# C_2005117EN.01002701.xml

| 19.5.2005 | EN | Official Journal of the European Union | C 117/27 |
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19.5.2005

EN

Official Journal of the European Union

C 117/27

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Action brought on 10 February 2005 by the EFTA Surveillance Authority against the Republic of Iceland

(Case E-2/05)

(2005/C 117/08)

An action against the Republic of Iceland was brought before the EFTA Court on 10 February 2005 by the EFTA Surveillance Authority, represented by Niels Fenger and Bjørnar Alterskjær, acting as Agents of the EFTA Surveillance Authority, Rue Belliard 35, B-1040 Brussels.

The applicant claims that the Court should:

| 1. | declare that by failing to abolish and recover within the prescribed period the aid provided for under the tax schemes declared incompatible with the EEA Agreement by decision No 21/04/COL of 25 February 2004, the Republic of Iceland has failed to fulfil its obligations under Articles 2, 3 and 4 of said decision; and |
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1.

declare that by failing to abolish and recover within the prescribed period the aid provided for under the tax schemes declared incompatible with the EEA Agreement by decision No 21/04/COL of 25 February 2004, the Republic of Iceland has failed to fulfil its obligations under Articles 2, 3 and 4 of said decision; and

| 2. | order the Republic of Iceland to pay the costs of the proceedings. |
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2.

order the Republic of Iceland to pay the costs of the proceedings.

Legal and factual background and pleas in law adduced in support:

| — | In March 1999, Iceland adopted Act No 31/1999 on International Trading Companies without notifying the EFTA Surveillance Authority; cf. Article 1(3) of Protocol 3 to the Surveillance and Court Agreement (the ‘SCA’). |
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In March 1999, Iceland adopted Act No 31/1999 on International Trading Companies without notifying the EFTA Surveillance Authority; cf. Article 1(3) of Protocol 3 to the Surveillance and Court Agreement (the ‘SCA’).

| — | On 25 February 2004, the EFTA Surveillance Authority adopted decision No 21/04/COL, finding that the tax measures of the Act constituted State aid according to Article 61(1) EEA, that the aid was unlawful on procedural grounds as notification had not been given, and that the aid was incompatible with the EEA Agreement. |
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On 25 February 2004, the EFTA Surveillance Authority adopted decision No 21/04/COL, finding that the tax measures of the Act constituted State aid according to Article 61(1) EEA, that the aid was unlawful on procedural grounds as notification had not been given, and that the aid was incompatible with the EEA Agreement.

| — | Applying Article 14 in Part II of Protocol 3 to the SCA, the EFTA Surveillance Authority concluded that the aid should be recovered from the beneficiaries as from the fiscal year 1999. |
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Applying Article 14 in Part II of Protocol 3 to the SCA, the EFTA Surveillance Authority concluded that the aid should be recovered from the beneficiaries as from the fiscal year 1999.

| — | The Republic of Iceland has failed to comply with decision No 21/04/COL within the prescribed time. Thus, the EFTA Surveillance Authority has referred the matter to the EFTA Court pursuant to the second subparagraph of Article 1(2) in Part I of Protocol 3 to the SCA. |
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The Republic of Iceland has failed to comply with decision No 21/04/COL within the prescribed time. Thus, the EFTA Surveillance Authority has referred the matter to the EFTA Court pursuant to the second subparagraph of Article 1(2) in Part I of Protocol 3 to the SCA.

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