# Arrêt du Tribunal

**Case T-308/00**

**Salzgitter AG**

**v**

**Commission of the European Communities**

(State aid – Article 4(c) CS, Articles 67 CS and 95 CS – Financial intervention in favour of the undertaking Salzgitter – Border between the former German Democratic Republic and former Czechoslovak Republic – Non-notified aid – Sixth Steel Aid Code – Legal certainty)

Judgment of the Court of First Instance (Fourth Chamber, Extended Composition), 1 July 2004

Summary of the Judgment

1.     *ECSC – Aid to the steel industry – Assessment of lawfulness – Taking into account of the Community Courts’ case-law relating
to State aid under the EC Treaty – Limits*

*(Art. 4(c) CS)*

2.     *ECSC – Aid to the steel industry – Definition – Specific undertaking or selective application*

*(Art. 4(c) CS)*

3.     *ECSC – Aid to the steel industry – Definition – Legal nature – Interpretation on the basis of objective factors – Judicial
review – Scope*

*(Art. 4(c) CS; Art. 87(1) EC)*

4.     *ECSC – Aid to the steel industry – Definition – Tax measures – Selective nature of the measure*

*(Art. 4(c) CS)*

5.     *ECSC – Aid to the steel industry – Aid for certain areas affected by the division of Germany – Application of the provisions
of the EC Treaty – Not included*

*(Art. 4(c) CS; Art. 87(2)(c) EC)*

6.     *ECSC – Aid to the steel industry – Definition – Measures presented as aid for certain areas affected by the division of Germany
– Not included because of their compensatory nature – Discretion of the Commission*

*(Art. 4(c) CS; Art. 87(2)(c) EC)*

7.     *ECSC – Aid to the steel industry – Definition – Classification of a tax measure as an advantage – Normal tax burden to be
used as reference point*

*(Art. 4(c) CS)*

8.     *ECSC – Aid to the steel industry – Definition – Inclusion of both subsidies and mitigations of charges – Obligation on the
Commission to prove that subsidies and mitigations of charges have equivalent effects – None*

*(Art. 4(c) CS)*

9.     *ECSC – Aid to the steel industry – Prohibition – Effect on competition and on trade between Member States – Irrelevance*

*(Art. 4(c) CS)*

10.   *ECSC – Aid to the steel industry – Inapplicability of Article 67 CS – Commission practice – Irrelevance*

*(Arts 4(c) CS and 67 CS; General Decision No 2320/81)*

11.   *ECSC – Aid to the steel industry – Authorisation by the Commission under Article 95 CS – Lawfulness – Discretionary power
of the Commission – Judicial review – Limits*

*(Arts 4(c) CS and 95 CS)*

12.   *ECSC – Aid to the steel industry – Prohibition – Aid granted illegally – No rule laying down time-limits for the Commission
to exercise its powers – Compliance with requirements of legal certainty*

*(Art. 4(c) CS)*

13.   *Community law – Principles – Protection of legitimate expectations – Legal certainty – Distinct conditions for pleading –
Consequences – Possibility for the recipient of unlawful aid to the steel industry granted in violation of the notification
obligation to rely on legal certainty to contest the decision ordering recovery despite no legitimate expectation having been
created*

14.   *ECSC – Aid to the steel industry – Administrative procedure – Equivocal situation created by inaction on the part of the Commission
and the lack of any provision in the Second and Third Steel Aid Codes – Obligation to clarify that situation before being
able to order the restitution of aid already paid*

*(General Decisions Nos 1018/85 and 3484/85)*

1.     The Community judicature’s clarifications on the concepts referred to in the provisions of the EC Treaty relating to State
aid are relevant when applying the corresponding provisions of the ECSC Treaty to the extent that those clarifications are
not incompatible therewith. It is therefore permissible, to that extent, to refer to the case-law on State aid deriving from
the EC Treaty in order to assess the legality of decisions regarding aid under the ECSC Treaty.

(see para. 28)

2.     The condition that a State measure should relate to a specific undertaking or apply selectively is one of the defining features
of State aid, whether it be under the EC Treaty or the ECSC Treaty, even though that criterion is not specifically laid down
in Article 4(c) CS. An assessment must therefore be conducted as to whether the measure in question confers exclusive advantages
on certain undertakings or certain sectors of activity.

(see para. 29)

3.     State aid, as defined in the EC Treaty, is a legal concept which must be interpreted on the basis of objective factors. For
that reason, the Community judicature must in principle, having regard both to the specific features of the case before it
and to the technical or complex nature of the Commission’s assessments, carry out a comprehensive review as to whether a measure
falls within the scope of Article 87(1) EC.

The same holds true for the question whether a measure falls within the scope of application of Article 4(c) CS, since that
type of judicial review is not incompatible with the ECSC Treaty.

(see paras 30-31)

4.     As a general rule, a tax measure which is likely to be found to be State aid differs from a general tax provision in that
the number of recipients tends to be limited in law or in fact. It does not matter that the selective nature of the measure
flows, for example, from a sectoral criterion or from a criterion relating to geographic location in a defined part of the
territory of a Member State. What matters, however, for a measure to be found to be State aid, is that the recipient undertakings
belong to a specific category determined by the application, in law or in fact, of the criterion established by the measure
in question.

(see para. 38)

5.     Grants of State aid are covered by Article 4(c) CS and, consequently, the provisions of the EC Treaty cannot apply in the
area covered by the ECSC Treaty in respect of the matter.

Thus, in the absence of provisions in the ECSC Treaty identical or equivalent to Article 87(2)(c) EC, the recognition under
the EC Treaty of the compatibility of aids granted to the economy of certain areas of the Federal Republic of Germany affected
by the division of Germany does not affect either the scope of application of Article 4(c) CS or, by extension, the concept
of State aid as laid down by that provision.

(see paras 63-64)

6.     Since the abolition and prohibition of State aid contained in Article 4(c) CS are general and absolute in character, they
cannot be annulled by application of a vague and ill-defined procedure for compensation. The examination of the compensatory
nature of State measures falls within the power of assessment of the Commission under which it verifies that the conditions
for the derogation sought are fulfilled.

Accordingly, the mere reference to the exception provided for in Article 87(2)(c) EC, namely the recognition of the compatibility
of aid granted to the economy of certain areas of the Federal Republic of Germany affected by the division of Germany, which
does not apply and has no equivalent under the ECSC Treaty, does not suffice to prove a certain causal link, for the purposes
of that treaty, between the advantage conferred on an undertaking and an alleged economic disadvantage suffered by the undertakings
situated in a region affected by the division of Germany.

(see paras 72, 74-75)

7.     With respect to the ECSC Treaty, in order to identify State aid, it must only be determined whether under a particular statutory
scheme a State measure is such as to favour certain undertakings or the production of certain goods over others which are
in a legal and factual situation that is comparable in the light of the objective pursued by that scheme.

Consequently, in order to determine whether a measure confers an advantage, it is imperative to determine the reference point
in the scheme in question against which the situation created by that measure is to be compared. Thus, when a ‘normal’ tax
burden is being determined, comparison of the tax rules applicable in all of the Member States, or even some of them, would
inevitably distort the aim and functioning of the provisions on the monitoring of State aid. In the absence of Community-level
harmonisation of the tax provisions of the Member States, such an approach would in effect compare different factual and legal
situations arising from legislative and regulatory disparities between the Member States.

(see paras 79-81)

8.     Whilst the concept of State aid embraces not only positive benefits, such as the subsidies themselves, but also interventions
which, in various forms, mitigate the charges which are normally included in the budget of an undertaking and which, without,
therefore, being subsidies in the strict meaning of the word, are similar in character and have the same effect, it is not
necessary to establish a hierarchy between what constitutes a subsidy in the strict sense of the term, on the one hand, and
the other measures which may be likened to a subsidy, on the other, but rather to define the concept of aid for the purposes
of Article 4(c) CS. It follows from that definition that, once it has been proven that a State intervention measure mitigates
the charges which should normally be included in the budget of an undertaking, that measure must be classified as aid and,
by virtue of that very classification, has the same effect as a subsidy in the strict sense of the term.

The Commission is therefore not required to provide additional proof that the mitigation of charges which normally must be
borne by an undertaking has the same effect as a subsidy in the strict sense of the term.

(see paras 83-84, 89)

9.     Under Article 4(c) CS, State aid is deemed incompatible with the common market and there is no need to establish or even to
consider whether, in actual fact, there is, or is likely to be, any interference with competitive conditions. In order to
be caught by the provisions of that article, an aid measure does not necessarily need to have an effect on trade between Member
States or on competition.

(see paras 90-91)

10.   Article 4(c) CS, by prohibiting subsidies or aids granted by States in any form whatsoever, is intended to abolish and prohibit
certain types of action by Member States in a field which, under the ECSC Treaty, comes within the jurisdiction of the Community.
It does not draw any distinction between individual aid and aid schemes or between specific and non-specific aid schemes in
the coal and steel industry, and the prohibition laid down in that provision is formulated in strict terms.

Article 67 CS is intended to prevent the distortion of competition which exercise of the residual powers of the Member States
inevitably entails and thus simply lays down safeguard measures that the Community may adopt against action by a Member State
which, whilst having considerable influence on the conditions of competition in the coal and steel industries, does not have
an immediate and direct impact on them. Article 4(c) CS and Article 67 CS thus cover two distinct areas, with the latter not
covering State aid.

The fact that, until the adoption, by Decision No 2320/81, of the Second Steel Aid Code, the Commission considered that Article
4(c) CS applied only to specific aid in favour of steel undertakings, that is, to aid which benefited those undertakings specifically
or principally, whereas the application to the steel industry of general and regional aid schemes was subject to monitoring
by the Commission under both Article 67 CS and Articles 87 EC and 88 EC, is not such as to affect this interpretation.

(see paras 107-112, 115)

11.   Article 4(c) CS does not prohibit the Commission from authorising State aid to the steel industry, either under the categories
specifically covered by the steel aid codes, in any of its successive versions, or as State aid which does not fall into one
of those categories, directly on the basis of the first and second paragraphs of Article 95 CS.

When it avails itself of the latter possibility, the Commission has discretion under Article 95 CS in determining whether
aid is necessary in order to achieve the objectives of the treaty.

Consequently, in this area, the review of legality must be limited to an examination of whether the Commission has exceeded
the scope of its discretion by a distortion or manifest error of assessment of the facts or by misuse of powers or abuse of
process.

In order to establish that the Commission committed a manifest error in assessing the facts such as to justify the annulment
of its decision, sufficient evidence must be adduced to make the factual assessments used in the decision implausible.

(see paras 131, 136-138)

12.   In order to fulfil their function, limitation periods must be fixed in advance. The fixing of their duration and the detailed
rules for their application come within the powers of the Community legislature. The latter has not taken steps to prescribe
a limitation period concerning the review of aid granted under the ECSC Treaty.

However, the fundamental principle of legal certainty in its various forms aims to ensure that situations and legal relationships
governed by Community law remain foreseeable and must be taken into account when the validity of a Commission decision ordering
recovery of illegally granted State aid from a steel undertaking is being examined.

(see paras 159-161)

13.   The possibility of relying on the principle of legal certainty is not subject to conditions enabling a party to plead that
he had a legitimate expectation that State aid was properly granted.

Accordingly, a steel undertaking which obtained State aid which was not notified to the Commission may, in order to contest
a Commission decision ordering recovery, rely on the principle of legal certainty, even though, save in exceptional circumstances,
a recipient cannot have a legitimate expectation that aid was properly granted unless it has been granted in compliance with
the provisions on prior control of State aid.

(see paras 165-166)

14.   A steel undertaking which has received illegal aid may rightly rely on the principle of legal certainty in order to contest
the legality of a Commission decision ordering recovery thereof where, at the time it received that aid, there was, due to
the Commission’s actions, a situation of uncertainty and lack of clarity surrounding the legal scheme for the type of aid
in question, combined with the prolonged lack of reaction on the part of the Commission, who was aware of the aid received,
and which thus created, in disregard of its duty of care, an equivocal situation which it was under a duty to clarify before
it could take any action to order the recovery of the aid paid.

(see paras 174, 180, 182)

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: **Legal framework**

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: if the action taken by that State is having harmful effects on the coal or steel undertakings within the jurisdiction of that
State, the Commission may authorise it to grant aid to these undertakings, the amount, conditions and duration of which shall
be determined in agreement with the Commission. ...;

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: if the action taken by that State is having harmful effects on the coal or steel undertakings within the jurisdiction of other
Member States, the Commission shall make a recommendation to that State with a view to remedying these effects by such measures
as that State may consider most compatible with its own economic equilibrium.’

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: annul the contested decision;

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: order the defendant to pay the costs.

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: dismiss the application as unfounded;

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: order the applicant to pay the costs.

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subsequent application of Paragraph 3 of the ZRFG had to be notified as ‘plans’ for the purposes of Article 6 of the Third
Steel Aid Code.

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1.
: Annuls Articles 2 and 3 of Commission Decision 2000/797/ECSC of 28 June 2000 on State aid granted by the Federal Republic
of Germany to Salzgitter AG, Preussag Stahl AG and the group’s steel-industry subsidiaries, now known as Salzgitter AG – Stahl
und Technologie (SAG);

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2.
: Orders the applicant to bear one third of its costs;

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: Orders the Commission to bear its own costs and to pay two thirds of the applicant’s costs;

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: Orders the Federal Republic of Germany to bear its own costs.

---

1 –
: Language of the case: German.