive if only reasonable efforts are demanded. Additionally, pertinent assessments are usually already carried out through the investigation of artificially created conditions.
83. Nonetheless, in situations where it is impossible to conduct the necessary calculations, the case-law appears to support the view that refusal or withdrawal of the entire amount of the support is justified. ( 29 )
84. Therefore, arguments based on practical difficulties do not seem to be sufficient reasons that militate against the proposed interpretation.
V. Conclusion
85. In the light of the foregoing considerations, I propose that the Court answer the question referred for a preliminary ruling by the Naczelny Sąd Administracyjny (Supreme Administrative Court, Poland) as follows:
The term ‘advantage’ used in Article 4(3) of Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European Communities financial interests and Article 60 of Regulation (EU) No 1306/2013 of the European Parliament and of the Council of 17 December 2013 on the financing, management and monitoring of the common agricultural policy and repealing Council Regulations (EEC) No 352/78, (EC) No 165/94, (EC) No 2799/98, (EC) No 814/2000, (EC) No 1290/2005 and (EC) No 485/2008 must be interpreted as meaning that only that amount of the support which arises from the creation of artificial conditions should be refused or withdrawn.
1 Original language: English.
2 Council Regulation of 18 December 1995 on the protection of the European Communities financial interests (OJ 1995 L 312, p. 1).
3 Regulation of the European Parliament and of the Council of 17 December 2013 on the financing, management and monitoring of the common agricultural policy and repealing Council Regulations (EEC) No 352/78, (EC) No 165/94, (EC) No 2799/98, (EC) No 814/2000, (EC) No 1290/2005 and (EC) No 485/2008 (OJ 2013 L 347, p. 549). It has been replaced by Regulation (EU) 2021/2116 of the European Parliament and of the Council of 2 December 2021 on the financing, management and monitoring of the common agricultural policy and repealing Regulation No 1306/2013 (OJ 2021 L 435, p. 187).
4 Regulation of the European Parliament and of the Council of 17 December 2013 establishing rules for direct payments to farmers under support schemes within the framework of the common agricultural policy and repealing Council Regulation (EC) No 637/2008 and Council Regulation (EC) No 73/2009 (OJ 2013 L 347, p. 608). It has been replaced by Regulation (EU) 2021/2115 of the European Parliament and of the Council of 2 December 2021 establishing rules on support for strategic plans to be drawn up by Member States under the common agricultural policy (CAP Strategic Plans) and financed by the European Agricultural Guarantee Fund (EAGF) and by the European Agricultural Fund for Rural Development (EAFRD) and repealing Regulations (EU) No 1305/2013 and No 1307/2013 (OJ 2021 L 435, p. 1).
5 Regulation of the European Parliament and of the Council of 17 December 2013 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) and repealing Council Regulation (EC) No 1698/2005 (OJ 2013 L 347, p. 487). It too has been replaced by Regulation 2021/2115.
6 See, in particular, Article 1(1) and Article 2(1) and the third, ninth and thirteenth recitals of Regulation No 2988/95.
7 Kierownik Biura Powiatowego Agencji Restrukturyzacji i Modernizacji Rolnictwa (Head of the District Office of the Agency for Restructuring and Modernisation of Agriculture, Poland; ‘the first-instance administrative authority’).
8 Dyrektor Podkarpackiego Oddziału Regionalnego Agencji Restrukturyzacji i Modernizacji Rolnictwa w Rzeszowie (Director of the Subcarpathian Regional Office of the Agency for Restructuring and Modernisation of Agriculture, Rzeszów, Poland; ‘the second-instance administrative authority’).
9 The referring court takes into consideration the Court’s case-law, according to which an abusive practice requires two constituent elements: first, a combination of objective circumstances in which, despite formal observance of the conditions laid down by the relevant rules, the purpose of those rules has not been achieved; and, second, a subjective element consisting in the intention to obtain an advantage from the EU rules by creating artificially the conditions laid down for obtaining it. It mentions, in particular, the judgments of 12 September 2013, Slancheva sila (C‑434/12, EU:C:2013:546), and of 7 April 2022, Avio Lucos (C‑176/20, EU:C:2022:274).
10 Krajowa Rada Sądownictwa (National Council of the Judiciary, Poland; ‘the KRS’).
11 Poland refers to the judgments of 21 December 2023, Krajowa Rada Sądownictwa (Continued holding of a judicial office) (C‑718/21, EU:C:2023:1015), and of 4 September 2025, AW ‘T’ (C‑225/22, EU:C:2025:649), along with the judgment of the European Court of Human Rights (ECtHR), 8 November 2021, Dolińska-Ficek and Ozimek v. Poland (CE:ECHR:2021:1108JUD004986819).
12 See my Opinion in Naski (C‑273/24, EU:C:2026:609, in particular points 36 to 38), referring to the judgments of 26 March 2020, Review Simpson v Council and HG v Commission (C‑542/18 RX‑II and C‑543/18 RX‑II, EU:C:2020:232), and of 24 March 2026, Rzecznik Praw Obywatelskich (Recusal of a judge of an ordinary court) (C‑521/21, EU:C:2026:242). See also, most recently, judgments of 16 July 2026, Gekus (C‑748/23, EU:C:2026:594, in particular paragraphs 35 to 37), and of 16 July 2026, Rzecznik Dyscyplinarny Sądu Najwyższego (C‑96/24, C‑103/24 and C‑112/24, EU:C:2026:595, in particular paragraphs 52 to 54).
13 See my Opinion in Naski (C‑273/24, EU:C:2026:609, in particular points 39 to 42).
14 Namely, judgments of 21 December 2023, Krajowa Rada Sądownictwa (Continued holding of a judicial office) (C‑718/21, EU:C:2023:1015), and ECtHR, 8 November 2021, Dolińska-Ficek and Ozimek v. Poland (CE:ECHR:2021:1108JUD004986819).
15 Those circumstances included the appointment of persons as judges to the Supreme Court by the President of the Republic despite the decision of the competent Polish court suspending the relevant KRS resolutions, and the fact that the ECtHR and the Supreme Administrative Court considered the particular appointment procedures involving certain persons to be contrary to the requirements of independence.
16 Emphasis added.
17 Emphasis added.
18 It must, however, be noted that the Italian-language version of Article 4(2) of Regulation No 2988/95 differs from other language versions, inasmuch as it refers to the withdrawal of ‘the advantage unlawfully obtained’, whereas other language versions refer to ‘the advantage obtained’.
19 Poland essentially refers, in that regard, to: (1) Article 193 of Council Regulation (EC) No 1234/2007 of 22 October 2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (Single CMO Regulation) (OJ 2007 L 299, p. 1); (2) Article 30 of Council Regulation (EC) No 73/2009 of 19 January 2009 establishing common rules for direct support schemes for farmers under the common agricultural policy and establishing certain support schemes for farmers, amending Regulations No 1290/2005, (EC) No 247/2006, (EC) No 378/2007 and repealing Regulation (EC) No 1782/2003 (OJ 2009 L 30, p. 16); (3) Article 4(8) of Commission Regulation (EU) No 65/2011 of 27 January 2011 laying down detailed rules for the implementation of Council Regulation (EC) No 1698/2005, as regards the implementation of control procedures as well as cross-compliance in respect of rural development support measures (OJ 2011 L 25, p. 8); and (4) Article 145 of Commission Implementing Regulation (EU) No 543/2011 of 7 June 2011 laying down detailed rules for the application of Council Regulation (EC) No 1234/2007 in respect of the fruit and vegetables and processed fruit and vegetables sectors (OJ 2011 L 157, p. 1).
20 This is so, also in other EU acts. See, for example, Article 7 of Council Regulation (EC) No 1259/1999 of 17 May 1999 establishing common rules for direct support schemes under the common agricultural policy (OJ 1999 L 160, p. 113) or Article 29 of Council Regulation (EC) No 1782/2003 of 29 September 2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers and amending Regulations (EEC) No 2019/93, (EC) No 1452/2001, (EC) No 1453/2001, (EC) No 1454/2001, (EC) 1868/94, (EC) No 1251/1999, (EC) No 1254/1999, (EC) No 1673/2000, (EEC) No 2358/71 and (EC) No 2529/2001 (OJ 2003 L 270, p. 1).
21 See, in that respect, my Opinions in Rigall Arteria Management (C‑64/21, EU:C:2022:453, point 43) and in G.K. and Others (European Public Prosecutor’s Office) (C‑281/22, EU:C:2023:510, point 33).
22 In that light, the Court has held that the provisions of Regulation No 1306/2013 are to be interpreted in a manner that is consistent with the general rules of Regulation No 2988/95. See judgment of 29 February 2024, Eesti Vabariik (Põllumajanduse Registrite ja Informatsiooni Amet) (C‑437/22, EU:C:2024:176, paragraph 51).
23 The Court stated this for the first time in the judgment of 14 December 2000, Emsland-Stärke (C‑110/99, EU:C:2000:695, paragraph 56) (emphasis added), which concerned abusive practices relating to export refunds in the CAP, but in which Article 4(3) of Regulation No 2988/95 was not applicable ratione temporis . The Court reiterated the same in subsequent cases in which that regulation was applicable. See, for example, judgments of 4 June 2009, Pometon (C‑158/08, EU:C:2009:349, paragraph 28); of 9 July 2015, Cimmino and Others , C‑607/13, EU:C:2015:448, paragraph 73); and of 4 October 2024, Commission v PB (C‑721/22 P, EU:C:2024:836, paragraph 46).
24 Judgment of 9 July 2015 (C‑607/13, EU:C:2015:448, paragraph 75).
25 Opinion of Advocate General Sharpston in Cimmino and Others (C‑607/13, EU:C:2015:67, point 112).
26 Italy submits that Article 60 of Regulation No 1306/2013 implements Article 5 of Regulation No 2988/95. See point 44 of the present Opinion.
27 Emphasis added.
28 See, for example, judgment of 4 June 2009, Pometon (C‑158/08, EU:C:2009:349, paragraph 28 and the case-law cited).
29 In that respect, the Commission refers to the judgment of 13 December 2012, FranceAgriMer (C‑670/11, EU:C:2012:807), involving Article 4(1) of Regulation No 2988/95, in which the Court held that the national authorities could require repayment in full because part of the advantage could not be identified separately.