# C_2013367EN.01002803.xml

| 14.12.2013 | EN | Official Journal of the European Union | C 367/28 |
| --- | --- | --- | --- |

14.12.2013

EN

Official Journal of the European Union

C 367/28

---

Action brought on 2 August 2013 — APRAM v European Commission

(Case T-403/13)

2013/C 367/52

Language of the case: Portuguese

Parties

Parties

Applicant: APRAM — Administração dos Portos da Região Autónoma da Madeira, SA (Funchal, Portugal) (represented by: M. Gorjão-Henriques, lawyer)

Applicant:

Defendant: European Commission

Defendant:

Form of order sought

Form of order sought

The applicant claims that the Court should:

| — | annul Articles 1 and 2 of Commission Decision C(2013) 1870 final, of 27 March 2013, which reduces the contribution from the Cohesion Fund to the project ‘Development of Port infrastructures of the Autonomous Region of Madeira — Port of Caniçal’, Madeira, Portugal; |
| --- | --- |

—

annul Articles 1 and 2 of Commission Decision C(2013) 1870 final, of 27 March 2013, which reduces the contribution from the Cohesion Fund to the project ‘Development of Port infrastructures of the Autonomous Region of Madeira — Port of Caniçal’, Madeira, Portugal;

| — | declare that Regulation (EC) No 16/2003 (1) is not applicable in the present case, in particular Article 7 thereof, since it infringes essential procedural requirements and Regulation (EC) No 1164/94 (2) or, in any event, general principles of European Union law; |
| --- | --- |

—

declare that Regulation (EC) No 16/2003 (1) is not applicable in the present case, in particular Article 7 thereof, since it infringes essential procedural requirements and Regulation (EC) No 1164/94 (2) or, in any event, general principles of European Union law;

1

2

| — | declare that the European Commission is required to pay the outstanding balance; |
| --- | --- |

—

declare that the European Commission is required to pay the outstanding balance;

| — | in the alternative:






  (a) | declare that the limitation period has expired in respect of the procedure for recovering sums already paid and the right to retain the outstanding balance; |
| --- | --- | --- |

—

in the alternative:

(a)

declare that the limitation period has expired in respect of the procedure for recovering sums already paid and the right to retain the outstanding balance;

| (b) | declare that the European Commission is required to reduce the correction it made in relation to irregularities which could determine non-payment of the full outstanding balance and the recovery in full of payments made after 3 June 2003 but invoiced between June 2002 and February 2003; |
| --- | --- |

(b)

declare that the European Commission is required to reduce the correction it made in relation to irregularities which could determine non-payment of the full outstanding balance and the recovery in full of payments made after 3 June 2003 but invoiced between June 2002 and February 2003;

| — | in any event, order the European Commission to pay the costs. |
| --- | --- |

—

in any event, order the European Commission to pay the costs.

Pleas in law and main arguments

Pleas in law and main arguments

In support of the action, the applicant relies on six pleas in law.

1.   First plea in law: infringement of rules on the eligibility of expenditure

First plea in law: infringement of rules on the eligibility of expenditure

The contested decision infringes legal rules implementing the Treaty, in particular in so far they concern the eligibility of expenditure for financing by European funds, namely Article 11 of Regulation (EC) No 1164/94 and Article 7 of Regulation (EC) No 16/2003. In that regard, the parties disagree on the question whether payments made after and during the beginning of the eligibility period, though invoiced prior to that period, constitute expenditure which is eligible for European financing.

2.   Second plea in law: Regulation (EC) No 16/2003 is unlawful, since it infringes essential procedural requirements and a higher-ranking rule of law

Second plea in law: Regulation (EC) No 16/2003 is unlawful, since it infringes essential procedural requirements and a higher-ranking rule of law

The decision is also unlawful because it is based on Regulation No 16/2003, which is unlawful since it was not adopted by the College of Commissioners in accordance with the authorisation procedure or the written procedure, or any other simplified procedure in accordance with the Rules of Procedure of the Commission, (3) nor did it comply with Article 18 of those Rules of Procedure, and in so far as the Commission failed to interpret Article 7 of Regulation No 16/2003 in conformity with Regulation (EC) No 1164/94.

3

3.   Third plea in law: infringement of the principle of subsidiarity

Third plea in law: infringement of the principle of subsidiarity

The principle of subsidiarity requires the establishment of national rules concerning the eligibility of expenditure, since economic, social and territorial cohesion is an area in which jurisdiction is shared between the European Union and the Member States and, for this reason, it is necessary to observe that principle. However, Regulation No 16/2003 infringes that principle to the extent that it not only fails to invoke the principle, but also fails to justify the need for the system that it establishes having regard to that principle.

4.   Fourth plea in law: infringement of the principles of legitimate expectations and legal certainty and the obligation on administrative bodies to observe their own acts

Fourth plea in law: infringement of the principles of legitimate expectations and legal certainty and the obligation on administrative bodies to observe their own acts

The European Commission has consistently interpreted the legislative rule at issue in the way defended in the present case by APRAM.

That interpretation came from authorised European Commission sources, which was communicated to the Portuguese Republic, as well as other Member States, and the content thereof was clearly such that the Portuguese Republic could legitimately expect that the invoices received prior to, and paid after, receipt by the European Commission of the request for full payment were eligible. This was also the view of the competent national authorities. This is how APRAM created the legitimate expectation that that expenditure was effectively eligible.

The interpretation which the Commission now defends manifestly infringes the principle of legal certainty in that it imposes a substantial financial burden on APRAM, even though that interpretation was neither certain nor foreseeable.

5.   Fifth plea in law: infringement of the principle of proportionality

Fifth plea in law: infringement of the principle of proportionality

Although it is true that, in accordance with Article H of Annex II to Regulation (EC) No 1164/94, the European Commission is empowered to make financial corrections as its deems necessary, and which may imply full or partial annulment of the aid granted, it must also observe the principle of proportionality, taking account of the circumstances of the individual case, such as the type of irregularity and the possible financial impact of potential deficiencies in the management or monitoring systems, so as not to opt for a disproportionate response. In that regard, it is incomprehensible why it was regarded necessary to cancel all of the aid granted, since corrections at a rate of 100 % apply only when the deficiencies in the management and monitoring systems are so significant, or the irregularity found is so serious, as to constitute a complete disregard of European Union law rendering all of the payments improper. When that is not the case, those authorities propose corrections limited to 5 %, 2 % or even 0 %.

Difficulties in interpreting the rule at issue are a decisive attenuating circumstance which should always be taken into account by the Commission. In the light of the circumstances described, less restrictive means exist — such as the application of a reduced rate or even no correction at all — to achieve the desired objective. Accordingly, even if the Commission decides to apply a correction to the assistance granted — which is not the case — that correction should in no case exceed 5 % and should in fact be less or even zero.

6.   Sixth plea in law: the limitation period has expired

Sixth plea in law: the limitation period has expired

In any event, the limitation period in relation to requiring the recovery of expenditure predating 3 June 2003 has already expired, given that the last invoice was dated 28 February 2008, namely three months and two days before the date at issue. In accordance with Regulation (EC) No 2988/95 (4) of 18 December 1995, the limitation period for proceedings is four years as from the time when the irregularity was committed.

4

---

(1)  Commission Regulation (EC) No 16/2003 of 6 January 2003 laying down special detailed rules for implementing Council Regulation (EC) No 1164/94 as regards eligibility of expenditure in the context of measures part-financed by the Cohesion Fund (OJ 2003 L 2, p. 7).

1

(2)  Council Regulation (EC) No 1164/94 of 16 May 1994 establishing a Cohesion Fund (OJ 1994 L 130, p. 1).

2

(3)  OJ 2000 L 308, p. 26.

3

(4)  Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European Communities financial interests (OJ 1995 L 312, p. 1).

4

---